PART I. FINANCIAL INFORMATION
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, September 30 1998 1999 ---------------- ------------------ (unaudited) Assets Current assets: Cash and cash equivalents $ 13,801,190 $ 151,868,363 Accounts receivable, net 1,679,390 7,555,110 Prepaid expenses and other current assets 1,432,428 6,192,589 ------------- -------------- Total current assets 16,913,008 165,616,062 Tower assets, net 473,942,309 861,753,326 Leasehold interests, net -- 81,071,025 Fixed assets, net 2,476,666 3,606,803 Land 14,613,365 31,611,851 Deferred debt issue costs, net 6,686,683 14,026,548 Other assets 1,516,070 2,612,601 ------------- -------------- $ 516,148,101 $1,160,298,216 ============= ============== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,280,809 $ 4,903,801 Accrued expenses 5,761,016 48,652,128 Deferred revenue 1,448,432 4,344,308 Current portion of long-term debt 15,692,912 6,666,384 ------------- -------------- Total current liabilities 26,183,169 64,566,621 Long-term debt 417,524,802 698,320,176 Other liabilities 125,152 359,145 ------------- -------------- 443,833,123 763,245,942 ------------- -------------- Redeemable stock: Series A senior preferred stock, Class B common stock, and Class D common stock 31,643,338 -- Warrants 1,000,000 -- ------------- -------------- 32,643,338 -- ------------- -------------- Stockholders' equity: Series B junior preferred stock 59,928,980 -- Common stock: Class A common stock, 202,500 and 0 shares issued and outstanding at December 31, 1998 and September 30, 1999, respectively 203 -- Class E common stock, 174,766 and 0 shares issued and outstanding at December 31, 1998 and September 30, 1999, respectively 175 -- Common Stock, $.001 par value, 100,000,000 shares authorized; 0 and 41,094,520 shares issued and outstanding at December 31, 1998 and September 30, 1999, respectively -- 41,095 Additional paid-in capital 33,136,302 489,426,399 Accumulated deficit (53,394,020) (92,415,220) ------------- -------------- 39,671,640 397,052,274 ------------- -------------- $ 516,148,101 $1,160,298,216 ============= ============== |
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these condensed financial statements.
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended September 30, ---------------------------------- 1998 1999 ---------------- ---------------- (unaudited) (unaudited) Revenues $ 21,127,633 $ 48,816,143 Direct operating expenses, excluding depreciation and amortization 3,965,511 11,691,067 -------------- -------------- Gross margin, excluding depreciation and amortization 17,162,122 37,125,076 Other expenses: General and administrative 2,720,097 2,822,760 Corporate development 4,955,121 5,731,059 State franchise, excise and minimum taxes 398,730 699,836 Depreciation and amortization 13,357,626 35,118,413 -------------- -------------- 21,431,574 44,372,068 -------------- -------------- Loss from operations (4,269,452) (7,246,992) Interest expense 7,276,265 14,439,470 Amortization of original issue discount and debt issuance costs 11,635,619 17,334,738 -------------- -------------- Net loss $ (23,181,336) $ (39,021,200) ============== ============== Payable-in-kind preferred dividends and accretion 683,304 2,930,338 ============== ============== Net loss attributable to common shareholders $ (23,864,640) $ (41,951,538) Basic loss per common share(a) $ (2.46) $ (1.41) -------------- -------------- Weighted average number of common shares outstanding 9,708,457 29,721,466 ============== ============== |
(a) Basic loss per common share in 1999 and 1998 have been computed based on the weighted average number of common shares outstanding during the periods, after giving retroactive effect for the conversion of the Company's common stock outstanding prior to the Company's initial public offering in accordance with the recapitalization effected contemporaneously with the completion of the initial public offering (Note 3). Diluted loss per common share would be anti-dilutive and therefore is not applicable.
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these condensed financial statements.
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended September 30, --------------------------------- 1998 1999 --------------- ---------------- (unaudited) (unaudited) Revenue $ 8,583,537 $ 23,059,176 Direct operating expenses, excluding depreciation and amortization 1,908,426 6,863,660 ------------- -------------- Gross margin, excluding depreciation and amortization 6,675,111 16,195,516 Other expenses: General and administrative 852,967 1,210,505 Corporate development 1,660,506 2,459,995 State franchise, excise and minimum taxes 116,083 295,502 Depreciation and amortization 5,865,773 15,469,742 ------------- -------------- 8,495,339 19,435,744 ------------- -------------- Loss from operations (1,820,228) (3,240,228) Interest expense 2,725,923 6,199,411 Amortization of original issue discount and debt issuance costs 5,496,024 6,107,045 ------------- -------------- Net loss $ (10,042,175) $ (15,546,684) ------------- -------------- Payable-in-kind preferred dividends and accretion 683,304 - ============= ============== Net loss attributable to common shareholders $ (10,725,479) $ (15,546,684) Basic loss per common share(a) $ (1.07) $ (0.40) ------------- -------------- Weighted average number of common shares outstanding 10,000,000 38,842,567 ============= ============== |
(a) Basic loss per common share in 1999 and 1998 have been computed based on the weighted average number of common shares outstanding during the periods, after giving retroactive effect for the conversion of the Company's common stock outstanding prior to the Company's initial public offering in accordance with the recapitalization effected contemporaneously with the completion of the initial public offering (Note 3). Diluted loss per common share would be anti-dilutive and therefore is not applicable.
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these condensed financial statements.
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Series B Junior Class A preferred Stock Common Stock common stock --------------------------- ------------------- --------------------- Shares Amount Shares Amount Shares Amount ---------- ---------------- ---------- --------- -------- ----------- Balance at December 31, 1998 60.40 $ 59,928,980 - - 202,500 $ 203 Unaudited: Dividends and accretion on Preferred Stock 1.27 1,767,106 - - Issuance of common stock, net of issuance costs, and conversion (Note 3) 41,094,520 $ 41,095 (202,500) (203) Liquidation of Series B Junior Preferred Stock (61.67) (61,696,086) Distribution of contributed capital and yield on various classes of common stock Net Loss ------ ------------ ---------- ----------- -------- ------ Balance at September 30, 1999 - $ - 41,094,520 $ 41,095 - $ - ====== ============ ========== =========== ======== ====== Class E common stock Additional --------------------- paid-in Accumulated Stockholders' Shares Amount capital deficit equity --------- ---------- ------------ ------------ ------------- Balance at December 31, 1998 174,766 175 $ 33,136,302 $(53,394,020) $ 39,671,640 Unaudited: Dividends and accretion on Preferred Stock (2,930,338) (1,163,232) Issuance of common stock, net of issuance costs, and conversion (Note 3) (174,766) (175) 502,968,169 503,008,886 Liquidation of Series B Junior Preferred (61,696,086) Distribution of contributed capital and yield on various classes of common stock (43,747,734) (43,747,734) Net Loss (39,021,200) (39,021,200) ----------- ---------- ------------ ------------ ------------- Balance at September 30, 1999 - $ - $489,426,399 ($92,415,220) $ 397,052,274 =========== ========== ============ ============ ============= |
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these condensed financial statements.
PINNACLE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, ------------------------------------- 1998 1999 ----------------- ------------------ (unaudited) (unaudited) Cash flows from operating activities: Net loss $ (23,181,336) $ (39,021,200) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 13,357,626 35,118,413 Amortization of original issue discount and debt issuance costs 11,635,619 17,334,738 Provision for doubtful accounts 286,905 568,000 (Increase) decrease in: Accounts receivable, gross (855,026) (3,077,230) Prepaid expenses and other current assets 4,828 (758,769) Other assets (609,486) (1,096,531) Increase (decrease) in: Accounts payable 647,258 (430,522) Accrued expenses 4,279,009 4,041,112 Deferred revenue 399,402 296,130 Other liabilities 7,077 233,993 -------------- -------------- Total adjustments 29,153,212 52,229,334 -------------- -------------- Net cash provided by operating activities 5,971,876 13,208,134 -------------- -------------- Cash flows from investing activities: Payments made in connection with acquisitions: Tower assets (310,721,207) (383,216,262) Leasehold interests - (83,387,340) Land (7,010,921) (16,998,487) Net current liabilities acquired - 36,135,378 Capital expenditures: Tower assets (31,312,021) (27,706,463) Fixed assets (1,244,500) (1,833,704) -------------- -------------- Net cash used in investing activities (350,288,649) (477,006,878) -------------- -------------- Cash flows from financing activities: Borrowings under long-term debt, net 474,736,382 556,080,721 Repayment of long-term debt (204,138,000) (317,963,299) Proceeds from issuance of common stock, net 10,767,709 501,237,846 Proceeds from issuance of PIK preferred stock and warrants, net 61,669,647 - Liquidation of PIK preferred stock and warrants - (93,741,617) Distribution of contributed capital and payment of accretion on various classes of common stock (412,888) (43,747,734) -------------- -------------- Net cash provided by financing activities 342,622,850 601,865,917 ------------- -------------- Net increase (decrease) in cash and cash equivalents (1,693,923) 138,067,173 Cash and cash equivalents, beginning of period 1,693,923 13,801,190 ------------- -------------- Cash and cash equivalents, end of period $ - $ 151,868,363 ============= ============== Supplemental disclosure of cash flows: Cash paid for interest $ 7,840,878 $ 16,498,833 ============= ============== Non-Cash Transactions: Seller debt issued in acquisitions $ 2,347,107 $ 8,998,250 Payable-in-kind preferred dividends and accretion $ 683,304 $ 2,930,338 Stock issued for acquisitions $ - $ 8,804,163 |
The accompanying notes to Condensed Consolidated Financial Statements are an integral part of these condensed financial statements.
Pinnacle Holdings Inc.
Notes to Condensed Consolidated Financial Statements
1. Financial Statements
The accompanying condensed consolidated financial statements reflect the financial position and results of operations and cash flows of Pinnacle Holdings Inc. and its wholly owned subsidiaries: Pinnacle Towers Inc., Pinnacle Towers Canada Inc., Coverage Plus Antenna Systems, Inc. and Tower Systems, Inc. At the time of the August 31, 1999 Motorola site acquisition (as defined herein), the Company invested $49 million in convertible preferred stock of PT III, a newly formed entity, most of the common stock of which is owned by two members of management of the Company. These proceeds were utilized by PT III to acquire the ownership of certain rooftop communication site leases previously owned by Motorola. The Company and Part III modified certain aspects of those relationships subsequent to September 30, 1999. See Part II, Item 5, Other Information. In addition, PT III entered into a service agreement with the Company to manage these assets. As a result of these transactions and significant operating relationships with PT III, the assets and liabilities of PT III, together with the results of operations from the date of the Motorola acquisition, have been included in the Company's consolidated financial statements as of September 30, 1999. These entities are collectively referred to as the "Company". See Part II, Item 5, Other Information. All significant intercompany balances and transactions have been eliminated. Preparation of the consolidated financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may vary from estimates used.
Results of operations for any interim period are not necessarily indicative of results of any other periods or for the year. The consolidated statements as of September 30, 1999 and for the nine month and three month periods ended September 30, 1999 and 1998 are unaudited, but in the opinion of management include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of results for such periods . These consolidated financial statements should be read in conjunction with the Company's financial statements and notes thereto for the year ended December 31, 1998.
The Company's Condensed Consolidated Statements of Operations for the nine month and three month periods ended September 30, 1999, reflect all components of Comprehensive Income as defined by SFAS No. 130, "Reporting Comprehensive Income." Accordingly, no separate Consolidated Statement of Comprehensive Income is presented as would otherwise be required.
2. Acquisitions
The Company actively acquires communications sites and related real estate assets.
On March 4, 1998, the Company completed the acquisition of 201 communications sites from Southern Communications Services, Inc. ("Southern Communications"), a subsidiary of Southern Company. The Company paid $83,500,000 for these communications sites, located in Georgia, Alabama, Mississippi, and Florida.
On September 3, 1998, the Company acquired from MobileMedia Corporation ("MobileMedia") and several of its affiliates 166 communications sites for an aggregate purchase price of approximately $170 million (the "MobileMedia Acquisition"). MobileMedia assigned its existing tenant leases on the sites to the Company. The Company entered into a lease (the "Lease") with MobileMedia Communications, Inc., an affiliate of MobileMedia, providing such affiliate of MobileMedia the non-exclusive right to install a certain amount of its equipment on the acquired communications sites for aggregate rent of $10.7 million per year. The Lease has an initial term of 15 years and one five-year renewal term exercisable at the option of the lessee. Prior to this acquisition, space on the sites was primarily for the exclusive use of MobileMedia and its affiliates. The Company has integrated these communications sites into its rental tower business and is leasing space on these sites to other third party wireless
communications providers. The communications sites are located in the Southeastern United States, Southern California and New England.
In addition to the Southern Communications and MobileMedia transactions described above, the Company completed 80 acquisitions of 526 communications sites and related assets, all of which were individually insignificant to the Company, from various sellers during the year ended December 31, 1998 for an aggregate purchase price of $331,204,262, consisting of $328,789,297 in cash and $2,414,965 of notes payable to the former tower owners.
On August 31, 1999, the Company acquired 1858 communications sites and related assets from Motorola, Inc. ("Motorola") for $254 million, comprised of $245 million in cash and $9 million in the Company's common stock, plus fees and expenses of approximately $17 million (the "Motorola Antenna Site Acquisition"). The purchase price allocations related to this transaction are preliminary. However, we do not expect that the final allocation of the purchase price will be materially different from its preliminary allocation. This acquisition results in the Company having sites in all fifty States and nine Canadian Provinces. The Company transferred certain of the rooftop communication sites it acquired from Motorola to PT III. See Part II, Item 5, Other Information.
In addition to the Motorola Antenna Site Acquisition, during the nine months ended September 30, 1999 the Company completed 108 acquisitions of 295 communications sites and related assets, all of which were individually insignificant to the Company, from various sellers for an aggregate purchase price of $211 million consisting of $202 million in cash and $9 million of notes payable to the former tower owners.
The Company accounts for its acquisitions using the purchase method of accounting. The results of operations of the acquired assets are included with those of the Company from the dates of the respective acquisitions. The pro forma results of operations listed below reflect purchase accounting and pro forma adjustments as if all of the transactions completed during 1998 and the nine months ended September 30, 1999 occurred as of January 1, 1998. The unaudited pro forma condensed consolidated financial information are not necessarily indicative of the results that would have occurred if the assumed transactions had occurred on the dates indicated and are not necessarily indicative of the expected results of operations in the future.
Pro Forma ----------------------------------------- September 30, September 30, 1998 1999 ------------------- -------------------- (unaudited) (unaudited) Revenue $ 100,368,428 $ 110,241,230 Gross margin, excluding depreciation 57,896,990 67,573,289 Net loss (88,939,174) (72,603,977) Net loss attributable to common shareholders (89,622,478) (75,534,315) Basic net loss per common share (9.23) (2.54) |
3. Public Offerings and Stockholders' Equity
On February 19, 1999, the Company completed its initial public offering of common stock ("the IPO") whereby the Company sold 20,000,000 shares of a new class of common stock (the "Common Stock"). In addition, on March 19, 1999, the Underwriters over-allotment option was exercised to the extent that an additional 2,026,000 shares were sold. The initial price per share was $14, resulting in net proceeds from the IPO of approximately $288 million.
In connection with the IPO, pursuant to a recapitalization agreement between the Company, its largest stockholder, ABRY Broadcast Partners II, L.P. ("ABRY II"), and certain members of the Company's
management that are stockholders of the Company, the Company converted all outstanding shares of each class of the Company's five classes of common stock into shares identical to the Common Stock sold in the IPO and paid to the holders of certain of such classes of common stock preferential amounts and yields. The certificate of incorporation of the Company was amended immediately prior to the consummation of the IPO to eliminate the multiple classes of the Company's common stock and create the now single class of Common Stock, and all of the outstanding shares of all the classes of common stock of the Company other than Class D Common Stock were converted into approximately 8,571,309 shares of Common Stock and all shares of Class D common Stock were converted into approximately 1,428,691 shares of Common Stock.
The holders of the Company's outstanding (prior to the above described conversion) shares of Class A Common Stock, Class B Common Stock and Class E Common Stock were collectively paid approximately $38.9 million by the Company from proceeds of the IPO, which amount equaled the amount of preferences such shares were entitled to over the other classes of the Company's common stock pursuant to the Company's certificate of incorporation before giving effect to the amendment relative to the conversion of those shares as described above. In addition, the holders of the Company's outstanding (prior to the above described conversion) shares of Class A Common Stock were collectively paid approximately $4.8 million by the Company from proceeds of the IPO, which amount equaled the amount of yield such shares had accrued from the date of their issuances through June 30, 1997 pursuant to the Company's certificate of incorporation before giving effect to the amendment relative to the conversion of those shares as described above.
Other uses of proceeds from the IPO were: (1) approximately $32.0 million
redeemed the outstanding shares of the Company's Series A Senior Preferred Stock
(the "Senior Preferred Stock"); (2) approximately $61.7 million redeemed the
outstanding shares of the Company's Series B Junior Preferred Stock (the "Junior
Preferred Stock"); (3) approximately $15.7 million repaid in full and retired a
loan from ABRY II; (4) approximately $123.8 million repaid outstanding
borrowings under the Company's Senior Credit Facility (as defined herein); and,
(5) $11.4 million was used to fund the closing of pending acquisitions proximate
to the date the funds were available from the IPO.
On July 22, 1999, the Company completed a secondary offering of common stock (the "Secondary Offering") whereby the Company sold 8,650,000 shares of its Common Stock. The price per share was $25, resulting in net proceeds from the Secondary Offering of approximately $206 million. Certain stockholders of the Company also sold 2,350,000 shares of common stock, the net proceeds of which are not available to the Company. The proceeds from the Secondary Offering were invested initially in short-term liquid securities and will be used in conjunction with the Company's availability of senior debt under its amended Senior Credit Facility to fund acquisitions and development of communications sites. Approximately $55 million of this cash had been used as of September 30, 1999, $20 million of which was used to consummate the Motorola Antenna Site Acquisition.
Also in conjunction with the Motorola Antenna Site Acquisition the Company issued 418,520 shares of its common stock to Motorola as part of the consideration given for the acquisition. These shares were recorded at the fair value of the securities when the terms of the acquisition were agreed to and announced.
4. Long-term Debt
As of June 25, 1999, the Company amended its Senior Credit Facility to provide $520 million of financing, of which $470 million was committed. Advances under the Senior Credit Facility accrue interest at the Company's option of either LIBOR plus a margin of up to 3.00%, as defined in the related agreement, or at the greater of the Federal Funds Effective Rate plus 0.50% or the prime rate, plus a margin of up to 1.75%. Additionally, certain financial covenants were modified.
As of September 17, 1999, the Company again amended its Senior Credit Facility to provide $670 million of financing, of which $470 million was committed and utilized at September 30, 1999.
The Senior Credit Facility is secured by a lien on substantially all of the Company's assets and a pledge of substantially all of the capital stock of the Company's subsidiaries. The Senior Credit Facility contains customary covenants such as limitations on the Company's ability to incur indebtedness, to incur liens or encumbrances on assets, to make certain investments, to make distributions to shareholders, or prepay subordinated debt. Under the Senior Credit Facility, the Company may not permit the ratio of senior debt to annualized EBITDA as defined in the agreement to exceed certain amounts.
5. Commitments
As of and subsequent to September 30, 1999, the Company entered into several letters of intent with various third parties to purchase 512 additional communications sites and related assets, reflecting an aggregate commitment to pay approximately $105 million, all of which are subject to consummation of transactions pending completion of due diligence efforts and any further negotiation that may result therefrom.
6. Subsequent Events
During October 1999, the Company increased the committed amount of its Senior Credit Facility from $470 million to $520 million, $50 million of which remains available for use in making acquisitions as of November 11, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations:
The following discussion of the consolidated financial condition and results of operations of the Company should be read in conjunction with the condensed consolidated financial statements and related notes thereto. This discussion contains forward-looking statements within the meaning of the federal securities laws. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," and similar expressions and variations of such expressions identify certain of such forward-looking statements that speak only as of the dates on which they were made. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, the risk factors set forth in the Company's Amendment No. 2 to Registration Statement on Form S-3 (No. 333-82273) filed on July 21, 1999 (the "Registration Statement").
The Company
The Company acquires and constructs communications sites, including exclusive management rights or leasehold interests and leases space on such sites to a broad base of wireless communications providers, operators of private networks, government agencies and other customers. The Company's objective is to own or manage and operate clusters of rental communications sites in areas where there is significant existing and expected continued growth in the demand for rental communications sites by wireless communications providers. The Company seeks to obtain a substantial number of communications sites in its targeted markets in order to offer "one-stop shopping" to wireless communications providers who are deploying or expanding wireless communications networks.
The Company's growth has come primarily from aggressively pursuing communication site acquisitions in areas that complement the Company's existing base of rental communications sites and the expansion into additional high growth wireless communications markets. The Company also selectively constructs new communications sites to further augment its communication site portfolio. Additionally, the Company realizes organic revenue growth from new tenants, escalations and repricing of existing tenant leases. The Company is the leading provider of wireless communications rental tower space in the Southeastern United States. With the closing of the Motorola Antenna Site Acquisition, the Company's footprint has expanded to cover all fifty states and parts of Canada.
During the quarter, we achieved a 185% increase in our number of sites by closing 1,987 sites - nearly tripling our site inventory. These new sites included the purchase of all of Motorola's 1,858 North American antenna sites, which accounted for 499 owned sites, 526 "managed" sites and 833 "leased" sites. Managed sites are tower or rooftop communications sites owned by others where we would have the exclusive right to market antenna space on these sites. Leased sites are tower or rooftop communications sites owned by others that we would have a non-exclusive right to market antenna space. We subsequently sold certain rooftop sites to PT III. As of September 30, 1999, the Company has completed over 320 acquisitions and upon completion of all pending acquisitions will own or manage over 3,600 sites.
We currently have over 3000 customers renting space on one or more of our communications sites. Our tenants consist of all forms of wireless communications providers, operators of private wireless networks and government agencies, including Southern Communications, Nextel, Sprint PCS, PageNet, Motorola, BellSouth Mobility, MobileMedia Communications, Teletouch, Skytel, Pagemart, Federal Bureau of Investigation and Bureau of Alcohol, Tobacco & Firearms. The Company's leases generally range in duration from three to five years and many provide for scheduled minimum rent increases of the greater of a specified percentage (which typically ranges from 3-5%) or the change for the relevant period in the Consumer Price Index. Additionally, our customers are generally responsible for the installation of their own equipment and the incremental utility costs associated with such equipment. Hence, adding customers on a communications site does not increase monitoring, maintenance or utility costs. When new customers are added to a communications site, we are able to increase revenue at low incremental cost, thereby increasing cash flow margins.
The Company has designed and implemented a three-tiered growth strategy that focuses on: (i) increasing revenue yield per tower through aggressive marketing and development; (ii) continuing to acquire communications sites in key markets; and (iii) selective new tower construction. In order to effect its strategy, the Company has created a highly focused, structured organization in which significant resources are devoted to acquiring or constructing communications sites on strategically located sites supported by customer demand. In addition to supporting the purchase decision regarding potential acquisitions, the Company uses its proprietary information systems and other systems to rapidly integrate new communications sites and initiate sales and marketing efforts immediately following their acquisition or construction.
Results of Operations
Site Revenues increased by $27.7 million, or 131%, to $48.8 million for the nine-month period ended September 30, 1999 from $21.1 million for the nine-month period ended September 30, 1998. This additional revenue is mainly attributable to the acquisition and construction of 2,748 sites since January 1, 1998. They are as follows: 1,987 sites during third quarter, 1999; 197 sites during first two quarters of 1999; and 564 sites during 1998. A portion of the revenue increase is related to same-sites organic growth. Same-site organic growth is a result of expanded marketing efforts to increase the number of customers per site, renegotiating leases that are subject to renewal, and, contractual price escalations for existing customers.
Direct operating expenses, excluding depreciation and amortization, increased by $7.7 million or 195% to $11.7 for the nine-month period ended September 30, 1999 from $4.0 million for the nine-month period ended September 30, 1998. This increase is consistent with the acquisition and construction of the 2,748 sites discussed above. Direct operating expenses as a percentage of revenue increased to 23.9% for the nine-month period ended September 30, 1999 from 18.8% for the nine-month period ended September 30, 1998. The percentage increase is primarily a result of the change in mix of sites. Both managed and leased sites produce lower margins than
owned sites because of their variable rent expense. Notwithstanding, these sites are financially and strategically consistent with the Company's objective of providing wireless service providers a large selection of antenna site locations.
General and administrative expenses increased slightly for the nine-month period ended September 30, 1999 from $2.7 million to $2.8 million for the nine-month period ended September 30, 1998. The increases in expenses are from additional staffing required for the increased work volume, the Company becoming a public registrant, increased levels of advertising and marketing expenditures, and other related costs associated with the Company's growth. However, as a percentage of revenue, it decreased to 5.8% of revenue for the nine-month period ended September 30, 1999 from 12.9% for the nine-month period ended September 30, 1998 reflecting the disproportionate higher growth in revenues relative to expenses. The decrease in percentage is from economies of scale realized from increases in tower revenues as a result of the Company's acquisitions and construction of communications sites.
Corporate development expenses increased $776 thousand, but decreased as a percentage of revenue from 23.5% for the nine-month period ended September 30, 1998 compared to 11.7% for the nine-month period ended September 30, 1999. The increase in expense is related to the overall growth in the business and related activity during this same period. The decrease in percentage is from economies of scale realized from increases in tower revenues relative to direct operating expenses as a result of the Company's acquisitions and construction of communications sites.
State franchise, excise and minimum taxes, which represent taxes assessed in connection with the Company's operations in various state jurisdictions increased to $0.70 million for the nine-month period ended September 30, 1999 from $0.40 million for the nine-month period ended September 30, 1998. Such taxes are calculated using various methods such as a portion of the Company's property within a given state, the Company's capital structure or based upon a minimum tax in lieu of income taxes. The increase in 1999 is primarily attributable to the Company's significant growth in assets and capital, offset slightly by benefits resulting from the ability to apportion such amounts to certain newly entered states that have no such taxes or only minimum taxes, plus taxes to be incurred related to operations located in Canada from the Motorola Acquisition.
Depreciation and amortization expense increased 163%, or $21.8 million, to $35.1 million for the nine-month period ended September 30, 1999 from $13.4 million for the nine-month period ended September 30, 1998 as a result of the increase in tower assets through the acquisition activities of the Company as described above. Of the $21.8 million increase, $3.6 million was attributable to the Motorola Acquisition.
Interest expense increased $7.2 million, or 98%, for the nine-month period ended September 30, 1999 from $7.3 million for the nine-month period ended September 30, 1998. The increase in interest expenses was attributable to higher interest rates and increased average borrowings associated with the Company's acquisitions during the nine-month period ended September 30, 1999 as compared to the nine-month period ended September 30, 1998.
Amortization of original issue discount and debt issuance cost increased $5.7 million to $17.3 million for the nine-month period ended September 30, 1999 from $11.6 million for the nine-month period ended September 30, 1998. The prior year period included amortization of original issue discount for only six full and one partial month, as the sale of the Company's 10% Senior Discount Notes due March 15, 2008 ("Senior Discount Notes") was consummated on March 20, 1998, compared to a full nine-months of amortization on the accreted balance for the 1999 period.
Site Revenues increased by $14.5 million, or 169%, to $23.1 million for the three-month period ended September 30, 1999 from $8.6 million for the three- month period ended September 30, 1998. The additional revenue is mainly attributable to the acquisition and construction of 2,184 sites over the past twelve months since September 30, 1998, of which 1,987 closed during the three months ended September 30, 1999.
A portion of the revenue increase is related to same-sites sales growth. Same-site organic growth is a result of expanded marketing efforts to increase the number of customers per site, renegotiating leases that are subject to renewal, and contractual price escalations for existing customers.
Direct operating expenses, excluding depreciation and amortization, increased by $5.0 million, or 260%, to $6.9 million for the three-month period ended September 30, 1999 from $1.9 million for the three-month period ended September 30, 1998. This increase is consistent with the acquisition and construction of the 2,184 sites discussed above. Direct operating expenses as a percentage of revenue increased to 29.8% for the three-month period ended September 30, 1999 from 22.2% for the three-month period ended September 30, 1998. The percentage increase is primarily a result of the change in mix of sites. Both managed and leased sites produce lower margins than owned sites because of their variable rent expense. Notwithstanding, these sites are financially and strategically consistent with the Company's objective of providing wireless service providers a large selection of antenna site locations.
General and administrative expenses increased for the three-month period ended September 30, 1999 from $0.9 million to $1.2 million for the three-month period ended September 30, 1998. However, as a percentage of revenue, it decreased to 5.2% of revenue for the three-month period ended September 30, 1999 from 9.9% for the three-month period ended September 30, 1998 reflecting the disproportionate higher growth in revenues relative to expenses. The decrease in percentage is from economies of scale realized from increases in tower revenues as a result of the Company's acquisitions and construction of communications sites. The increases in expenses are from additional staffing required for the increased work volume, the Company becoming a public registrant, increased levels of advertising and marketing expenditures, and other related costs associated with the Company's growth.
Corporate development expenses increased $0.8 million, from $1.7 million to $2.5 million, but decreased as a percentage of revenue from 19.3% for the three-month period ended September 30, 1998 compared to 10.7% for the three- month period ended September 30, 1999. The increases are related to the overall growth in the business and related activity during this same period. The decrease in percentage is from economics of scale realized from increases in tower revenues relative to direct operating expenses as a result of the Company's acquisitions and construction of communications sites.
State franchise, excise and minimum taxes, which represent taxes assessed in connection with the Company's operations in various state jurisdictions increased to $0.3 million for the three-month period ended September 30, 1999 from $0.1 million for the three-month period ended September 30, 1998. Such taxes are calculated using various methods such as a portion of the Company's property within a given state, the Company's capital structure or based upon a minimum tax in lieu of income taxes. The increase in 1999 is primarily attributable to the Company's significant expansion of its geographic region, primarily through acquisitions.
Depreciation and amortization expense increased 164%, or $9.6, million to $15.5 million for the three-month period ended September 30, 1999 from $5.9 million for the three-month period ended September 30, 1998 as a result of the increase in tower assets through the acquisition activities of the Company as described above. Of the $9.6 million increase, $3.6 million was attributable to the Motorola Acquisition.
Interest expense increased $3.5 million, or 127%, for the three-month period ended September 30, 1999 from $2.7 million for the three-month period ended September 30, 1998. The increase in interest expenses was attributable to higher interest rates and increased average borrowings associated with the Company's acquisitions during the three-month period ended September 30, 1999 as compared to the three-month period ended September 30, 1998.
Amortization of original issue discount and debt issuance cost increased $0.6 million to $6.1 million for the three-month period ended September 30, 1999 from $5.5 million for the three-month period ended September 30, 1998. The increase reflects the twelve months of compounding of the amortized original issue discount of the zero-coupon Senior Discount Notes issued March 20, 1998 and due March 15, 2003.
The Company's liquidity needs arise from its acquisition-related activities, debt service, working capital and capital expenditures. The Company has historically funded its liquidity needs with proceeds from equity contributions, bank borrowings, cash flow from operations and the offering of its Senior Discount Notes. The Company had working capital of $101.0 million and a working capital deficit $9.3 million (inclusive of a $15.0 million bridge loan owed to ABRY II repaid on February 24, 1999) as of September 30, 1999 and December 31, 1998, respectively. The Company's ratio of total debt to stockholders' equity was 1.8 to 1.0 at September 30, 1999 and 10.9 to 1.0 at December 31, 1998.
The Senior Credit Facility with Bank of America, N.A. and certain other lenders provides a combination of term loans and revolving lines of credit for borrowings of up to $670 million, 520 of which is currently committed. The Company may make borrowings and repayments until June 30, 2006. Beginning June 30, 2001, the availability under the term loans and revolving lines of credit start reducing by specified amounts on a quarterly basis until June 30, 2007 when the availability will be reduced to zero. Loans under the Senior Credit Facility bear interest at a rate per annum, at the borrower's request, equal to the agent bank's prime rate plus a margin of up to 1.75% or the 90-day London Interbank Offered Rate plus a margin of up to 3.00%. Outstanding borrowings under the Senior Credit Facility have been used primarily to fund acquisitions and construction of communications sites. As of September 30, 1999, there was approximately $200 million available under the Senior Credit Facility (of the additional $50 million of uncommitted amount that subsequently was committed and the $150 million that remains uncommitted currently) after giving effect to approximately $25.7 million of outstanding letters of credit, which reduce availability under the Senior Credit Facility.
The Company also uses seller financing to fund certain of its tower acquisitions. The Company had outstanding notes that it issued to sellers bearing interest at rates ranging from 8.5% to 13.0% per annum in the aggregate amount of $28.2 million at September 30, 1999.
In March 1998, the Company completed its offering of its Senior Discount Notes. The Company received net proceeds of approximately $192.8 million from that offering. The proceeds were used to repay outstanding borrowings under the Senior Credit Facility, to repay in full and retire a $12.5 million bridge loan from ABRY II and accrued interest thereon, to repay in full and retire a $20 million subordinated term loan and accrued interest thereon and to pay a distribution preference to holders of Class B Common Stock. The Senior Discount Notes were issued under an indenture dated as of March 20, 1998 and will mature on March 15, 2008. Until March 15, 2003, the Company's interest expense on the Senior Discount Notes will consist solely of the accretion of original issue discount. Thereafter, the Senior Discount Notes will require semi-annual cash interest payments of $16.25 million.
In September 1998, in order to finance the MobileMedia Acquisition, the Company sold two newly issued series of Preferred Stock, the Senior Preferred Stock with a liquidation preference of $30.0 million and the Junior Preferred Stock with a liquidation preference of $32.5 million. Included in the sale of the Senior Preferred Stock were warrants to purchase approximately .75% of the Company's outstanding common stock. The warrants were cancelled upon the redemption of the Senior Preferred Stock. ABRY/Pinnacle, Inc., an affiliate of ABRY II, purchased the Junior Preferred Stock. In addition to the proceeds from the above sales, the MobileMedia Acquisition was funded with the ABRY Bridge Loan and borrowings under the Senior Credit Facility. In December 1998, the Company issued $26.2 million of additional Junior Preferred Stock to ABRY/Pinnacle, Inc. The proceeds from the sale of the Junior Preferred Stock were used to fund tower acquisitions and pay operating costs. The Senior Preferred Stock and the Junior Preferred Stock were entitled to receive dividends, payable quarterly, at a current rate of 14% per annum. The Senior Preferred Stock and the Junior Preferred Stock were redeemable, at the option of the Company, in whole (but not in part), at any time at a redemption price equal to the aggregate liquidation preference thereof, plus all accumulated but unpaid dividends to the date of redemption.
The principal stockholders of the Company (ABRY II, and Messrs. Wolsey, Dell'Apa and Day) were parties to a Subscription and Stockholders Agreement, dated as of May 16, 1996, as amended (the "Stockholders Agreement"). Pursuant to the Stockholders Agreement, ABRY II agreed to make capital contributions to the Company, up to an aggregate capital contribution of $50.0 million. As of December 31, 1998, ABRY II had contributed $37.2 million and had guaranteed an additional $3.9 million of other debt under the aggregate $50.0 million capital contribution commitment. Such capital contribution commitment terminated upon the closing of the IPO. Additionally, as of December 31, 1998, ABRY II or an affiliate had contributed separately $73.7 million to the Company, including $15.0 million outstanding under the ABRY Bridge Loan and $58.7 million of Junior Preferred Stock. The Stockholders Agreement was terminated upon completion of the IPO.
On February 19, 1999, the Company completed the IPO whereby the Company sold 20,000,000 shares of Common Stock. In addition, on March 19, 1999, the Underwriters over-allotment option was exercised to the extent that an additional 2,026,000 shares were sold. The initial price per share was $14, resulting in net proceeds from the IPO of approximately $290 million before deducting costs of the IPO.
In connection with the IPO, pursuant to a recapitalization agreement between the Company, its largest stockholder, ABRY II, and certain members of the Company's management that are stockholders of the Company, the Company converted all outstanding shares of each class of the Company's five classes of common stock into shares of the Common Stock sold in the IPO and paid to the holders of certain of such classes of common stock preferential amounts and yields. The certificate of incorporation of the Company was amended immediately prior to the consummation of the IPO to eliminate the multiple classes of the Company's common stock and create the now single class of Common Stock, and all of the outstanding shares of all the classes of common stock of the Company other than Class D Common Stock were converted into approximately 8,571,309 shares of Common Stock and all shares of Class D common Stock were converted into approximately 1,428,691 shares of Common Stock.
The holders of the Company's outstanding (prior to the above described conversion) shares of Class A Common Stock, Class B Common Stock and Class E Common Stock were collectively paid approximately $38.9 million by the Company from proceeds of the IPO, which amount equaled the amount of preferences such shares were entitled to over the other classes of the Company's common stock pursuant to the Company's certificate of incorporation before giving effect to the amendment relative to the conversion of those shares as described above. In addition, the holders of the Company's outstanding (prior to the above described conversion) shares of Class A Common Stock were collectively paid approximately $4.8 million by the Company from proceeds of the IPO, which amount equaled the amount of yield such shares had accrued from the date of their issuances through June 30, 1997 pursuant to the Company's certificate of incorporation before giving effect to the amendment relative to the conversion of those shares as described above.
Other uses of proceeds from the IPO were: (1) approximately $32.0 redeemed the outstanding shares of the Company's Senior Preferred Stock; (2) approximately $61.7 million redeemed the outstanding shares of the Company's Junior Preferred Stock; (3) approximately $15.7 million repaid in full and retired a loan from ABRY II; (4) approximately $123.8 million repaid outstanding borrowings under the Company's Senior Credit Facility; and, (5) $11.4 was used to fund the closing of pending acquisitions proximate to the date the funds were available from the IPO.
On July 22, 1999, the Company completed the Secondary Offering whereby the Company sold 8,650,000 shares of common stock. The price per share was $25, resulting in net proceeds from the Secondary Offering of approximately $206 million. Certain stockholders of the Company also sold 2,350,000 shares of common stock, the net proceeds of which are not available to the Company. The proceeds from the Secondary Offering were invested initially in short-term liquid securities and will be used in conjunction with the Company's availability of senior debt under the Senior Credit Facility to fund the expected consummation of the Motorola Antenna Site Acquisition and other acquisitions and development of communications sites.
Capital expenditures, including acquisitions, for the nine months ended September 30, 1999 were $477.0 million, compared to $350.3 million in the comparable 1998 period. The Company anticipates that it will spend approximately $98.7 million on capital expenditures during the period from October 1, 1999 through December 31, 1999, including the Motorola Antenna Site Acquisition, various individually immaterial acquisitions in the Company's current targeted acquisitions pipeline, construction and upgrading of communications sites. Depending on availability of additional capital, the Company expects that it may make substantial capital expenditures for acquisitions, construction and upgrading of additional communications sites in 1999 and 2000.
The Company believes that cash flow from operations and existing cash balances will be sufficient to meet working capital requirements for existing properties. The Company currently anticipates that it will seek additional financing in order to pursue additional acquisitions, construction activity and other capital expenditures that will require funding in excess of available proceeds and funds available under its Senior Credit Facility. Such additional financing may be obtained by the Company through public or private debt and equity offerings or increasing availability under its Senior Credit Facility. There can be no assurance that such financing will be commercially available through an increased commitment under the Senior Credit Facility or otherwise or be permitted by the terms of the Company's existing indebtedness. To the extent that the Company is unable to finance future capital expenditures, it may not be able to achieve its current acquisition strategy.
Inflation
Because of the relatively low levels of inflation experienced in 1998 and as of September 30, 1999, inflation did not have a significant effect on the Company's results in such years.
Year 2000
Many computer systems in use today were designed and developed using two digits, rather than four, to specify years. As a result, such systems will recognize the year 2000 as "00" or 1900. This could cause many computer applications to fail completely or to create erroneous results unless corrective measures are taken.
We utilize management information systems and software technology that may be affected by Year 2000 issues throughout our businesses. During 1996, we began to implement plans to assess our systems to determine their ability to meet our internal and external requirements. During 1998, we completed our initial comprehensive testing of and modifications to our information systems in response to that testing. We have developed questionnaires and contacted key suppliers regarding their Year 2000 compliance to determine any impact on our operations. In general, our suppliers and customers appear to have developed or are in the process of developing plans to address Year 2000 issues. We will continue to monitor and evaluate the progress of our suppliers and customers on this matter.
Year 2000 issues are not expected to have a material impact on our current information systems as a result of the steps already completed to try and make our systems Year 2000 compliant. Based on the nature of our business, we anticipate that we are not likely to experience material business interruption due to the impact of Year 2000 compliance on our customers and vendors, although if our customers and vendors experience Year 2000 problems, our results of operations could be materially adversely affected. We estimate that we will spend approximately $100,000 in 1999 to continue to monitor and test our systems for Year 2000 compliance including our software applications that we continuously develop and enhance. As a result, we do not anticipate that incremental expenditures to address Year 2000 compliance will be material to our liquidity, financial position or results of operations prior to the Year 2000.
The Company is exposed to certain market risks inherent in the Company's financial instruments. These instruments arise from transactions entered into in the normal course of business and, in some cases, relate to the Company's acquisitions of related businesses. The Company is subject to interest rate risk on its existing Senior Credit Facility and any future financing requirements. The Company's fixed rate debt consists primarily of outstanding balances on its Senior Discount Notes and notes payable to former tower owners and its variable rate debt relates to borrowings under its Senior Credit Facility. See "-Liquidity and Capital Resources".
The following table represents the future principal payment obligations and weighted-average interest rates associated with the Company's existing long-term debt instruments assuming the Company's actual level of long-term indebtedness of $676.8 million under the Senior Discount Notes and the Senior Credit Facility as of September 30, 1999:
Expected Maturity Date 1999 2000 2001 2002 2003 Thereafter Liabilities Long-term Debt Fixed Rate (10.00%) $ -- $ -- $ -- $ -- $ -- $325,000,000 Variable Rate (Weighted Average Interest Rate of 8.32%) -- -- 34,530,000 51,245,000 61,274,000 297,251,000 |
The Company's primary market risk exposure relates to (i) the interest rate risk on long-term and short-term borrowings, (ii) its ability to refinance its Senior Discount Notes at maturity at market rates, (iii) the impact of interest rate movements on its ability to meet interest expense requirements and exceed financial covenants and (iv) the impact of interest rate movements on the Company's ability to obtain adequate financing to fund future acquisitions. The Company manages interest rate risk on its outstanding long-term and short-term debt through its use of fixed and variable rate debt. While the Company can not predict or manage its ability to refinance existing debt or the impact interest rate movements will have on its existing debt, management continues to evaluate its financial position on an ongoing basis.
PART II. OTHER INFORMATION
The Company is from time to time involved in ordinary litigation incidental to the conduct of its business. The Company believes that none of its pending litigation will have a material adverse effect on the Company's business, financial condition or results of operations.
Not applicable.
Not applicable.
Not applicable.
The Company is taxed as a Real Estate Investment Trust ("REIT") for federal income tax purposes. The federal tax laws and regulations relating to REITs limit the Company's ability to own and derive income from certain types of assets. In order to minimize the risk that the ownership of or income from certain of the roof top communications sites acquired from Motorola (the "Transferred Assets") might negatively affect the Company's qualification as a REIT, effective September 29, 1999 the Transferred Assets were transferred to PT III for $49,000,000. A subsidiary of the Company owns approximately 9% of PT III's common stock. Certain officers of the Company own the remaining outstanding common stock of PT III. In September 1999, a subsidiary of the Company purchased $49,000,000 of convertible preferred stock issued by PT III. PT III used the proceeds from the sale of such preferred stock to acquire the Transferred Assets. In connection with such transfer, a subsidiary of the Company and PT III entered into a services agreement whereby such subsidiary agreed to service the assets of PT III and take certain related actions. Subsequent to September 30, 1999, PT III exchanged a portion of the convertible preferred stock it issued for a $39,200,000 convertible promissory note issued by it to a subsidiary of the Company and amended certain terms of the remaining convertible preferred stock. In addition, the aforementioned services agreement was replaced with a cost and expense sharing and reimbursement agreement. PT III has guaranteed the Senior Credit Facility and has pledged all of its assets to secure such guarantee. The Board of Directors of the Company, excluding the officers of the Company owning PT III common stock, who abstained, approved the transactions with PT III and determined that such transactions were on terms no less favorable to the Company than those that would be obtained in comparable arms-length transactions with parties that were not affiliated with the Company, and that such transactions were in the best interests of the Company. The Company currently does not anticipate that the officers of the Company who own PT III common stock will significantly benefit from such stock ownership.
As a result of the acts referenced in the preceding paragraph, a subsidiary of the Company currently owns a $39,200,000 convertible promissory note issued by PT III that accrues interest at the rate of 13%, with interest payable quarterly and all principal and accrued interest due and payable within 30 days upon demand. The $9,800,000 of outstanding PT III convertible preferred stock accrues dividends at 18% per annum, payable quarterly. The terms of PT III's convertible promissory note, convertible preferred stock and certificate of incorporation limit PT III's ability to borrow money, pledge its assets, issue additional securities, make distributions to its shareholders, purchase and sell assets, enter into transactions with affiliates and take certain actions without seeking approval from either its common shareholders, the holders of the convertible preferred
stock and/or the holders of the convertible note, depending on the action seeking to be taken. Should all of the PT III convertible preferred stock and the convertible promissory note be fully converted to common stock of PT III, a subsidiary of the Company would own in excess of 99.9% of the outstanding common stock of PT III. PT III may issue limited amounts of nonvoting common stock in the future in order for it to independently qualify as a REIT.
The foregoing is merely a summary description of PT III and the transactions between it and the Company and its subsidiaries. The description does not purport to be a complete description of such matters and is subject to the provisions of, and is qualified in its entirety be reference to, the material agreements relating to those matters, copies of which are filed as exhibits to this Quarterly Report on Form 10-Q.
The Company continues to assess the risk to its status as a REIT that might result from it reacquiring the Transferred Assets. Depending upon the conclusions reached from such assessment, the Company may seek to reacquire the Transferred Assets by purchase, merger or other means. It is possible that the Company may enter into additional transactions with PT III or other similar entities in certain circumstances to minimize the risk of no longer qualifying as a REIT. In addition, as additional acquisition opportunities become available to the Company in its existing line of business or in complimentary non-real estate based communication services activities, the Company may determine that it is in its best interests to acquire, operate or derive income from assets, business or entities that would cause it to no longer qualify as a REIT.
(a) The Exhibits listed in the "Exhibit Index" are filed as part of this report.
(b) Reports on Form 8-K. The Company filed a Form 8-K on September 14, 1999 with respect to the acquisition of communication sites from Motorola, Inc. as discussed in footnote 2 to the Consolidated Financial Statements in Part I, Item 1 above. The Company indicated in such Form 8-K that it intended to file the required financial statements and pro forma financial information as soon as practicable, but no later than 60 days from the date of that filing. The Form 8-K/A was filed on November 15, 1999.
No other reports on Form 8-K were filed during the nine month period ended September 30, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Pinnacle Holdings Inc.
Date November 15, 1999 By: /s/ Steven R. Day ----------------------- Steven R. Day Chief Financial Officer Vice President, and Secretary |
Duly Authorized Officer and Principal Financial Officer.
EXHIBIT INDEX
2.1 Agreement for Purchase and Sale of Assets between Pinnacle Towers Inc. and Motorola, Inc., dated June 25, 1999.***
2.2 Amendment to Agreement for Purchase and Sale of Assets dated as of August 31, 1999 between Pinnacle Towers Inc. and Motorola, Inc.+
3.1.1 Amended and Restated Certificate of Incorporation.*
3.1.2 Bylaws of the Company.**
4.1 Registration Rights Agreement dated as of August 31, 1999 between the Registrant and Motorola, Inc.+ 10.1 Fourth Amended and Restated Credit Agreement, dated June 25, 1999.**** 10.2 Fifth Amended and Restated Credit Agreement, dated September 17, 1999. 10.3 Subscription Agreement between Pinnacle Towers Inc. and Pinnacle Towers III, Inc., dated as of August 31, 1999. 10.4 Amended and Restated Articles of Incorporation of Pinnacle Towers III, Inc., dated September 28, 1999. 10.5 Agreement For Purchase and Sale Agreement of Assets by and between Pinnacle Towers Inc. and Pinnacle Towers III, Inc., dated as of August 31, 1999. 10.6 Services Agreement by and between Pinnacle Towers Inc. and Pinnacle Towers III, Inc., dated as of August 31, 1999. 10.7 Agreement by and between Pinnacle Towers III, Inc. and Pinnacle Towers Inc., dated as of September 28, 1999. 10.8 Amended and Restated Articles of Incorporation of Pinnacle Towers III, Inc., dated October 28, 1999. 10.9 Convertible Promissory Note of Pinnacle Towers III, Inc. |
10.10 Cost and Expense Sharing and Reimbursement Agreement by and between Pinnacle Towers Inc. and Pinnacle Towers III, Inc., effective as of August 31, 1999.
27.1 Financial Data Schedule
* Previously filed on February 17, 1999 with Amendment No. 6 to the Company's Registration Statement on Form S-11 (S.E.C. File No. 333-59297).
** Previously filed on April 1, 1998 with the Company's Registration Statement on Form S-4 (S.E.C. File No. 333-49147).
*** Previously filed on July 2, 1999 with the Company's Registration Statement on Form S-3 (S.E.C. File No. 333-82273).
**** Previously filed on July 21, 1999 with Amendment No. 2 to the Company's Registration Statement on Form S-3 (S.E.C. File No. 333-82273).
+ Previously filed on September 14, 1999 with the Company's Report on Form 8-K (S.E.C. file No. 000-24773)
$470,000,000
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Among
PINNACLE TOWERS INC.
And
BANK OF AMERICA, N.A.
as Administrative Agent
BANKERS TRUST COMPANY
as Syndication Agent
BANKBOSTON, N.A.
as Documentation Agent
KEY CORPORATE CAPITAL INC.
UNION BANK OF CALIFORNIA, N.A.
SOCIETE GENERALE
as Managing Agents
DRESDNER BANK AG NEW YORK & GRAND CAYMAN BRANCHES
THE BANK OF NOVA SCOTIA
CREDIT LYONNAIS NEW YORK BRANCH
COBANK, ACB
as Co-Agents
and
LENDERS
as defined herein
Dated as of September 17, 1999
With
BANC OF AMERICA SECURITIES LLC
as Sole Lead Arranger and Sole Book Manager
PINNACLE TOWERS INC.
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS 1.01. Definitions.................................................................. 2 1.02. Accounting and Other Terms................................................... 27 ARTICLE II. THE LOAN FACILITIES 2.01. The Loans.................................................................... 27 2.02. Making Advances.............................................................. 28 2.03. Evidence of Debt for Borrowed Money.......................................... 29 2.04. Optional Prepayments......................................................... 30 2.05. Mandatory Prepayments........................................................ 30 2.06. Repayment.................................................................... 31 2.07. Interest..................................................................... 33 2.08. Default Interest............................................................. 33 2.09. Continuation and Conversion Elections........................................ 34 2.10. Fees and the Fee Letter...................................................... 35 2.11. Reduction of Commitment...................................................... 36 2.12. Funding Losses............................................................... 38 2.13. Computations and Manner of Payments.......................................... 38 2.14. Yield Protection; Changed Circumstances...................................... 40 2.15. Use of Proceeds.............................................................. 42 2.16. Collateral and Collateral Call............................................... 42 2.17. Replacement of a Lender...................................................... 43 2.18. Conditions Precedent to the Increase of the Commitment....................... 44 ARTICLE III. LETTERS OF CREDIT 3.01. Issuance of Letters of Credit................................................ 46 3.02. Letters of Credit Fee........................................................ 47 3.03. Reimbursement Obligations.................................................... 47 3.04. Lenders' Obligations......................................................... 50 3.05. Administrative Agent's Obligations........................................... 50 ARTICLE IV. CONDITIONS PRECEDENT 4.01. Conditions Precedent to Closing, Effectiveness of this Agreement and the Refunding Advance........................................................... 51 4.02. Conditions Precedent to All Advances and Letters of Credit................... 52 |
4.03. Conditions Precedent to Advances for Permitted Acquisitions.................. 53 ARTICLE V. REPRESENTATIONS AND WARRANTIES 5.01. Representations and Warranties............................................... 54 5.02. Survival of Representations and Warranties................................... 62 ARTICLE VI. GENERAL COVENANTS 6.01. Preservation of Existence and Similar Matters................................ 62 6.02. Business; Compliance with Law and Material Agreements........................ 62 6.03. Maintenance of Properties.................................................... 62 6.04. Accounting Methods and Financial Records..................................... 62 6.05. Insurance.................................................................... 63 6.06. Payment of Taxes and Claims.................................................. 63 6.07. Visits and Inspections....................................................... 63 6.08. Payment of Debt for Borrowed Money........................................... 63 6.09. Use of Proceeds.............................................................. 63 6.10. Indemnity.................................................................... 63 6.11. Environmental Law Compliance................................................. 64 6.12. Interest Rate Protection Agreements.......................................... 65 6.13. Issuance and Pledge of Capital Stock of the Borrower......................... 65 6.14. Continued Status as a Real Estate Investment Trust; Prohibited Transactions.. 65 6.15. Tenant Leases, Ground Leases and Fee Owned Property.......................... 66 6.16. Acquisitions, Generally...................................................... 67 6.17. Year 2000.................................................................... 68 ARTICLE VII. INFORMATION COVENANTS 7.01. Quarterly Financial Statements and Information............................... 68 7.02. Annual Financial Statements and Information; Certificate of No Default....... 69 7.03. Compliance Certificates...................................................... 69 7.04. Copies of Other Reports and Notices.......................................... 69 7.05. Notice of Litigation, Default and Other Matters.............................. 70 7.06. ERISA Reporting Requirements................................................. 71 7.07. Fee Owned Property, Ground Leases and Tenant Leases.......................... 72 ARTICLE VIII. NEGATIVE COVENANTS 8.01. Financial Covenants.......................................................... 73 8.02. Debt for Borrowed Money...................................................... 75 8.03. Liens........................................................................ 77 8.04. Investments.................................................................. 77 8.05. Amendment and Waiver......................................................... 78 8.06. Liquidation, Disposition or Acquisition of Assets, Merger, New Subsidiaries.. 79 8.07. Guaranties; Contingent Liabilities........................................... 79 8.08. Restricted Payments.......................................................... 80 8.09. Affiliate Transactions....................................................... 81 |
8.10. Compliance with ERISA........................................................ 81 8.11. Capital Stock................................................................ 82 8.12. Sale and Leaseback........................................................... 82 8.13. Sale or Discount of Receivables.............................................. 82 8.14. Limitation on Restrictive Agreements......................................... 82 8.15. Synthetic Leases............................................................. 82 ARTICLE IX. EVENTS OF DEFAULT 9.01. Events of Default............................................................ 83 9.02. Remedies upon Default........................................................ 86 9.03. Cumulative Rights............................................................ 87 9.04. Waivers...................................................................... 87 9.05. Performance by Administrative Agent or any Lender............................ 87 9.06. Expenditures................................................................. 87 9.07. Control...................................................................... 87 ARTICLE X. THE ADMINISTRATIVE AGENT 10.01. Authorization and Action..................................................... 88 10.02. Administrative Agent's Reliance, Etc......................................... 88 10.03. Bank of America, N.A. and Affiliates......................................... 88 10.04. Lender Credit Decision....................................................... 89 10.05. Indemnification by Lenders................................................... 89 10.06. Successor Administrative Agent............................................... 89 ARTICLE XI. MISCELLANEOUS 11.01. Amendments and Waivers....................................................... 90 11.02. Notices...................................................................... 90 11.03. Parties in Interest and Register............................................. 92 11.04. Assignments and Participations............................................... 92 11.05. Sharing of Payments.......................................................... 93 11.06. Right of Set-off............................................................. 94 11.07. Costs, Expenses, and Taxes................................................... 94 11.08. Rate Provision............................................................... 97 11.09. Severability................................................................. 97 11.10. Exceptions to Covenants...................................................... 98 11.11. Counterparts................................................................. 98 11.12. GOVERNING LAW; WAIVER OF JURY TRIAL.......................................... 98 11.13. ENTIRE AGREEMENT............................................................. 98 11.14. Amendment, Restatement, Extension, Renewal and Increase...................... 99 |
Schedule 2.16 - Items required with respect to Each Fee Owned Real Property of the Borrower and its Subsidiaries Schedule 3.01 - Existing Letters of Credit Schedule 5.01(a) - Jurisdictions of Qualification, Ownership and Capital Structure - Borrower Schedule 5.01(f) - FAA Non-Compliance as of the Closing Date Schedule 5.01(h) - Existing Litigation Schedule 5.01(w) - Tenant Leases in existence on the Closing Date Schedule 5.01(x) - Ground Leases in existence on the Closing Date Schedule 5.01(y) - Owned Real Property in existence on the Closing Date Schedule 8.02 - Existing Debt and Liabilities Schedule 8.03 - Existing Liens Schedule 8.04 - Existing Investments Schedule 8.09 - Existing Affiliate Transactions Schedule 11.02 - Lender Addresses |
Exhibit A-1 - Form of Revolver Note Exhibit A-2 - Form of Term Loan A Note Exhibit A-3 - Form of Term Loan B Note Exhibit B - Form of Security Agreement (Borrower) Exhibit C - Form of Compliance Certificate Exhibit D - Form of Borrowing Notice Exhibit E - Form of Conversion/Continuation Notice Exhibit F - Form of Assignment and Acceptance Exhibit G - Form of Guaranty of Subsidiaries Exhibit H - Form of Security Agreement (Subsidiary) Exhibit I - Form of Subordination Agreement Exhibit J - Form of Borrower Pledge Agreement Exhibit K - Form of Certain Ground Lease Provisions Exhibit L - Form of Guaranty of Parent Exhibit M - Form of Parent Pledge Agreement Exhibit N - Form of Estoppel and Attornment Language |
$470,000,000
PINNACLE TOWERS INC.
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as of September 17, 1999, among Pinnacle Towers Inc., a Delaware corporation (the "Borrower"), the Lenders (as defined below), Bank of America, N.A., as a Lender and Administrative Agent (the "Administrative Agent"), Bankers Trust Company, as Syndication Agent, BankBoston, N.A., as Documentation Agent, Key Corporate Capital Inc., Union Bank of California, N.A. and Societe Generale, as Managing Agents and Dresdner Bank AG New York & Grand Cayman Branches, The Bank of Nova Scotia, Credit Lyonnais New York Branch and COBANK, ACB as Co-Agents. Banc of America Securities LLC acted as Sole Lead Arranger and Sole Book Manager.
BACKGROUND.
WHEREAS, Borrower entered into that certain Fourth Amended and Restated Credit Agreement with Bank of America, N.A. (formerly known as NationsBank, N.A.) and Lenders, dated as of June 25, 1999 (the "Original Credit Agreement") which provided for loan facilities in the initial amount of $470,000,000;
WHEREAS, Borrower and Administrative Agent have agreed to restructure, extend, renew, refinance, and restate such indebtedness under the Original Credit Agreement as set forth herein to provide for three separate facilities 1) a seven year reducing revolver facility in the initial amount of $235,000,000 (with a subfacility provided by Bank of America Canada to a Canadian subsidiary of the Borrower in a maximum amount not to exceed $16,464,800 Canadian Dollars (such amount approximately equal to $11,000,000 on the closing date), 2) a seven year delayed draw acquisition term loan in the amount of $125,000,000, and 3) an eight year term loan in the amount of $110,000,000 (which must be fully drawn on the date of closing), and to make certain other agreed to changes to the existing credit facility among the parties thereto. Of the proceeds of the facility referenced in 1) above, $219,957,000 be applied on the date hereof to refinance indebtedness under the Original Credit Agreement Term Loan A (as defined in the Original Credit Agreement) and such portions of Revolver A and Revolver B (as each is defined in the Original Credit Agreement) that constitute Acquisition Debt (as defined below).
AGREEMENT.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.01. Definitions. As used in this Agreement, the following terms have the respective meanings indicated below (such meanings to be applicable equally to both the singular and plural forms of such terms):
"Acquisition Debt" shall have the meaning ascribed thereto in the Indenture.
"Acquisition Agreement" means that certain Agreement For Purchase and Sale of Assets by and between Motorola and the Borrower, in the form of the draft of such agreement delivered to the Administrative Agent on June 24, 1999, and in any executed copy of such Agreement For Purchase and Sale of Assets, so long as any such executed copy is in such form delivered, with only minor and immaterial changes, or such form with material changes that are consented to by the Majority Lenders.
"Advance" means an advance made by a Lender to the Borrower pursuant to
Section 2.01 hereof which may be a Revolver Advance, a Term Loan A Advance or a
Term Loan B Advance (and may either be Base Advance or a LIBOR Advance), and
which such Advance may also be a Refinancing Advance.
"Affiliate" means a Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled By or is Under Common Control with another Person.
"Administrative Agent" means Bank of America, N.A. in its capacity as Administrative Agent hereunder, or any successor Administrative Agent appointed pursuant to Section 10.06 hereof.
"Agreement" means this Fifth Amended and Restated Credit Agreement, as hereafter amended, modified, increased, extended, restated or supplemented from time to time.
"Annualized EBITDA" means, (a) with respect to Compliance Certificates delivered in connection with Section 7.03 hereof, the product of (i) EBITDA for the Parent, the Borrower and its Subsidiaries on a consolidated basis, for the most recently completed fiscal quarter immediately preceding the date of determination times (ii) four and (b) with respect to pro-forma Compliance Certificates delivered in connection with Permitted Acquisitions delivered pursuant to Section 6.16 hereof, the product of (i) EBITDA for the Parent, the Borrower and its Subsidiaries on a consolidated basis, for the most recently completed fiscal quarter immediately preceding the date of determination with respect to which the Borrower has financial statements prepared, times (ii) four.
"Applicable Law" means (a) in respect of any Person, all provisions of Laws applicable to such Person, and all orders and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party and (b) in respect of contracts made or performed in the State of Texas, "Applicable Law" shall also mean the laws of the United States of America, including, without limiting the foregoing, 12 USC Sections 85 and 86, as amended to the date hereof and as the same may be amended at any time and from time to time hereafter, and any
other statute of the United States of America now or at any time hereafter prescribing the maximum rates of interest on loans and extensions of credit, and the laws of the State of Texas, including, without limitations, Articles 5069- 1H, Title 79, Revised Civil Statutes of Texas, 1925, as amended ("Art. 1H"), if applicable, and if Art. 1H is not applicable, Article 5069-1D, Title 79, Revised Civil Statutes of Texas, 1925 ("Art. 1D"), as amended, and any other statute of the State of Texas now or at any time hereafter prescribing maximum rates of interest on loans and extensions of credit, provided however, that pursuant to Article 5069-15.10(b), Title 79, Revised Civil Statutes of Texas, 1925, as amended, the Borrower agrees that the provisions of Chapter 15, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall not apply to the Advances hereunder.
"Applicable Margin" means, (a) with respect to Advances outstanding under the Term Loan A and the Revolver Loan, 2.75% per annum for LIBOR Advances and 1.50% per annum for Base Advances and (b) with respect to Advances under the Term Loan B, 3.000% per annum for LIBOR Advances and 1.750% for Base Advances, provided that, after the date which the Administrative Agent and the Lenders receive a Compliance Certificate required to be delivered in accordance with the terms of Section 7.01 hereof for the fiscal quarter ended June 30, 2000, then, if there exists no Default or Event of Default, the Applicable Margin will be the following per annum percentages applicable in the following situations:
Term Loan A and Revolver Loan Term Loan B Applicability Percentage Percentage ------------- --------------- ----------- (i) If the Leverage 2.750% 3.000% Ratio is equal to or greater than 6.00 to 1.00 (ii) If the Leverage 2.500% 3.000% Ratio is equal to or greater than 5.50 to 1.00 but is less than 6.00 to 1.00 (iii)If the Leverage 2.250% 3.000% Ratio is equal to or greater than 5.00 to 1.00 but is less than 5.50 to 1.00 (iv) If the Leverage 2.000% 3.000% Ratio is equal to or greater than 4.50 to 1.00 but is less than 5.00 to 1.00 3 |
(v) If the Leverage 1.750% 2.750% Ratio is equal to or greater than 4.00 to 1.00 but is less than 4.50 to 1.00 (vi) If the Leverage 1.500% 2.750% Ratio is equal to or greater than 3.50 to 1.00 but is less than 4.00 to 1.00 (vii)If the Leverage 1.250% 2.750% Ratio is less than 3.50 to 1.00 |
In each case in the above grid, the Applicable Margin for Base Advances shall be a per annum rate equal to 1.25% less than the Applicable Margin for the applicable LIBOR Advance. The Applicable Margin payable by the Borrower shall be (a) after the Administrative Agent has received all financial information required by Section 7.01 hereof for the fiscal quarter ended June 30, 2000, reduced or increased as applicable and as set forth in the table above, on a quarterly basis according to the performance of the Parent, Borrower and Subsidiaries of Borrower as tested by the Leverage Ratio and (b) further increased as set forth in Section 6.15(c) hereof. Except as set forth in the last sentence hereof, any such increase or reduction in the Applicable Margin provided for herein shall be effective three Business Days after receipt by Administrative Agent of the applicable financial statements and corresponding Compliance Certificate. If financial statements and a Compliance Certificate of the Borrower setting forth the Leverage Ratio are not received by the Administrative Agent by the date required pursuant to Article VII hereof, the Applicable Margin shall be determined as if the Leverage Ratio exceeds 6.00 to 1.00, until such time as such financial statements and Compliance Certificate are received. For the final quarter of any fiscal year of the Borrower, the Borrower may provide the unaudited financial statements of the Borrower, subject only to year-end adjustments, for the purpose of adjusting the Applicable Margin.
"Applicable Specified Percentage" means with respect to any Lender, in the case of the Revolver Loan, such Lender's Revolver Specified Percentage, in the case of the Term Loan A, such Lender's Term Loan A Specified Percentage, in the case of the Term Loan B, such Lender's Term Loan B Specified Percentage, and in the case of the Canada Indebtedness, with respect to the Canada Lender, such Lender's Canada Specified Percentage.
"Application" means any stand-by letter of credit application delivered to Administrative Agent for or in connection with any stand-by Letter of Credit pursuant to Article III hereof, in Administrative Agent's standard form for stand-by letters of credit.
"Art. 1D" has the meaning specified in the definition herein of "Applicable Law".
"Art. 1H" has the meaning specified in the definition herein of "Applicable Law".
"Auditor" means PricewaterhouseCoopers LLP, or other independent certified public accountants selected by the Borrower and acceptable to Administrative Agent.
"Authorized Officer" means, with respect to the Borrower and its Subsidiaries, the President, Chief Executive Officer, Chief Financial Officer or the Controller of the Borrower.
"Bank Affiliate" means the holding company of any Lender, or any wholly-owned direct or indirect subsidiary of such holding company or of such Lender.
"BAS" means Banc of America Securities LLC.
"Base Advance" means an Advance bearing interest at the Base Rate.
"Base Rate" means a per annum interest rate equal to the lesser of (a) the
Highest Lawful Rate, and (b) the sum of the Applicable Margin plus the higher of
(i) a fluctuating rate per annum as shall be in effect from time to time
announced or published by Bank of America, N.A. as its prime rate, and which may
not necessarily be the lowest interest rate charged by Bank of America, N.A. and
(ii) the Federal Funds Rate in effect at such time plus .50%.
"Borrowing" means a borrowing of the same Type made on the same day.
"Borrowing Notice" has the meaning set forth in Section 2.02(a) hereof.
"Bridge Debt" has the meaning ascribed thereto in Section 8.02(c)(ii) hereof.
"Business Day" means a day of the year on which banks are not required or authorized to close in Dallas, Texas or Sarasota, Florida, or, if with respect to any notice, payment or calculation related to a LIBOR Advance, in New York, New York, Dallas, Texas, Sarasota, Florida or London, England.
"Canadian Dollars" means the lawful currency of Canada.
"Canada Guarantors" means the Borrower and the Parent.
"Canada Guaranty" means that certain Guaranty executed by the Canada Guarantors, guaranteeing payment and performance of the Canada Indebtedness.
"Canada Indebtedness" means the Dollar Equivalent of all Debt for Borrowed Money under that certain term loan incurred by Canada Sub from the Canada Lender, in a maximum amount outstanding at any one time not to exceed $16,464,800 Canadian Dollars (the Dollar Equivalent of such amount being approximately equal to $11,000,000 on the Closing Date).
"Canada Indebtedness Agreements" means the Canada Guaranty, that certain Term Loan Agreement, executed by the Canada Lender and the Canada Sub, dated as of August 31, 1999, and each promissory note, security agreement, mortgage, deed of trust, pledge agreement, assignment and all other documents, instruments and agreements at any time evidencing any portion of the Canada Obligations, or granting any Lien or security interest in any assets or properties securing all or any portion of the Canada Obligations, or otherwise related to or executed in connection with, the Canada Indebtedness.
"Canada Indebtedness Amount" means, on any date of determination, the Dollar Equivalent of $16,464,800 Canadian Dollars (such Dollar Equivalent being approximately $11,000,000 on the Closing Date), or the Dollar Equivalent of such lesser amount as such amount is reduced by all repayments and prepayments of the Canada Indebtedness from time to time.
"Canada Lender" means Bank of America Canada and any other lenders, or any of their assignees, in each case which are at any time owed any portion of the Canada Obligations.
"Canada Obligations" means the Dollar Equivalent of all obligations of the Canada Sub and the Canada Guarantors under all agreements and documents executed by each of the foregoing in connection with the Canada Indebtedness and the Canada Guaranty, including, without limitation, all principal, interest, fees, expenses and other payment obligations under such documentation, and all "obligations" as defined in any such documentation.
"Canada Specified Percentage" means, as to any Lender, the percentage indicated beside its name on the signature pages hereof designated as its Canada Specified Percentage, or as adjusted or specified (a) in any Assignment and Acceptance or (b) in any amendment to this Agreement.
"Canada Sub" means Pinnacle Towers Canada, Inc., a corporation incorporated under the laws of New Brunswick, Canada, and wholly owned indirect Subsidiary of the Borrower.
"Canada Term Loan Advances" means the Dollar Equivalent of all advances under the term loan constituting Canada Indebtedness.
"Capital Expenditures" means capital expenditures, as defined in accordance with GAAP.
"Capital Leases" means capital leases and subleases, as defined in accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such Person, including, without limitation, the shares of each class of capital stock of any Person that is a corporation and each class of partnership interests (including without limitation, general, limited and preference units) in any Person that is a partnership, and including options, warrants and similar interests with respect to any such capital stock.
"Change of Control" means the occurrence of one of more of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Parent and its Subsidiaries, taken as a whole, to any Person or group of related Persons, as defined in Section 13(d) of the Securities Exchange Act of 1934 (a "Group"), other than Permitted Holders, (ii) any Person or Group (other than Permitted Holders) shall become the owner, directly or indirectly, beneficially or of record, of shares representing 30% or more of the aggregate voting power represented by the issued and outstanding voting stock of the Parent or any successor to all or substantially all of its assets; or (iii) the first day on which a majority of the members of the board of directors of the Parent are not Continuing Directors.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any reference to any provision of the Code shall include all successor provisions thereto.
"Collateral" has the meaning ascribed thereto in Section 2.16 hereof.
"Commitment" means $235,000,000 minus the sum of (a) the undrawn face amount of all Letters of Credit plus (b) the sum of all reimbursement obligations under Article III hereof, in each case as such amount may be increased prior to June 30, 2001 in accordance with the terms of Section 2.18 hereof, plus (c) the Canada Indebtedness Amount, as such Commitment may be further reduced from time to time or terminated pursuant to Sections 2.06, 2.11 or 9.02 hereof.
"Commitment Fee" means the fee described in Section 2.10(b) hereof.
"Communications Act" means, collectively, the Communications Act of 1934 and the rules and regulations promulgated thereunder, as from time to time in effect.
"Consequential Loss" with respect to (a) the Borrower's payment of all or
any portion of the then-outstanding principal amount of a LIBOR Advance on a day
other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the maturity of a
Note, (b) subject to Administrative Agents' prior consent, a LIBOR Advance made
on a date other than the date on which the Advance is to be made according to
Section 2.02(a) or Section 2.09 hereof to the extent such Advance is made on
such other date at the request of the Borrower, or (c) any of the circumstances
specified in Section 2.04 hereof on which a Consequential Loss may be incurred,
means any loss, cost or expense incurred by any Lender as a result of the timing
of the payment or Advance or in liquidating, redepositing, redeploying or
reinvesting the principal amount so paid or affected by the timing of the
Advance or the circumstances described in Section 2.04 hereof, which amount
shall be the sum of (i) the interest that, but for the payment or timing of
Advance, such Lender would have earned in respect of that principal amount,
reduced, if such Lender is able to redeposit, redeploy, or reinvest the
principal amount, by the interest earned by such Lender as a result of
redepositing, redeploying or reinvesting the principal amount plus (ii) any
expense or penalty incurred by such Lender by reason of liquidating,
redepositing, redeploying or reinvesting the principal amount. Each
determination by each Lender of any Consequential Loss is, in the absence of
manifest error, presumptive evidence of the validity of such claim.
"Contingent Liability" means, as to any Person, any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt or obligation of any other Person in any manner, whether directly or indirectly, including without limitation any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Debt, (b) to purchase Property or services for the purpose of assuring the owner of such Debt of its payment, or (c) to maintain the solvency, working capital, equity, cash flow, fixed charge or other coverage ratio, or any other financial condition of the primary obligor so as to enable the primary obligor to pay any Debt or to comply with any agreement relating to any Debt or obligation, but excluding endorsement of checks, drafts and other instruments in the ordinary course of business.
"Continue," "Continuation" and "Continued" each refer to the continuation pursuant to Section 2.09 hereof of a LIBOR Advance from one Interest Period to the next Interest Period.
"Continuing Directors" means, as of any date of determination, any member of the board of directors of the Parent who (i) was a member of such board of directors on the date hereof or (ii) was nominated for election or elected to such board of directors by any of the Permitted Holders or with the approval of a majority of the Continuing Directors who were members of such board at the time of such nomination or election.
"Controlled Group" means, as to any Person, all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) which are under common control with such Person and which, together with such Person, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.
"Conversion or Continuance Notice" has the meaning set forth in Section 2.09(b) hereof.
"Debt" means all obligations, contingent or otherwise, which in accordance with GAAP are required to be classified on the balance sheet as liabilities, and in any event including (without duplication) (a) Capital Leases, (b) Contingent Liabilities that are required to be disclosed and quantified in notes to consolidated financial statements in accordance with GAAP, and (c) liabilities secured by any Lien on any Property, regardless of whether such secured liability is with or without recourse.
"Debt for Borrowed Money" means, as to any Person, at any date, without duplication, (a) all obligations of such Person for borrowed money, letters of credit (or applications for letters of credit), bankers' acceptances or other similar instruments, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments and (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, and, with respect to the Parent, the Borrower and its Subsidiaries, including any accrued but unpaid Earn-Out Liability, but excluding any unaccrued Earn-Out Liability, provided that, notwithstanding the foregoing, with respect to the Parent, the Borrower and the Subsidiaries of the Borrower, Debt for Borrowed Money shall specifically include (without duplication) all Canada Obligations and all obligations under the Canada Guaranty.
"Debtor Relief Laws" means applicable bankruptcy, reorganization, moratorium, or similar Laws, or principles of equity affecting the enforcement of creditors' rights generally.
"Default" means any event specified in Section 9.01 hereof, whether or not any requirement in connection with such event for the giving of notice, lapse of time, or happening of any further condition has been satisfied.
"Distribution" means, as to any Person, (a) any declaration or payment of any distribution or dividend (other than a stock dividend) on, or the making of any pro rata distribution, loan, advance, or investment to or in any holder of, any partnership interest or shares of capital stock or other equity interest of such Person (or the establishment of a sinking fund or otherwise setting aside of funds for any such purpose), or (b) any purchase, redemption, or other acquisition or retirement for value of any shares of partnership interest or capital stock or other equity interest of such Person (or the establishment of a sinking fund or otherwise setting aside of funds for any such purpose).
"Dollar Equivalent" means (a) in relation to any amount denominated in Dollars, the amount thereof and (b) in relation to an amount denominated in Canadian Dollars, the amount of such Dollars required to purchase the relevant stated amount of Canadian Dollars at the Exchange Rate on the date of determination.
"Earn-Out Liability" means, with respect to the Borrower and its Subsidiaries, any unsecured contingent liability of the Borrower or any Subsidiary of the Borrower incurred in connection with any Permitted Acquisition, which such contingent liability (a) constitutes a portion of the purchase price for the property acquired but is not an amount certain, (b) is only payable based on the performance of the acquired property and in an amount based only on the performance of the acquired property and (c) is not subject to any acceleration right.
"EBITDA" means, for the Parent, the Borrower and its Subsidiaries, for any
period of determination, the sum of (a) net income for such period, excluding
non-cash income, plus (b) amortization and depreciation for such period, plus
(c) non-cash charges (minus non-cash income) and other extraordinary items for
such period to the extent not included in net income, plus (d) Interest Expense
for such period, plus (e) Income Tax Expense for the Parent, the Borrower and
its Subsidiaries for such period, plus (f) an adjustment to net income (without
duplication) for such period to account for the effect of treating all
acquisitions completed in such period as if such acquisitions had been completed
on the first day of such period, plus (g) an adjustment to net income for such
period to record (i) an increase in revenue related to all new leases executed
or acquired in the period as if such leases were effective as of the beginning
of such period and (ii) a decrease in revenue related to all terminated or
canceled leases during the period as if such leases were terminated or canceled
as of the beginning of such period, provided that, determinations of adjustments
to EBITDA with respect to the assets acquired by the Borrower in connection with
the Motorola Acquisition shall be calculated in a manner reasonably acceptable
to the Administrative Agent and Majority Lenders.
"Eligible Assignee" means any Lender, Related Fund of a Lender or Bank Affiliate, and any (a) commercial bank organized under the laws of the United States, or any state thereof, and having total assets in excess of $1,000,000,000; (b) savings and loan association or savings bank organized under the laws of the United States, or any state thereof, having total assets in excess of $1,000,000,000, and not in receivership or conservatorship; (c) commercial bank organized
under the laws of any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, and having total assets in excess of $1,000,000,000, provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is described in this clause; (d) central bank of any country which is a member of the Organization for Economic Cooperation and Development; and (e) any other Person approved by the Administrative Agent, which approval will not be unreasonably withheld.
"Environmental Claim" means any written notice by any Tribunal alleging liability for damage to the environment, or by any Person alleging liability for personal injury (including sickness, disease or death), resulting from or based upon (a) the presence or release, or threatened release (including sudden or non-sudden, accidental or non-accidental, leaks or spills) of any Hazardous Material at, in or from property, whether or not owned by the Parent, the Borrower or any of its Subsidiaries, or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. (S)9601 et seq.) ("CERCLA"), the Hazardous Material Transportation Act (49 U.S.C. (S)1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C (S)6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. (S)1251 et seq.), the Clean Air Act (42 U.S.C. (S)7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S)2601 et seq.), and the Occupational Safety and Health Act (29 U.S.C. (S)651 et seq.) ("OSHA"), as such laws have been or hereafter may be amended or supplemented, and any and all analogous future federal, or present or future state or local, Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the rulings and regulations issued thereunder, as from time to time in effect.
"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the controlled group of the Borrower or any Obligor, or is under common control with 67 Borrower or any Obligor, within the meaning of Section 414(c) of the Code, and the regulations and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within the meaning of Section
4043 of ERISA, unless the 30-day notice requirement with respect thereto has
been waived by the PBGC, (b) the issuance by the administrator of any Plan of a
notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA), (c) the withdrawal by the Parent, the Borrower, any
Subsidiary of the Borrower, or an ERISA Affiliate from a Multiple Employer Plan
during a Plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA, (d) the failure by the Borrower, any Subsidiary of
the Borrower, or any ERISA Affiliate to make a payment to a Plan required under
Section 302 of ERISA, (e) the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA, or (f) the
institution by the PBGC of proceedings to terminate a Plan, pursuant to Section
4042 of ERISA, or the occurrence of any event or condition that constitutes
grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, a Plan.
"Event of Default" means any of the events specified in Section 9.01 of this Agreement, provided there has been satisfied any requirement in connection therewith for the giving of notice, lapse of time, or happening of any further condition.
"Excess Cash Flow" means, for any fiscal year of the Borrower, EBITDA for
such year minus the sum of (a) Fixed Charges for such year (excluding interest
paid or payable, at the option of the Borrower, in-kind), plus (b) (without
duplication) all voluntary principal prepayments on the Obligations pursuant to
Section 2.04 hereof during such period.
"Exchange Rate" means with respect to Canadian Dollars on a particular date, the rate at which Canadian Dollars may be exchanged into Dollars, as set forth on such date on the Reuters currency page for exchanges of Dollars into Canadian Dollars. In the event that such rate does not appear on any Reuters currency page, the Exchange Rate with respect to Canadian Dollars shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrower.
"FAA" means the Federal Aviation Administration, or any governmental agency succeeding to the functions thereof.
"FCC" means the Federal Communications Commission, or any governmental agency succeeding to the functions thereof.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of Dallas, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such date on such transactions received by Administrative Agent from three federal funds brokers of recognized standing selected by it.
"Fee Letter" means that certain Fee Letter and Agreement, dated June 23, 1999, between the Borrower and the Administrative Agent, as such letter may be amended, modified, substituted, replaced, or increased from time to time, and such other fee letters as may be executed among the parties from time to time, as such letters may be amended, modified, substituted, replaced, or increased from time to time.
"Final Maturity Date" means June 30, 2007, or such earlier date on which all outstanding Advances under the Term Loan B and all other outstanding Obligations are due and payable
(including, without limitation, whether by acceleration, installment payment, mandatory or voluntary commitment reduction or mandatory or voluntary prepayment).
"First Maturity Date" means June 30, 2006, or such earlier date on which all outstanding Advances under the Revolver Loan and the Term Loan A, respectively, are due and payable (including, without limitation, whether by acceleration, installment payment, scheduled reduction of the Commitment to zero or mandatory or voluntary commitment reduction of the Commitment to zero or mandatory or voluntary prepayment).
"Fixed Charges" means, for any specified period for the Parent, the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) required or scheduled principal and interest payments with respect to Debt for Borrowed Money for such period, plus (b) required or scheduled principal payments with respect to seller notes executed by the Borrower in connection with Permitted Acquisitions to the extent permitted by Section 8.02 hereof, plus (c) accrued or paid Earn-Out Liabilities, plus (d) required or scheduled payments with respect to Capital Leases for such period, plus (e) cash distributions made by the Borrower and the Parent in accordance with the terms of Section 8.08(b)(iii) hereof during such period (without duplication), plus (f) Capital Expenditures for such period, plus, (g) (without duplication), cash Income Tax Expense of the Parent, the Borrower and its Subsidiaries with respect to such period.
"GAAP" means generally accepted accounting principles applied on a consistent basis. Application on a consistent basis shall mean that the accounting principles observed in a current period are comparable in all material respects to those applied in a preceding period, except for new developments or statements promulgated by the Financial Accounting Standards Board and other changes in accounting methods permitted by generally accepted accounting principles.
"Guarantors" means the Parent and each Subsidiary of the Borrower existing on the Closing Date or formed or acquired from time to time thereafter.
"Guaranty" means a guaranty executed by any Person of the obligations of another Person, or any agreement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor or such other Person against loss, including, without limitation, any comfort letter, or take-or-pay contract and shall include without limitation, the contingent liability of such Person in connection with any application for a letter of credit.
"Hazardous Materials" means all materials subject to any Environmental Law, including without limitation materials listed in 49 C.F.R. (S) 172.101, Hazardous Substances, explosive or
radioactive materials, hazardous or toxic wastes or substances, petroleum or petroleum distillates, asbestos, or material containing asbestos.
"Hazardous Substances" means hazardous waste as defined in the Clean Water Act, 33 U.S.C. (S) 1251 et seq., the Comprehensive Environmental Response Compensation and Liability Act as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. (S) 9601 et seq., the Resource Conservation Recovery Act, 42 U.S.C. (S) 6901 et seq., and the Toxic Substances Control Act,
15 U.S.C. (S) 2601 et seq. "Highest Lawful Rate" means at the particular time in question the maximum rate of interest which, under Applicable Law, Administrative Agent is then permitted to charge on the Obligations. If the maximum rate of interest which, under Applicable Law, such Lender is permitted to charge on the Obligations shall change after the date hereof, the Highest Lawful Rate shall be automatically increased or decreased, as the case may be, from time to time as of the effective time of each change in the Highest Lawful Rate without notice to the Borrower. For purposes of determining the Highest Lawful Rate under Applicable Law, the applicable rate ceiling shall be (a) the indicated rate ceiling described in and computed in accordance with the provisions of Art. lH; or (b) either the annualized ceiling or quarterly ceiling computed pursuant to .008 of Art. 1D; provided, however, that at any time the indicated rate ceiling, -------- ------- the annualized ceiling or the quarterly ceiling, as applicable, shall be less than 18% per annum or more than 24% per annum, the provisions of Sections .009(a) and .009(b) of said Art. lD shall control for purposes of such determination, as applicable. |
"Income Tax Expense" means the aggregate Taxes accrued by the Parent, the Borrower and its Subsidiaries for the relevant period of determination, plus any cash Distributions made by the Borrower for the purposes of satisfying any Tax liabilities in accordance with Section 8.08 hereof.
"Indenture" means that certain Indenture, dated March 20, 1998, between the Parent and The Bank of New York, as trustee, in connection with the Parent Senior Notes.
"Insufficiency" means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities within the meaning of Section 4001(a)(18) of ERISA.
"Interest Expense" means, for the Parent, the Borrower and its Subsidiaries on a consolidated basis, all interest expense and commitment fees incurred with respect to Total Debt whether accrued or paid, all fees or expenses with respect to letters of credit, bankers' acceptances or similar facilities, excluding interest actually paid-in-kind.
(a) the Borrower may not select any Interest Period that ends after any principal repayment date unless, after giving effect to such selection, the aggregate principal amount of LIBOR Advances having Interest Periods that end on or prior to such
principal repayment date, shall be at least equal to the principal amount of Advances due and payable on and prior to such date;
(c) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.
"Interest Rate Protection Agreement" means an interest rate swap, cap, collar or similar interest rate protection agreement between the Borrower and any Lender or any Bank Affiliate.
"Investment" means any acquisition of all or substantially all of the assets of any Person, or any direct or indirect purchase or other acquisition of, or a beneficial interest in, capital stock or other securities of any other Person, or any direct or indirect loan, advance (other than (i) advances to employees for moving and travel expenses, (ii) drawing accounts, (iii) deposits and advances made to contractors, vendors and others in the ordinary course of business, (iv) earnest money deposits, good faith deposits and similar deposits made in connection with Permitted Acquisitions, and (v) similar expenditures in the ordinary course of business), or capital contribution to or investment in any other Person, including without limitation the incurrence or sufferance of Debt or accounts receivable of any other Person that are not current assets or do not arise from sales to that other Person in the ordinary course of business.
"Law" means any constitution, statute, law, ordinance, regulation, rule, order, writ, injunction, or decree of any Tribunal.
"Lenders" means (a) the lenders listed on the signature pages of this Agreement, and each Eligible Assignee which hereafter becomes a party to this Agreement pursuant to Section 11.04 hereof or pursuant to an amendment to this Agreement or Section 2.18 hereof, for so long as each is owed any portion of the Obligation or is obligated under any portion of the Commitment, and (b) the Canada Lender, for so long as each is owed any portion of the Canada Obligation, and in each case, any Bank Affiliate who is owed any portion of the Obligations.
on the Advances and the Commitment Fee will thereafter be made. Lenders may have more than one Lending Office for the purpose of making Base Advances and LIBOR Advances.
"Letter of Credit Commitment" means an amount equal to the lesser of (a) $40,000,000 and (b) the remainder of the Commitment minus the sum of all outstanding Revolver Advances.
"Letters of Credit" means the irrevocable standby letters of credit issued by Administrative Agent under and pursuant to Article III hereof, and under or pursuant to Article III of the Original Credit Agreement, as each may be amended, modified, substituted, increased, replaced, renewed or extended from time to time.
"LIBOR Advance" means an Advance bearing interest at the LIBOR Rate.
"LIBOR Rate" means a simple per annum interest rate equal to the lesser of
(a) the Highest Lawful Rate, and (b) sum of the Applicable Margin plus the LIBOR
Rate Basis. The LIBOR Rate shall, with respect to LIBOR Advances subject to
reserve or deposit requirements under any Law, be subject to premiums assessed
therefor by each Lender, which are payable directly to each Lender in an amount
sufficient to compensate such Lender for any increased cost or reduced rate of
return attributable to such reserve deposit requirements. Any calculation by a
Lender of such increased cost or reduced rate of return which is in reasonable
detail and submitted to Borrower shall, in the absence of manifest error, be
presumptive evidence of the validity of such claim. Once determined for any
LIBOR Advance, the LIBOR Rate shall remain unchanged during the applicable
Interest Period.
"LIBOR Rate Basis" means, for any LIBOR Advance for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at
"License" means, as to the Parent, the Borrower, or any Subsidiary of the Borrower, any license, permit, consent, certificate of need, authorization, certification, accreditation, franchise, approval, or grant of rights by, or any filing or registration with, any Tribunal or third Person (including without limitation the FCC and the FAA) necessary for such Person to own, build, maintain, or operate its business or Property.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien, or charge of any kind, including without limitation any agreement to give or not to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement or other similar form of public notice under the Laws of any jurisdiction (except for the filing of a financing statement or notice in connection with an (a) operating lease or (b) the true consignment of goods to the Borrower or any Subsidiary of the Borrower as consignee).
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or investigation conducted by or before any Tribunal or arbitrator, including without limitation proceedings, claims, lawsuits, and/or investigations under or pursuant to any environmental, occupational, safety and health, antitrust, unfair competition, securities, Tax, or other Law, or under or pursuant to any contract, agreement, or other instrument.
"Loan" means, as applicable in the context used, the Revolver Loan, the Term Loan A or the Term Loan B, and "Loans" means all or any combination of the Revolver Loan, the Term Loan A and the Term Loan B, as applicable in the context used.
"Loan Papers" means this Agreement, the Notes, the Security Agreements, Borrower Pledge Agreement, the Subsidiary Guaranties, the Parent Guaranty, the Parent Pledge Agreement, the Fee Letters, the Canada Indebtedness Agreements, financing statements, mortgages, deeds of trust, any Interest Rate Protection Agreement and related documents entered into by the Borrower with any Lender or Bank Affiliate, all Letters of Credit, all Applications and all other agreements between the Borrower, the Parent or any Subsidiary of the Borrower and the Administrative Agent related to any Letter of Credit, letter agreements, assignment of leases, other fee letters, Assignment and Acceptances, post-closing letters, and all other documents, instruments, agreements, or certificates executed or delivered from time to time by any Person in connection with this Agreement or as security for the Obligations hereunder, granting Collateral or otherwise, as each such agreement may be amended, modified, substituted, replaced or extended from time to time.
"Majority Lenders" means any combination of Lenders having at least 51.00% of the aggregate amount of the sum of (a) the outstanding Commitment plus (b) the outstanding Term Loan A Advances, plus (c) the outstanding Term Loan B Advances, plus (d) the outstanding Canada Term Loan Advances, provided, however, that if the Commitment has been terminated, then (a) above will be the amount of the outstanding Advances under the Revolver Loan.
"Material Adverse Change" means any circumstance or event that is or would reasonably be expected to (a) be material and adverse to the financial condition, business operations, prospects, or Properties of the Parent, the Borrower and its Subsidiaries on a consolidated basis, (b) materially and adversely affect (i) the validity or enforceability of or (ii) any material Rights of the Administrative Agent or any Lender under (A) any Note, (B) this Agreement or (C) any Loan Paper or Loan Papers which in the aggregate are material, or (c) cause a Default or Event of Default.
"Maximum Amount" means the maximum amount of interest which, under Applicable Law, a Lender is permitted to charge on the Obligations.
"Motorola" means Motorola, Inc., a Delaware corporation.
"Motorola Acquisition" means that certain acquisition by the Borrower of certain tower assets of Motorola in accordance with the Acquisition Agreement.
"Multiemployer Plan" means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions, such plan being maintained pursuant to one or more collective bargaining agreements.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate and at least
one Person other than the Borrower, any Subsidiary of the Borrower, and any
ERISA Affiliate, or (b) was so maintained and in respect of which the Borrower,
any Subsidiary of the Borrower, or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were to
be terminated.
"Net Proceeds" means the gross cash proceeds received by the Parent, the
Borrower or any Subsidiary of the Borrower in connection with or as a result of
(a) any asset sale not in the ordinary course of business, minus (so long as
each of the following are estimated in good faith by the management of the
Borrower and certified to the Lenders in reasonable detail by an Authorized
Officer) (i) distributions to be made, if any, by the Borrower to the Parent and
by the Parent to the Shareholders, each as permitted by Section 8.08 hereof,
plus to the extent the Borrower or such Subsidiary has any actual Tax liability,
actual Taxes payable with respect to such asset sale in an amount equal to the
Tax liability of the Parent, the Borrower or any Subsidiary of the Borrower in
respect of such sale (taking into account the distribution to the Parent and by
the Parent to the Shareholders, and all Tax benefits of each of the parties),
reasonable and customary transaction costs payable by the Parent, the Borrower
or any Subsidiary of the Borrower related to such sale and (iii) Debt secured by
the assets sold that is immediately repaid as a consequence of such sale, and
(b) any additional equity or permitted Debt for Borrowed Money, except such Debt
for Borrowed Money that is specifically permitted to be incurred under the terms
of Section 8.02 hereof, minus (so long as it is estimated in good faith by the
management of the Borrower or such Subsidiary and certified to the Lenders in
reasonable detail by an Authorized Officer), reasonable and customary
transaction costs (including reasonable and customary broker's fees), payable by
the Parent, the Borrower or any Subsidiary of the Borrower related to such
transaction.
"Obligations" means all present and future obligations, indebtedness and liabilities, and all renewals and extensions of all or any part thereof, of the Borrower and each Obligor to Lenders and Administrative Agent arising from, by virtue of, or pursuant to this Agreement, any of the other Loan Papers and any and all renewals and extensions thereof or any part thereof, or future amendments thereto, all interest accruing on all or any part thereof and reasonable attorneys' fees incurred by the Administrative Agent for the preparation of this Agreement and consummation of this credit facility, execution of waivers, amendments and consents, and in connection with the enforcement or the collection of all or any part thereof, and reasonable attorneys' fees incurred by the Lenders in connection with the enforcement or the collection of all or any part of the Obligations during the continuance of an Event of Default, in each case whether such obligations, indebtedness and liabilities are direct, indirect, fixed, contingent, joint, several or joint and several. Without limiting the generality of the foregoing, "Obligations" includes all amounts which would be owed by the Borrower, each other Obligor and any other Person (other than Administrative Agent or Lenders) to Administrative Agent or Lenders under any Loan Paper, but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Borrower, any other Obligor or any other Person (including all such amounts which would become due or would be secured but for the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding of the Borrower, any other Obligor or any other Person under any Debtor Relief Law).
"Obligor" means (a) the Borrower, (b) the Parent, (c) each Subsidiary of the Borrower, (d) each other Person liable for performance of any of the Obligations and (e) each other Person the Property of which secures the performance of any of the Obligations.
"Oral Tenant Leases" means those Tenant Leases which are oral and not subject to any written agreement.
"Original Credit Agreement" has the meaning ascribed thereto in the preamble hereof.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor agency or entity performing substantially the same functions.
"Parent" means Pinnacle Holdings Inc., a Delaware corporation.
"Parent Senior Notes" means those certain 10% Senior Discount Notes due 2008 aggregating $325,000,000.00 amount in face value, unsecured, non cash interest bearing (payment in kind only) for the first five years and issued by the Parent pursuant to the Parent Senior Notes Documentation.
"Parent Senior Notes Documentation" means that certain Indenture and all other written agreements and documentation relating to the Parent Senior Notes in existence on the Closing Date or as permitted to be amended by Section 8.05 hereof.
"Permitted Acquisition" means any acquisition of assets related to the communications tower or rooftop business, including, without limitation, (i) the development, construction or acquisition of towers or rooftop space and related real estate, ground leases, and easements for towers, rooftops, access and/or guy wires, or (ii) acquisitions of 100% of the Capital Stock of any Person owning or leasing towers or rooftop space, or (iii) acquisitions of leasehold rights on Towers for the purpose of subleasing, in each case by the Borrower or any Subsidiary of the Borrower, which, after giving effect to the proposed acquisition and any equity investments and borrowings related thereto, would not cause a Default or Event of Default under Section 8.01(a) or 8.01(b) hereof or any other term or provision of this Agreement and the Loan Papers.
"Permitted Holders" means as of the date of determination (i) Robert Wolsey and his spouse, and any of his respective estates, lineal descendants (including adoptive children), heirs, executors, personal representatives, administrators and trusts for any of their benefit and (ii) any other Person, the majority of which voting stock is directly or indirectly owned by any Person described in clause (i) above.
"Permitted Liens" means, as applied to any Person:
(a) any Lien in favor of the Lenders to secure the Obligations hereunder;
(b) (i) Liens on real estate for real estate Taxes not yet delinquent, (ii) Liens created by lease agreements, statute or common law to secure the payments of rental amounts and other sums not yet due thereunder, (iii) Liens on leasehold interests created by the lessor in favor of any mortgagee of the leased premises, and (iv) Liens for Taxes, assessments, governmental
charges, levies or claims that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on such Person's books, but only so long as no foreclosure, restraint, sale or similar proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and materialmen and other similar Liens incurred in the ordinary course of business for sums not yet due or being contested in good faith, if such reserve or appropriate provision, if any, as shall be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in connection with worker's compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, restrictions and other similar encumbrances on the use of real property which do not interfere with the ordinary conduct of the business of such Person or materially and adversely affect the value of such real property;
(f) Liens in respect of judgments or awards for which appeals or proceedings for review are being prosecuted and in respect of which a stay of execution upon any such appeal or proceeding for review shall have been secured, provided that (i) such Person shall have established adequate reserves for such judgments or awards, (ii) such judgments or awards shall be fully insured and the insurer shall not have denied coverage, or (iii) such judgments or awards shall have been bonded to the satisfaction of the Majority Lenders;
(h) Any Liens which secure the Debt for Borrowed Money permitted under
Section 8.02(e) hereof.
"Person" means an individual, partnership, joint venture, corporation, trust, Tribunal, unincorporated organization, and government, or any department, agency, or political subdivision thereof.
"Pinnacle III" means Pinnacle Towers III Inc., a Florida corporation.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledged Stock" means all of the Capital Stock of the Subsidiaries of the Borrower and all of the Capital Stock of the Borrower.
"Pro Forma Debt Service" means, on any date of determination, for the Parent, the Borrower and its Subsidiaries, the sum of (a) cash Interest Expense plus (b) required or scheduled principal payments with respect to Debt for Borrowed Money, each for the four fiscal quarters immediately succeeding any date of determination, provided that, with respect to any
Debt for Borrowed Money subject to a floating interest rate, the rate of interest on such Debt for Borrowed Money for the four fiscal quarters immediately succeeding any such date of determination shall be deemed to be the weighted average interest rate applicable to the Obligations on the date of calculation of Pro Forma Debt Service.
"Prohibited Transaction" has the meaning specified in Section 4975 of the Code or Section 406 of Title I of ERISA.
"Property" means all types of real, personal, tangible, intangible, or mixed property, whether owned or hereafter acquired in fee simple or leased by the Parent, the Borrower and its Subsidiaries, including for the Borrower and its Subsidiaries without limitation, the Tenant Leases.
"PT Transactions" means the following series of transactions: (a) the issuance and sale by Pinnacle III, and the purchase by the Borrower, of certain Capital Stock in Pinnacle III, (b) the issuance and sale by Pinnacle III, and the purchase by Borrower and certain management and employee shareholders of Parent or Borrower, of certain common Capital Stock in Pinnacle III and (c) the sale by Borrower and the purchase by Pinnacle III of certain rooftop assets acquired by the Borrower in the Motorola Acquisition.
"Qualified REIT Subsidiaries" means the Borrower and any Subsidiary of the Borrower, so long as such entity meets the qualifications set forth in Section 856(i)(2) of the Code.
"Qualified Facility Revolver Advance" means all or any portion of any Revolver Advance borrowed hereunder if, after giving effect to all or such portion of such Advance the aggregate amount of outstanding Qualified Facility Revolver Advances under the Revolver Loan does not exceed $15,000,000.
"Quarterly Date" means the last day of each March, June, September and December during the term of this Agreement.
"Ratable" means, as to any Lender, a determination made in accordance with its Applicable Specified Percentage or Total Specified Percentage, in each case applicable in the context used.
"Refinancing Advance" means any Advance which is (a) used to pay the principal amount (or any portion thereof) of an Advance at the end of its Interest Period, or (b) a conversion of all or any portion of an outstanding Base Advance to a LIBOR Advance, which, in each case after giving effect to such application, does not result in an increase in the aggregate amount of outstanding Advances.
"Register" has the meaning ascribed thereto in Section 11.03 hereof.
"REIT Conversion" means the occurrence of any one of the following events:
(a) the election by the Parent to no longer maintain its REIT Status, (b) the
election by the Borrower or any Subsidiary of the Borrower to no longer maintain
its Qualified REIT Subsidiary status, (c) the occurrence of any event which
results in the Parent no longer having REIT Status, or (d) the occurrence of any
event which results in the Borrower or any Subsidiary of the Borrower no longer
qualifying as a Qualified REIT Subsidiary.
"REIT Status" means, with respect to any Person, such Person's status as a real estate investment trust, as defined in Section 856(a) of the Code, that satisfies the conditions and limitations set forth in Sections 856(b) and 856(c) of the Code.
"Related Fund" means with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is advised or managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.
"Release Date" means the first date on which all of the following have occurred: (a) the Notes have been paid, (b) all other Obligations due and owing have been paid and performed in full, (c) all Letters of Credit have been terminated, fully drawn or extinguished, (d) all Canada Obligations have been paid in full, and (d) the Commitment has been terminated.
"Restricted Payments" means (a) any direct or indirect Distribution, dividend or other payment on account of any equity interest in, or shares of capital stock or other securities of, the Borrower or the Parent (or the establishment of any sinking fund or otherwise the setting aside of any funds with respect thereto); (b) any management, consulting or other similar fees, or any interest thereon, payable by the Parent, the Borrower or any of its Subsidiaries to any Affiliate of the Parent, the Borrower, or to any other Person other than an unrelated third party (or the establishment of any sinking fund or otherwise the setting aside of any funds with respect thereto); and (c) any cash payment of interest, principal, fees or penalties, on any Debt for Borrowed Money or Subordinated Debt, or the establishment of any sinking fund or otherwise the setting aside of any funds with respect thereto.
"Revolver Advances" means Advances made under the Revolver Loan.
"Revolver Loan" means the loan made by a Lender pursuant to Section 2.01(a) of this Agreement.
"Revolver Specified Percentage" means, as to any Lender, the percentage indicated beside its name on the signature pages hereof designated as its Revolver Specified Percentage, or as adjusted or specified (a) in any Assignment and Acceptance, (b) in any amendment to this Agreement or (c) in each case, upon each date of any reduction in the Canada Indebtedness Amount, the Revolver Specified Percentage of each Lender will be adjusted to increase the
Canada Lender's Revolver Specified Percentage and decrease each other Lender's Revolver Specified Percentage, such that, (i) after such adjustments to the Revolver Specified Percentages of the Lenders, the Canada Lender's Revolver Specified Percentage of the Commitment shall be equal to a greater amount than prior to such adjustment (and such amount of increase shall be equal to the amount of decrease in the Canada Indebtedness Amount), and (ii) both before and after such adjustments to the Revolver Specified Percentages of the Lenders, with respect to all Lenders other than the Canada Lender, each such Lenders' Revolver Specified Percentage of the Commitment shall be equal to the same Dollar amount.
"Rights" means rights, remedies, powers, and privileges.
"Second Parent Issuance" has the meaning ascribed thereto in Section 8.02(c)(i) hereof.
"Second Parent Issuance Documentation" means any indenture and all other written agreements and documentation relating to the Second Parent Issuance to be entered into in accordance with the terms of Section 8.02(c) hereof, as such documentation is permitted to be amended by Section 8.05 hereof.
"Senior Debt" means, on any date of determination, the difference between Total Debt and Debt of the Parent included in the definition of Total Debt.
"Shareholder" or "Shareholders" means, on any date of determination, the shareholders of the Parent.
"Single Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, other than a Multiple Employer Plan of the Borrower.
"Solvent" means, with respect to any Person, that on such date (a) the fair
value of the Property of such Person is greater than the total amount of
liabilities, including without limitation Contingent Liabilities of such Person,
(b) the present fair salable value of the assets of such Person on a going
concern basis is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's Property would constitute an unreasonably small capital.
"Special Counsel" means the law firm of Donohoe, Jameson & Carroll, P.C., Dallas, Texas, or such other individual or firm acting as special counsel to Administrative Agent, as designated by Administrative Agent from time to time.
"Subsidiary" of any Person means any corporation, partnership, joint venture, trust or estate of which (or in which) 50% or more of:
(a) the outstanding capital stock having voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership or joint venture, or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person and one or more of its Subsidiaries or by one or more of such Person's Subsidiaries.
"Synthetic Lease" means any lease entered into in connection with the lease or acquisition of fixed assets which is treated under GAAP as an operating lease but for Tax purposes as a capital lease.
"Taxes" means all taxes, assessments, imposts, fees, or other charges at any time imposed by any Laws or Tribunal.
"Tenant Lease Revenue" means, with respect to each Tenant Lease for the most recently completed calendar month, all revenues generated by such Tenant Lease for such month.
"Term Loan A Advance" means the initial advance and any of the Refinancing Advances made under the Term Loan A.
"Term Loan B Advance" means the initial advance and any of the Refinancing Advances made under the Term Loan B.
"Term Loan A" means the term loan made by the Lenders pursuant to Section 2.01(b) of this Agreement.
"Term Loan B" means the term loan made by the Lenders pursuant to Section 2.01(c) of this Agreement.
"Term Loan A Initial Advance" has the meaning set forth in Section 2.01(b) hereof.
"Term Loan B Initial Advance" has the meaning set forth in Section 2.01(c) hereof.
"Term Loan A Specified Percentage" means, as to any Lender, the percentage of the outstanding portion of the Term Loan A held by such Lender on any date of determination, or as adjusted or specified (i) in any Assignment and Acceptance or (ii) in any amendment to this Agreement.
"Term Loan B Specified Percentage" means, as to any Lender, (a) prior to the initial Term Loan B Advance, the percentage indicated beside its name on the signature pages hereof designated as its Term Loan B Specified Percentage, or as adjusted or specified (i) in any Assignment and Acceptance or (ii) in any amendment to this Agreement, and (b) after the initial Term Loan B Advance, the percentage of the outstanding portion of the Term Loan B held by such Lender on any date of determination (after giving effect to assignments in accordance with the terms of Section 11.04 hereof).
"Total Debt" means all Debt for Borrowed Money of the Borrower, the Parent and any Subsidiary of the Borrower which would be shown on a balance sheet in accordance with GAAP, including, without limitation, (a) Capital Lease obligations, (b) obligations to pay the deferred purchase price of property and services (but excluding trade payables that are less than 90 days old and any thereof that are being contested in good faith), (c) Debt of any other Person secured by a Lien on the property of the Borrower and the Parent or any Subsidiary of the Borrower and the Parent, (d) Contingent Liabilities, and (e) Withdrawal Liability.
"Total Specified Percentage" means, as to any Lender on any date of determination, the percentage that the sum of such Lender's outstanding (a) Revolver Advances bears to the aggregate outstanding amount of all Revolver Advances plus (b) Term Loan A Advances, Term Loan B Advances and Canada Term Loan Advances bears to the aggregate outstanding amount of Term Loan A Advances, Term Loan B Advances and Canada Term Loan Advances made by all Lenders hereunder, provided that, if there are no outstanding Revolver Advances hereunder
on any such date, subsection (a) above for any such Lender shall be instead an amount equal to the percentage that the sum of its Revolver Specified Percentage of the Commitment bears to the aggregate Commitments of all Lenders on such date.
"Tower" means each tower owned or managed by the Borrower or any Subsidiary of the Borrower, and each rooftop or other site owned or managed by the Borrower or any Subsidiary of the Borrower in the ordinary course of business.
"Tower Cash Flow" means, with respect to each Tower for the most recently completed calendar month, the remainder of (a) the aggregate amount of all Tenant Lease Revenues generated by all Tenant Leases relating to such Tower for such month, plus (b) the aggregate amount of all Tenant Lease Revenues generated by all newly executed or acquired leases relating to such Tower as if such leases were effective as of the beginning of such calendar month minus (c) Tower level cash operating expenses for such Tower for such month.
"Tribunal" means any state, commonwealth, federal, foreign, territorial, or other court or government body, subdivision, agency, department, commission, board, bureau, or instrumentality of a governmental body.
"Type" refers to the distinction between Advances bearing interest at the Base Rate and LIBOR Rate.
"UCC" means the Uniform Commercial Code as adopted in the State of Texas on the Closing Date.
"Unavailable Commitment" means (a) prior to June 30, 2001, $200,000,000 (as such amount may be reduced from time to time as a result of the reallocation of any portion of the Unavailable Commitment to the Commitment in accordance with the terms of Section 2.18 hereof), and (b) on and after June 30, 2001, $0.00.
"Withdrawal Liability" has the meaning given such term under Part I of Subtitle E of Title IV of ERISA.
1.02. Accounting and Other Terms. All accounting terms used in this Agreement which are not otherwise defined herein shall be construed in accordance with GAAP on a consolidated basis for the Parent, the Borrower and its Subsidiaries, unless otherwise expressly stated herein. References herein to one gender shall be deemed to include all other genders. Except where the context otherwise requires, (a) definitions imparting the singular shall include the plural and vice versa and (b) all references to time are deemed to refer to Dallas time.
ARTICLE II. THE LOAN FACILITIES
2.01. The Loans.01.
(b) Term Loan A. Each Lender severally agrees, on the terms and subject to the conditions hereinafter set forth, to make a Term Loan A available to the Borrower on the Closing Date in an aggregate principal amount equal to such Lender's Term Loan A Specified Percentage of $125,000,000. The Term Loan A must be borrowed in one initial Advance only (the "Term Loan A Initial Advance"), which such Term Loan A Initial Advance must be made on the Closing Date. Once borrowed and repaid, no Term Loan A Advance may be reborrowed.
(c) Term Loan B. Each Lender severally agrees, on the terms and subject to the conditions hereinafter set forth, to make a Term Loan B available to the Borrower on the Closing Date in an aggregate principal amount equal to such Lender's Term Loan B Specified Percentage of $110,000,000. The Term Loan B must be borrowed in one initial Advance only (the "Term Loan B Initial Advance"), which such Term Loan B Initial Advance must be made on the Closing Date. If the Borrower does not borrow the Term Loan B Initial Advance on the Closing Date, the obligations of the Lenders to make the Term Loan B available under this Section 2.01(c) shall terminate. Once borrowed and repaid, no Term Loan B Advance may be reborrowed.
2.02. Making Advances.
(i) the date of such proposed Borrowing, which shall be a Business Day;
(ii) the Type of Advances of which the Borrowing is to be comprised, and whether such Borrowing is a Revolver Advance, a Term Loan A Advance or a Term Loan B Advance (provided that, other than with respect to the Term Loan A Initial
Advance and the Term Loan B Initial Advance, all such borrowings under the Term Loan A and the Term Loan B shall be Refinancing Advances);
(iii) the amount of such proposed Borrowing which, (A) in the case of Advances under the Revolver Loan, shall not exceed the unused portion of the Commitment, in the case of the Term Loan A Initial Advance, shall not exceed the Term Loan A amount of $125,000,000, and in the case of the Term Loan B Initial Advance, shall not exceed the Term Loan B amount of $110,000,000, (B) shall, in the case of a Borrowing of Base Advances, be in an amount of not less than $500,000 or an integral multiple of $50,000 in excess thereof (or any lesser amount if such amount is the remaining undrawn portion under the Commitment) and (C) shall, in the case of a Borrowing of LIBOR Advances, be in an amount of not less than $5,000,000 or an integral multiple of $100,000 in excess thereof; and
(iv) if the Borrowing is to be comprised of LIBOR Advances, the duration of the initial Interest Period applicable to such Advances.
If the Borrowing Notice fails to specify the duration of the initial Interest Period for any Borrowing comprised of LIBOR Advances, such Interest Period shall be three months. Administrative Agent shall promptly notify Lenders of each such notice. Each Lender shall, before 1:00 p.m. on the date of each Advance hereunder (other than a Refinancing Advance), make available to Administrative Agent, at its office at Bank of America Plaza, 901 Main Street, Dallas, Texas 75202, such Lender's Applicable Specified Percentage of the aggregate Advances to be made on that day in immediately available funds.
(b) Unless any applicable condition specified in Article IV has not been satisfied, Administrative Agent will make the funds promptly available to the Borrower (other than with respect to a Refinancing Advance) by wiring such amounts pursuant to any wiring instructions specified by the Borrower to the Administrative Agent in writing.
(c) After giving effect to any Borrowing, (i) there shall not be more than ten different Interest Periods in effect and (ii) the aggregate principal amount of outstanding Revolver Advances shall not exceed the Commitment.
(d) No Interest Period applicable to any Revolver Advance and Term Loan A Advance shall extend beyond the First Maturity Date, and no Interest Period applicable to any Term Loan B Advance shall extend beyond the Final Maturity Date.
(e) Unless a Lender shall have notified Administrative Agent prior to the date of any Advance that it will not make available its Applicable Specified Percentage of any such Advance (that is not a Refinancing Advance), the Administrative Agent may assume that such Lender has made the appropriate amount available in accordance with Section 2.02(a) hereof, and Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If and to the extent any Lender shall not have made such amount available to Administrative Agent, such Lender and the Borrower severally agree to repay to Administrative Agent immediately on demand such corresponding amount together with interest
thereon, from the date such amount is made available to the Borrower until the date such amount is repaid to Administrative Agent, at (i) in the case of the Borrower, the Base Rate, and (ii) in the case of such Lender, the Federal Funds Rate.
(f) The failure by any Lender to make available its Applicable Specified Percentage of any Advance hereunder shall not relieve any other Lender of its obligation, if any, to make available its Applicable Specified Percentage of any Advance. In no event, however, shall any Lender be responsible for the failure of any other Lender to make available any portion of any Advance.
(g) The Borrower shall indemnify each Lender against any Consequential Loss incurred by each Lender as a result of (i) any failure to fulfill, on or before the date specified for the Advance, the conditions to the Advance set forth herein or (ii) the Borrower's requesting that an Advance not be made on the date specified in the Borrowing Notice.
2.03. Evidence of Debt for Borrowed Money.
(b) Administrative Agent's and each Lender's records shall be presumptive evidence as to amounts owed Administrative Agent and such Lender under the Notes and this Agreement. The Borrower shall maintain a Register of each Note and each Person who is owed any principal or interest, and each assignee thereof, in accordance with the terms of Sections 11.03 and 11.04 hereof, but the Borrower shall have no liability or obligation resulting from errors or mistakes in such Register to the extent that the Borrower has not received notice of assignment or transfer in accordance with the terms of Section 11.04 hereof.
2.04. Optional Prepayments.
(b) No prepayments of Revolver Advances made solely pursuant to this
Section 2.04 shall cause the Commitment to be reduced. Prepayments of Term Loan
A Advances and Term Loan B Advances may not be reborrowed. All prepayments made
hereunder shall be allocated in accordance with the terms and conditions of
Section 2.13(f) hereof.
2.05. Mandatory Prepayments.
(a) Excess Cash Flow. Commencing April 30, 2000 and continuing on each April 30 thereafter, the Borrower shall pay to Administrative Agent for the Ratable account of Lenders to repay the Obligations, an amount equal to (i) 50% of Excess Cash Flow for the preceding fiscal year if the Leverage Ratio calculated at the end of the same period is less than 4.00 to 1.00, or (b) 75% of Excess Cash Flow for the preceding fiscal year if the Leverage Ratio calculated at the end of the same period is greater than or equal to 4.00 to 1.00.
(b) Additional Equity and Allowed Debt. To the extent that the Parent, the Borrower or any of its Subsidiaries issues any public or private indebtedness, or equity securities (except equity permitted to be issued by the Parent in Section 8.11 hereof and Debt permitted to be incurred by the Parent under Section 8.02(c) hereof, but only to the extent in each case that such Debt and equity when added together do not exceed $250,000,000 in the aggregate over the term of this Agreement) (this provision shall not in and of itself permit the Borrower to consummate any of the above described transactions), then, unless the Net Proceeds therefrom are used, within 180 days thereafter, for Permitted Acquisitions or for Capital Expenditures relating to Towers, the Borrower and its Subsidiaries shall immediately after the expiration of such 180-day period use the Net Proceeds of any such transaction to repay Advances hereunder. All prepayments made pursuant to this Section 2.05(b) shall be applied to reduce outstanding Advances, and shall reduce the Commitment in accordance with the terms of Section 2.11(c)(ii) hereof (if applied to the Commitment by the terms of Section 2.13(f) hereof). Upon the occurrence of a "Change of Control" as that term is defined in the Indenture, the Borrower will repay all Advances and Obligations hereunder (and the Commitment shall correspondingly reduce to zero in accordance with the terms of Section 2.11(c)(iv) hereof).
(c) Asset Sales. To the extent that the Parent, the Borrower or any of its Subsidiaries consummates any sale of any asset or any of its Properties other than in the ordinary course of business, then unless the Net Proceeds therefrom are used, within 180 days thereafter, for Permitted Acquisitions or for Capital Expenditures relating to Towers, the Borrower and its Subsidiaries shall immediately after the expiration of the 180-day period use the Net Proceeds of any such transaction to repay Advances hereunder. All prepayments made pursuant to this Section 2.05(c) shall be applied to reduce outstanding Advances and, such prepayment shall also reduce the Commitment in accordance with the terms of Section 2.11(c)(iii) hereof (if applied to the Commitment by the terms of Section 2.13(f) hereof).
(d) Outstandings in Excess of the Commitment. To the extent that the outstanding aggregate amount of Revolver Advances at any time exceed the Commitment, the Borrower shall pay to Administrative Agent for the account of Lenders in their Revolver Specified Percentages, such excess amount necessary to reduce the outstanding aggregate Revolver Advances to an amount less than, or equal to, the Commitment.
(e) Mandatory Prepayments, Generally. Unless otherwise directed by the Borrower, any prepayments made pursuant to this Section 2.05 shall be first applied to Base Advances and then to LIBOR Advances, without premium or penalty, except the Borrower must pay together with any such prepayments, any Consequential Losses. Application of all payments and prepayments shall be applied in accordance with the terms of Section 2.13(f) hereof.
2.06. Repayment.
(a) LIBOR Advances. The principal amount of each LIBOR Advance is due and payable on the last day of the applicable Interest Period, which principal payment may be made by means of a Refinancing Advance (subject to the other provisions of this Agreement).
(b) Reduction of Commitment On the date of each reduction of the Commitment pursuant to Section 2.11 hereof, the Borrower shall immediately repay the Obligations in an amount equal to the difference by which the sum of the amount of all Revolver Advances outstanding on the date of reduction exceeds the Commitment, as reduced, which principal payment may not be made by means of a Refinancing Advance.
(c) Maturity Dates. All outstanding Advances under the Revolver Loan and the Term Loan A, and all other Obligations in connection with the Revolver Loan and the Term Loan A, shall be due and payable in full on the First Maturity Date. All outstanding Advances under the Term Loan B, and all other outstanding Obligations, shall be due and payable in full on the Final Maturity Date.
(d) Installment Repayments of Term Loan A and Term Loan B. After June 30, 2001, each of the Term Loan A and Term Loan B shall be repaid by the Borrower on each Quarterly Date, in an amount on each such date equal to the percentage set forth below of the outstanding Term Loan A Advances and the outstanding Term Loan B Advances, respectively, in effect on June 30, 2001, in each case opposite each such Quarterly Date, until each of the Term Loan A and the Term Loan B has been repaid in full. The first such installment repayment shall occur on September 30, 2001, and continue thereafter as follows:
Repayment Percentage is equal to the Outstanding Amount of the Term Loan Date of Installment Repayment A Advances and the outstanding of the Term Loan A and the Term Loan B Advances, respectively, Term Loan B in effect on June 30, 2001 ----------------------------- ------------------------------------- Term Loan A Term Loan B ----------- ----------- September 30, 2001 5.00% 0.50% December 31, 2001 5.00% 0.50% March 31, 2002 3.75% 0.25% June 30, 2002 3.75% 0.25% September 30, 2002 3.75% 0.25% December 31, 2002 3.75% 0.25% March 31, 2003 4.50% 0.25% June 30, 2003 4.50% 0.25% September 30, 2003 4.50% 0.25% December 31, 2003 4.50% 0.25% March 31, 2004 5.50% 0.25% June 30, 2004 5.50% 0.25% September 30, 2004 5.50% 0.25% December 31, 2004 5.50% 0.25% March 31, 2005 6.25% 0.25% June 30, 2005 6.25% 0.25% September 30, 2005 6.25% 0.25% December 31, 2005 6.25% 0.25% 33 |
March 31, 2006 5.00% 0.25% June 30, 2006 5.00% 0.25% September 30, 2006 0.00% 0.25% December 31, 2006 0.00% 0.25% March 31, 2007 0.00% 47.00% June 30, 2007 0.00% 47.00% |
(e) Repayments, Generally. Any repayments made pursuantto this Section 2.06 shall be first applied to Base Advances and then to LIBOR Advances in the order of maturity, without premium or penalty, except the Borrower must pay together with any such prepayments, any Consequential Losses. All repayments shall be allocated among the Loans in accordance with the terms of Section 2.13(f) hereof.
2.07. Interest. Subject to Section 2.08 and Section 11.08 hereof, the Borrower shall pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal shall be paid in full, at the following rates per annum:
(b) LIBOR Advances. LIBOR Advances shall bear interest at the rate per annum equal to the LIBOR Rate applicable to such Advance.
2.08. Default Interest. During the continuation of any Event of Default, the Borrower shall pay, on demand, interest (after as well as before judgment to the extent permitted by Law) on the principal amount of all Advances outstanding and on all other Obligations due and unpaid hereunder at a per annum rate equal to the lesser of the (a) the Highest Lawful Rate and (b) (i) to the extent any such Advance outstanding at such time is bearing interest at the LIBOR Rate, then the applicable LIBOR Rate plus 3.00% to the end of its
Interest Period, and (ii) for all other outstanding Advances, the Base Rate plus 2.00%. LIBOR Advances shall not be available for selection by the Borrower during the continuance of an Event of Default.
2.09. Continuation and Conversion Elections.
(a) The Borrower may upon irrevocable written notice to Administrative Agent and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any portion of outstanding Base Advances (in an aggregate amount not less than $500,000 or an integral multiple of $50,000 in excess thereof) into LIBOR Advances; or
(ii) elect to convert at the end of any Interest Period therefor, all or any portion of outstanding LIBOR Advances comprised in the same Borrowing (in an aggregate amount not less than $5,000,000 or an integral multiple of $100,000 in excess thereof) into Base Advances; or
(iii) elect to continue, at the end of any Interest Period therefor, any LIBOR Advances;
Each such Conversion or Continuation Notice shall be by telecopy or telephone, promptly confirmed by letter, specifying therein:
(i) the proposed date of conversion or continuation and whether such continuation or conversion is a Revolver Advance, a Term Loan A Advance or a Term Loan B Advance (or any combination thereof);
(ii) the aggregate amount of Advances to be converted or continued;
(iii) the nature of the proposed conversion or continuation; and
(iv) the duration of the applicable Interest Period.
(c) If, upon the expiration of any Interest Period applicable to LIBOR Advances, the Borrower shall have failed to select a new Interest Period to be applicable to such LIBOR Advances or if an Event of Default shall then have occurred and be continuing, the Borrower shall be deemed to have elected to convert such LIBOR Advances into Base Advances effective as of the expiration date of such current Interest Period.
(d) Notwithstanding any other provision contained in this Agreement, after giving effect to any conversion or continuation of any Advances, there shall not be outstanding Advances with more than ten different Interest Periods. The Borrower shall indemnify each Lender against any Consequential Loss incurred by each Lender as a result of (i) any failure to fulfill, on or before the date specified for a conversion or continuation of an Advance, the conditions to the Advance set forth herein or (ii) the Borrower's requesting that a conversion or continuation of an Advance not be made on the date specified in the Conversion or Continuation Notice.
2.10. Fees and the Fee Letter.
(a) Facility Fee. Subject to Section 11.08 hereof, the Borrower shall pay to Administrative Agent for the account of each of the Lenders such origination and facility fees as are agreed to in writing by the Borrower, the Administrative Agent and the Lenders, including those set forth in the Fee Letter.
(b) Commitment Fee. Subject to Section 11.08 hereof, the Borrower shall pay to Administrative Agent for the Ratable account of Lenders having Revolver Specified Percentages in excess of zero, a commitment fee on the average daily amount of the sum of (i) the difference between the Commitment and the sum of all Revolver Advances outstanding, plus (ii) until December 31, 1999, the difference between $125,000,000 and the sum of all Term Loan A Advances outstanding, in each case at a per annum rate based on usage equal to the percentage set forth below, applicable in the following circumstances, payable in each case in arrears on each Quarterly Date and on the First Maturity Date, commencing with the first Quarterly Date after the Closing Date, and continuing until the First Maturity Date:
Percentage of Usage of the Revolver Loan and the Term Loan A Commitment Fee Percentage ------------------- ------------------------- If outstanding Revolver Advances and Term Loan A Advances are less than 25% of the Commitment plus $125,000,000 1.25% 36 |
If outstanding Revolver Advances and Term Loan A Advances are greater than 25% of the Commitment plus $125,000,000 but equal to or less than 50% 0.75% If outstanding Revolver Advances and Term Loan A Advances are greater than 50% of the Commitment plus $125,000,000 0.50% |
(c) Other Fees and the Fee Letter. The Borrower shall pay such other fees as are set forth in Article III hereof, in the Fee Letter and in any other Loan Paper, in each case in accordance with the terms of such agreements. The Borrower agrees to perform, over the term of this Agreement, all terms, conditions and agreements of the Fee Letter in accordance with the terms thereof.
2.11. Reduction of Commitment.
(a) Mandatory Termination of the Commitment. The Commitment shall reduce to zero and terminate on the First Maturity Date.
(b) Mandatory Scheduled Reduction of the Commitment. After June 30, 2001, the Commitment shall automatically reduce on each Quarterly Date, in a reduction amount on each such date equal to the percentage set forth below of the Commitment in effect on June 30, 2001, in each case opposite each such Quarterly Date, until the Commitment has been reduced to zero. The first such automatic reduction in the Commitment shall occur on September 30, 2001, and continue thereafter as follows:
Reduction Percentage is equal to the Date of Automatic Reduction Percentage of the Commitment in effect of the Commitment on June 30, 2001, and the Commitment
shall each be reduced to zero Reduction Percentage is equal to the Date of Automatic Reduction Percentage of the Commitment in effect of the Commitment on June 30, 2001 --------------------------- ------------------------------------------- September 30, 2001 5.00% December 31, 2001 5.00% March 31, 2002 3.75% June 30, 2002 3.75% September 30, 2002 3.75% December 31, 2002 3.75% March 31, 2003 4.50% June 30, 2003 4.50% September 30, 2003 4.50% December 31, 2003 4.50% March 31, 2004 5.50% 37 |
June 30, 2004 5.50% September 30, 2004 5.50% December 31, 2004 5.50% March 31, 2005 6.25% June 30, 2005 6.25% September 30, 2005 6.25% December 31, 2005 6.25% March 31, 2006 5.00% June 30, 2006 5.00% |
(c) Reduction of the Commitment. The Commitment shall be permanently reduced from time to time:
(i) on the date of, and by the amount of, each Excess Cash Flow mandatory prepayment required by Section 2.05(a) hereof,
(ii) on the date of, and by the amount of, each mandatory prepayment made from the issuance of equity or debt, in each case only as required to be prepaid by Section 2.05(b) hereof,
(iii) on the date of, and by the amount of, each mandatory prepayment made
from the sale of assets, in each case only as required to be prepaid by
Section 2.05(c) hereof, and
(iv) on the date of any occurrence of a "Change of Control" as that term is defined in the Indenture, the Commitment will automatically be reduced to zero and terminate.
No reduction in the Commitment set forth in 2.11(c) above shall reduce or relieve the automatic scheduled reduction of the Commitment required by Section 2.11(b) above.
(e) Commitment Reductions, Generally. No prepayment under Section 2.04 hereof, required prepayment under Section 2.05 hereof or commitment reductions under Sections 2.11(c) and (d) above shall reduce or relieve the scheduled reduction required by Section 2.11(b) above. To the extent the outstanding Revolver Advances exceed the Commitment after any reduction thereof, the Borrower shall repay, on the date of such reduction, any such excess amount and all accrued interest thereon, the applicable Commitment Fee on the amount of such reduction and all amounts due. Once reduced or terminated, the Commitment may not be increased or reinstated,
except in accordance with Section 2.18 hereof. Application of all reductions in the Commitment shall be in accordance with the terms of Section 2.13(f) hereof.
The Borrower agrees that each Lender is not obligated to actually reinvest the amount prepaid in any specific obligation as a condition to receiving any Consequential Loss, or otherwise.
2.13. Computations and Manner of Payments.
(a) The Borrower shall make each payment hereunder and under the other
Loan Papers not later than 1:00 p.m. on the day when due in same day funds to
Administrative Agent, for the Ratable account of Lenders unless otherwise
specifically provided herein, at Administrative Agent's office at Bank of
America Plaza, 901 Main Street, Dallas, Texas 75202, for further credit to the
account of Pinnacle Towers Inc. No later than the end of each day when each
payment hereunder is made, the Borrower shall notify Judy Schneidmiller, at
(214) 209-2135, or such other Person as Administrative Agent may from time to
time specify.
(b) Unless Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due hereunder that the Borrower will not make payment in full, Administrative Agent may assume that such payment is so made on such date and may, in reliance upon such assumption, make distributions to Lenders. If and to the extent the Borrower shall not have made such payment in full, each Lender shall repay to Administrative Agent forthwith on demand the applicable amount distributed, together with interest thereon at the Federal Funds Rate, from the date of distribution until the date of repayment. The Borrower hereby authorizes each Lender, if and to the extent payment is not made when due hereunder, to charge the amount so due against any account of the Borrower with such Lender.
(c) Subject to Section 11.08 hereof, interest on LIBOR Advances under the Loan Papers shall be calculated on the basis of actual days elapsed but computed as if each year consisted of 360 days. Subject to Section 11.08 hereof, interest on Base Advances, the Commitment Fee, and other amounts due under the Loan Papers shall be calculated on the basis of actual days elapsed but computed as if each year consisted of 365 or 366 days, as applicable. Such computations shall be made including the first day but excluding the last day occurring in the period for which such interest, payment or Commitment Fee is payable. Each determination by Administrative Agent or a Lender of an interest rate, fee or commission hereunder shall be
presumptive evidence of the validity of such claim. All payments under the Loan Papers shall be made in United States dollars, and without setoff, counterclaim, or other defense.
(e) Reference to any particular index or reference rate for determining any applicable interest rate under this Agreement is for purposes of calculating the interest due and is not intended as and shall not be construed as requiring any Lender to actually obtain funds for any Advance at any particular index or reference rate.
(f) Notwithstanding anything to the contrary herein or in any Loan Paper, to the extent the Borrower makes any voluntary prepayment, or voluntary reduction of the Commitment under Sections 2.04 or 2.11 hereof, or any mandatory prepayment, or mandatory reduction of the Commitment under Sections 2.05 and 2.11 hereof, then such reduction of the Commitment or such prepayment shall be applied as follows:
(i) so long as there exists no Default or Event of Default, all voluntary Commitment reductions and all voluntary repayments and prepayments shall be applied as directed by the Borrower, and in the absence of direction by the Borrower, shall be deemed to prepay and reduce, respectively (1) the Commitment and the Revolver Loan, until the Commitment has been reduced to zero and the outstandings under the Revolver Loan have been repaid in full, then (2) the Term Loan A and the Term Loan B, pro rata, until all outstanding Term Loan A Advances and Term Loan B Advances have been repaid in full and (3) to all remaining outstanding and unpaid Obligations; provided that, so long as there exists no Default or Event of Default, each Lender having a Term Loan B Specified Percentage in excess of zero may elect to decline all voluntary prepayments made or allocated to Term Loan B in accordance with the terms of this Agreement, in which case such declined prepayments shall be allocated to the Revolver Loan and the Term Loan A pro rata;
(ii) so long as there exists no Default or Event of Default, all mandatory Commitment reductions and all mandatory repayments and prepayments shall be applied pro rata among the Revolver Loan, the Term Loan A and the Term Loan B, and then to all remaining outstanding Obligations; provided that, so long as there exists no Default or Event of Default, each Lender having a Term Loan B Specified Percentage in excess of zero may elect to decline all mandatory prepayments made or allocated to Term Loan B in accordance with the terms of this Agreement, in which case such declined prepayments shall be allocated to the Revolver Loan and the Term Loan A pro rata;
(iii) if there exists a Default or Event of Default, all mandatory and voluntary Commitment reductions and mandatory and voluntary repayments and prepayments shall
be applied pro rata among the Revolver Loan, the Term Loan A and the Term Loan B, and then to all remaining outstanding Obligations; and
(iv) all Term Loan A and Term Loan B repayments and prepayments shall be applied to installments due thereunder in the inverse order of maturity, and all repayments and prepayments, and reductions to the Commitment shall not affect the mandatory commitment reduction schedule set forth in Section 2.11(b) hereof.
2.14. Yield Protection; Changed Circumstances.
(b) If, after the date hereof, any Tribunal, central bank or other comparable authority, at any time imposes, modifies or deems applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the amount of, or credit extended by, any Lender, or imposes on any Lender any other condition affecting a LIBOR Advance, the Notes, or its obligation to make a LIBOR Advance, or imposes on any Lender any other condition affecting a Letter of Credit; and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining its Letter of Credit, LIBOR Advances, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or under the
(c) Notwithstanding any other provision of this Agreement, if the introduction of or any change in or in the interpretation or administration of any Law shall make it unlawful, or any central bank or other Tribunal shall assert that it is unlawful, for a Lender to perform its obligations hereunder to issue or maintain Letters of Credit, make LIBOR Advances or to continue to fund or maintain LIBOR Advances hereunder, then, on notice thereof and demand therefor by such Lender to the Borrower, (i) each LIBOR Advance will automatically, upon such demand, convert into a Base Advance, (ii) the obligation of such Lender to make, or to convert Advances into, LIBOR Advances shall be suspended until such Lender notifies Administrative Agent and the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist, and (iii) the obligation of such Lender to make or maintain Letters of Credit shall be suspended until such Lender notifies Administrative Agent and the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default or Event of Default, (i) each LIBOR Advance will automatically, on the last day of the then existing Interest Period therefor, convert into a Base Advance and (ii) the obligation of each Lender to make, or to convert Advances into, LIBOR Advances shall be suspended.
(e) If any Lender notifies Administrative Agent that the LIBOR Rate for any Interest Period for any LIBOR Advances will not adequately reflect the cost to such Lender of making, funding or maintaining LIBOR Advances for such Interest Period, Administrative Agent shall promptly so notify the Borrower, whereupon (i) each such LIBOR Advance will automatically, on the last day of the then existing Interest Period therefor, convert into a Base Advance and (ii) the obligation of such Lender to make, or to convert Advances into, LIBOR Advances shall be
suspended until such Lender notifies Administrative Agent that such Lender has determined that the circumstances causing such suspension no longer exist and Administrative Agent notifies the Borrower of such fact.
(f) Failure on the part of any Lender to demand compensation for any increased costs, increased capital or reduction in amounts received or receivable or reduction in return on capital pursuant to this Section 2.14 with respect to any period shall not constitute a waiver of any Lender's right to demand compensation with respect to such period or any other period, subject, however, to the limitations set forth in this Section 2.14.
(g) The obligations of the Borrower under this Section 2.14 shall survive any termination of this Agreement, provided that, in no event shall the Borrower be required to make a payment under this Section 2.14 with respect to any event of which the Lender making such claim had knowledge more than twelve months prior to demand for such payment.
(h) Determinations by Lenders for purposes of this Section 2.14 shall be presumptively correct. Any certificate delivered to the Borrower by a Lender pursuant to this Section 2.14 shall include in reasonable detail the basis for such Lender's demand for additional compensation and a certification that the claim for compensation is consistent with such Lender's treatment of similar customers having similar provisions generally in their agreements with such Lender.
(i) Notwithstanding any other provision of this Agreement, no Lender not organized under the Laws of the United States or any State (or which has a Bank Affiliate not organized under the Laws of the United States or any State) shall be entitled to compensation pursuant to this Section 2.14 with respect to any amount which would otherwise be due under this Section 2.14 but which is the result of an act of a Tribunal of the country in which such Lender or Bank Affiliate is organized.
2.15. Use of Proceeds. The proceeds of all Revolver Advances borrowed hereunder shall be solely used in connection with the acquisition of assets in accordance with the terms of Section 1008(v) of the Indenture, such that all Revolver Advances constitute in each case, Acquisition Debt or"Purchase Money Secured Debt" (as defined in the Indenture) in accordance with the terms of the Indenture, the other Parent Senior Notes Documentation and permitted fully secured indebtedness under all Second Parent Issuance Documentation. The proceeds of the initial Term Loan B Advance and all Term Loan A Advances shall be available (and the Borrower shall use such proceeds) solely (i) with respect to the initial Term Loan B Advance and any Term Loan A Advance made on the Closing Date only, to refinance existing indebtedness of the Borrower, (ii) for Permitted Acquisitions, (iii) for Capital Expenditures permitted under the terms of this Agreement, (iv) for working capital and (v) for other lawful corporate purposes. Notwithstanding the preceding sentences of this Section 2.15, any Revolver Advance that constitutes a Qualified Facility Revolver Advance shall be available (and the Borrower shall use such proceeds) solely (i) for Permitted Acquisitions, (ii) for Capital Expenditures permitted under the terms of this Agreement, (iii) for working capital and (iv) for other lawful corporate purposes.
2.16. Collateral and Collateral Call.
foregoing, in no event shall the Borrower be obligated to grant, or perfect, any new leasehold mortgage or leasehold deed of trust.
2.17. Replacement of a Lender. If any Lender has requested compensation or
reimbursement in accordance with the terms of Section 2.14 hereof or in
accordance with the terms of Section 11.07 hereof and (a) such request is not
the result of any uniform changes in the statutes or regulations for capital
adequacy, (b) there exists no Default or Event of Default hereunder, and (c) the
Borrower and such Lender are unable to reach a written agreement regarding such
request within 30 days following written notice by such Lender to the Borrower
and the Administrative Agent of such request, then after the expiration of 30
days following the delivery of the notice under Section 2.14 or Section 11.07
hereof, the Borrower may replace such Lender in whole with another Eligible
Assignee reasonably acceptable to Administrative Agent pursuant to an Assignment
and Acceptance and in accordance with Section 11.04 hereof. Until such time as
any Lender is replaced by the Borrower, the Borrower shall reimburse or
compensate such Lender in accordance with the terms of Section 2.14 hereof and
Section 11.07 hereof.
2.18. Conditions Precedent to the Increase of the Commitment.
Prior to June 30, 2001, upon written request by the Borrower to the Administrative Agent and any other existing Lender of its choice (and not all Lenders) not less than ten Business Days prior to the proposed effective date of the proposed increase (or, in the case of each proposed lender, such lesser notice as any proposed lender is willing to accept), the Commitment shall, subject to the further terms and conditions set forth below, increase to a maximum of $435,000,000 in the manner set forth below:
(a) On any date of proposed increase, the representations and warranties contained in Article V hereof are true and correct on such date, as though made on and as of such date, except to the extent expressly made only as of a prior date; and
(b) On any date of proposed increase, no Default or Event of Default shall exist on any such date, and no Default or Event of Default would result from the such increase in the Commitment and the subsequent Revolver Advance to the Borrower up to the amount of the Commitment; and
(c) On any date of proposed increase, there shall have occurred no Material Adverse Change since December 31, 1998; and
(d) On any date of proposed increase, the sum of all Revolver Advances outstanding (after giving effect to any proposed Revolver Advance to be made on such date) shall not exceed the Commitment; and
(e) The proposed increase shall occur prior to June 30, 2001 and the Commitment as increased shall not be in excess of the sum of the Commitment prior to such increase plus the Unavailable Commitment prior to such increase; and
(f) Upon satisfaction of each of the conditions precedent in this
Section 2.18, the Borrower shall be entitled to increase the Commitment not
more than five times, in an aggregate amount for such increases not to
exceed the Unavailable Commitment . Each Lender specified by the Borrower
shall have received not less than 5 Business Days' prior written notice
from the Borrower requesting such Commitment increase. Each such Lender
electing to participate in such Commitment increase shall commit to an
amount not less than $5,000,000, but shall accept any allocation amount
designated by the Borrower and the Administrative Agent that is equal to or
less than its proposed portion of the Commitment increase; and
(g) Notwithstanding anything herein or in any other Loan Paper to the contrary, (i) the Borrower is not obligated to notify each Lender of, or to allocate to any existing Lender any portion of, the proposed increase, and the Borrower and the Administrative Agent may agree to add other creditors in connection with any such proposed increase. Each existing Lender agrees and acknowledges that new creditors may be allocated all or any portion of the proposed increase upon the determination of the Borrower and the Administrative Agent; and
(h) Each of the proposed increases shall be in an aggregate minimum amount of $10,000,000 and $5,000,000 multiples thereof; and
(i) The Administrative Agent shall have received a certificate from the Borrower to the effect that (i) such increase has received all required regulatory approvals, if necessary, and is in compliance with all applicable Laws, and (ii) no other approvals or consents from any Person are required by any such Person except to the extent they have been received; and
(j) Each new Lender (including any new Lenders party hereto) shall have received a promissory Note evidencing its new Revolver Specified Percentage of the Commitment, and the Borrower and each new Lender agrees to execute any and all such documents deemed necessary by the Administrative Agent in order to effectuate this Section 2.18 (whether UCC- 1s, new documentation relating to any Collateral, Guaranty or otherwise); and
(k) On the date of increase, the Administrative Agent shall deliver to each Lender evidence of new Revolver Specified Percentages adjusted to give effect to the increase in the Commitment; and
(l) On or prior to the date of increase, each new lender being added to the credit facility shall deliver to the Borrower and the Administrative Agent documentation acceptable to the Administrative Agent evidencing such new Lender's acceptance of this Agreement and all the other Loan Papers in form and substance reasonably acceptable to the Administrative Agent (and making such lender a party to this Agreement and the other Loan Papers); and
(m) The Administrative Agent shall have received a pro-forma Compliance Certificate in form and substance acceptable to the Lenders and demonstrating compliance with the terms of this Agreement and the Loan Papers for one full year after the date of such proposed increase; and
(n) The Administrative Agent shall have received financial projections in form and substance acceptable to the Lenders and demonstrating compliance with the financial covenants set forth in Section 8.01 hereof throughout the term of this Agreement; and
(o) The Commitment shall (i) never exceed the sum of the Commitment
plus the Unavailable Commitment, as each is reduced in accordance with
Section 2.11 hereof, this Section 2.18 and the other terms of this
Agreement, and (ii) never increase except to the extent, and not to exceed
such amount, that the Unavailable Commitment is in excess of zero; and
(p) The Unavailable Commitment shall be reduced in accordance with this Section 2.18 dollar for dollar for each increase in the Commitment; and
(q) The Administrative Agent on behalf of each Lender shall have received all amendments to security agreements, deeds of trust and mortgages as the Administrative Agent shall deem necessary to maintain its valid and perfected Lien.
No Lender shall be obligated to increase the dollar amount of its share of the Commitment without its written consent in its sole discretion. In connection with any increase to the Commitment in accordance with the terms of this Section 2.18, each existing Lender (regardless of whether such Lender is participating in such increase) agrees to execute any and all agreements requested by the Administrative Agent to effectuate the intent of this Section 2.18. Notwithstanding anything contained herein to the contrary, the limitations placed upon assignments set forth in Section 11.04 hereof shall not apply to proposed increases pursuant to this Section.
ARTICLE III. LETTERS OF CREDIT
3.02. Letters of Credit Fee. In consideration for the issuance of each Letter of Credit, the Borrower shall pay to (a) the Administrative Agent for its own account, an application and processing fee in the amount of (i) $350.00 on each Letter of Credit, due and payable on the date of issuance of each Letter of Credit and (ii) the product of 1/8 of 1 percent multiplied by the face amount of each such Letter of Credit, plus and (b) the Administrative Agent for the account of the Administrative Agent and the Lenders in accordance with their Revolver Specified Percentages, a per annum fee for each Letter of Credit equal to the product of the Applicable Margin for LIBOR Advances on the date of issuance multiplied by the
face amount of each such Letter of Credit. Each fee for each Letter of Credit under subsections (a)(i) and (b) above shall be due and payable to the Administrative Agent quarterly as it accrues on each Quarterly Date during the term of the Letter of Credit and on the expiration or renewal and/or extension of each such Letter of Credit, beginning with the first such Quarterly Date after the issuance of each Letter of Credit and continuing through the expiry date of each such Letter of Credit, or the renewal and/or extension of each such Letter of Credit.
3.03. Reimbursement Obligations.
(a) The Borrower hereby absolutely, unconditionally and irrevocably agrees to reimburse Administrative Agent immediately upon demand by Administrative Agent, and in immediately available funds, for any payment or disbursement made by Administrative Agent under any Letter of Credit. The obligations of the Borrower under this Agreement, any Letter of Credit and any Application to reimburse the Administrative Agent for a drawing under a Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the term of this Agreement and each Application under all circumstances, including the following:
(i) any lack of validity of enforceability of this Agreement or any Application;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of the provisions of this Agreement or any Application;
(iii) the existence of any claim, set-off, defense or other right that the Borrower or any Subsidiary of the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Administrative Agent or any other Person, whether in connection with this Agreement, the transactions contemplated hereby, any Application, any underlying transaction or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit;
(v) any payment by the Administrative Agent under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Administrative Agent under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any proceeding arising in connection with any Debtor Relief Laws;
(vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the obligations of the Borrower in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor.
(b) The Borrower hereby also agrees to pay to Administrative Agent immediately upon demand by Administrative Agent and in immediately available funds, as security for their reimbursement obligations in respect of the Letters of Credit under Section 3.03(a) hereof and any other amounts payable hereunder and under the Notes, an amount equal to the aggregate amount available to be drawn under Letters of Credit then outstanding, irrespective of whether the Letters of Credit have been drawn upon, upon an Event of Default. Any such payments shall be deposited in a separate account designated "Pinnacle Special Account" or such other designation as Administrative Agent shall elect. All such amounts deposited with Administrative Agent shall be and shall remain funds of the Borrower on deposit with Administrative Agent and may be invested by Administrative Agent as Administrative Agent shall determine. Such amounts may not be used by Administrative Agent to pay the drawings under the Letters of Credit; however, such amounts may be used by Administrative Agent as reimbursement for Letter of Credit drawings which Administrative Agent has paid. If any amounts in the Pinnacle Special Account shall have been deposited upon the occurrence of an Event of Default only and such Event of Default shall have been subsequently cured or waived and no other Event of Default exists, the Borrower shall be relieved of its obligations under this Section 3.03(b) until an Event of Default once again occurs. During the existence of an Event of Default but after the expiration of any Letter of Credit that was not drawn upon, the Borrower may direct the Administrative Agent to use any cash collateral for any such expired Letter of Credit, if any, to reduce the amount of the Obligations. Any amounts remaining in the Pinnacle Special Account, after the date of the expiration of all Letters of Credit and after all Obligations have been paid in full, shall be repaid to the Borrower promptly after such expiration and such payment in full.
(c) The obligations of the Borrower under this Section 3.03 will continue until all Letters of Credit have expired and all reimbursement obligations with respect thereto have been paid in full by the Borrower and until all other Obligations shall have been paid in full.
(d) The Borrower shall be obligated to reimburse Administrative Agent upon demand for all amounts paid under the Letters of Credit as set forth in Section 3.03(a) hereof; provided, however, if the Borrower for any reason fails to reimburse Administrative Agent in full upon demand, whether by borrowing Advances to pay such reimbursement obligations or otherwise, the Lenders shall reimburse Administrative Agent in accordance with each Lender's Revolver Specified Percentage for amounts due under this Article III and unpaid from the Borrower as set forth in Section 3.04 hereof; provided, however, that no such reimbursement made by the Lenders shall discharge the Borrower's obligations to reimburse Administrative Agent.
(e) The Borrower shall indemnify and hold Administrative Agent and each Lender, its officers, directors, representatives and employees harmless from loss for any claim, demand or liability which may be asserted against Administrative Agent or such indemnified party in connection with actions taken under the Letters of Credit or in connection therewith (including losses resulting from the negligence of Administrative Agent or such indemnified party), and shall pay Administrative Agent for reasonable fees of attorneys (who may be employees of Administrative Agent) and legal costs paid or incurred by Administrative Agent in connection with any matter related to the Letters of Credit, except for losses and liabilities incurred as a direct result of the gross negligence or wilful misconduct of Administrative Agent or such indemnified party, as finally determined by a court of competent jurisdiction. If the Borrower for any reason fails to indemnify or pay Administrative Agent or such indemnified party as set forth herein in full, the Lenders shall indemnify and pay Administrative Agent upon demand, in accordance with each Lender's Revolver Specified Percentage of such amounts due and unpaid from the Borrower. The provisions of this Section 3.03(e) shall survive the termination of this Agreement.
3.04. Lenders' Obligations. Each Lender agrees, unconditionally and irrevocably to reimburse Administrative Agent (to the extent Administrative Agent is not otherwise reimbursed by the Borrower in accordance with Section 3.03(a) hereof) on demand for such Lender's Revolver Specified Percentage of each draw paid by Administrative Agent under any Letter of Credit. All amounts payable by any Lender under this subsection shall include interest thereon at the Federal Funds Rate, from the date of the applicable draw to the date of reimbursement by such Lender. No Lender shall be liable for the performance or nonperformance of the obligations of any other Lender under this Section. The obligations of the Lenders under this Section with respect to Letters of Credit issued in accordance with the terms of this Agreement shall continue after the First Maturity Date and shall survive the termination of any Loan Papers, but only to the extent that any such Lender has not reimbursed the Administrative Agent prior to such date in accordance with the terms hereof.
3.05. Administrative Agent's Obligations.
(a) Administrative Agent makes no representation or warranty, and assumes no responsibility with respect to the validity, legality, sufficiency or enforceability of any Application or any document relative thereto or to the collectibility thereunder. Administrative Agent assumes no responsibility for the financial condition of the Borrower and its Subsidiaries or for the performance of any obligation of the Borrower. Administrative Agent may use its discretion with respect to exercising or refraining from exercising any rights, or taking or refraining from taking any action which may be vested in it or which it may be entitled to take or assert with respect to any Letter of Credit or any Application.
(b) Except as set forth in subsection (c) below, Administrative Agent shall be under no liability to any Lender, with respect to anything the Administrative Agent may do or refrain from doing in the exercise of its judgment, the sole liability and responsibility of Administrative Agent being to handle each Lender's share on as favorable a basis as Administrative Agent handles its own share and to promptly remit to each Lender its share of any sums received by Administrative Agent under any Application. Administrative Agent shall have no duties or responsibilities except those expressly set forth herein and those duties and liabilities shall be subject to the limitations and qualifications set forth herein.
(c) Neither Administrative Agent nor any of its directors, officers, or employees shall be liable for any action taken or omitted (whether or not such action taken or omitted is expressly set forth herein) under or in connection herewith or any other instrument or document in connection herewith, except for gross negligence or willful misconduct, and no Lender waives its right to institute legal action against Administrative Agent for wrongful payment of any Letter of Credit due to Administrative Agent's gross negligence or willful misconduct. Administrative Agent shall incur no liability to any Lender, the Borrower or any Affiliate of the Borrower or Lender in acting upon any notice, document, order, consent, certificate, warrant or other instrument reasonably believed by Administrative Agent to be genuine or authentic and to be signed by the proper party.
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to Closing, Effectiveness of this Agreement and
the Refunding Advance. The effectiveness of this Agreement and the obligation of
the Lenders to make the initial refunding Advance to refinance the existing
indebtedness, or issue the first Letter of Credit, is subject to receipt by the
Administrative Agent of each of the following, in form and substance
satisfactory to the Administrative Agent (and, in the case of subparagraphs (b),
(c) and (i) below, each Lender), with a copy (except for the Notes) for each
Lender:
(a) A loan certificate of the Borrower, the Parent and each Subsidiary of the Borrower certifying as to the accuracy of their representations and warranties in the Loan Papers, certifying that no Default has occurred, and including a certificate of incumbency with respect to each Authorized Officer, and including (i) a copy of the Articles of Incorporation of the Borrower, the
Parent and each Subsidiary of the Borrower, certified to be true, complete and correct by the secretary of state of its state of incorporation, (ii) a copy of the By-Laws of the Borrower, the Parent and each Subsidiary of the Borrower, as in effect on the Closing Date, (iii) a copy of the resolutions of the Borrower, the Parent and each Subsidiary of the Borrower authorizing them to execute, deliver and perform this Agreement, the Notes and the other Loan Papers to which each of them is a party, and (iv) a copy of a certificate of good standing and a certificate of existence for the Borrower's, the Parent's, and each of the Borrower's Subsidiaries' state of incorporation and each state in which they are conducting material business;
(b) duly executed Notes, payable to the order of each Lender in an amount
for each Lender (i) equal to its Revolver Specified Percentage of $235,000,000,
(ii) equal to its Term Loan A Specified Percentage of $125,000,000 and (iii)
equal to its Term Loan B Specified Percentage of $110,000,000;
(d) copies of all financing statements filed against the Borrower, the Parent and each Subsidiary of the Borrower, as debtor;
(e) opinions of counsel to the Borrower, the Parent and each Subsidiary of the Borrower addressed to the Lenders and in form and substance satisfactory to the Lenders, dated the Closing Date, including, without limitation, an opinion of counsel to the Borrower that this Agreement does not violate or conflict with any term or condition of the Indenture of any of the other Parent Senior Notes Documentation;
(f) copies of insurance binders or certificates covering the assets of the Borrower, the Parent and the Subsidiaries of the Borrower, and meeting the requirements of Section 6.05 hereof;
(g) payment of all fees due to the Administrative Agent in accordance with the terms of the Fee Letter to be paid on the Closing Date and reimbursement for Administrative Agent of its reasonable fees and expenses and for Special Counsel's reasonable fees and expenses rendered through the date hereof and receipt by each Lender of its upfront fees;
(h) evidence that all corporate proceedings of the Borrower, the Parent and the Subsidiaries of the Borrower taken in connection with the transactions contemplated by this Agreement and the other Loan Papers shall be reasonably satisfactory in form and substance to the Lenders and Special Counsel; and the Lenders shall have received copies of all documents or
other evidence which the Administrative Agent, Special Counsel or any Lender may reasonably request in connection with such transactions;
(i) copies of the following audited financial statements for the Borrower (and as applicable, the Parent), as of and for the period ended December 31, 1998; (i) balance sheets of the Borrower, the Parent and the Subsidiaries of the Borrower as of the end of such period, and (ii) statements of income and changes in cash for such period; all in reasonable detail and certified by an Authorized Officer to the best of his knowledge to present fairly in all material respects the consolidated financial position of the Borrower and the results of operations for the period then ended and, except as noted therein, to be in accordance with GAAP (other than footnotes thereto);
(j) a duly completed Compliance Certificate evidencing no Default or Event of Default as of the Closing Date;
(k) the Parent, the Borrower and each Subsidiary of the Borrower shall have provided the Administrative Agent with all information, documentation, agreements, etc. in order for the Administrative Agent to have a Lien in all cash of the Parent, the Borrower and each Subsidiary of the Borrower from time to time on hand in excess of $10,000,000; and
(l) in form and substance satisfactory to the Lenders and Special Counsel, such other documents, instruments and certificates as the Administrative Agent or any Lender may reasonably require in connection with the transactions contemplated hereby, including without limitation the status, organization or authority of the Borrower, the Parent and the Subsidiaries of the Borrower, and the enforceability of and security for the Obligations.
4.02. Conditions Precedent to All Advances and Letters of Credit. The obligation of each Lender to make each Advance hereunder and the obligation of the Administrative Agent to issue any Letter of Credit shall be subject to the further conditions precedent that on the date of such Advance or such issuance of such Letter of Credit:
(a) All of the representations and warranties of the Borrower under this Agreement shall be true and correct at such time in all material respects, both before and after giving effect to the application of the proceeds of the Advance or the issuance of the Letter of Credit, except those representations and warranties that specifically speak as of a particular date;
(b) The incumbency of the Authorized Officers shall be as stated in the certificate of incumbency delivered in the Borrower's loan certificate pursuant to Section 4.01(a) or as subsequently modified and reflected in a certificate of incumbency delivered to the Administrative Agent. The Lenders may, without waiving this condition, consider it fulfilled and a representation by the Borrower made to such effect if no written notice to the contrary, dated on or before the date of such Advance or the issuance of such Letter of Credit, is received by the Administrative Agent from the Borrower prior to the making of such Advance or such Letter of Credit;
(c) There shall not exist a Default hereunder or an Event of Default hereunder and none shall exist as a result of making any such Advance or such Letter of Credit, and the Administrative Agent shall have received written or telephonic certification thereof by an Authorized Officer (which certification, if telephonic, shall be followed promptly by written certification);
(d) There shall have occurred no Material Adverse Change since December 31, 1998;
(e) In the case of each Letter of Credit, Borrower shall have delivered to the Administrative Agent a duly executed and complete Application acceptable to Administrative Agent;
(f) In the case of any Advance under the Revolver Loan, the aggregate outstanding Revolver Advances, after giving effect to any such proposed Revolver Advance, shall not exceed the Commitment; and
(g) In the case of each and every Advance under the Loan, the Borrower, by
making its borrowing request hereunder, or requesting the issuance of any Letter
of Credit, will provide a certificate to the Administrative Agent containing (i)
a representation and warranty to the Administrative Agent and each Lender that
the proceeds of such Advance shall be used in accordance with the terms of
Section 2.15 hereof, and (ii) a representation and calculation that with respect
to each Revolver Advance that is not a Qualified Facility Revolver Advance, such
Advance will constitute Acquisition Debt in accordance with the terms of the
Indenture and that such acquisition is a nonleveraging event, in accordance
with the terms of the Indenture, the Parent Senior Notes Documentation (with
supporting calculations in reasonable detail acceptable to the Administrative
Agent with respect thereto).
4.03. Conditions Precedent to Advances for Permitted Acquisitions. The obligation of each Lender to make each Advance (including the initial Advance) where any proceeds of such Advance will be used for a Permitted Acquisition, shall be subject to the further conditions precedent that the Borrower has complied with all terms and provisions of Sections 6.15 and 6.16 hereof.1
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties. The Borrower hereby represents and warrants to each Lender as follows:
(b) The Borrower has corporate power and has taken all necessary corporate action to authorize it to borrow hereunder. Each of the Parent, the Borrower and its Subsidiaries has corporate power and has taken all necessary corporate action to execute, deliver and perform the Loan Papers to which it is party in accordance with the terms thereof, and to consummate the transactions contemplated thereby. Each Loan Paper has been duly executed and delivered by the Parent, the Borrower or such Subsidiary executing it. Each of the Loan Papers to which the Parent, the Borrower, and its Subsidiaries are party is a legal, valid and binding respective obligation of the Parent, the Borrower or such Subsidiary, as applicable, enforceable in accordance with its terms, subject, to enforcement of remedies, to the following qualifications: (i) equitable principles generally, and (ii) bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Parent, the Borrower or any Subsidiary of the Borrower).
(c) The execution, delivery and performance by the Parent, the Borrower and its Subsidiaries of the other Loan Papers to which they are respectively a party, and the consummation of the transactions contemplated thereby, do not and will not (i) require any consent or approval not already obtained, (ii) violate any Applicable Law, (iii) conflict with, result in a breach of, or constitute a default under the articles of incorporation or by-laws of the Parent, the Borrower or any Subsidiary of the Borrower, or under any material License, indenture, agreement or other instrument, to which the Parent, the Borrower or any Subsidiary of the Borrower is a party or beneficiary of, or by which they or their respective Properties may be bound, or (iv) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Parent, the Borrower or any Subsidiary of the Borrower, except Permitted Liens.
(d) The Parent, the Borrower and its Subsidiaries are primarily engaged in the operation of leasing and subleasing towers and tower sites, and pursuing activities related thereto.
(e) All material Licenses have been duly authorized and obtained, and are in full force and effect. The Parent, the Borrower and its Subsidiaries are and will continue to be in compliance in all material respects with all provisions thereof. On the Closing Date, no material License is the subject of any pending or, to the best of the Borrower's knowledge, threatened challenge or revocation. After the Closing Date, no material License is the subject of any pending or, to the best of the Borrower's knowledge, threatened challenge or revocation, which such event could cause a Material Adverse Change. The Parent, the Borrower and its Subsidiaries are not required to obtain any material License that has not already been obtained from, or effect any material filing or registration that has not already been effected with, the FCC, the FAA or any other federal, state or local regulatory authority in connection with the execution and delivery of this Agreement or any other Loan Paper, or the performance thereof (other than any enforcement of remedies by the Administrative Agent on behalf of the Lenders), in accordance with their respective terms, including any borrowings hereunder.
(g) The Parent, the Borrower and its Subsidiaries have good and indefeasible title to, or a valid leasehold interest in, all of their material assets. None of their assets are subject to any Liens, except Permitted Liens. As of the Closing Date, no financing statement or other Lien filing authorized by the Parent, the Borrower or any Subsidiary of the Borrower (except relating to Permitted Liens) is on file in any state or jurisdiction that names the Parent, the Borrower or any of its Subsidiaries as debtor or covers (or purports to cover) any assets of the Parent, the Borrower or any of its Subsidiaries. After the Closing Date, no financing statement or other Lien filing authorized by the Parent, the Borrower or any Subsidiary of the Borrower (except relating to Permitted Liens) is on file in any state or jurisdiction that names the Parent, the Borrower or any of its Subsidiaries as debtor or covers (or purports to cover) any assets of the Parent, the Borrower or any of its Subsidiaries, which such financing statement or other Lien filing could cause a Material Adverse Change. The Parent, the Borrower and its Subsidiaries have not signed any such financing statement or filing, nor any security agreement authorizing any Person to file any such financing statement or filing.
or before or by any governmental body. On each date after the Closing Date on which this representation is deemed to be made, there is no action, suit, proceeding or any other Litigation pending against, or, to the best of the Borrower's knowledge, threatened against the Parent, the Borrower or any of its Subsidiaries, or in any other manner relating to the Parent, the Borrower, any of its Subsidiaries, or any of their Properties, in any court or before any arbitrator of any kind or before or by any governmental body, which could reasonably be expected to cause a Material Adverse Change.
(i) All federal, state and other Tax returns of the Parent, the Borrower and its Subsidiaries required by law to be filed have been duly filed and all federal, state and other Taxes, assessments and other governmental charges or levies upon the Parent, the Borrower, its Subsidiaries or any of their Properties, income, profits and assets, which are due and payable, have been paid, except those that are diligently contested in good faith by the Borrower and for which a reserve has been established in accordance with GAAP, and no Lien (other than a Permitted Lien) has attached and no foreclosure, distraint, sale or similar proceedings have been commenced.
(j) The Borrower has furnished or caused to be furnished to the Lenders copies of its audited financial statements at December 31, 1998, which are prepared in good faith and complete in all material respects and present fairly in all material respects and in accordance with GAAP (except, with respect to the financial statements delivered prior to the Closing Date, as noted therein), the financial position of the Parent, the Borrower and its Subsidiaries as at such dates and the results of operations for the periods then ended. The Parent, the Borrower and its Subsidiaries have no material liabilities, contingent or otherwise, nor material losses, except as disclosed in writing to the Lenders prior to the Closing Date or as disclosed on any subsequent financial statements. On the Closing Date after giving effect to the Advances made on such date, each of the Parent, the Borrower and its Subsidiaries is Solvent.
(k) Since the date of the most recent financial statements delivered to the Lenders, no event or circumstances have occurred or arisen that could constitute a Material Adverse Change.
(l) None of the Borrower or its Controlled Group maintains or contributes to any Plan other than those disclosed to the Administrative Agent in writing. Each such Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code, and any other applicable Federal or state law, rule or regulation. With respect to each Plan of the Borrower and each member of its Controlled Group (other than a Multiemployer Plan), all reports required under ERISA or any other Applicable Law to be filed with any governmental authority, the failure of which to file could reasonably result in liability of the Borrower or any member of its Controlled Group in excess of $100,000, have been duly filed. All such reports are true and correct in all material respects as of the date given. No such Plan of the Borrower or any member of its Controlled Group has any accumulated funding deficiency (as defined in Section 412(a) of the Code) (without regard to any waiver granted under Section 412 of the Code), nor has any funding waiver from the Internal Revenue Service been received or requested. None of the Borrower or any member of its Controlled Group has failed to make any contribution or pay any amount due or owing as required by Section 412 of the Code or Section 302 of ERISA or the terms of any such Plan prior to the due date under Section 412 of the Code
and Section 302 of ERISA. There has been no ERISA Event or any event requiring disclosure under Section 4041(c)(3)(C), 4068(f), 4063(a) or 4043(b) of ERISA with respect to any Plan or trust of the Borrower or any member of its Controlled Group since the effective date of ERISA. The value of the assets of each Plan (other than a Multiemployer Plan) of the Borrower and each member of its Controlled Group equaled or exceeded the present value of the benefit liabilities, as defined in Title IV of ERISA, of each such Plan as of the most recent valuation date using Plan actuarial assumptions at such date. There are no pending or, to the best of the Borrower's knowledge, threatened claims, lawsuits or actions (other than routine claims for benefits in the ordinary course) asserted or instituted against, and neither the Borrower nor any member of its Controlled Group has knowledge of any threatened Litigation or claims against, (i) the assets of any Plan or trust or against any fiduciary of a Plan with respect to the operation of such Plan, or (ii) the assets of any employee welfare benefit plan within the meaning of Section 3(1) or ERISA, or against any fiduciary thereof with respect to the operation of any such plan. None of the Borrower or any member of its Controlled Group has engaged in any prohibited transactions, within the meaning of Section 406 of ERISA or Section 4975 of the Code, in connection with any Plan. None of the Borrower or any member of its Controlled Group, nor has incurred or reasonably expects to incur (A) any liability under Title IV of ERISA (other than premiums due under Section 4007 of ERISA to the PBGC), (B) any withdrawal liability (and no event has occurred which with the giving of notice under Section 4219 of ERISA would result in such liability) under Section 4201 of ERISA as a result of a complete or partial withdrawal (within the meaning of Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or (C) any liability under Section 4062 of ERISA to the PBGC or to a trustee appointed under Section 4042 of ERISA. None of the Borrower, any member of its Controlled Group, or any organization to which the Borrower or any member of its Controlled Group is a successor or parent corporation within the meaning of ERISA Section 4069(b), has engaged in a transaction within the meaning of ERISA Section 4069. None of the Borrower or any member of its Controlled Group maintains or has established any welfare benefit plan within the meaning of Section 3(1) of ERISA which provides for continuing benefits or coverage for any participant or any beneficiary of any participant after such participant's termination of employment except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") and the regulations thereunder, and at the expense of the participant or the beneficiary of the participant, or retiree medical liabilities. Each of the Borrower and its Controlled Group which maintains a welfare benefit plan within the meaning of Section 3(1) of ERISA has complied in all material respects with any applicable notice and continuation requirements of COBRA and the regulations thereunder.
(m) The Borrower is not engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or carrying any margin stock within the meaning of Regulations T, U and X of the Board of Governors of the Federal Reserve System, and no part of the proceeds of the Advances will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. No assets of the Parent, the Borrower and its Subsidiaries are margin stock, and none of the Pledged Stock is margin stock. None of the Parent, the Borrower and its Subsidiaries, nor any agent acting on their behalf, have taken or will knowingly take any action which might cause this Agreement or any Loan Papers to violate any regulation of the Board of Governors of the
Federal Reserve System or to violate the Securities Exchange Act of 1934, in each case as in effect now or as the same may hereafter be in effect.
(n) As of the Closing Date, the Parent, the Borrower and its Subsidiaries
are in compliance in all material respects with all of the provisions of their
articles of incorporation and by-laws, and no event has occurred or failed to
occur, which has not been remedied or waived, the occurrence or non-occurrence
of which constitutes, or which with the passage of time or giving of notice or
both would constitute, (i) an Event of Default or (ii) a default by the Parent,
the Borrower or any of its Subsidiaries under any material indenture, agreement
or other instrument, or any judgment, decree or order to which the Parent, the
Borrower or any of its Subsidiaries is a party or by which they or any of their
material Properties is bound. After the Closing Date, the Parent, the Borrower
and its Subsidiaries are in compliance in all material respects with all of the
provisions of their articles of incorporation and by-laws, and no event has
occurred or failed to occur, which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes, or which with the passage of
time or giving of notice or both would constitute, (i) an Event of Default or
(ii) a default by the Parent, the Borrower or any of its Subsidiaries under any
material indenture, agreement or other instrument, or any judgment, decree or
order to which the Parent, the Borrower or any of its Subsidiaries is a party or
by which they or any of their material Properties is bound, that could
reasonably be expected to cause a Material Adverse Change.
(o) The Borrower is not required to register under the provisions of the Investment Company Act of 1940, as amended. Neither the entering into or performance by the Borrower of this Agreement nor the issuance of the Notes violates any provision of such act or requires any consent, approval, or authorization of, or registration with, the Securities and Exchange Commission or any other governmental or public body of authority pursuant to any provisions of such act.
(p) On the Closing Date, none of the Borrower nor any Subsidiary of the Borrower has any actual knowledge or reason to believe that any substance deemed hazardous by any applicable Environmental Law, has been installed on any real property now owned by the Parent, the Borrower or any of its Subsidiaries, except (i) for hazardous substances the presence of which is not in violation of law and (ii) as disclosed to the Lenders. After the Closing Date, none of the Parent, the Borrower nor any Subsidiary of the Borrower has any actual knowledge or reason to believe that any substance deemed hazardous by any applicable Environmental Law, has been installed in violation of law on any real property now owned by the Parent, the Borrower or any of its Subsidiaries except as disclosed to the Lenders and which would not, in the reasonable judgment of the Borrower, cause a Material Adverse Change. As of the Closing Date, the Borrower and its Subsidiaries are not in violation of or subject to any existing, pending or, to the best of the Borrower's knowledge, threatened investigation or inquiry
by any governmental authority or to any material remedial obligations under any applicable Environmental Laws, and this representation and warranty would continue to be true and correct following disclosure to the applicable governmental authorities of all relevant facts, conditions and circumstances, if any, pertaining to any real property of the Parent, the Borrower and its Subsidiaries. After the Closing Date, the Parent, the Borrower and its Subsidiaries are not in violation of or subject to any existing, pending or, to the best of the Borrower's knowledge, threatened investigation or inquiry by any governmental authority or to any material remedial obligations under any applicable Environmental Laws which could cause a Material Adverse Change, and this representation and warranty would continue to be true and correct following disclosure to the applicable governmental authorities of all relevant facts, conditions and circumstances, if any, pertaining to any real property of the Parent, the Borrower and its Subsidiaries. The Parent, the Borrower and its Subsidiaries are not required to obtain any permits, Licenses or similar authorizations to construct, occupy, operate or use any buildings, improvements, fixtures, and equipment forming a part of any real property of the Parent, the Borrower or any Subsidiary of the Borrower by reason of any applicable Environmental Laws, except those that have been obtained. As of the Closing Date, the Borrower and its Subsidiaries have no actual knowledge or reason to believe, after reasonable investigation, that any hazardous substances or solid wastes have been disposed of or otherwise released on or to the real property of the Parent, the Borrower or any of its Subsidiaries in violation of any applicable Environmental Law. After the Closing Date, the Parent, the Borrower and its Subsidiaries have no actual knowledge or reason to believe, that any hazardous substances or solid wastes have been disposed of or otherwise released on or to the real property of the Parent, the Borrower or any of its Subsidiaries, within the meaning of the applicable Environmental Laws, except as disclosed to the Lenders and which such disposal or release would not cause a Material Adverse Change.
(q) The agreements evidencing obligations with respect to Capital Leases have been duly authorized, executed and delivered by the Parent, Borrower or its Subsidiaries, as applicable, and (to the best of the Borrower's knowledge) the other parties thereto. Except as disclosed to each Lender, there is no Litigation, or, to the best of the Borrower's knowledge, threatened Litigation or pending or threatened claim of breach or default, with respect to any such Capital Lease obligations that could be expected to adversely affect any such lease or contract. There is no Litigation, or, to the best of the Borrower's knowledge, threatened Litigation or pending or threatened claim of breach or default, with respect to any loan agreement or document evidencing any Debt for Borrowed Money of the Parent, the Borrower, or their Subsidiaries that has not been disclosed to Lenders. The Borrower has no knowledge of any default by any tenant or tenants under any Tenant Leases which aggregate five percent or more of the revenues of the Borrower and its Subsidiaries, except as disclosed to the Lenders. The Borrower has no notice of or belief that any party to any material Capital Lease is contemplating a breach, default or termination for any reason of such contract or lease, except as disclosed to the Lenders. As of the Closing Date, the Borrower has provided, or caused to be provided, to the Administrative Agent complete and correct copies of or access to the Capital Leases, all as amended, together with all exhibits and schedules thereto.
(r) All Pledged Stock has been duly authorized and validly issued, and is fully paid and nonassessable. The Capital Stock described on Exhibit A to Borrower Pledge Agreement constitutes all the issued and outstanding Capital Stock of the Subsidiaries of the Borrower or the Subsidiaries of another Subsidiary, except such shares that have been issued after the Closing Date, pledged to the Administrative Agent to secure the Obligations and delivered to the Administrative Agent together with stock powers executed in blank. All Capital Stock of the Borrower is pledged to the Administrative Agent on behalf of Lenders to secure the Obligations. No Person has conversion rights with respect to, or any subscription rights, calls, commitments or claims of any character for, or any repurchase or redemption options relating to, the Pledged
Stock, other than those that have waived. The Pledged Stock, when issued or sold, was either (i) registered or qualified under applicable federal or state securities laws, or (ii) exempt therefrom.
(s) No broker's, finder's or other fee or commission will be payable by the Borrower (other than to the Lenders hereunder) with respect to the making of the Commitment or the Advances hereunder. The Borrower agrees to indemnify and hold harmless the Administrative Agent and each Lender from and against any claims, demand, liability, proceedings, costs or expenses asserted with respect to or arising in connection with any such fees or commissions.
(t) No event has occurred which permits (or with the passage of time would permit) the revocation or termination of any material License, or which could result in the imposition of any restriction thereon of such a nature that could reasonably be expected to constitute a Material Adverse Change.
(u) The Parent, the Borrower and its Subsidiaries have obtained all material patents, trademarks, service-marks, trade names, copyrights, Licenses and other rights, free from burdensome restrictions, that are necessary for the operation of their business as presently conducted and as proposed to be conducted. Nothing has come to the attention of the Borrower or any of its Subsidiaries to the effect that (i) any process, method, part or other material presently contemplated to be employed by the Parent, Borrower or any Subsidiary of the Borrower may infringe any patent, trademark, service-mark, trade name, copyright, License or other right owned by any other Person, or (ii) there is pending or overtly threatened any claim or Litigation against or affecting the Borrower or any Subsidiary of the Borrower contesting its right to sell or use any such process, method, part or other material, which could reasonably be expected to cause a Material Adverse Change.
(v) Neither this Agreement nor any other document, certificate or statement which has been furnished to any Lender by or on behalf of the Parent, the Borrower or any Subsidiary of the Borrower in connection herewith contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statement contained herein and therein not misleading at the time it was furnished. On the Closing Date, there is no fact known to the Borrower and not known to the public generally that could reasonably be expected to cause a Material Adverse Change, which has not been set forth in this Agreement or in the documents, certificates and statements furnished to the Lenders by or on behalf of the Borrower prior to the date hereof in connection with the transaction contemplated hereby. On each date after the Closing Date on which this representation is deemed to be made, there is no fact known to the Borrower and not known to the public generally that could reasonably be expected to cause a Material Adverse Change, which has not been disclosed to the Lenders in writing.
may have Oral Tenant Leases that are disclosed to the Lenders in connection with
Section 7.07 below and accurately included in all calculations pursuant to
Sections 6.15(a) and (c) below.
(z) Either (i) Parent (A) qualifies as a real estate investment trust, as
defined in Section 856(a) of the Code, and satisfies the conditions and
limitations set forth in Sections 856(b) and 856(c) of the Code, (B) has not
engaged in any "prohibited transactions" as defined in Section 857(b)(6)(B)(iii)
and (C) of the Code and (C) for its current "tax year" (as defined in the Code)
is and for all prior tax years subsequent to its election to be a real estate
investment trust has been entitled to a dividends paid deduction under the
requirements of Section 857 of the Code. Borrower and each of the Subsidiaries
of Borrower is a Qualified REIT Subsidiary, or (ii) the Borrower has delivered
written notice to the Administrative Agent in accordance with the terms of
Section 7.04(e) hereof, that a REIT Conversion has occurred.
(aa) On each date after the Closing Date on which this representation is deemed to be made, no event has occurred and no circumstance exists, which by itself or aggregated together with all other such events or circumstances is likely to (i) reduce Tower Cash Flow in the aggregate for all Towers by five percent or more for a period in excess of three months, or (ii) otherwise cause a Material Adverse Change.
(bb) None of the Parent, the Borrower or their respective Subsidiaries have any Synthetic Leases.
(cc) Each piece of Collateral (except cash and cash equivalents) is subject to a perfected first priority Lien securing the Obligations, subject to Liens permitted to exist in accordance with the terms of Section 8.03 hereof. All cash and cash equivalents of the Borrower, the Parent and the Subsidiaries of the Parent and the Borrower in excess of $10,000,000 is subject to a Lien securing the Obligations.
(dd) The Borrower has (a) undertaken a detailed review and assessment of all areas within its business and operations that could be adversely affected by the "Year 2000 Problem" (that is, the risk that computer applications used by the Borrower may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to, on, and any date after
December 31, 1999), (b) developed a detailed plan and timeline for addressing the Year 2000 Problem on a timely basis, and (c) to date, implemented that plan in accordance with that timetable. The Borrower reasonably anticipates that all computer applications that are material to its business and operations will on a timely basis be able to perform properly date-sensitive functions for all dates before, on and after January 1, 2000 (that is, be "Year 2000 Compliant").
5.02. Survival of Representations and Warranties. All representations and warranties made under this Agreement and the other Loan Papers shall be deemed to be made at and as of the Closing Date and at and as of the date of each Advance and/or the issuance of each Letter of Credit, and each shall be true and correct in all material respects when made. All such representations and warranties shall survive, and not be waived by, the execution hereof by any Lender, any investigation or inquiry by any Lender, or by the making of any Advance under this Agreement.
ARTICLE VI. GENERAL COVENANTS
So long as any of the Obligations or Canada Obligations are outstanding and unpaid or any portion of either of the Commitment or any Letter of Credit is outstanding (whether or not the conditions to borrowing have been or can be fulfilled):
6.01. Preservation of Existence and Similar Matters. The Borrower shall, and shall cause each Subsidiary of the Borrower and the Parent to:
(a) preserve and maintain, or timely obtain and thereafter preserve and maintain, its existence and material rights, franchises, authorizations, consents, privileges and all other material Licenses from federal, state and local governmental bodies and any Tribunal (regulatory or otherwise); and
(b) qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its Properties or the nature of its business requires such qualification or authorization, except where the failure to do so would not cause a Material Adverse Change.
6.02.Business; Compliance with Law and Material Agreements. The Parent, the Borrower and its Subsidiaries shall (a) engage primarily in the acquisition and operation of Towers, and leasing and subleasing Towers and Tower sites, and activities related thereto, and (b) comply in all material respects with the requirements of all Applicable Law and all material agreements to which each is a party.
6.03.Maintenance of Properties. The Borrower shall, and shall cause the Parent and each Subsidiary of the Borrower to, maintain or cause to be maintained all its material Properties necessary to the conduct of its business (whether owned or held under lease) in reasonably good repair, working order and condition, taken as a whole, and from time to time make or cause to be made all appropriate repairs, renewals, replacements, additions, betterments and improvements thereto.
6.04. Accounting Methods and Financial Records. The Borrower shall, and shall cause the Parent and each Subsidiary of the Borrower to, maintain a system of accounting established and administered in accordance with GAAP, keep adequate records and books of account in which complete entries will be made and all transactions reflected in accordance with GAAP, and keep accurate and complete records of its respective assets. The Borrower and each of its Subsidiaries shall maintain a fiscal year ending on December 31.
6.05. Insurance. The Borrower shall, and shall cause the Parent and each Subsidiary of the Borrower to, maintain insurance from responsible companies in such amounts and against such risks as shall be customary and usual in the industry for companies of similar size and capability, but in no event less than the amount and types insured as of the Closing Date, provided that, the Borrower is permitted to self insure the replacement value of Towers having in the aggregate at any one time insurable values not more than 5% of the aggregate insurable values for all Towers. Each insurance policy shall provide for at least 30 days' prior notice to the Administrative Agent of any proposed termination or cancellation of such policy, whether on account of default or otherwise and all property insurance shall name the Administrative Agent as loss payee or additional insured, as appropriate.
6.06. Payment of Taxes and Claims. The Borrower shall, and shall cause the Parent and each Subsidiary of the Borrower to, pay and discharge all Taxes, assessments and governmental charges or levies imposed upon it or its income or Properties prior to the date on which penalties attach thereto, and all lawful material claims for labor, materials and supplies which, if unpaid, might become a Lien upon any of their Properties, except those Taxes, assessments and charges contested by the Borrower diligently in good faith, and for which adequate reserves have been established in accordance with GAAP. The Borrower shall, and shall cause the Parent and each Subsidiary of the Borrower to, timely file all information returns required by federal, state or local Tax authorities.
6.07. Visits and Inspections. The Borrower shall, and shall cause each Subsidiary of the Borrower and the Parent to, promptly permit representatives of the Administrative Agent or any Lender from time to time to (a) visit and inspect the Properties of the Parent, the Borrower and each Subsidiary of the Borrower as often as the Administrative Agent or any Lender shall deem advisable, (b) inspect and make extracts from and copies of the Borrower's, the Parent's and each Subsidiary of the Borrower's books and records, and (c) discuss with the Parent's, the Borrower's and each Subsidiary's directors, officers, employees and, after notice to the Borrower, the auditors of Borrower and the Parent, its business, assets, liabilities, financial positions, results of operations and business prospects.
6.08. Payment of Debt for Borrowed Money. The Borrower shall, and shall cause the Parent and each Subsidiary of the Borrower to, pay its Debt for Borrowed Money when and as the same becomes due.
6.09. Use of Proceeds. The Borrower shall use the proceeds of Advances solely as set forth in Section 2.15 hereof.
6.10. Indemnity.
(a) The Borrower agrees to defend, protect, indemnify and hold harmless the Administrative Agent, each Lender, each of their respective Affiliates, and each of their respective (including such Affiliates') officers, directors, employees, agents, attorneys, shareholders and consultants (including, without limitation, those retained in connection with the satisfaction or attempted satisfaction of any of the conditions set forth herein) of each of the foregoing (collectively, "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnitees shall be designated a party thereto), imposed on, incurred by, or asserted against such Indemnitees (whether direct, indirect or consequential and whether based on any federal, state, or local laws and regulations, under common law or at equitable cause, or on contract, tort or otherwise, arising from or connected with the past, present or future operations of the Borrower or its predecessors in interest, in any manner relating to or arising out of this Agreement, the Loan Papers, or any act, event or transaction or alleged act, event or transaction relating or attendant thereto, the making of any participations in the Advances and the management of the Advances, including in connection with, or as a result, in whole or in part, of any negligence of Administrative Agent or any Lender (other than those matters raised exclusively by a participant against the Administrative Agent or any Lender and not the Borrower), or the use or intended use of the proceeds of the Advances hereunder, or in connection with any investigation of any potential matter covered hereby, but excluding, in the case of each Indemnitee, any claim or liability that arises as the result of the gross negligence or willful misconduct of such Indemnitee, as finally judicially determined by a court of competent jurisdiction (collectively, the "Indemnified Matters").
(b) In addition, the Borrower shall periodically, upon request, reimburse each Indemnitee for its reasonable legal and other actual expenses (including the cost of any investigation and preparation) incurred in connection with any Indemnified Matter. The reimbursement and indemnity obligations under this Section shall be in addition to any liability which the Borrower may otherwise have, shall extend upon the same terms and conditions to each Indemnitee, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Borrower, the Administrative Agent, the Lenders and all other Indemnitees. This Section shall survive any termination of this Agreement and payment of the Obligations.
6.11. Environmental Law Compliance. The use which the Parent, the Borrower or any Subsidiary of the Borrower intends to make of any real Property owned by it will not result in the disposal or other release of any hazardous substance or solid waste on or to such real Property in violation of any Environmental Law. As used herein, the terms "hazardous substance" and "release" as used in this Section shall have the meanings
specified in CERCLA (as defined in the definition of applicable Environmental Laws), and the terms "solid waste" and "disposal" shall have the meanings specified in RCRA (as defined in the definition of applicable Environmental Laws); provided, however, that if CERCLA or RCRA is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment; and provided further, to the extent that any other law applicable to the Parent, the Borrower, any Subsidiary of the Borrower or any of their Properties establishes a meaning for "hazardous substance," "release," "solid waste," or "disposal" which is broader than that specified in either CERCLA or RCRA, such broader meaning shall apply. The Borrower agrees to indemnify and hold the Administrative Agent and each Lender harmless from and against, and to reimburse them with respect to, any and all claims, demands, causes of action, loss, damage, liabilities, costs and expenses (including attorneys' fees and courts costs) of any kind or character, known or unknown, fixed or contingent, asserted against or incurred by any of them at any time and from time to time by reason of or arising out of (a) the failure of the Parent, the Borrower or any Subsidiary of the Borrower to perform any obligation hereunder regarding asbestos or applicable Environmental Laws, (b) any violation on or before the Release Date of any applicable Environmental Law in effect on or before the Release Date, and (c) any act, omission, event or circumstance existing or occurring on or prior to the Release Date (including without limitation the presence on such real Property or release from such real Property of hazardous substances or solid wastes disposed of or otherwise released on or prior to the Release Date), resulting from or in connection with the ownership of the real Property, regardless of whether the act, omission, event or circumstance constituted a violation of any applicable Environmental Law at the time of its existence or occurrence, or whether the act, omission, event or circumstance is caused by or relates to the negligence of any indemnified Person; provided that, the Borrower shall not be under any obligation to indemnify the Administrative Agent or any Lender to the extent that any such liability arises as the result of the gross negligence or willful misconduct of such Person, as finally judicially determined by a court of competent jurisdiction, or for any event which is both not caused by the Parent, the Borrower or any Subsidiary of the Borrower and occurs after any foreclosure by the Lenders on any specific Property. The provisions of this paragraph shall survive the Release Date and shall continue thereafter in full force and effect.
6.12. Interest Rate Protection Agreements. By no later than September 30, 1999, the Borrower will enter into an Interest Rate Protection Agreement on terms acceptable to the Administrative Agent providing for interest rate protection for one year for 50% of the principal of the Obligations outstanding on September 30, 1999, and the Borrower shall thereafter, until the third anniversary of the Closing Date, maintain an Interest Rate Protection Agreement in effect at all times on terms acceptable to the Administrative Agent and providing for an interest rate protection for not less than 50% of the entire principal of the Obligations.
6.13. Issuance and Pledge of Capital Stock of the Borrower. Prior to or simultaneous with the issuance by the Borrower of any Capital Stock to any Person and/or the acquisition by the Parent, the Borrower or any Subsidiary of the Parent or the Borrower of any Capital Stock, the Borrower shall, and shall cause the Parent to, cause such Capital Stock to be pledged to the Administrative Agent on
6.14. Continued Status as a Real Estate Investment Trust; Prohibited Transactions. Parent will either (a) (i) continue to be qualified as a real estate investment trust as defined in Section 856 of the Code, (ii) not engage in any "prohibited transactions" as defined in Section 857(b)(6)(B)(iii) or (C) of the Code, (iii) continue to satisfy the conditions and limitations set forth in Sections 856(b) and 856(c) of the Code and (iv) will do all acts necessary to continue to be entitled to a dividend paid deduction under Section 857 of the Code, or (b) elect to not maintain its REIT Status and notify the Administrative Agent and each Lender of its decision in writing in accordance with the provisions of Section 7.04(e) hereof. The Borrower and each of its Subsidiaries will either (a) continue to be a Qualified REIT Subsidiary so long as the Parent remains a REIT, or (b) elect not to qualify as a Qualified REIT Subsidiary and notify the Administrative Agent and each Lender of its decision in writing in accordance with the provisions of Section 7.04(e) hereof.
6.15. Tenant Leases, Ground Leases and Fee Owned Property.
subject to a mortgage or deed of trust on the Closing Date, all such property shall be treated as if such property were acquired on the Closing Date in order to determine compliance with Section 6.15(d)(i) above.
6.16. Acquisitions, Generally. In connection with any acquisition made by the Borrower during the term of this Agreement, the Borrower shall, in addition to the requirements set forth in Sections 4.04, 6.15 and 6.18 (to the extent applicable) hereof, with respect to individual Permitted Acquisitions in excess of $20,000,000 and any series of related Permitted Acquisitions which in the aggregate exceed $20,000,000, (a) deliver notice to Administrative Agent at such time prior to the proposed acquisition date as is reasonable under the circumstances, together with (or, the following may be delivered later than the notice (but still prior to the proposed acquisition), so long as such delivery is reasonable under the circumstances, and copies of agreements are delivered promptly upon execution of each such agreement: (i) a detailed description of the proposed Permitted Acquisition in form reasonably acceptable to the Administrative Agent, a description and location of all fee owned real property, all Towers and all other assets (together with all legal descriptions of all real property (fee owned) available at such time), (ii) the address of any office acquired, (iii) the most recent financial statements with respect to the acquired assets and/or Person, and to the extent available, the most recent audited financial statements, and (iv) a copy of the purchase agreement, schedules thereto and all related documentation (unless such schedules or documentation are to be delivered by the seller, in which case the Borrower shall deliver drafts and originals of such schedules and documentation promptly upon receipt by the Borrower if later than ten days prior to closing), and (b) prior to the consummation of the acquisition a statement certified by an Authorized Officer that (i) the proposed transaction complies with the definition of Permitted Acquisition set forth in Article I hereof, and (ii) no Default or Event of Default exists prior to or after giving effect to any requested Advance or the consummation of such acquisition, or will exist upon consummation of the proposed acquisition and related borrowings and transactions, together with a pro forma Compliance Certificate computed after giving effect to such acquisition and borrowings (A) for acquisitions having purchases prices in excess of $20,000,000 but less than $50,000,000, evidencing compliance with the terms of this Agreement for the lesser of two years after the consummation of the proposed acquisition or the remainder of the term of this Agreement, together with all projections of the Parent, the Borrower and any acquired assets and/or Person used to compute the Compliance Certificate (and, in each case, to the extent that the Parent, the Borrower or any Subsidiary of the Borrower has prepared or has in its possession projections later than two years after any such proposed acquisitions, the Borrower shall deliver such projections to the Administrative Agent) and (B) for acquisitions having purchases prices in excess of $50,000,000, evidencing compliance with the terms of this Agreement for the remainder of the term of this Agreement, together with all projections of the Parent, the Borrower and any acquired assets and/or Person used to compute the Compliance Certificate.
6.17. Year 2000. The Borrower will promptly notify the Administrative Agent in the event the Borrower discovers or determines that any computer application material to the business and operations of the Borrower, the Parent or any of their respective Subsidiaries will not be Year 2000 Compliant as of January 1, 2000.
ARTICLE VII. INFORMATION COVENANTS
So long as any of the Obligations or Canada Obligations are outstanding and unpaid or any portion of either of the Commitment or any Letter of Credit is outstanding (whether or not the conditions to borrowing have been or can be fulfilled), the Borrower shall furnish or cause to be furnished to each Lender:
7.01. Quarterly Financial Statements and Information. Within 45 days after the end of each fiscal quarter, consolidated and consolidating balance sheets of Parent, the Borrower and its Subsidiaries as at the end of such quarter and the related consolidated and consolidating statements of income and consolidated statements of changes in cash for such quarter and for the elapsed portion of the year ended with the last day of such quarter, all of which shall be certified by an Authorized Officer, to, in his or her opinion, present fairly in all material respects, in accordance with GAAP, the financial position and results of operations of the Parent, the Borrower and its Subsidiaries as at the end of and for such period, and for the elapsed portion of the year ended with the last day of such period.
7.02. Annual Financial Statements and Information; Certificate of No Default.
(a) Within 120 days after the end of each fiscal year, a copy of (i) the consolidated balance sheet of the Parent, the Borrower and its Subsidiaries, as of the end of the current and prior fiscal years and (ii) consolidated statements of earnings, statements of changes in shareholders' equity, and statements of changes in cash as of and through the end of such fiscal year, all of which are prepared in accordance with GAAP, and certified by independent certified public accountants acceptable to the Lenders, whose opinion shall be in scope and substance in accordance with generally accepted auditing standards and shall be unqualified.
(b) As soon as available, but in any event within 60 days following the end of each fiscal year, a copy of the annual consolidated operating budget of the Borrower, the Parent, and its Subsidiaries for the succeeding fiscal year.
7.03. Compliance Certificates. At the time financial statements are furnished pursuant to Section 7.01 hereof and Section 7.02 hereof, a Compliance Certificate.
7.04. Copies of Other Reports and Notices.
(a) Promptly upon their becoming available, a copy of (i) all material reports or letters submitted to the Parent, the Borrower or any Subsidiary of the Borrower by accountants in connection with any annual, interim or special audit, including without limitation any report prepared in connection with the annual audit referred to in Section 7.03 hereof, and any other comment letter submitted to management in connection with any such audit, (ii) each financial statement, report, notice or proxy statement sent by the Parent, the Borrower or any Subsidiary of the Borrower to stockholders generally, (iii) each regular or periodic report and any registration statement or prospectus (or material written communication in respect of any thereof) filed by the Parent, the Borrower or any Subsidiary of the Borrower with any securities exchange, with the Securities and Exchange Commission or any successor agency, and (iv) all press releases concerning material financial aspects of the Parent, the Borrower or any Subsidiary of the Borrower;
(b) Promptly upon becoming aware that (i) the holder(s) of any note(s) or other evidence of indebtedness or other security of the Parent, the Borrower or any Subsidiary of the Borrower in excess of $250,000 in the aggregate has given notice or taken any action with respect to a breach, failure to perform, claimed default or event of default thereunder, (ii) any party to any material Capital Lease of the Borrower or any Subsidiary of the Borrower has given notice or taken any action with respect to a breach, failure to perform, claimed default or event of default thereunder, (iii) any occurrence or non-occurrence of any event which constitutes or which with the passage of time or giving of notice or both could constitute a material breach by the Parent, the Borrower or any Subsidiary of the Borrower under any material agreement or instrument other than this Agreement to which the Parent, the Borrower or any Subsidiary of the Borrower is a party or by which any of their Properties may be bound, or (iv) any event, circumstance or condition which could reasonably be expected to constitute a Material Adverse Change, a written notice specifying the details thereof (or the nature of any claimed default or event of default) and what action is being taken or is proposed to be taken with respect thereto;
(c) Promptly upon receipt thereof, information with respect to and copies of any notices received from the FCC, the FAA or any other federal, state or local regulatory agencies or any tribunal relating to any order, ruling, law, information or policy that relates to a breach of or noncompliance with the Communications Act, or might result in the payment of money by the Parent, the Borrower or any Subsidiary of the Borrower in an amount of $250,000 or more in the aggregate, or otherwise constitute a Material Adverse Change, or result in the loss or suspension of any material License;
(d) Promptly upon receipt from any governmental agency, or any government, political subdivision or other entity, any material notice, correspondence, hearing, proceeding or order regarding or affecting the Parent, the Borrower, any Subsidiary of the Borrower, or any of their Properties or businesses not in the ordinary course of business, a copy of such notice, correspondence, hearing, proceeding or order;
(e) Promptly upon and in any event within forty-eight hours after the Borrower first has knowledge of (i) the Parent failing to or electing to, as appropriate, (A) continue to qualify as
a real estate investment trust as defined in Section 856 of the Code or (B) maintain its REIT Status, (ii) any act by the Parent causing the election by the Parent or the Borrower, as applicable, to be taxed as a real estate investment trust to be terminated, (iii) any act causing the Parent to be subject to the taxes imposed by Section 857(b)(6) of the Code, (iv) the Parent failing to be entitled to a dividends paid deduction under Section 857 of the Code, (v) the Parent failing to satisfy any condition or limitation set forth in Section 856(b) or 856(c) of the Code, (vi) any challenge by the Internal Revenue Service to the Parent's REIT Status, (vii) the Borrower or any Subsidiary of Borrower failing to be a Qualified REIT Subsidiary, (viii) any challenge by the Internal Revenue Service to the status of Borrower or any Subsidiary of Borrower as a Qualified REIT Subsidiary, or (ix) any other REIT Conversion, immediate telephonic and subsequent written notice within forty-eight hours of any such occurrence or circumstance; and
(f) From time to time and promptly upon each request, such data, certificates, reports, statements, documents or further information regarding the assets, business, liabilities, financial position, projections, results of operations or business prospects of the Parent, the Borrower and its Subsidiaries that is within the Borrower's control, as the Administrative Agent or any Lender may reasonably request.
7.05. Notice of Litigation, Default and Other Matters. Prompt notice of the following events after the Borrower has knowledge or notice thereof:
(a) The commencement of all proceedings and investigations by or before the FCC, the FAA or any other governmental body, and all other actions and proceedings in any court or before any arbitrator involving claims for damages (including punitive damages) in excess of $250,000 in the aggregate (after deducting the amount with respect to the Parent, the Borrower or any Subsidiary of the Borrower is insured), against or in any other way relating directly to the Parent, the Borrower, any Subsidiary of the Borrower, or any of their Properties or businesses;
(b) Promptly upon the happening of any condition or event which constitutes a Default, a written notice specifying the nature and period of existence thereof and what action is being taken or is proposed to be taken with respect thereto; and
(c) Any Material Adverse Change with respect to the business, assets, liabilities, financial position, results of operations or prospective business of the Parent, the Borrower or any Subsidiary of the Borrower.
7.06. ERISA Reporting Requirements.
(a) Promptly and in any event (i) within 30 days after the Borrower or any member of its Controlled Group knows or has reason to know that any ERISA Event described in clause (a) of the definition of ERISA Event or any event described in Section 4063(a) of ERISA with respect to any Plan of the Borrower or any member of its Controlled Group has occurred, and (ii) within 10 days after the Borrower or any member of its Controlled Group knows or has reason to know that any other ERISA Event with respect to any Plan of the Borrower or any member of its Controlled Group has occurred or a request for a minimum funding waiver under Section 412 of the Code with respect to any Plan of the Borrower or any member of its Controlled Group, a written notice describing such event and describing what action is being taken or is proposed to be taken with respect thereto, together with a copy of any notice of event that is given to the PBGC;
(b) Promptly and in any event within two Business Days after receipt thereof by the Borrower or any member of its Controlled Group from the PBGC, copies of each notice received by the Borrower or any member of its Controlled Group of the PBGC's intention to terminate any Plan or to have a trustee appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof by the Borrower or any member of its Controlled Group with the United States Department of Labor, the Internal Revenue Service or the PBGC, copies of each annual and other report (including Schedule B thereto) with respect to each Plan;
(d) Promptly and in any event within 30 days after receipt thereof, a copy of any notice, determination letter, ruling or opinion the Borrower or any member of its Controlled Group receives from the PBGC, the United States Department of Labor or the Internal Revenue Service with respect to any Plan;
(e) Promptly, and in any event within 10 Business Days after receipt thereof, a copy of any correspondence the Borrower or any member of its Controlled Group receives from the Plan Sponsor (as defined by Section 4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief financial officer of the Borrower or such member of its Controlled Group setting forth details as to the events giving rise to such potential withdrawal liability and the action which the Borrower or such member of its Controlled Group is taking or proposes to take with respect thereto;
(f) Notification within 30 days of any material increases in the benefits of any existing Plan which is not a Multiemployer Plan, or the establishment of any new Plans, or the commencement of contributions to any Plan to which the Borrower or any member of its Controlled Group was not previously contributing;
(g) Notification within three Business Days after the Borrower or any
member of its Controlled Group knows or has reason to know that the Borrower or
any such member of its Controlled Group has or intends to file a notice of
intent to terminate any Plan under a distress termination within the meaning of
Section 4041(c) of ERISA and a copy of such notice; and
(h) Promptly after receipt of written notice of commencement thereof, notice of all actions, suits and proceedings before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Borrower or any member of its Controlled Group with respect to any Plan.
7.07. Fee Owned Property, Ground Leases and Tenant Leases.
ARTICLE VIII. NEGATIVE COVENANTS
So long as any of the Obligations or Canada Obligations are outstanding and unpaid or any portion of either of the Commitment or any Letter of Credit is outstanding (whether or not the conditions to borrowing have been or can be fulfilled):
8.01. Financial Covenants.
(a) Leverage Ratio. The Borrower shall not permit the Leverage Ratio to be more than the following ratios at the end of any fiscal quarter during the time during the following time periods:
Period Ratio ------ ----- From the Closing Date through September 30, 1999 6.75 to 1.00 From October 1, 1999 through June 29, 2000 6.50 to 1.00 From June 30, 2000 through September 29, 2000 6.00 to 1.00 From September 30, 2000 through December 30, 2000 5.25 to 1.00 From December 31, 2000 through March 30, 2001 4.75 to 1.00 From March 31, 2001 through June 29, 2001 4.50 to 1.00 From June 30, 2001 through December 30, 2001 4.25 to 1.00 From December 31, 2001 through December 30, 2002 3.50 to 1.00 From December 31, 2002 and thereafter 3.00 to 1.00 |
(b) Consolidated Leverage Ratio. Commencing December 31, 2001, the Borrower shall not permit the Consolidated Leverage Ratio to be more than the following ratios at the end of any fiscal quarter during the time during the following time periods:
Period Ratio ------ ----- From December 31, 2001 through December 30, 2002 7.50 to 1.00 From December 31, 2002 through December 30, 2003 6.50 to 1.00 From December 31, 2003 and thereafter 5.50 to 1.00 |
(c) Consolidated Interest Coverage Ratio. The Borrower shall not permit, at the end of any fiscal quarter, the ratio of (i) EBITDA for the preceding twelve month period to (ii) cash Interest Expense for the preceding twelve month period, to be less than the following ratios during the following time periods:
Period Ratio ------ ----- From the Closing Date through June 29, 2000 1.75 to 1.00 From June 30, 2000 through December 30, 2000 2.00 to 1.00 From December 31, 2000 through March 30, 2001 2.25 to 1.00 From March 31, 2001 and thereafter 2.50 to 1.00 |
(d) Consolidated Pro Forma Debt Service Coverage Ratio. The Borrower shall not permit at the end of any fiscal quarter the ratio of (a) Annualized EBITDA to (b) Pro Forma Debt Service to be less than 1.50 to 1.00.
(e) Consolidated Fixed Charge Coverage Ratio. On March 31, 2001 and for each fiscal quarter thereafter, the Borrower shall not permit at the end of any fiscal quarter the ratio of (a) EBITDA for the most recently completed twelve month period to (b) Fixed Charges paid in cash during the most recently completed twelve month period, to be less than the following ratios during the following time periods:
Period Ratio ------ ----- From March 31, 2001 through December 31, 2001 1.10 to 1.00 From January 1, 2002 and thereafter 1.25 to 1.00 |
(f) Capital Expenditures. The Borrower shall not permit Capital Expenditures (excluding acquisitions permitted to be consummated in accordance with the terms of Section 8.06(b) hereof) made by the Parent, the Borrower and its Subsidiaries in the aggregate, during the fiscal year 2000, to exceed $40,000,000.
8.02. Debt for Borrowed Money. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, create, assume,
incur or otherwise become or remain obligated in respect of, or permit to be outstanding, or suffer to exist any Debt for Borrowed Money or any preferred Capital Stock, except:
(a) with respect to the Borrower and its Subsidiaries, Debt for Borrowed Money under the Loan Papers;
(c) provided that no Default or Event of Default exists or would result from the incurrence thereof and that the net proceeds of any such Debt or preferred Capital Stock issuance be downstreamed by the Parent to the Borrower as equity, the Parent may, so long as the aggregate amount of Second Parent Issuance and the Bridge Debt incurred pursuant to subsections (i) and (ii) below in the aggregate over the term of this Agreement do not exceed $250,000,000 AND at no time shall the aggregate amount of outstanding Debt and preferred Capital Stock under subsections (i) and (ii) below exceed $200,000,000 (except in connection with any accretion), elect to:
(i) issue unsecured public Debt for Borrowed Money up to the maximum aggregate amount at any one time outstanding of $200,000,000, except with respect to any accretion (the "Second Parent Issuance"), and which such Debt, notwithstanding the foregoing, (i) must be on terms and conditions substantially similar to the Parent Senior Notes and the Parent Senior Notes Documentation, (ii) may not be subject to an interest rate in excess of 13.5% per annum, (iii) must have a scheduled maturity date later than the Final Maturity Date, and must not be subject to any mandatory repurchase, redemption, defeasance or any similar provision prior to the Final Maturity Date, except to the extent there exists a Change of Control, and in such event such Debt must provide for the repayment in full of the Obligations prior to such redemption, repurchase, repayment or other provision, (iv) may not contain covenants or other provisions more restrictive than this Agreement and the other Loan Papers (including the definitions), and may not prohibit any action or omission with respect to this Agreement and the Loan Papers, and (v) shall provide for no principal payments until the Obligations have been paid in full, and in-kind interest payments only for a period of not less than the first five years after its issuance; and
(ii) incur unsecured Debt for Borrowed Money and/or preferred Capital Stock up to the maximum aggregate amount for both Debt for Borrowed Money and preferred Capital Stock at any one time outstanding of $50,000,000, except with respect to any accretion (such Debt for Borrowed Money or preferred Capital Stock herein referred to as the "Bridge Debt"), and which such Bridge Debt, notwithstanding the foregoing (i) must be payment in kind only, and not subject to any cash interest payments, principal payments, fees or otherwise, (ii) must have a scheduled maturity date not earlier than the Final Maturity Date, (iii) must not be subject to any mandatory repurchase, redemption, defeasance or any similar provision prior to the Final Maturity Date and (iv) may not contain covenants or other provisions more restrictive than this Agreement and the other
Loan Papers (including the definitions), and may not prohibit any action or omission with respect to this Agreement and the Loan Papers;
(d) provided that no Default or Event of Default exists or would result from the incurrence thereof, with respect to the Borrower and the Parent, unsecured Debt for Borrowed Money not to exceed $5,000,000 in the aggregate for the Borrower and the Parent throughout the term of this Agreement;
(e) provided that no Default or Event of Default exists or would result from the incurrence thereof, with respect to the Borrower and the Parent, secured Debt for Borrowed Money not to exceed $5,000,000 in the aggregate for the Borrower and the Parent throughout the term of this Agreement;
(f) provided that no Default or Event of Default exists or would result from the incurrence thereof, with respect to the Borrower, accrued but unpaid Earn-Out Liabilities;
(g) provided that no Default or Event of Default exists or would result from the incurrence thereof, in addition to the Subordinated Debt the Parent is entitled to incur in accordance with the terms of Section 8.02(c) above, if there has not occurred a REIT Conversion, the Parent may incur Subordinated Debt to the Shareholders, such Subordinated Debt not to exceed in principal face amount in the aggregate for any taxable year, the amount necessary to enable the Borrower to obtain the maximum possible deduction for dividends paid, as defined in Section 561 of the Code and further described in Section 857 of the Code for such year, taking into account the sum of all distributions previously made to Shareholders permitted by Section 8.08(b)(iii) hereof for such fiscal year, provided that, any determination under Section 857 of the Code shall take into consideration for such purpose the necessity of increasing the aggregate amounts distributed to reflect the fact that distributions in redemption of any preferred return on any class of stock will be treated as being made partly from earnings and profits and partly from capital;
(i) with respect to the Canada Sub, Debt for Borrowed Money in the form of the Canada Indebtedness, and with respect to the Parent and the Borrower, Debt for Borrowed Money under the Canada Guaranty.
8.03. Liens. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, create, assume, incur, permit or suffer to exist, directly or indirectly, any Lien on any of its assets or Properties, whether now owned or hereafter acquired, except Permitted Liens and Liens securing the Canada Indebtedness and the Canada Guaranty. The Borrower shall not, and shall not permit Parent or any Subsidiary of the Borrower to, agree
with any other Person that it shall not create, assume, incur, permit or suffer to exist or to be created, assumed, incurred or permitted to exist, directly or indirectly, any Lien on any of its assets or Properties.
8.04. Investments. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, make any Investment, except that the Borrower may purchase or otherwise acquire and own:
(a) Marketable, direct obligations of, or guaranteed by, the United States of America and maturing within 365 days of the date of purchase;
(b) Commercial paper issued by U.S. corporations that have a rating of A- 1/P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc.;
(c) Certificates of deposit of domestic banks maturing within 365 days of the date of purchase, which banks' debt obligations have one of the two highest ratings obtainable from Moody's Investors Service, Inc. or Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc.;
(d) Securities issued by U.S. corporations that have one of the two highest ratings obtainable from Moody's Investors Service, Inc. or Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc.;
(e) Investments in newly-formed or existing, wholly-owned Subsidiaries of the Borrower, in each case (i) that are subject to the provisions hereof, (ii) that are or immediately become party to the Subsidiary Guaranty and any security documents required by the Administrative Agent, (iii) whose stock is pledged to the Lenders to secure the Obligations pursuant to a pledge agreement substantially identical in form and substance to the Borrower Pledge Agreement and (iv) if the Parent has not notified the Administrative Agent and each Lender of a REIT Conversion, such Subsidiaries must be Qualified REIT Subsidiaries;
(f) Accounts receivable that arise in the ordinary course of business and are payable on standard terms;
(h) Investments constituting Permitted Acquisitions permitted by Section 8.06(b) hereof;
(i) Investments in Pinnacle III so long as (i) such Investments are in accordance with the terms of the PT Transactions, (ii) Pinnacle III becomes a party to the Subsidiary Guaranty and executes any security documents required by the Administrative Agent to grant a security interest in its assets in accordance with the terms of Section 2.16(b) hereof and (iii) the Capital
Stock of Pinnacle III is pledged to the Lenders to secure the Obligations pursuant to a pledge agreement substantially identical in form and substance to the Borrower Pledge Agreement; and
(j) Certificates of deposit and Eurodollar time deposits with maturities of one year or less from the date of acquisition, overnight bank deposits and repurchase obligations having a term of not more than 30 days with respect to securities issued or fully guaranteed or insured by the United States government or any agency thereof, in each case, of either an Eligible Assignee or Brown Brothers Harriman & Co., provided that such Investments do not exceed $20,000,000 in the aggregate at any time outstanding.
8.06. Liquidation, Disposition or Acquisition of Assets, Merger, New Subsidiaries. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or dissolution) or otherwise wind up; or sell, lease, abandon, transfer or otherwise dispose of all or any part of its assets, Properties or business, other than in the ordinary course of business and other than assets that are damaged or obsolete), provided that, (i) any Subsidiary of the Borrower can be dissolved so long as the Borrower or a wholly-owned Subsidiary of the Borrower acquires all such Subsidiary's assets; and (ii) so long as there exists no Default or Event of Default both before and after giving effect to such sale (A) and the Borrower complies fully with Section 2.05(c) hereof, Borrower may consummate the sale of Towers (but not all or any substantial portion of Towers) and (B) the Borrower may transfer certain rooftop assets acquired by the Borrower in connection with the Motorola Acquisition to Pinnacle III in accordance with the PT Transactions;
(b) acquire any assets, Property or business of any other Person except
(i) the Borrower and the Subsidiaries of the Borrower may acquire assets and
Property acquired in the ordinary course of business and (ii) provided no
Default or Event of Default exists or would result therefrom, the Borrower may
consummate transactions constituting Permitted Acquisitions;
(c) enter into any merger or consolidation, except that, so long as there exists no Default or Event of Default and none is caused thereby, (i) any Subsidiary of the Borrower can merge or consolidate into any other Subsidiary of the Borrower, or so long as such transaction is in connection with a Permitted Acquisition, into another Person, so long as a Subsidiary of the Borrower is a survivor, or into the Borrower so long as the Borrower is the surviving corporation, and (ii) another Person may be merged into the Borrower or any Subsidiary of the Borrower in connection with a Permitted Acquisition, so long as the Borrower or such Subsidiary is the surviving corporation; or
(d) create or acquire any Subsidiary, except as permitted by Section 8.04(e) hereof.
In connection with any asset sale permitted by this Section 8.06, Section 11.01
hereof or otherwise consented to by the Lenders in accordance with the terms of
this Agreement, the Administrative Agent is hereby authorized by each Lender to
(i) execute any and all releases deemed appropriate by it to release such assets
of the Borrower and the Subsidiaries of the Borrower constituting Collateral
from all Liens and security interests securing all or any portion of the
Obligations, (ii) return to the Borrower any such Collateral in the possession
of the Administrative Agent, and (iii) take such other action as the
Administrative Agent deems necessary or appropriate in connection with such
transaction and in furtherance of the effectuation thereof.
8.07. Guaranties; Contingent Liabilities. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, at any time make or issue any Guaranty, or assume, be obligated with respect to, or permit to be outstanding any Contingent Liabilities, except pursuant to the Loan Papers, the Canada Indebtedness and the Canada Guaranty.
8.08. Restricted Payments. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, directly or indirectly declare, make or pay any Restricted Payment; provided, however
(a) any Subsidiary of the Borrower may declare and pay a Distribution to the Borrower, and
(b) so long as there exists no Default or Event of Default immediately before and after giving effect to any such transaction or payment,
(i) commencing April 30, 2000, the Borrower may make an annual Restricted Payment in an aggregate amount not to exceed in any fiscal year, the difference between Excess Cash Flow for the preceding calendar year and the amount required by Section 2.05(a) hereof to repay the Obligations, provided that, no such Restricted Payment may be made in any fiscal year of the Borrower until the Borrower has fully complied with Section 2.05(a) hereof with respect to such year,
(ii) the Borrower and the Parent may each make payments in kind on its Subordinated Debt (but only in kind payments and no cash payments),
(iii) so long as there has not been a REIT Conversion, the Borrower may annually make not more than two cash distributions to the Parent, who must use such cash distributions to make distributions to the Shareholders, each such distribution in an aggregate amount per taxable year equal to (A) the amount of gross income actually includible by the Shareholders on their Tax returns with respect to such taxable year solely as a result of the operations of the Parent, the Borrower and its Subsidiaries, multiplied by (B) the sum of the highest marginal Federal and highest marginal State income tax rates applicable to one or more of the Shareholders,
(iv) so long as there has not been a REIT Conversion, the Borrower may make one or more distributions with respect to any taxable year constituting Subordinated Debt to the Parent, who, to the extent such distribution is made by the Borrower may make one or more distributions with respect to any taxable year constituting Subordinated Debt to the Shareholders, each such distribution constituting Subordinated Debt not to exceed in the aggregate an amount necessary to enable the Parent to obtain the maximum possible deduction for dividends paid, as defined in Section 561 of the Code and further described in Section 857 of the Code for such year, taking into account the sum of all distributions previously paid to Shareholders in accordance with the terms of Section 8.08(b)(iii) above, provided that, in connection with any such distribution, the Parent shall take into consideration for such purpose the necessity of increasing the aggregate amounts distributed to reflect the fact that distributions in redemption of any preferred return on any class of stock will be treated as being made partly from earnings and profits and partly from capital,
(v) the Borrower may make an annual distribution to Parent in an amount not to exceed $25,000 to reimburse the Parent for its miscellaneous expenses,
(vi) until September 1, 2003, the Parent may make (A) payments in kind only on the Parent Senior Notes (but only in kind payments and no cash payments), in accordance with the terms of the Parent Senior Notes Documentation, and (B) payments in kind only on the Second Parent Issuance (but only in kind payments and no cash payments), in accordance with the terms of the Second Parent Issuance Documentation,
(vii) the Parent may repay in its entirety the Bridge Debt, but only
so long as the Parent uses the proceeds of (i) Debt issued in accordance
with the terms of Section 8.02(c)(i) hereof to repay such Bridge Debt or
(ii) equity issued in accordance with the terms of Section 8.11 hereof to
repay such Bridge Debt, and
(viii) the Borrower may repay seller debt permitted to be incurred in accordance with the terms of Section 8.02(h) hereof, so long as such repayments are in accordance with the terms thereof; and
(c) the Canada Sub may make payments of principal, interest and fees on the Canada Indebtedness.
8.10. Compliance with ERISA. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, directly or indirectly, or permit any member of its Controlled Group to directly or indirectly, (a) terminate any Plan so as to result in any material (in the opinion of the Majority Lenders) liability to the Borrower or any member of its Controlled Group, (b) permit to exist any ERISA Event, or any other event or condition which presents the risk of liability of the Borrower or any member of its Controlled Group, (c) make a complete or partial withdrawal (within the meaning of Section 4201 of ERISA) from any Multiemployer Plan so as to result in any liability to the Borrower or any member of its Controlled Group, (d) enter into any new Plan or modify any existing Plan so as to increase its obligations thereunder except in the ordinary course of business consistent with past practice which could result in any liability to the Borrower or any member of its Controlled Group, or (e) permit the present value of all benefit liabilities, as defined in Title IV of ERISA, under each Plan of the Borrower or any member of its Controlled Group (using the actuarial assumptions utilized by the PBGC upon termination of a plan) to exceed the fair market value of Plan assets allocable to such benefits all determined as of the most recent valuation date for each such Plan.
8.12. Sale and Leaseback. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, enter into any arrangement whereby it sells or transfers any of its assets, and thereafter rents or leases such assets, except that the Borrower may sell real estate that it owns and thereafter lease it subject to a Ground Lease, provided that the Borrower complies with the provisions of Sections 6.15 and 7.07 hereof as if the Borrower had acquired such leased property.
8.13. Sale or Discount of Receivables. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, directly or indirectly sell, with or without recourse, for discount or otherwise, any notes or accounts receivable.
8.14. Limitation on Restrictive Agreements. The Borrower shall not, and shall not permit the Parent or any Subsidiary of the Borrower to, enter into any indenture, agreement, instrument, financing document or other arrangement which, directly or indirectly, prohibits or restrains, or has the effect of prohibiting or restraining, or imposes materially adverse conditions upon (a) any amendment of, or waiver or consent to, any provision of this Agreement or any other Loan Paper and (b) the granting of any Liens to secure the Obligations, and, except with respect to the Parent Senior Notes, the Second Parent Issuance, the Bridge Debt, the Canada Indebtedness and the Canada Guaranty: (i) the incurrence of indebtedness, (ii) the granting of Liens, (iii) the making or granting of Guarantees, (iv) the payment of dividends or Distributions, (v) the purchase, redemption or retirement of any Capital Stock, (vi) the making of loans or advances, (vii) transfers or sales of property or assets (including Capital Stock) by the Parent, the Borrower or any of its Subsidiaries, (viii) the making of Investments and (ix) any change of control or management.
8.15. Synthetic Leases. The Borrower shall not, nor shall it permit any Subsidiary to, create any, or permit to exist, any Synthetic Lease.
ARTICLE IX. EVENTS OF DEFAULT
9.01. Events of Default. Any one or more of the following shall be an "Event of Default" hereunder, if the same shall occur for any reason whatsoever, whether voluntary or involuntary, by operation of Law, or otherwise:
(a) The Borrower shall fail to pay any (i) principal payable under any Loan Paper on the date due; or (ii) any interest, fees or other amounts payable within three days of the date due;
(b) Any representation or warranty made or deemed made by any Obligor (or any of its officers or representatives) under or in connection with any Loan Paper shall prove to have been incorrect or misleading in any material respect when made or deemed made;
(c) The Borrower shall fail to perform or observe any term or covenant contained in Article VIII hereof or in Section 7.04(e) hereof;
(d) Any Obligor shall fail to perform or observe any other term or covenant contained in any Loan Paper, other than those described in Sections 9.01(a), (b) and (c) above or in Section 6.15(a) hereof, and such failure shall not be remedied within thirty days following the earlier of the Borrower's knowledge of such failure or notice from any Lender of the occurrence of such failure;
(e) Any of the following shall occur: (i) Any Loan Paper or material
provision thereof shall, for any reason, not be valid and binding on the Obligor
signatory thereto, or not be in full force and effect, or shall be declared to
be null and void; or (ii) the validity or enforceability of any Loan Paper shall
be contested by any Obligor; or (iii) any Obligor shall deny in writing that it
has any or further liability or obligation under its respective Loan Papers; or
(iv) any default or breach under any provision of any Loan Papers shall continue
after the applicable grace period, if any, specified in such Loan Paper;
(f) Any of the following shall occur: (i) any Obligor shall make an assignment for the benefit of creditors or be unable to pay its debts generally as they become due; (ii) any Obligor shall petition or apply to any Tribunal for the appointment of a trustee, receiver, or liquidator of it, or of any substantial part of its assets, or shall commence any proceedings relating to any Obligor under any Debtor Relief Laws; (iii) any such petition or application shall be filed, or any such proceedings shall be commenced, against any Obligor, or an order, judgment or decree shall be entered appointing any such trustee, receiver, or liquidator, or approving the petition in any such proceedings, and such petition or application shall be consented to or uncontested by such Obligor, or if contested by such Obligor, shall not be dismissed within 60 days following the filing of such petition or application; (iv) any final order, judgment, or decree shall be entered in any proceedings against any Obligor decreeing its dissolution; or (v) any final order, judgment, or decree shall be entered in any proceedings against any Obligor decreeing its split-up which requires the divestiture of a substantial part of its assets;
(g) Any of the following shall occur: (i) The Borrower or any other Obligor shall fail to pay any Subordinated Debt, Debt evidenced by the Parent Senior Notes, Debt evidenced by any Second Parent Issuance Documentation, Bridge Debt or any other Debt, or obligations in respect of Capital Leases (other than Debt under the Loan Papers) in an aggregate amount of $1,000,000 or more when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or (ii) the Borrower or any other Obligor shall fail to perform or observe any term or covenant contained in any agreement or instrument relating to any such Debt, when required to be performed or observed, and such failure shall continue after the applicable grace period, if any, specified in such agreement or instrument, and can result in acceleration of the maturity of such Debt; or (iii) any such Debt shall be declared to be due and payable, or required to be prepaid, mandatorily redeemed or repurchased (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof;
(h) Any Obligor shall have any final judgment(s) outstanding against it for the payment of $1,000,000 or more, and such judgment(s) shall remain unstayed, in effect, and unpaid for the period of time after which the judgment holder may and may cause the creation of Liens against or seizure of any of its Property;
(i) Any of the following shall have occurred: (i) Any ERISA Event shall have occurred with respect to a Plan of the Borrower, and the sum of the Insufficiency of such Plan and liabilities relating thereto is equal to or greater than $1,000,000 or (ii) the Borrower or any ERISA Affiliate of the Borrower shall have committed a failure described in Section 302(f)(l) of ERISA, and the amount determined under Section 302(f)(3) of ERISA is equal to or greater than $1,000,000;
(j) The Borrower or any ERISA Affiliate of the Borrower shall have been notified by the sponsor of a Multiemployer Plan that (A) it has incurred Withdrawal Liability to such Plan in an amount that, exceeds $1,000,000 or requires payments exceeding $1,000,000 per annum, or (B) such Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result thereof the aggregate annual contributions to all Multiemployer Plans in reorganization or being terminated is increased over the amounts contributed to such Plans for the preceding Plan year by an amount exceeding $1,000,000;
(k) Any Obligor shall be required under any Environmental Law (i) to implement any remedial, neutralization, or stabilization process or program, the cost of which would constitute a Material Adverse Change, or (ii) to pay any penalty, fine, or damages in an aggregate amount which would constitute a Material Adverse Change;
(l) Any of the following shall have occurred: (i) Any Property (whether leased or owned), or the operations conducted thereon by any Obligor or any current or prior owner or operator thereof (in the case of real Property), shall violate or have violated any applicable Environmental Law, if such violation would constitute a Material Adverse Change; or (ii) such Obligor shall not obtain or maintain any License required to be obtained or filed under any Environmental Law in connection with the use of such Property and assets, including without
limitation past or present treatment, storage, disposal, or release of Hazardous Materials into the environment, if the failure to obtain or maintain the same would constitute a Material Adverse Change;
(m) Any of the following shall have occurred: (i) Any Loan Paper shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien in the Collateral purported to be covered thereby (except as permitted by the terms of this Agreement or consented to by the Lenders); (ii) any Loan Paper shall for any reason cease to secure the Obligations purported to be secured thereby (except as permitted by the terms of this Agreement or consented to by the Lenders); or (iii) less than 100% of the Capital Stock of the Borrower shall be pledged to secure the Obligations;
(n) Any of the following shall have occurred: (i) A final non-appealable order is issued by any Tribunal, including, but not limited to, the FCC, the FAA or the United States Justice Department, requiring Borrower to divest a substantial portion of its assets pursuant to any antitrust, restraint of trade, unfair competition, industry regulation, or similar Laws, or (ii) any Tribunal shall condemn, seize, or otherwise appropriate, or take custody or control of all or any substantial portion of the assets of Borrower;
(o) Any of the following shall have occurred if the effect thereof is to cause a Material Adverse Change: (i) Any License whether presently existing or hereafter granted to or obtained by Borrower or any Subsidiary of the Borrower shall expire without renewal on or before payment in full of the Notes and all Obligations hereunder, or be suspended or revoked, or (ii) Borrower or any Subsidiary of the Borrower shall become subject to any injunction or other order affecting or which may affect Borrower's or a Subsidiary of the Borrower's present or proposed operations under any such License;
(p) The occurrence of one of more of the following events: (i) the occurrence of a Change of Control, or (ii) the Parent shall own less than 100% of the Capital Stock of the Borrower, or the Borrower shall own less than 100% of its Subsidiaries; or (iii) any one of the President, Chief Executive Officer, Chief Financial Officer or Chief Operating Officer of the Borrower shall, for any reason, fail to perform the primary roles and functions of such position on behalf of the Borrower (whether pursuant to death, extended disability, termination, resignation or otherwise) AND the Borrower shall not have replaced such senior executive with a new employee reasonably acceptable to the Majority Lenders within 60 days after such failure;
(q) For any taxable year, the Borrower shall have made any Restricted Payment to the Parent, or the Parent shall have made any Restricted Payment to any Shareholder in accordance with the terms of Section 8.08(b)(iii) hereof for the tax liability of any Shareholder for such taxable year, and the Borrower or the Parent shall also have paid or be subject to any Federal income tax on any amount in excess of five percent of the Borrower's real estate investment trust taxable income for such taxable year;
(r) Any civil action, suit or proceeding shall be commenced against Borrower, the Parent, or any Subsidiary of the Borrower under any federal or state racketeering statute (including, without limitation, the Racketeer Influenced and Corrupt Organization Act of 1970)
("RICO") and such suit shall be adversely determined by a court of applicable jurisdiction and forfeiture shall commence against assets in the aggregate having fair market value of $1,000,000 or more, or any criminal action or proceeding shall be commenced against the Borrower, the Parent, or any Subsidiary of the Borrower under any federal or state racketeering statute (including, without limitation, RICO);
(s) With respect to Parent, Borrower or any Subsidiary of the Borrower, if the Parent and the Borrower have not notified the Administrative Agent in accordance with the terms of Section 7.04(e) hereof of a REIT Conversion, (i) any such entity fails to pay dividends in the amount of taxable income necessary to maintain Parent's REIT Status, or (ii) Parent shall fail to maintain its REIT Status or (iii) Borrower or any Subsidiary of Borrower shall fail to maintain its status as a Qualified REIT Subsidiary;
(t) A "Change of Control" as that term is defined in the Parent Senior Notes Documentation or any Second Parent Issuance Documentation shall occur;
(u) The Borrower shall not have received an equity contribution within five days after the payment by the Borrower of cash dividends in accordance with the terms of Sections 8.08(b)(iii) and (iv) hereof ("Tax Dividends"), in an amount not less than the difference between (i) the aggregate amount of such Tax Dividends and (ii) the Shareholder's maximum tax liability as a result of the operations of the Borrower (after giving effect to all tax benefits); or
(v) There shall exist any default or breach with respect to any of the Canada Indebtedness Agreements.
9.02. Remedies upon Default. If an Event of Default described in Section 9.01(f) shall occur with respect to any Obligor, the aggregate unpaid principal balance of and accrued interest on all Advances shall, to the extent permitted by applicable Law, thereupon automatically become due and payable concurrently therewith, without any action by Administrative Agent or any Lender, and without diligence, presentment, demand, protest, notice of protest or intent to accelerate, or notice of any other kind, all of which are hereby expressly waived. Subject to the foregoing sentence, if any Event of Default shall occur and be continuing, Administrative Agent may at its election, or shall at the direction of the Majority Lenders, do any one or more of the following:
(a) Declare the entire unpaid balance of all Advances immediately due and payable, whereupon it shall be due and payable without diligence, presentment, demand, protest, notice of protest or intent to accelerate, or notice of any other kind (except notices specifically provided for under Section 9.01 hereof), all of which are hereby expressly waived (except to the extent waiver of the foregoing is not permitted by applicable Law);
(b) Terminate the Commitment;
(c) Reduce any claim of Administrative Agent and Lenders to judgment;
(d) Demand (and the Borrower shall pay to Administrative Agent immediately upon demand and in immediately available funds), the amount equal to the aggregate amount of the Letters of Credit then outstanding, irrespective of whether such Letters of Credit have been drawn upon, all as set forth and in accordance with the terms of provisions of Article III hereof. The Administrative Agent shall promptly advise the Borrower of any such declaration or demand but failure to do so shall not impair the effect of such declaration or demand; and
(e) Exercise any Rights afforded under any Loan Papers, by Law, including but not limited to the UCC, at equity, or otherwise.
9.03. Cumulative Rights. All Rights available to Administrative Agent and Lenders under the Loan Papers shall be cumulative of and in addition to all other Rights granted thereto at Law or in equity, whether or not amounts owing thereunder shall be due and payable, and whether or not Administrative Agent or any Lender shall have instituted any suit for collection or other action in connection with the Loan Papers.
9.04. Waivers. The acceptance by Administrative Agent or any Lender at any time and from time to time of partial payment of any amount owing under any Loan Papers shall not be deemed to be a waiver of any Default or Event of Default then existing. No waiver by Administrative Agent or any Lender of any Default or Event of Default shall be deemed to be a waiver of any Default or Event of Default other than such Default or Event of Default. No delay or omission by Administrative Agent or any Lender in exercising any Right under the Loan Papers shall impair such Right or be construed as a waiver thereof or an acquiescence therein, nor shall any single or partial exercise of any such Right preclude other or further exercise thereof, or the exercise of any other Right under the Loan Papers or otherwise.
9.05. Performance by Administrative Agent or any Lender. Should any covenant of any Obligor fail to be performed in accordance with the terms of the Loan Papers, Administrative Agent may, at its option, perform or attempt to perform such covenant on behalf of such Obligor. Notwithstanding the foregoing, it is expressly understood that neither Administrative Agent nor any Lender assumes, and shall not ever have, except by express written consent of Administrative Agent or such Lender, any liability or responsibility for the performance of any duties or covenants of any Obligor.
9.06. Expenditures. The Borrower shall reimburse Administrative Agent and
each Lender for any reasonable sums spent by it in connection with the exercise
of any Right under Section 9.05 hereof. Such sums shall bear interest at the
lesser of (a) the Base Rate (whether or not in effect), plus 2.00% per annum and
(b) the Highest Lawful Rate, from five days after the date any Lender makes
demand to the Borrower for reimbursement of such amount until the date of
repayment by the Borrower.
the owner of any partnership, stock or other equity interest in any Person, whether through foreclosure or otherwise, it shall be entitled to exercise such legal Rights as it may have by being an owner of such stock or other equity interest in such Person.
ARTICLE X. THE ADMINISTRATIVE AGENT
10.02. Administrative Agent's Reliance, Etc. Neither Administrative Agent, nor any of its directors, officers, agents, employees, or representatives shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any other Loan Paper, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, Administrative Agent (a) may treat the payee of any Note as the holder thereof until Administrative Agent receives written notice of the assignment or transfer thereof signed by such payee and in form satisfactory to Administrative Agent; (b) may consult with legal counsel (including counsel for the Borrower or any of its Subsidiaries), independent public accountants, and other experts selected by it, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants, or experts; (c) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties, or representations made in or in connection with this Agreement or any other Loan Papers; (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants, or conditions of this Agreement or any other Loan Papers on the part of any Obligor or its Subsidiaries or to inspect the Property (including the books and records) of any Obligor or its Subsidiaries; (e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency, or value of this Agreement, any other Loan Papers, or any other instrument or document furnished pursuant hereto; and (f) shall incur no liability under or in respect of this Agreement or any other
Loan Papers by acting upon any notice, consent, certificate, or other instrument or writing believed by it to be genuine and signed or sent by the proper party or parties.
10.03. Bank of America, N.A. and Affiliates. With respect to its portion of the Commitment, its Advances, the Canada Indebtedness, and any Loan Papers, Bank of America, N.A. has the same Rights under this Agreement as any other Lender and may exercise the same as though it were not Administrative Agent. Bank of America, N.A. and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, any Obligor, any Affiliate thereof, and any Person who may do business therewith, all as if Bank of America, N.A. were not Administrative Agent and without any duty to account therefor to any Lender.
10.04. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon Administrative Agent or any other Lender, and based on the financial statements referred to in Section 5.01(j), Article VII hereof and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Papers.
10.06. Successor Administrative Agent. Administrative Agent may resign at any time by giving written notice thereof to Lenders and the Borrower, and may be removed at any time with or without cause by the action of all Lenders (other than Administrative Agent, if it is a Lender). Upon any such resignation, Majority Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within thirty days after the retiring Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of Lenders, appoint a successor Administrative Agent, which shall be a commercial bank organized under the Laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the Rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Papers, provided that if the retiring or removed Administrative Agent is unable to appoint a successor Administrative Agent, Administrative Agent shall, after the expiration of a sixty day period from the date of notice, be relieved of all obligations as Administrative Agent hereunder. Notwithstanding any Administrative Agent's resignation or removal hereunder, the provisions of this Article shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.
ARTICLE XI. MISCELLANEOUS
11.02. Notices.
(a) Manner of Delivery. All notices communications and other materials to be given or delivered under the Loan Papers shall, except in those cases where giving notice by telephone is expressly permitted, be given or delivered in writing. All written notices, communications and materials shall be sent by registered or certified mail, postage prepaid, return receipt requested, by telecopier, or delivered by hand. In the event of a discrepancy between any telephonic notice and any written confirmation thereof, such written confirmation shall be deemed the effective notice except to the extent Administrative Agent, any Lender or the Borrower has acted in reliance on such telephonic notice.
(b) Addresses. All notices, communications and materials to be given or delivered pursuant to this Agreement shall be given or delivered at the following respective addresses and telecopier and telephone numbers and to the attention of the following individuals or departments:
(i) If to the Borrower:
Pinnacle Towers Inc.
1549 Ringling Boulevard
3rd Floor
Sarasota, Florida 34236
Telephone No.: (941) 364-8886
Telecopier No.: (941) 364-8761
Attention: Mr. Steve Day
(ii) If to Administrative Agent:
Bank of America, N.A.
Bank of America Plaza
901 Main Street, 64th Floor
Dallas, Texas 75202
Telephone No.: (214) 209-0988 Telecopier No.: (214) 209-9390 Attention: Ms. Roselyn M. Drake Principal |
With a copy to:
Donohoe, Jameson & Carroll, P.C.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Telephone No.: (214) 698-3814 Telecopier No.: (214) 744-0231 Attention: Melissa Ruman Stewart |
or at such other address or, telecopier or telephone number or to the attention of such other individual or department as the party to which such information pertains may hereafter specify for the purpose in a notice to the other specifically captioned "Notice of Change of Address".
11.03. Parties in Interest and Register. All covenants and agreements contained in this Agreement and all other Loan Papers shall bind and inure to the benefit of the respective successors and assigns of the parties hereto. Each Lender may from time to time assign or transfer its interests hereunder pursuant to Section 11.04 hereof. The Borrower may not assign or transfer its Rights or obligations hereunder without the prior written consent of Administrative Agent. The Borrower shall maintain a register (the "Register") indicating (a) each Person entitled to receive principal and interest with respect to the all or any portion of the Loans and (b) each transfer of all or any portion of the Loans. The Borrower shall have no liability or obligation resulting from errors or mistakes in such Register to the extent that
the Borrower has not received notice of assignment or transfer in accordance with the terms of Section 11.04 hereof.
11.04. Assignments and Participations.
(a) Each Lender (an "Assignor") may assign its Rights and obligations as a
Lender under the Loan Papers to one or more Eligible Assignees pursuant to an
Assignment and Acceptance, so long as (i) each assignment shall be of a
constant, and not a varying percentage of all Rights and obligations thereunder,
(ii) each Assignor shall obtain in each case the prior written consent of
Administrative Agent and the Borrower, in each case such consent not to be
unreasonably withheld or delayed, provided that, in the event there exists a
Default or Event of Default, any such consent of the Borrower shall not be
required, (iii) each Assignor shall in each case pay a $3,500 processing fee to
Administrative Agent and (iv) no such assignment is for an amount less than
$3,000,000 (and, if such assignment is a partial assignment, no Lender shall
hold less than $3,000,000 immediately after giving effect to any assignment
unless it is assigning such Lender's entire interest), in each case, unless
otherwise consented to by the Administrative Agent. Assignments and other
transfers (except participations) with respect to each Lender's participation in
a given Letter of Credit may only be made with the prior written consent of the
Administrative Agent. Within five Business Days after Administrative Agent and
the Borrower receive notice of any such assignment, the Borrower shall (A)
record such transfers and assignments in the Register and (B) execute and
deliver to Administrative Agent, in exchange for the Notes issued to Assignor,
new Notes to the order of such Assignor and its assignee in amounts equal to
their respective Revolver Specified Percentages of the Commitment, the
respective Term Loan A Specified Percentages of $125,000,000 and their
respective Term Loan B Specified Percentages of $110,000,000. Such new Notes
shall be dated the effective date of the assignment. It is specifically
acknowledged and agreed that on and after the effective date of each assignment,
the assignee shall be a party hereto and shall have the Rights and obligations
of a Lender under the Loan Papers.
(c) Any Lender may, in connection with any assignment or participation, or proposed assignment or participation, disclose to the assignee or participant, or proposed assignee or participant, any information relating to any Obligor furnished to such Lender by or on behalf of any Obligor.
(d) Notwithstanding any other provision set forth in this Agreement, (i) any Lender may at any time create a security interest in all or any portion of its Rights under this Agreement
(including, without limitation, the Advances owing to it and the Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System and any Lender that is a fund that invests in bank loans may, without the consent of the Administrative Agent or the Borrower, pledge its Note or any other instrument evidencing its rights as a Lender under this Agreement to any holder of obligations owed, or securities issued, by such fund as security for such obligations or securities, or to any trustee for, or any other representative of, such holders; provided that any foreclosure or similar action by such trustee shall be subject to the provisions of this Section concerning assignments, (ii) no participant of any Lender may further assign or participate any of its interest in the Loan Papers to any Person (except as may be required by Law or a Tribunal having authority over such participant), and (iii) no Lender (other than Bank of America, N.A.) may assign any of its interest in the Loan Papers to any Person (except as may be required by Law or a Tribunal having authority over Bank of America, N.A.) except as specifically provided in Section 11.04 hereof.
11.06. Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by Law, to set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the other Loan Papers, whether or not Administrative Agent or any Lender shall have made any demand under this Agreement or the other Loan Papers, and even if such obligations are unmatured. Each Lender shall promptly notify the Borrower after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application. The Rights of each Lender under this Section 11.06 are in addition to other Rights (including, without limitation, other Rights of set-off) which such Lender may have.
11.07. Costs, Expenses, and Taxes.
(a) The Borrower agrees to pay on demand (i) all costs and expenses of Administrative Agent and BAS in connection with the preparation and negotiation of all Loan Papers, including without limitation the reasonable fees and out-of-pocket expenses of Special Counsel, (ii) all costs and expenses of Administrative Agent and BAS in connection with any syndication of the Loans, including without limitation the costs of all amendments to this Agreement and the Loan Papers and the reasonable fees and out-of-pocket expenses of Special Counsel, (iii) all costs and expenses (including reasonable attorneys' fees and expenses) of Administrative Agent in connection with any interpretation, grant and perfection of any Lien, modification, amendment, waiver, release of any Loan Papers, restructuring or work-out and (iv) all costs and expenses (including reasonable attorneys' fees and expenses) of Administrative Agent and each Lender in connection with any collection of any portion of the Obligations or the enforcement of any Loan Papers during the continuance of an Event of Default.
(b) In addition, the Borrower shall pay any and all stamp, debt, and other
Taxes ("Other Taxes") payable or determined to be payable in connection with any
payment hereunder (other than Taxes on the overall net income of Administrative
Agent or any Lender or franchise Taxes or Taxes on capital or capital receipts
of Administrative Agent or any Lender), or the execution, delivery, or
recordation of any Loan Papers, and agrees to save Administrative Agent and each
Lender harmless from and against any and all liabilities with respect to, or
resulting from any delay in paying or omission to pay any Taxes in accordance
with this Section 11.07, including any penalty, interest, and expenses relating
thereto. All payments by the Borrower or any Subsidiary of the Borrower under
any Loan Papers shall be made free and clear of and without deduction for any
present or future Taxes (other than Taxes on the overall net income of
Administrative Agent or any Lender of any nature now or hereafter existing,
levied, or withheld, or franchise Taxes or Taxes on capital or capital receipts
of Administrative Agent or any Lender), including all interest, penalties, or
similar liabilities relating thereto. If the Borrower shall be required by Law
to deduct or to withhold any Taxes from or in respect of any amount payable
hereunder (i) the amount so payable shall be increased to the extent necessary
so that, after making all required deductions and withholdings (including Taxes
on amounts payable to Administrative Agent or any Lender pursuant to this
sentence), Administrative Agent or any Lender receives an amount equal to the
sum it would have received had no such deductions or withholdings been made,
(ii) the Borrower shall make such deductions or withholdings, and (iii) the
Borrower shall pay the full amount deducted or withheld to the relevant taxing
authority in accordance with applicable Law.
obligation to indemnify such Lender or the Administrative Agent (i) unless
notice has been given by such Lender or the Administrative Agent, as applicable,
in a time sufficient to afford the Borrower, in good faith, a reasonable
opportunity to contest such payment by such Lender or the Administrative Agent,
provided such opportunity to contest exists under Applicable Law, and (ii) until
such Lender or the Administrative Agent shall have delivered to the Borrower a
certificate setting forth in reasonable detail the basis of the Borrower's
obligation to indemnify such Lender or the Administrative Agent pursuant to this
Section 11.07. This indemnification shall be made within 30 days from the date
such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(e) Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a Lender which becomes a party hereto pursuant to Section 11.04 after the Closing Date, the date upon which such Lender becomes a party hereto) deliver to the Borrower through the Administrative Agent, with a copy to the Administrative Agent:
in each case indicating that such Lender is on the date of delivery thereof entitled to receive payments of principal, interest and fees for the account of such lending office or lending offices under this Agreement free from withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office or lending offices or selects an additional lending office it shall, at the same time or reasonably promptly thereafter but only to the extent the forms previously delivered by it hereunder are no longer effective, deliver to the Borrower through the Administrative Agent, with a copy to the Administrative Agent, in replacement for the forms previously delivered by it hereunder:
(A) if such changed or additional lending office is located in the United States of America, two (2) accurate and complete signed originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of Form 1001 or W-8, as applicable,
in each case indicating that such Lender is on the date of delivery thereof entitled to receive payments of principal, interest and fees for the account of such changed or additional lending office under this Agreement free from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in clause
(ii) above) requiring a change in the most recent Form 4224, Form 1001 or
Form W-8 previously delivered by such Lender and if the delivery of the same
be lawful, deliver to the Borrower through the Administrative Agent with a
copy to the Administrative Agent, two (2) accurate and complete original
signed copies of Form 4224, Form 1001 or Form W-8 in replacement for the
forms previously delivered by such Lender; and
(iv) it shall, promptly upon the request of the Borrower to that effect, deliver to the Borrower such other forms or similar documentation as may be required from time to time by any applicable law, treaty, rule or regulation in order to establish such Lender's tax status for withholding purposes.
(f) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 11.07 shall survive the payment in full of principal and interest
hereunder.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 11.07 shall use its reasonable best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office, if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the sole judgment of such Lender, be
otherwise disadvantageous to such Lender.
(h) Each Lender (and the Administrative Agent with respect to payments to the Administrative Agent for its own account) agrees that (i) it will take all reasonable actions by all usual means to maintain all exemptions, if any, available to it from United States withholding
11.09. Severability. If any provision of any Loan Papers is held to be illegal, invalid, or unenforceable under present or future Laws during the term thereof, such provision shall be fully severable, the appropriate Loan Paper shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part thereof, and the remaining provisions thereof shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance therefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as a part of such Loan Paper a legal, valid, and enforceable provision as similar in terms to the illegal, invalid, or unenforceable provision as may be possible.
11.10. Exceptions to Covenants. No Obligor shall be deemed to be permitted to take any action or to fail to take any action that is permitted as an exception to any covenant in any Loan Papers, or that is within the permissible limits of any covenant, if such action or omission would result in a violation of any other covenant in any Loan Papers.
11.11. Counterparts. This Agreement and the other Loan Papers may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. In making proof of any such agreement, it shall not be necessary to produce or account for any counterpart other than one signed by the party against which enforcement is sought.
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO BE CONTRACTS MADE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS) AND THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS, WILL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH OTHER PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT, EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, THE OTHER LOAN PAPERS, OR ANY RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
(b) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS UPON IT. THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL. NOTHING IN THIS SECTION 11.12 SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
11.13. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
11.14. Amendment, Restatement, Extension, Renewal and Increase. This Agreement is a renewal and amendment and restatement of the Original Credit Agreement, and, as such, except for the "Obligation" as
defined in the Original Credit Agreement (which shall survive, be renewed and restated by the terms of this Agreement), all other terms and provisions supersede in their entirety the Original Credit Agreement. All subordination agreements, security agreements, pledge agreements, mortgages, deeds of trust and other documents and instruments granting any security interest or assigning any interest in any assets of the Borrower or any Subsidiary to secure the Obligation executed and delivered in connection with this Agreement that restate any previously granted interest shall supersede any subordination agreements, security agreements, pledge agreements, mortgages, deeds of trust and other documents and instruments granting any security interest or assigning any interest in any assets of the Borrower or any Subsidiary that were executed and delivered in connection with the Original Credit Agreement (the "Original Security Documents"), except for the Liens created under the Original Security Documents which shall remain valid, binding and enforceable Liens against the Borrower, the Subsidiaries and each of the other Persons granting any such Liens. All other Original Security Documents shall continue to secure the Obligations as herein defined, and shall be in full force and effect.
IN WITNESS WHEREOF, this Fifth Amended and Restated Credit Agreement is executed as of the date first set forth above.
THE BORROWER:
PINNACLE TOWERS INC.
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative
Agent
LENDERS:
Term Loan A Specified Percentage: 7.7777778% BANK OF AMERICA, N.A., individually as a Lender Term Loan B Specified Percentage: 21.8181818% ________________________________________ By: Roselyn M. Drake Revolver Its: Principal Specified Percentage: 3.2490079% Total Specified Percentage: 11.0638298% Address: Bank of America Plaza 901 Main Street, 64th Floor Dallas, Texas 75202 Attn.: Roselyn M. Drake Telephone: (214) 209-0988 Telecopy: (214) 209-9390 105 |
Term Loan A Specified Percentage: 7.7777778% BANKBOSTON, N.A. Term Loan B Specified Percentage: 7.2727273% __________________________________ By: ______________________________ Revolver Its:______________________________ Specified Percentage: 8.1597222% Total Specified Percentage: 7.6595745% Address: 100 Federal Street, MA 01-08-08 Boston, Massachusetts 02110 Attn.: Lenny L. Mason Telephone: (617) 434-6489 |
Telecopy: (617) 434-3401
Term Loan A Specified Percentage: 7.7777778% BANKERS TRUST COMPANY Term Loan B Specified Percentage: 7.2727273% _______________________________________ By: ___________________________________ Revolver Its: __________________________________ Specified Percentage: 8.1597222% Total Specified Percentage: 7.6595745% Address: 130 Liberty Street New York, New York 10006 Attn.: James Cullen Telephone: (212) 250-7343 |
Telecopy: (212) 250-7351
Term Loan A Specified Percentage: 6.9444444% SOCIETE GENERALE Term Loan B Specified Percentage: 7.2727273% ------------------------------ By: -------------------------- Revolver Its:-------------------------- Specified Percentage: 7.2854663% Total Specified Percentage: 7.0212766% |
Address:
1221 Avenue of the Americas
New York, New York 10020
Attn.: John Sadik-Khan
Telephone: (212) 278-6873 Telecopy: (212) 267-6240 |
Term Loan A Specified Percentage: 7.7777778% UNION BANK OF CALIFORNIA, N.A. Term Loan B Specified Percentage: 4.5454545% ---------------------------------- By: ------------------------------ Revolver Its:------------------------------ Specified Percentage: 8.1597222% Total Specified Percentage: 7.0212766% |
Address:
445 S. Figueroa Street, 16th Floor
Los Angeles, California 90071
Attn.: Peter Connoy
Telephone: (213) 236-6803 Telecopy: (213) 236-5747 |
Term Loan A Specified Percentage: 7.7777778% KEY CORPORATE CAPITAL INC. Term Loan B Specified Percentage: 4.5454545% -------------------------------- By: ---------------------------- Revolver Its:---------------------------- Specified Percentage: 8.1597222% Total Specified Percentage: 7.0212766% Address: 127 Public Square Mail Code: OH-01-27-0602 Cleveland, Ohio 44114 Attn.: Jason Weaver Telephone: (216) 689-4457 Telecopy: (216) 689-4666 |
Term Loan A Specified Percentage: 6.9444444% COBANK, ACB Term Loan B Specified Percentage: 0.0000000% ---------------------------- By: ------------------------ Revolver Its:------------------------ Specified Percentage: 7.2854663% Total Specified Percentage: 5.3191489% Address: 5500 South Quebec Street Englewood, Colorado 80111 Attn.: Terry Fountain Telephone: (303) 694-5864 Telecopy: (303) 224-2553 |
Term Loan A Specified Percentage: 6.9444444% CREDIT LYONNAIS NEW YORK BRANCH Term Loan B Specified Percentage: 0.0000000% -------------------------------------- By: ---------------------------------- Revolver Its:---------------------------------- Specified Percentage: 7.2854663% Total Specified Percentage: 5.3191489% |
Address:
1301 Avenue of the Americas
New York, New York 10019
Attn.: Patrick McCarthy
Telephone: (212) 261-7263 Telecopy: (212) 261-3288 |
Term Loan A Specified Percentage: 6.9444444% THE BANK OF NOVA SCOTIA Term Loan B Specified Percentage: 0.0000000% ------------------------------ By: -------------------------- Revolver Its:-------------------------- Specified Percentage: 7.2854663% Total Specified Percentage: 5.3191489% Address: One Liberty Plaza New York, New York 10006 Attn.: Stuart Malakoff Telephone: (212) 225-5639 Telecopy: (212) 225-5090 |
Term Loan A Specified Percentage: 5.5555556% DRESDNER BANK AG NEW YORK & GRAND CAYMAN BRANCHES Term Loan B Specified Percentage: 0.0000000% -------------------------------------- By: ---------------------------------- Revolver Its:---------------------------------- Specified Percentage: 5.8283730% Total Specified Percentage: 4.2553191% Address: 75 Wall Street New York, New York 10005 Attn.: William E. Lambert Telephone: (212) 429-2459 Telecopy: (212) 429-4181 |
Term Loan A Specified Percentage: 4.1666667% MERCANTILE BANK NATIONAL ASSOCIATION Term Loan B Specified Percentage: 0.0000000% --------------------------------------- By: ----------------------------------- Revolver Its:----------------------------------- Specified Percentage: 4.3712799% Total Specified Percentage: 3.1914894% Address: One Merchantile Center 7th & Washington, 12-3 St. Louis, Missouri 63101 Attn.: Michael J. Homeyer Telephone: (314) 418-8129 Telecopy: (314) 418-8292 |
Term Loan A Specified Percentage: 4.1666667% U.S. BANK NATIONAL ASSOCIATION Term Loan B Specified Percentage: 0.0000000% -------------------------------------- By: ---------------------------------- Revolver Its:---------------------------------- Specified Percentage: 4.3712798% Total Specified Percentage: 3.1914894% |
Address:
1420 Fifth Avenue, 10th Floor
Seattle, Washington 98101
Attn.: Thomas G. Gunder
Telephone: (206) 344-5694 Telecopy: (206) 344-2331 |
Term Loan A Specified Percentage: 4.1666667% CREDIT LOCAL DE FRANCE - NEW YORK AGENCY Term Loan B Specified Percentage: 0.0000000% -------------------------------------- By: ---------------------------------- Revolver Its:---------------------------------- Specified Percentage: 4.3712798% Total Specified Percentage: 3.1914894% |
Address:
450 Park Avenue, 3rd Floor
New York, New York 10022
Attn.: Michael Wiskind
Telephone: (212) 515-7031 Telecopy: (212) 753-5522 |
Term Loan A Specified Percentage: 4.1666667% IBM CREDIT CORPORATION Term Loan B Specified Percentage: 0.0000000% -------------------------------------- By: ---------------------------------- Revolver Its:---------------------------------- Specified Percentage: 4.3712798% Total Specified Percentage: 3.1914894% Address: North Castle Drove Armonk, New York 10504 Attn.: Stephen Santini Telephone: (914) 765-6605 Telecopy: (914) 765-6271 |
Term Loan A
Specified Percentage: 4.1666667% THE CIT GROUP/EQUIPMENT FINANCING,
INC.
Term Loan B Specified Percentage: 0.0000000% -------------------------------------- By: ---------------------------------- Revolver Its:---------------------------------- Specified Percentage: 4.3712798% Total Specified Percentage: 3.1914894% |
Address:
900 Ashwood Parkway, Suite 600
Atlanta, Georgia 30338
Attn.: Russ Hanley
Telephone: (770) 551-7801 Telecopy: (770) 206-9295 |
Term Loan A Specified Percentage: 2.7777778% ALLFIRST BANK Term Loan B Specified Percentage: 0.0000000% -------------------------------------- By: ---------------------------------- Revolver Its:---------------------------------- Specified Percentage: 2.9141865% Total Specified Percentage: 2.1276596% Address: 25 S. Charles Street 18th Floor, M/C 101-511 Baltimore, Maryland 21202 Attn.: Wendy Andrus Telephone: (410) 545-2044 Telecopy: (410) 244-4920 |
Term Loan A Specified Percentage: 2.7777778% CITY NATIONAL BANK Term Loan B Specified Percentage: 0.0000000% -------------------------------------- By: ---------------------------------- Revolver Its:---------------------------------- Specified Percentage: 2.9141865% Total Specified Percentage: 2.1276596% |
Address:
400 North Roxbury, 3rd Floor
Beverly Hills, California 90210
Attn.: Patrick M. Drum
Telephone: (310) 888-6526 Telecopy: (310) 888-6564 |
Term Loan A Specified Percentage: 1.3888889% RAYMOND JAMES BANK, FSB Term Loan B Specified Percentage: 0.0000000% --------------------------------------- By: ----------------------------------- Revolver Its:----------------------------------- Specified Percentage: 1.4570933% Total Specified Percentage: 1.0638298% Address: 710 Carillon Parkway St. Petersburg, Florida 33716 Attn.: John D. Hallstrom Telephone: (727) 573-3800 x4847 Telecopy: (727) 573-8377 |
Term Loan B Specified Percentage: 13.6363636% HELLER FINANCIAL, INC. Total Specified Percentage: 3.1914894% -------------------------------------- By: ---------------------------------- Its:---------------------------------- Address: 500 W. Monroe Street Chicago,Illinois 60661 Attn.: Sheila Weimer Telephone: (312) 441-7947 Telecopy: (312) 441-7357 |
Term Loan B Specified Percentage: 5.4545455% PILGRIM PRIME RATE TRUST By: Pilgrim Investment, Inc., as its investment manager Total Specified Percentage: 1.2765957% -------------------------------------- By: ---------------------------------- Its:---------------------------------- Address: Two Renaissance Tower |
40 North Central Avenue, Suite 1200
Pheonix, Arizona 85004-4424
Attn.: Melonie Clark
Telephone: (602) 417-8268 Telecopy: (602) 417-8321 |
Term Loan B Specified Percentage: 9.0909091% PPM SPYGLASS FUNDING TRUST Total Specified Percentage: 2.1276596% --------------------------------------- By: ----------------------------------- Its:----------------------------------- |
Address:
c/o Banc of America Securities LLC
100 North Tryon Street
NC1-007-06-07
Charlotte, North Carolina 28255
Attn.: Kelly C. Walker
Telephone: (704) 388-8943 Telecopy: (704) 388-0648 |
Term Loan B
Specified Percentage: 11.8181818% MORGAN STANLEY DEAN WITTER PRIME INCOME
TRUST
Total Specified Percentage: 2.7659574% --------------------------------------- By: ----------------------------------- Its:----------------------------------- |
Address:
c/o Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center, 72nd Floor
New York, New York 10048
Attn.: Kevin Egan
Telephone: (212) 392-5845 Telecopy: (212) 392-5345 |
Term Loan B Specified Percentage: 2.7272727% KZH ING-1 LLC Total Specified Percentage: 0.6382979% ------------------------------------ By: -------------------------------- Its:-------------------------------- |
Address:
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attn.: Virginia Conway
Telephone: (212) 946-7575 Telecopy: (212) 946-7776 |
Term Loan B Specified Percentage: 4.5454545% KZH ING-2 LLC Total Specified Percentage: 1.0638298% -------------------------------------- By:----------------------------------- Its:---------------------------------- |
Address:
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attn.: Virginia Conway
Telephone: (212) 946-7575
Telecopy: (212) 946-7776
EXHIBIT 10.3
SUBSCRIPTION AGREEMENT
The Company has agreed to issue and sell to the Purchaser, and the Purchaser has agreed to subscribe for and purchase, certain shares of the Series A Preferred.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchaser agree as follows:
* * * *
This Subscription Agreement is hereby executed and delivered by the parties as of the date first written above.
PINNACLE TOWERS INC.
By: _________________________________
Its: _________________________________
PINNACLE TOWERS III INC.
By: ______________________________________
Steven R. Day, Vice President, Chief
Financial Officer and Secretary
Exhibit 10.4
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PINNACLE TOWERS III INC.
In accordance with Section 607.1007 of the Florida Business Corporation Act ("FBCA"), the Articles of Incorporation of Pinnacle Towers III Inc., a Florida corporation (the "Corporation"), are hereby amended and restated to read in their entirety as follows:
The name of the Corporation is:
PINNACLE TOWERS III INC.
The mailing address of the Corporation is:
1549 Ringling Boulevard
Sarasota, Florida 34236
The existence of the Corporation will commence at 12:01 A.M., the date of filing of these Articles of Incorporation.
The Corporation is organized to engage in any activity or business permitted under the laws of the United States and Florida.
nor will it permit any Subsidiary to (i) issue any Senior Securities, Pari Passu Securities or Junior Securities, other than to issue up to 5,000 additional shares of nonvoting Common Stock in order for it, in the judgement of any officer of the Corporation, to obtain or maintain the status of the Corporation as a Real Estate Investment Trust under Section 856-860 of the Code, (ii) redeem, purchase or otherwise acquire directly or indirectly any Pari Passu Securities or Junior Securities, (iii) sell, transfer, assign or dispose of or lease to one or more related parties in one or more related series of transactions or take any similar action with respect to any substantial portion of the Corporation's assets, or make any material acquisition of assets other than pursuant to that certain Agreement for Purchase and Sale effective as of August 31, 1999, between the Corporation and Pinnacle Towers Inc., a Delaware corporation, (iv) Incur in excess of $100,000 in Debt for borrowed money, (v) enter into a transaction with an Affiliate of the Corporation involving consideration in excess of $10,000 (vi) directly or indirectly pay or declare any dividend or make any distribution upon any Pari Passu Securities or any Junior Securities, or (vii) Incur or suffer to exist any Lien on or with respect to any property or assets now owned or hereafter acquired to secure any Debt.
maturity of such obligation shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. The principal amount of such obligation shall be the capitalized amount thereof that would appear on the face of a balance sheet of the Corporation in accordance with generally accepted accounting principles.
(ii) to purchase property, securities or services for the purpose of assuring the holder of such Debt of the payment of such Debt, or (iii) to maintain working capital, equity or other financial statement condition or liquidity of the Primary Obligor so as to enable the Primary Obligor to pay such Debt (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have the meanings correlative to the foregoing); provided, however, that the Guaranty by the Corporation shall not include endorsements by the Corporation for collection or deposit, in either case, in the ordinary course of business.
Incorporation of the Corporation, if the terms of such series expressly provide that shares of such series will be "Pari Passu Securities" with respect to the Series A Preferred.
"The shares represented by this certificate are subject to restriction on transfer and ownership for the purpose of the Corporation's maintenance of its status as a Real Estate Investment Trust under the Code. Subject to certain further restrictions and except as expressly provided in the
Corporation's articles of incorporation, as amended, any transfer of any share of capital stock of the Corporation will be void and of no legal effect if such transfer would result in (i) the ownership by five or fewer individuals of more than fifty percent of the aggregate value of all shares of capital stock of the Corporation or (ii) beneficial ownership of all shares of common stock would be held by less than 100 persons. Any shares of capital stock purported to be transferred in violation of these restrictions will be automatically transferred to the Corporation, as trustee, for the benefit of one or more charitable beneficiaries. A copy of the Corporation's articles of incorporation, as amended, including the foregoing restrictions on transfer, will be sent without charge to each shareholder who so requests."
The street address of the current registered office of the Corporation is 1200 South Pine Island, Plantation, Florida 33324, and the name of the Corporation's current registered agent at that address is CT Corporation Systems.
The Corporation shall have two directors initially. The number of directors may be either increased or diminished from time to time, as provided in the bylaws, but shall never be less than one. The names and street addresses of the initial directors are:
Name Address ---- ------- Steven R. Day 1549 Ringling Boulevard, Third Floor Sarasota, Florida 34236 Robert J. Wolsey 1549 Ringling Boulevard, Third Floor Sarasota, Florida 34236 ARTICLE IX. BYLAWS ------------------- |
The power to adopt, alter, amend or repeal bylaws shall be vested in the Board of Directors and the shareholders, except that the Board of Directors may not amend or repeal any bylaws or article or provision thereof without the affirmative vote of the holders of the outstanding stock of each voting group entitled to vote thereon if the bylaws provide that they or such article or provision is not subject to amendment or repeal by the Board of Directors.
The Corporation reserves the right to amend, alter, change or repeal any provision in these Articles of Incorporation in the manner prescribed by law, and all rights conferred on shareholders are subject to this reservation.
IN WITNESS WHEREOF, the undersigned has executed these Amended and Restated Articles of Incorporation this 28th day of September, 1999.
CERTIFICATE TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF PINNACLE TOWERS III INC.
The undersigned, Steven R. Day, Secretary of PINNACLE TOWERS III INC., a Florida corporation (the "Corporation"), does hereby certify as follows:
1. In accordance with Section 607.1007 of the Florida Statutes, the foregoing Amended and Restated Articles of Incorporation were duly adopted by the Board of Directors of the Corporation on September 28, 1999, without shareholder action which was not required for effectiveness pursuant to Section 607.0602 of the FBCA.
2. The undersigned officer of the Corporation has been duly authorized to submit these Amended and Restated Articles of Incorporation of the Corporation to the Department of State of Florida for filing in accordance with Section 607.1007 of the Florida Statutes.
PINNACLE TOWERS III INC.
By:______________________________
Steven R. Day, Secretary
Exhibit 10.5
AGREEMENT
FOR PURCHASE AND SALE OF ASSETS
BY AND BETWEEN
PINNACLE TOWERS INC., SELLER
AND
PINNACLE TOWERS III INC., PURCHASER
THIS AGREEMENT is effective as of the 31/st/ day of August, 1999, by and between PINNACLE TOWERS III INC., a Florida corporation ("Purchaser") and PINNACLE TOWERS INC., a Delaware corporation ("Seller").
WHEREAS, Purchaser desires to purchase from Seller and Seller desires to sell to Purchaser, subject to the assumption of the associated liabilities and obligations, the Rooftop Assets;
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements herein contained, the parties agree as follows:
ARTICLE I
THE TRANSACTION
(a) the accounts and notes receivable of the Rooftop Business;
(c) the deposits and prepaid assets of the Rooftop Business related to the Sites;
(d) the performance and other bonds, security and other deposits, and advances maintained solely for use in the conduct of the Rooftop Business related to the Sites;
(e) the customer files and all lists of customers, suppliers and vendors of the Rooftop Business related to the Sites;
(f) the rights and claims under lease, management or sale contracts, customer orders, service agreements and other similar commitments of the Rooftop Business related to the Sites;
(g) rights in, to and under agreements directly and solely relating to the Rooftop Business, including the Material Contracts (as defined below), the Rooftop Agreements (as defined below), and the Tenant Leases (as defined below);
(h) documents and records directly and solely relating to the Sites, including accounts receivable and accounts payable ledgers, records and files;
(i) master customer and vendor lists directly and solely relating to the operation of the Sites; and
(j) to the extent assignable and transferable to Purchaser, permits and licenses (and pending applications for any thereof) related to the operation of the Sites;
provided, however, that the definition of Rooftop Assets shall not include any items defined as Excluded Assets in Section 1.3 below.
(a) all cash and cash equivalents, including cash on hand or in bank accounts;
(b) corporate accounting journals and corporate books of account which comprise Seller's permanent accounting or tax records;
(c) corporate minute books, stock records and corporate seals of Seller;
(d) refunds pertaining to any Tax obligations of Seller;
(e) software and information systems;
(f) any cash management or other treasury services, legal, patent, tax, insurance administration, corporate accounting, audit, human resources or other services provided to the Rooftop Business by Seller;
(h) items sold, transferred, disposed of or consumed in the ordinary course prior to the Closing;
provided, however, that the definition of Excluded Assets shall not include any items defined as Rooftop Assets in Section 1.2.
ARTICLE II
CONSIDERATION FOR TRANSFER
(a) The aggregate consideration for the Rooftop Assets shall be:
(i) Forty Nine Million Dollars $49,000,000 (the "Purchase Price"); and
(ii) assumption by Purchaser of the Assumed Liabilities.
(b) All payments hereunder shall be made in U.S. dollars by wire transfer or other immediately-available funds, and all currency amounts referred to throughout this Agreement are to U.S. dollars.
ARTICLE III
THE CLOSING AND TRANSFER OF ROOFTOP ASSETS
(a) an amount equal to the Purchase Price payable in immediately available funds to the account designated by Seller; and
(b) such other instruments or documents as may be reasonably necessary or appropriate to carry out the transactions contemplated hereby or as specifically required to fulfill Purchaser's covenants hereunder.
(a) General Assignment, Bill of Sale and Assumption of Liabilities in substantially the form attached hereto as Attachment I; and
(b) Services Agreement in substantially the form attached hereto as Attachment II, providing for, if necessary, the provision of certain services at an appropriate cost.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser, as of the date hereof, and as of the Closing Date, as set forth below. All of the representations and warranties herein (except those set forth in Section 4.1, 4.2 and 4.3) are based solely upon those representations and warranties made by Motorola to Seller pursuant to the Motorola Purchase Agreement. To the extent that any representation or warranty made hereunder by Seller is based upon or is subject to the representations or warranties of Motorola under the Motorola Purchase Agreement, and to the knowledge of Seller such representation is true and correct, Seller shall have no liability or obligation to Purchaser regarding such representation or warranty if the corresponding representation or warranty from Motorola actually is not true or correct. Also, Seller shall have no liability or obligation to Purchaser regarding any representation or warranty to the extent information provided or made available to Seller or Purchaser resulting from the Due Diligence contradicts such representation or warranty or otherwise indicates such representation or warranty is not true or correct. For purposes of this Agreement, a "Material Adverse Effect" shall mean any effect which is materially adverse to the Rooftop Assets when taken as a whole. For purposes of this Agreement, the phrase "to the knowledge of Seller," or other language of
and encumbrances which do not detract from the value or interfere with the present use of the Rooftop Assets in such manner as could reasonably be expected to have, in the aggregate, a Material Adverse Effect, (c) materialmen's, mechanics', carriers', workmen's, repairmen's and other like liens arising in the ordinary course of business, (d) liens for current Taxes not yet due or payable or any Taxes being contested in good faith by Seller, or (e) liens in favor of Seller's senior lenders described on the attached Schedule 4.6. To the knowledge of Seller, the Rooftop Assets are in good operating condition and repair (reasonable wear and tear excepted).
(a) all Site agreements and lease agreements (the "Tenant Leases") with an annual revenue in excess of $100,000;
(b) all management and service contracts and purchase orders and other contracts for the purchase of materials or services relating to the Sites requiring annual payments in excess of $100,000;
(c) all machinery leases, equipment leases and other personal property leases relating to the Sites requiring annual payments in excess of $100,000; and
(d) all other contracts, commitments, agreements, arrangements and understandings relating to the Sites which provide for annual payment to or from Seller having an aggregate value of $100,000 or more.
asserted by a Tax authority for which Purchaser may become liable or the liability for which might encumber the Rooftop Assets after the Closing as a result of the transactions contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as of the date hereof, and as of the Closing Date, as set forth below.
Purchaser and are not prohibited by, do not violate or conflict with any provision of, and do not and will not (immediately, with notice, the passage of time or both) result in a default under or a breach of (a) the charter or by- laws of Purchaser, (b) any contract, agreement, permit, license or other instrument to which Purchaser is a party or by which either is bound, (c) any order, writ, injunction, decree or judgment of any court or governmental agency, or (d) any law, rule or regulation applicable to Purchaser, except for such creations, accelerations, terminations, violations, conflicts, breaches, defaults, charges or encumbrances which, in the aggregate will not have an adverse effect on Purchaser's ability to consummate the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF SELLER
ARTICLE VII
COVENANTS OF PURCHASER
may be reasonably necessary for litigation, preparation of financial statements, tax returns and audits or other valid business purposes. If Purchaser elects to dispose of such records, Purchaser shall first give Seller sixty (60) days' written notice, during which period Seller shall have the right to take such records without further consideration.
ARTICLE VIII
[INTENTIONALLY OMITTED]
ARTICLE IX
[INTENTIONALLY OMITTED]
ARTICLE X
[INTENTIONALLY OMITTED]
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
(a) Purchaser shall indemnify and hold harmless Seller from and against any and all loss, damage, cost or expense (including reasonable attorneys' fees and expenses), judgments and fines (collectively, "Damages") (i) caused by any failure to fulfill any covenant or agreement of Purchaser contained herein or in any other agreement or document delivered pursuant hereto, (ii) arising from the Assumed Liabilities, (iii) arising from any action or inaction of Purchaser after the Closing, other than in accordance with the terms hereof (provided, however, that the foregoing shall not relieve Seller of any of its obligations hereunder unless and to the extent, Purchaser's actions or inactions expand or increase Seller's obligations and liabilities hereunder) or (iv) arising as a result of, in connection with, or related to the operation of the Rooftop Business and the Rooftop Assets following Closing.
(b) Seller shall indemnify and hold harmless Purchaser from and against any Damages (i) caused by any failure to fulfill any covenant or agreement of Seller contained herein, or in any other agreement or document delivered pursuant hereto or (ii) arising from the Excluded Liabilities.
(a) Seller shall not be required to make any payments pursuant to this Article XI, unless and until the aggregate amount of all claims pursuant to this Article XI shall exceed an amount equal to three percent (3%) of the total cash consideration for the Rooftop Assets (the "Threshold Amount"), as to which Seller shall be responsible only for the excess over Three Million Dollars ($3,000,000) with respect to any other indemnification claims. The maximum aggregate amount recoverable from Seller with respect to any claims relating to this Agreement or the transactions contemplated hereby shall not exceed an amount equal to twenty-five percent (25%) of the total cash consideration for the Rooftop Assets (the "Cap").
(b) The party seeking indemnification shall give written notice to the
indemnifying party of the facts and circumstances giving rise to any claim for
indemnification as soon as reasonably possible but in any event within thirty
(30) days after it obtains knowledge of the basis for a claim for
indemnification hereunder. The party entitled to indemnification shall take all
reasonable steps to mitigate all indemnifiable liabilities and damages upon and
after becoming aware of any event which could reasonably be expected to give
rise to any liabilities and damages that are indemnifiable hereunder. No party
shall be entitled to indemnification to the extent of any insurance, tax or
other benefits (if applicable, computed on a present value basis using a 6%
discount rate) resulting from or which may be claimed as a result of the facts
and circumstances relating to any indemnifiable claim. If any Damages are
covered by insurance, Purchaser shall use all reasonable efforts to recover the
amount of such Damages from the insurer of such insurance which recovery (net of
any retroactive premium adjustments and the aggregate amount of reasonably
anticipated (based or written advice from insurance brokers or providers)
increased insurance premiums over the following two policy years) shall reduce
the amount of Damages hereunder; provided, however, that Purchaser shall not be
required to obtain such recovery as a condition to making a claim against Seller
pursuant to this Article XI.
(c) With respect to each claim by a third party which could give rise to an indemnification obligation under this Article XI (a "Third Party Claim"), the party seeking indemnification (the "Indemnified Party") must give prompt notice to the indemnifying party (the "Indemnifying Party") of the Third Party Claim. The Indemnifying Party may, at its sole cost and expense, upon notice to the Indemnified Party within thirty (30) days after the Indemnifying Party receives notice of the Third Party Claim, assume the defense of the Third Party Claim, with counsel of its choice. The Indemnifying Party shall not consent to a settlement of, or the entry of any judgment arising from, any Third Party Claim, unless (i) the settlement or judgment is solely for money damages, or (ii) the Indemnified Party consents thereto, which consent shall not be unreasonably withheld. The Indemnifying Party shall provide the Indemnified Party with fifteen (15) days prior notice before it consents to a settlement of, or the entry of a judgment arising from, any Third Party Claim. The Indemnified Party shall be entitled to participate in the defense of (but not control) any Third Party Claim, the defense of which is assumed by the Indemnifying Party, with its own counsel and at its own expense. The parties shall cooperate in the defense of any Third Party Claim and the relevant records of each party shall be made available on a timely basis. If the Indemnifying Party does not assume the defense of any such claim or proceeding resulting therefrom in accordance with the terms hereof, the Indemnified Party may defend such claim or proceeding in a reasonable manner, including settling such claim or proceeding on such terms as the Indemnified Party may deem appropriate after giving fifteen (15) days' notice of the same to the Indemnifying Party and obtaining the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. To the extent applicable, the Indemnified Party shall keep the Indemnifying Party reasonably informed, in writing, as to the defense of any such matter hereunder.
(d) Neither party shall have any obligation to indemnify the other party or otherwise have liability to the other party for consequential damages, special damages, incidental damages, indirect damages, lost profits or similar items.
(e) Seller shall have no liability under this Article XI to the extent
arising from (i) actions taken or not taken by Purchaser or its affiliates after
the Closing Date (provided, however, that the foregoing shall not relieve Seller
of any obligations hereunder unless and to the extent, Purchaser's actions or
inactions expand or increase Seller's obligations and liabilities hereunder) or
(ii) matters disclosed or available to Purchaser as a result of the Due
Diligence.
(f) To the extent that Seller discharges any claim for indemnification hereunder, Seller shall be subrogated to all rights of Purchaser against third parties.
(g) After the Closing, the indemnification rights provided hereunder shall be the exclusive remedy of Seller and Purchaser and each of their respective affiliates and their officers, directors, employees, stockholders, affiliates, agents or representatives with respect to any dispute arising out of or related to this Agreement.
ARTICLE XII
[INTENTIONALLY OMITTED]
ARTICLE XIII
[INTENTIONALLY OMITTED]
ARTICLE XIV
DEFINITIONS
(a) "ADR" has the meaning assigned to such term in Section 15.11(b).
(b) "Apportioned Obligations" has the meaning assigned to such term in
Section 15.4(a).
(c) "Assumed Liabilities" has the meaning assigned to such term in
Section 1.4.
(d) "Cap" has the meaning assigned to such term in Section 11.3(a).
(e) "Closing" has the meaning assigned to such term in Section 3.1.
(f) "Closing Date" has the meaning assigned to such term in Section 3.1.
(g) ""Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Damages" has the meaning assigned to such term in Section 11.2.(a).
(i) "Due Diligence" means the due diligence regarding the Purchased Assets (as defined in the Motorola Purchase Agreement) conducted pursuant to the Motorola Purchase Agreement..
(j) "Excluded Assets" has the meaning assigned to such term in Section 1.3.
(k) "Excluded Liabilities" has the meaning assigned to such term in
Section 1.5.
(l) "Indemnified Party" has the meaning assigned to such term in Section 11.3(c).
(m) "Indemnifying Party" has the meaning assigned to such term in Section 11.3(c).
(n) "IRS" shall mean the Internal Revenue Service.
(o) "Material Adverse Effect" has the meaning assigned to such term in Article IV.
(p) "Material Contracts" has the meaning assigned to such term in Section 4.10.
(q) "Motorola" has the meaning assigned to such term in the preamble.
(r) "Motorola Purchase Agreement" has the meaning assigned to such term in the preamble.
(s) "Post-Closing Tax Period" has the meaning assigned to such term in
Section 15.4(a).
(t) "Pre-Closing Tax Period" has the meaning assigned to such term in
Section 15.4(a).
(u) "Purchase Price" has the meaning assigned to such term in Section 2.1.
(v) "Purchaser" has the meaning assigned to such term in the preamble
(w) "Rooftop Agreements" has the meaning assigned to such term in Section 4.8.
(x) "Rooftop Assets" has the meaning assigned to such term in Section 1.2.
(y) "Seller" has the meaning assigned to such term in the preamble.
(aa) "Tax" has the meaning assigned to such term in Section 4.15.
(bb) "Tax Returns" has the meaning assigned to such term in Section 4.15.
(cc) "Taxes" has the meaning assigned to such term in Section 4.15.
(dd) "Tenant Leases" has the meaning assigned to such term in Section 4.10(b).
(ee) "Third Party Claim" has the meaning assigned to such term in Section 11.3(c).
(ff) "Threshold Amount" has the meaning assigned to such term in Section 11.3(a).
(gg) "To the knowledge of Seller" has the meaning assigned to such term in Article IV.
ARTICLE XV
GENERAL PROVISIONS
(a) If to Seller:
Pinnacle Towers Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Ben Gaboury
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
(b) If to Purchaser:
Pinnacle Towers III Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
Any party may change its address or add or change parties for receiving notice by written notice given to the others named above. Notices shall be deemed given as of the date of receipt.
documentation with respect to all such permit, license or other similar fees, and, if required by applicable law, Seller will, and will cause its affiliates to, join in the execution of any such Tax Returns and other documentation
audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Purchaser and Seller agree (i) to retain all books and records with respect to Tax matters relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Purchaser or Seller, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any Tax authority, and (ii) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, Purchaser or Seller, as the case may be, shall allow the other party to take possession of such books and records.
waives all claims of immunity from jurisdiction and any right to object on the basis that any dispute, action, suit or proceeding brought in the federal district or state court of Tampa, Florida has been brought in an improper or inconvenient venue or forum.
(a) Seller and Purchaser mutually desire that friendly collaboration will develop between themselves. Accordingly, they shall try to resolve in a friendly manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement, including any amendments hereof.
(b) (i) To the extent that any misunderstanding or dispute cannot be resolved agreeably in a friendly manner, the dispute will be mediated by a mutually acceptable mediator to be chosen by Seller and Purchaser within forty- five (45) days after written notice by one of the parties demanding mediation. Neither party may unreasonably withhold consent to the selection of a mediator, however, by mutual agreement Seller and Purchaser may postpone mediation until each has completed specified but limited discovery with respect to a dispute. The parties may also agree to attempt some other form of alternative dispute resolution ("ADR") in lieu of mediation, including by way of example and without limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through negotiation, mediation or other form of ADR within six (6) months of the date of the initial demand for it by one of the parties may then be submitted to the courts for resolution. The use of any ADR procedures will not be construed under the doctrine of laches, waiver or estoppel to affect adversely the rights of either party. Nothing in this Section 15.11 will prevent either party from resorting to judicial proceedings if (A) good faith efforts to resolve the dispute under these procedures have been unsuccessful or (B) interim relief from a court is necessary to prevent serious and irreparable injury to one party or to others.
(c) Each of Purchaser and Seller shall bear their own respective costs of mediation or ADR but Purchaser and Seller agree to share the costs of the mediation or ADR equally.
* * *
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by a duly authorized officer all as of the date first written above.
PINNACLE TOWERS INC., PINNACLE TOWERS III INC., a Delaware corporation a Florida corporation ______________________________ __________________________________________ Bernard Gaboury, President Steven R. Day, Vice President, Chief Financial Officer and Secretary |
SCHEDULE 1.2(b)
(See attached)
SCHEDULE 1.3
None.
SCHEDULE 4.0
Persons Who Have Actual Knowledge
1. Jim Bokish
2. Steven Day
3. Bob Wolsey
4. Ben Gaboury
SCHEDULE 4.6
1. Liens arising in connection with the Fifth Amended and Restated Credit Agreement executed September 17, 1999, by and between Seller and Bank of America, N.A.
SCHEDULE 4.10
(See attached)
SCHEDULE 4.12(a)
None.
SCHEDULE 4.13
Compliance With Laws
To the knowledge of the Seller, with respect to the Sites located in the United States, to the extent that Seller is required to comply with the United States Federal Communications Commission Rules and Regulations relating to ElectroMagnetic Emissions ("EME") at antenna sites [47 CFR. 1.1307(b)] ("FCC EME Rules"), Seller is currently in compliance in all material respects (or shall be in compliance in all material respects as of the Closing Date) with the FCC EME Rules.
Additionally, to the knowledge of Seller, with respect to the sites located in Canada, to the extent that Seller is required to comply with the Health Canada's Rules and Regulations relating to ElectroMagnetic Emissions ("EME") at antenna sites [Health Canada Safety Code 6] ("Safety Code 6"), Seller is currently in compliance in all material respects (or shall be in compliance in all material respects as of the Closing Date) with Safety Code 6.
Pinnacle Towers Inc. is not a licensed real estate broker.
SCHEDULE 7.5
(See attached)
Exhibit 10.6
THIS SERVICES AGREEMENT (this "Agreement") is effective as of the 31st day of August, 1999, by and between PINNACLE TOWERS INC., a Delaware corporation ("Seller") and Pinnacle Towers III Inc., a Florida corporation ("Purchaser").
WHEREAS, pursuant to that Agreement for Purchase and Sale of Assets dated August 31, 1999 by and between Seller and Purchaser (the "Asset Purchase Agreement"), Purchaser is purchasing certain assets from Seller;
WHEREAS, Seller will provide certain services to Purchaser subject to the provisions set forth herein;
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements herein contained, the parties agree as follows:
(a) As consideration for the Services provided by Seller to Purchaser pursuant to Schedule A of this Agreement, Purchaser will pay to Seller a fee on an annual basis during the term of this Agreement in which Purchaser receives Services (the "Services Fee").
(b) The Services Fee shall be equal to all costs and expenses incurred by Seller in connection with the provision of the Services and shall include, without limitation, the following: (i) all direct costs incurred to provide the Services, including out-of-pocket expenses, (ii) all fees of third parties, including fees and expenses of consultants, attorneys, accountants and other experts and (iii) such portion of the overhead expenses relating to the provision of the Services as the parties shall agree upon in writing prior to the provision of any Service.
(c) Purchaser shall pay the full amount of the Services Fee within ten (10) days of the date on which such Services Fee is determined in accordance with the terms set forth on Schedule A.
(a) Seller and its Affiliates, and the officers, directors, employees, shareholders, partners, representatives, consultants and agents of Seller and its Affiliates (collectively, "Providing Parties") shall not be liable to the party receiving the Services, its Affiliates, or to any officer, director, employee,
shareholder, partner, representative, consultant or agent of such party or its Affiliates (collectively, "Receiving Parties"), for any liability, cost, damage, expense or loss, including, without limitation, any special, indirect, consequential or punitive damages (i) arising or allegedly arising out of any actions or failures to act by any of the Providing Parties with respect to the Services to be provided hereunder, or (ii) as a result of the reliance by any of the Receiving Parties on any advice or data that any of the Providing Parties may provide pursuant to this Agreement; provided, however, that the foregoing shall not apply to limit liability of a party to the extent caused by such party's gross negligence or willful misconduct.
(b) The Receiving Parties shall indemnify and hold harmless each and every of the Providing Parties from and against any liability, cost, damage, expense or loss (including court costs and reasonable attorneys' fees) which such Providing Parties may sustain or incur by reason of any claim, demand, suit or recovery by any person or entity, directly resulting from acts or omissions committed by the Receiving Party in connection with this Agreement; provided, however, that no person may benefit from the foregoing indemnity in the event of its gross negligence or willful misconduct.
If to Seller:
Pinnacle Towers Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Ben Gaboury
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
If to Purchaser:
Pinnacle Towers III Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
Any party may change its address or add or change parties for receiving notice by written notice given to the others named above. Notices shall be deemed given as of the date of receipt.
(a) Seller and Purchaser mutually desire that friendly collaboration will develop between themselves. Accordingly, they shall try to resolve in a friendly manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement, including any amendments hereof.
(b) (i) To the extent that any misunderstanding or dispute cannot be resolved agreeably in a friendly manner, the dispute will be mediated by a mutually acceptable mediator to be chosen by Seller and Purchaser within forty-five (45) days after written notice by one of the parties demanding mediation. Neither party may unreasonably withhold consent to the selection of a mediator, however, by mutual agreement Seller and Purchaser may postpone mediation until each has completed specified but limited discovery with respect to a dispute. The parties may also agree to attempt some other form of alternative dispute resolution ("ADR") in lieu of mediation, including by way of example and without limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through negotiation, mediation or other form of ADR within six months of the date of the initial demand for it by one of the parties may then be submitted to the courts for resolution. The use of any ADR procedures will not be construed under the doctrine of laches, waiver or estoppel to affect adversely the rights of either party. Nothing in this Section 14 will prevent either party from resorting to judicial proceedings if (A) good faith efforts to resolve the dispute under these procedures have been unsuccessful or (B) interim relief from a court is necessary to prevent serious and irreparable injury to one party or to others.
(c) Each of Purchaser and Seller shall bear its costs of mediation or ADR, but Purchaser and Seller agree to share the costs of the mediation of ADR equally.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
PINNACLE TOWERS INC.
PINNACLE TOWERS III INC.
SCHEDULE A
Services:
All organizational, sales, marketing, general and administrative services reasonably required by Purchaser.
Services Fee:
To be determined by the parties no later than ninety (90) days after the end of each calendar year during the term of this Agreement for the prior year, based on the actual Services provided by Seller to Purchaser during such calendar year.
Exhibit 10.7
This Agreement (the "Agreement") is made and entered into effective as of September 28, 1999, by and between Pinnacle Towers III Inc., a Florida corporation (the "Company") and Pinnacle Towers Inc., a Delaware corporation ("PT").
Background
PT owns 49 shares of Series A Convertible Preferred Stock of the Company ("Series A Preferred"). The parties hereto desire to: (a) effect the redemption of 39.2 shares of Series A Preferred (the "Preferred Shares") from PT in exchange for $39,200,000, payable in the form of a Convertible Promissory Note in the form attached hereto as Exhibit A (the "Promissory Note"); (b) modify the terms of the Series A Preferred; and (c) terminate that certain Servicing Agreement between the parties and enter into a Cost and Expense Sharing and Reimbursement Agreement, subject to the terms of this Agreement. Accordingly, in consideration of the mutual covenants and agreements contained in this Agreement, and in reliance on the representations and warranties specified below, the parties agree as follows:
Terms
1. Redemption of Preferred Shares. In exchange for the consideration set forth in Section 2 below, PT hereby transfers the Preferred Shares to the Company, and the Company hereby redeems the Preferred Shares from PT. At the time of execution of this Agreement, PT shall transfer or cause to be transferred the certificate evidencing the Preferred Shares, duly endorsed for transfer or accompanied by an appropriate stock power endorsed in blank, to the Company. The Company shall reissue or cause the reissuance of a certificate representing the remaining 9.8 shares of Series A Preferred held by PT.
2. Purchase Price and Method of Payment. The purchase price to be paid to PT in exchange for the Preferred Shares shall be $39,200,000, payable at the time of execution of this Agreement by the delivery of the Promissory Note.
3. Representations and Warranties of PT. PT represents and warrants to the Company that the following statements contained in this Section 3 are correct and complete as of the date of this Agreement:
The Board of Directors of PT and Pinnacle Holdings, Inc., a Delaware corporation and sole stockholder of PT, have duly authorized the execution, delivery and performance of this Agreement, with Steven Day and Robert Wolsey abstaining. This Agreement constitutes the valid and legally binding obligation of PT, enforceable in accordance with its terms and conditions. PT need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.
4. Representations and Warranties of the Company. The Company
represents and warrants to PT that the following statements contained in this
Section 4 are correct and complete as of the date of this Agreement:
5. Consent to Amended and Restated Articles. PT hereby consents to
the modification of the terms of the Series A Preferred as set forth in the
Amended and Restated Articles of Incorporation in the form attached hereto as
Exhibit B (the "Amended and Restated Articles"), which consent is required by
Section 5(k) of the Amended and Restated Articles of the Company and deemed
satisfied by PT's execution of this Agreement. The parties agree that the
shares of Series A Preferred held by PT from the date of original issuance shall
have the preferences, qualifications, rights and privileges set forth in the
Amended and Restated Articles.
6. Cost and Expense Sharing and Reimbursement Agreement. The parties entered into that certain Servicing Agreement, effective as of August 31, 1999, pertaining to certain services to be performed by PT on behalf of the Company. The parties hereby agree to terminate the Servicing Agreement, effective as of August 31, 1999, and enter into a Cost and Expense Sharing and Reimbursement Agreement in the form attached hereto as Exhibit C (the "Expense Sharing Agreement"), which Expense Sharing Agreement shall govern the parties' rights and obligations effective as of August 31, 1999.
7. Miscellaneous.
If to the Company:
Pinnacle Towers III Inc.
1549 Ringling Boulevard, 3/rd/ Floor
Sarasota, Florida 34236
Attn: Steven R. Day
If to PT:
Pinnacle Towers Inc.
1549 Ringling Boulevard, 3/rd/ Floor
Sarasota, Florida 34236
Attn: Ben Gaboury
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
PINNACLE TOWERS INC.
By: _________________________________
Its: _________________________________
PINNACLE TOWERS III INC.
By: _________________________________
Steven R. Day, Vice President, Chief
Financial Officer and Secretary
Exhibit A
NEITHER THIS CONVERTIBLE PROMISSORY NOTE NOR THE VOTING COMMON STOCK INTO WHICH IT IS CONVERTIBLE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PINNACLE TOWERS III INC.
CONVERTIBLE PROMISSORY NOTE
$39,200,000 ____________, __________ October __, 1999
PINNACLE TOWERS III INC., a Florida corporation (the "Company"), the principal office of which is located at 1549 Ringling Boulevard, Third Floor, Sarasota, Florida 34236, for value received hereby promises to pay to Pinnacle Towers Inc., or its registered assigns, the sum of Thirty Nine Million Two Hundred Thousand Dollars ($39,200,000), or such lesser amount as shall then equal the outstanding principal amount hereof and any unpaid accrued interest hereon, as set forth below. The outstanding principal under this Note shall be due and payable in full within 30 days of the date demand is made therefor by the Holder. Demand under this Note shall be given by the Holder to the Company by written notice thereof in accordance with Section 11 below. Payment for all amounts due hereunder shall be made at the Company's option by either wire transfer or by mail to the registered address of the Holder.
The following is a statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof, by the acceptance of this Note, agrees:
1. Definitions. As used in this Note, the following terms, unless the context otherwise requires, have the following meanings:
(a) "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Note.
(b) "Holder," when the context refers to a holder of this Note, shall mean any Person who shall at the time be the registered holder of this Note.
(c) "Person" means any individual, Company, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
2. Interest. Commencing on ___________________, and on each ________________ and _________________ thereafter until all outstanding principal and interest on this Note shall have been paid in full, the Company shall pay interest at the rate of eighteen percent (18%) per annum (the "Initial Interest Rate") on the principal of this Note outstanding during the period beginning on the date of issuance of this Note and ending on the date that the principal amount of this Note becomes due and payable. In the event that the principal amount of this Note is not paid in full when such amount becomes due and payable, interest at the same rate as the Initial Interest Rate plus _____ percent (___%) shall continue to accrue on the balance of any unpaid principal until such balance is paid.
3. Conversion.
3.1 Conversion. Any Holder of this Note has the right, at the Holder's option (the "Option"), at any time prior to payment in full of the principal balance of this Note, to convert this Note, in accordance with the provisions of Section 3.2 hereof, in whole or in part, into fully paid and nonassessable shares of the Company's Voting Common Stock, par value $0.001 per share or Nonvoting Common Stock, par value $0.001 per share (the "Common Stock"), at the option of the Holder from time to time. The number of shares of Common Stock into which this Note may be converted ("Conversion Shares") shall be determined by dividing the aggregate principal amount of this Note together with all accrued interest to the date of conversion elected to be converted by the Holder by the Conversion Price (as defined below) in effect at the time of such conversion. The initial Conversion Price shall be equal to $25 (the "Conversion Price").
3.2 Notice of Conversion Pursuant to Section 3.1. Before the Holder shall be entitled to convert this Note into shares of Common Stock, it shall surrender this Note at the office of the Company and shall give written notice to the Company at its principal corporate office of the election to convert all or a portion of the same pursuant to this Section 3 ("Notice of Conversion"), and shall state therein the amount of the Note to be converted and the name or names in which the certificate or certificates for shares of Common Stock are to be issued. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Note, and the Person or Persons entitled to receive the shares of Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date.
3.3 Mechanics and Effect of Conversion. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal that is not so converted, such payment to be in the form as provided below. Upon the conversion of this Note pursuant to Section 3.1 above, the Holder shall surrender this Note, duly endorsed, at the principal office of the Company. At its expense, the Company shall, as soon as practicable thereafter, issue and deliver to such Holder at such principal office a certificate or certificates for the number of shares of such Common Stock to which the Holder shall be entitled upon such conversion (bearing such legends as are required by applicable state and federal securities laws in the opinion of counsel to the Company), together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note, including a check payable to the Holder for any cash amounts payable as described above and a replacement Note representing any amount of the Note not converted. Upon the complete conversion of all of this Note, the Company shall be forever released from all its obligations and liabilities under this Note, except that the Company shall be obligated to pay the Holder, within ten (10) days after the date of such conversion, any interest accrued and unpaid or unconverted to and including the date of such conversion, and no more.
4. Prepayment. Prepayment of the principal of this Note is permitted, in whole or in part, without premium or penalty of any kind; provided the Company provides the Holder with thirty (30) days' prior written notice (unless notice is waived in writing by the Holder) of its intention to prepay the principal of this Note, in whole or in part, during which time the Holder may exercise the Option by delivering to the Company the Notice of Conversion.
5. Conversion Price Adjustments.
5.1 Adjustments for Stock Splits and Subdivisions. In the event the Company should at any time or from time to time after the date of issuance hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as "Common Stock Equivalents") without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of this Note shall be appropriately decreased so that the number of shares of Common Stock issuable upon conversion of this Note shall be increased in proportion to such increase of outstanding shares.
5.2 Adjustments for Reverse Stock Splits. If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for this Note shall be appropriately increased so that the number of shares of Common Stock issuable on conversion hereof shall be decreased in proportion to such decrease in outstanding shares.
5.3 Notices of Record Date, etc. In the event of:
(a) Any taking by the Company of a record of the holders of any class of securities of the Company for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend payable out of earned surplus at the same rate as that of the last such cash dividend theretofore paid) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; or
(b) Any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all of the assets of the Company to any other Person or any consolidation or merger involving the Company; or
(c) Any voluntary or involuntary dissolution, liquidation or windingup of the Company, the Company will mail to the holder of this Note at least seven (7) days prior to the earliest date specified therein, a notice specifying:
(i) The date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right; and
(ii) The date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or windingup is expected to become effective and the record date for determining shareholders entitled to vote thereon.
5.4 Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of this Note such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of the Note; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the entire outstanding principal amount of this Note, in addition to such other remedies as shall be available to the holder of this Note, the Company will use its best efforts to take such corporation action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.
6. Representations and Warranties of the Holder.
(a) The Holder by its acceptance of this Note acknowledges that it is aware that this Note and the shares of Common Stock issuable to it by the Company upon conversion of this Note have not been registered under the Securities Act of 1933, as amended ("Act"), or the securities laws of any state or other jurisdiction.
(b) The Holder warrants and represents to the Company that it has acquired this Note, and, upon conversion of the Note, it will be acquiring the Common Stock, for investment and not with a view to or for sale in connection with any distribution of this Note or such Common Stock or with any intention of distributing or selling this Note or such Common Stock.
(c) The Holder has no right to demand that the Company register this Note or the shares of Common Stock issued or issuable under this Note.
7. Assignment. Subject to the restrictions on transfer described in
Section 11 below, the rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
8. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.
9. Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such Holder's counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Promptly upon receiving such written notice and reasonably satisfactory opinion, if so requested, the Company, as promptly as practicable, shall notify such Holder that such Holder may sell or otherwise dispose
of this Note or such securities, all in accordance with the terms of the notice
delivered to the Company. If a determination has been made pursuant to this
Section 9 that the opinion of counsel for the Holder is not reasonably
satisfactory to the Company, the Company shall so notify the Holder promptly
after such determination has been made. Each Note thus transferred and each
certificate representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order to ensure compliance
with the Act, unless in the opinion of counsel for the Company such legend is
not required. The Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions.
10. Treatment of Note. To the extent permitted by generally accepted accounting principles, the Company will treat, account and report the Note as debt and not equity for accounting purposes and with respect to any returns filed with federal, state or local tax authorities.
11. Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if (and then two business days after) mailed by registered or certified mail, postage prepaid, at the respective addresses of the parties as set forth herein. Any party hereto may by notice so given change its address for future notice hereunder.
12. No Shareholder Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or any other Person the right to vote or to consent or to receive notice as a shareholder in respect of meetings of shareholders for the election of directors of the Company or any other matters or any rights whatsoever as a shareholder of the Company; and no dividends or interest shall be payable or accrued in respect of this Note or the interest represented hereby or the Conversion Shares obtained hereunder until, and only to the extent that, this Note shall have been converted.
13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, excluding that body of law relating to conflict of laws.
14. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.
IN WITNESS WHEREOF, the Company has caused this Note to be issued this _____ day of ___________, 1999.
PINNACLE TOWERS III INC.
By_________________________________
Steven R. Day, Vice President
Name of Holder: ____________
Address: ___________________
Exhibit B
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PINNACLE TOWERS III INC.
In accordance with Section 607.1007 of the Florida Business Corporation Act ("FBCA"), the Articles of Incorporation of Pinnacle Towers III Inc., a Florida corporation (the "Corporation"), are hereby amended and restated to read in their entirety as follows:
The name of the Corporation is:
PINNACLE TOWERS III INC.
The mailing address of the Corporation is:
1549 Ringling Boulevard
Sarasota, Florida 34236
The existence of the Corporation will commence at 12:01 A.M., the date of filing of these Articles of Incorporation.
The Corporation is organized to engage in any activity or business permitted under the laws of the United States and Florida.
of the Corporation involving consideration in excess of $10,000;
(vi) directly or indirectly pay or declare any dividend or make
any distribution upon any Pari Passu Securities or any Common
Stock; or (v) Incur or suffer to exist any Lien on or with
respect to any property or assets now owned or hereafter acquired
to secure any Debt.
which are being contested in good faith), (v) every Capital Lease
Obligation of the Corporation, (vi) all Receivables Sales of the
Corporation, together with any obligation of the Corporation to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or
other amounts in connection therewith, (vii) every obligation under
Interest Rate or Currency Protection Agreements of the Corporation and
(viii) every obligation of the type referred to in clauses (i) through
(vii) of another Person and all dividends of another Person the payment of
which, in either case, the Corporation has Guaranteed or is responsible or
liable, directly or indirectly, as obligor, Guarantor or otherwise. The
"amount" or "principal amount" of Debt at any time of determination as used
herein represented by (a) any contingent Debt, shall be the maximum
principal amount hereof, (b) any Debt issued at a price that is less than
the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally
accepted accounting principals, and (c) any Receivables Sale, shall be the
amount, if any, in connection with such Receivables Sale for which there is
recourse to the seller or any of its Subsidiaries.
that results in an obligation of the Corporation that exists at such time becoming Debt shall not be deemed an Incurrence of such Debt.
circumstances) in electing the board of directors are, at the time as of which any determination is being made, owned by the Corporation either directly or indirectly through Subsidiaries.
Securities; (ii) redeem, purchase or otherwise acquire directly or indirectly any Pari Passu Securities or Junior Securities; (iii) sell, transfer, assign or dispose of or lease to one or more Affiliates in one or more related series of transactions or take any similar action with respect to a majority of the Corporation's assets; or (iv) directly or indirectly pay or declare any dividend or make any distribution upon any Pari Passu Securities or any Junior Securities.
certificate, and dividends will accrue on the Series A Preferred represented by such new certificate from the date to which dividends have been fully paid on such lost, stolen, destroyed or mutilated certificate.
respect thereof or other cost incurred by the Corporation in connection with such issuance.
"The shares represented by this certificate are subject to restriction on transfer and ownership for the purpose of the Corporation's maintenance of its status as a Real Estate Investment Trust under the Code. Subject to certain further restrictions and except as expressly provided in the Corporation's articles of incorporation, as amended, any transfer of any share of capital stock of the Corporation will be void and of no legal effect if such transfer would result in (i) the ownership by five or fewer individuals of more than fifty percent of the aggregate value of all shares of capital stock of the Corporation or (ii) beneficial ownership of all shares of common stock would be held by less than 100 persons. Any shares of capital stock purported to be transferred in violation of these restrictions will be automatically transferred to the Corporation, as trustee, for the benefit of one or more charitable beneficiaries. A copy of the Corporation's articles of incorporation, as amended, including the foregoing restrictions on transfer, will be sent without charge to each shareholder who so requests."
delivered to the shareholders. If no record date is set by the Board of Directors, the record date shall be determined as follows: for determining shareholders entitled to demand a special meeting, the record date is the date the first such demand is delivered to the Corporation; and for determining shareholders entitled to a share dividend, the record date is the date the Board of Directors authorizes the dividend. For determining shareholders entitled to notice of and to vote at an annual or special shareholders meeting the record date is as of the close of business on the date that is seven days after notice of the record date is first delivered or deemed delivered to the shareholders entitled to notice thereof; provided, however, that no record date shall occur within the last five calendar days of a calendar quarter. When a determination of the shareholders entitled to vote at any meeting has been made, that determination shall apply to any adjournment of the meeting, unless the Board of Directors fixes a new record date. The Board of Directors shall fix a new record date if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. Notwithstanding anything contained herein to the contrary, irrespective of whether prior action is required by the Board of Directors, the record date for determining shareholders entitled to take action without a meeting is the date a signed written consent is delivered to the Corporation by the holders of at least 95% of the outstanding stock of each voting group entitled to vote thereon.
The street address of the current registered office of the Corporation is 1200 South Pine Island, Plantation, Florida 33324, and the name of the Corporation's current registered agent at that address is CT Corporation Systems.
The Corporation shall have two directors initially. The number of directors may be either increased or diminished from time to time, as provided in the bylaws, but shall never be less than one. The names and street addresses of the initial directors are:
Name Address ---- ------- 14 |
Steven R. Day 1549 Ringling Boulevard, Third Floor Sarasota, Florida 34236 Robert J. Wolsey 1549 Ringling Boulevard, Third Floor Sarasota, Florida 34236 ARTICLE IX. BYLAWS ------------------- |
The power to adopt, alter, amend or repeal bylaws shall be vested in the Board of Directors and the shareholders, except that the Board of Directors may not amend or repeal any bylaws or article or provision thereof without the affirmative vote of the holders of the outstanding stock of each voting group entitled to vote thereon if the bylaws provide that they or such article or provision is not subject to amendment or repeal by the Board of Directors.
The Corporation reserves the right to amend, alter, change or repeal any provision in these Articles of Incorporation in the manner prescribed by law, and all rights conferred on shareholders are subject to this reservation.
IN WITNESS WHEREOF, the
undersigned has executed these
Amended and Restated Articles of
Incorporation this ___ day of
October, 1999.
CERTIFICATE TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF PINNACLE TOWERS III INC.
The undersigned, Steven R. Day, Secretary of PINNACLE TOWERS III INC., a Florida corporation (the "Corporation"), does hereby certify as follows:
1. In accordance with Sections 607.1006 and 607.1007 of the Florida Statutes, the foregoing Amended and Restated Articles of Incorporation were duly adopted by the Board of Directors and by the holders of a majority of the Voting Common and Series A Preferred of the Corporation on October ____, 1999. The number of votes cast for the amendment by the Corporation's shareholders, constitutes a sufficient number of votes to approve the amendment.
2. The undersigned officer of the Corporation has been duly authorized to submit these Amended and Restated Articles of Incorporation of the Corporation to the Department of State of Florida for filing in accordance with Section 607.1007 of the Florida Statutes.
PINNACLE TOWERS III INC.
By:____________________________
Steven R. Day, Secretary
Exhibit C
THIS COST AND EXPENSE SHARING AND REIMBURSEMENT AGREEMENT (this "Agreement") is effective as of the 31st day of August, 1999, by and between PINNACLE TOWERS INC., a Delaware corporation ("PTI") and Pinnacle Towers III Inc., a Florida corporation ("PT3").
WHEREAS, PT3 owns certain assets which it acquired from PTI; and
WHEREAS, in connection with the conduct of its business, PT3 considers it necessary or convenient to avail itself of certain of PTI's personnel, facilities and general and administrative overhead, and PTI is willing to make such available to PT3; and
WHEREAS, PT3 has agreed to reimburse PTI for its allocable share of the cost and expense of such shared personnel, facilities and general and administrative overhead as determined in the manner hereinafter provided;
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements herein contained, the parties agree as follows:
(a) With respect to any Shared Costs and Expenses directly attributable solely to PT3, an amount equal to the marginal or incremental cost or expense thereof incurred by PTI; and
(b) With respect to any Shared Costs and Expenses not described in
(a) above, the pro rata share of such Shared Costs and Expenses based on
the product obtained by multiplying the gross amount of such Shared Costs
and Expenses by the quotient obtained by dividing the gross revenues of PT3
for the year by the sum of the gross revenues for the year of both PTI and
PT3, or an amount determined on such other reasonable basis as the parties
may mutually agree.
The Reimbursement Amount for each calendar year shall be determined no later than three months after the end of such calendar year and payment of the Reimbursement Amount shall be due on or before the April 10/th/ of the year following the end of such calendar year.
(a) PTI and its Affiliates, and the officers, directors,
employees, shareholders, partners, representatives, consultants and
agents of PTI and its Affiliates (collectively, "Providing Parties")
shall not be liable to the party on whose behalf the Shared Costs and
Expenses are incurred, its Affiliates, or to any officer, director,
employee, shareholder, partner, representative, consultant or agent of
such party or its Affiliates (collectively, "Receiving Parties"), for
any liability, cost, damage, expense or loss, including, without
limitation, any special, indirect, consequential or punitive damages
(i) arising or allegedly arising out of any actions or failures to act
by any of the Providing Parties with respect to the Shared Costs and
Expenses to be provided hereunder, or (ii) as a result of the reliance
by any of the Receiving Parties on any advice or data that any of the
Providing Parties may provide pursuant to this Agreement; provided,
however, that the foregoing shall not apply to limit liability of a
party to the extent caused by such party's gross negligence or willful
misconduct.
(b) The Receiving Parties shall indemnify and hold harmless each and every of the Providing Parties from and against any liability, cost, damage, expense or loss (including court costs and reasonable attorneys' fees) which such Providing Parties may sustain or incur by reason of any claim, demand, suit or recovery by any person or entity, directly resulting from acts or omissions committed by the Receiving Party in connection with this Agreement; provided, however, that no person may benefit from the foregoing indemnity in the event of its gross negligence or willful misconduct.
If to PTI:
Pinnacle Towers Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Ben Gaboury
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
If to PT3:
Pinnacle Towers III Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
Any party may change its address or add or change parties for receiving notice by written notice given to the others named above. Notices shall be deemed given as of the date of receipt.
(a) PTI and PT3 mutually desire that friendly collaboration will develop between themselves. Accordingly, they shall try to resolve in a friendly manner
all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement, including any amendments hereof.
(b) (i) To the extent that any misunderstanding or dispute cannot be resolved agreeably in a friendly manner, the dispute will be mediated by a mutually acceptable mediator to be chosen by PTI and PT3 within forty-five (45) days after written notice by one of the parties demanding mediation. Neither party may unreasonably withhold consent to the selection of a mediator, however, by mutual agreement PTI and PT3 may postpone mediation until each has completed specified but limited discovery with respect to a dispute. The parties may also agree to attempt some other form of alternative dispute resolution ("ADR") in lieu of mediation, including by way of example and without limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through negotiation, mediation or other form of ADR within six months of the date of the initial demand for it by one of the parties may then be submitted to the courts for resolution. The use of any ADR procedures will not be construed under the doctrine of laches, waiver or estoppel to affect adversely the rights of either party. Nothing in this Section 15 will prevent either party from resorting to judicial proceedings if (A) good faith efforts to resolve the dispute under these procedures have been unsuccessful or (B) interim relief from a court is necessary to prevent serious and irreparable injury to one party or to others.
(c) Each of PT3 and PTI shall bear its costs of mediation or ADR, but PT3 and PTI agree to share the costs of the mediation of ADR equally.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
PINNACLE TOWERS INC.
PINNACLE TOWERS III INC.
Exhibit 10.8
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PINNACLE TOWERS III INC.
In accordance with Section 607.1007 of the Florida Business Corporation Act ("FBCA"), the Articles of Incorporation of Pinnacle Towers III Inc., a Florida corporation (the "Corporation"), are hereby amended and restated to read in their entirety as follows:
The name of the Corporation is:
PINNACLE TOWERS III INC.
The mailing address of the Corporation is:
1549 Ringling Boulevard
Sarasota, Florida 34236
The existence of the Corporation will commence at 12:01 A.M., the date of filing of these Articles of Incorporation.
The Corporation is organized to engage in any activity or business permitted under the laws of the United States and Florida.
that shares of such series will be "Pari Passu Securities" with respect to the Series A Preferred.
sold or otherwise transferred (with or without consideration) to any individual if such transfer would result in a violation of the Percentage Ownership Limit.
assets available to be distributed to the Corporation's shareholders will be distributed pro rata among the holders of Series A Preferred and any Pari Passu Securities based upon the aggregate Liquidation Value (plus all accrued and unpaid dividends) of the Series A Preferred, and the comparable amount payable to the holders of any Pari Passu Securities, held by each such holder. Neither the consolidation or merger of the Corporation into or with any other entity or entities (whether or not the Corporation is the surviving entity), nor the sale or transfer by the Corporation of all or any part of its assets, nor the reduction of the capital stock of the Corporation nor any other form of recapitalization or reorganization affecting the Corporation will be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 5(d).
Corporation will, at the request of the record holder of such certificate, execute and deliver (at the Corporation's expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of Shares represented by the surrendered certificate. Each such new certificate will be registered in such name and will represent such number of Shares as is requested by the holder of the surrendered certificate and will be substantially identical in form to the surrendered certificate, and dividends will accrue on the Series A Preferred represented by such new certificate from the date to which dividends have been fully paid on such Series A Preferred represented by the surrendered certificate.
classes of capital stock was held by 100 or more persons prior to such transfer, or (ii) a violation of the Percentage Ownership Limit would occur.
"The shares represented by this certificate are subject to restriction on transfer and ownership for the purpose of the Corporation's maintenance of its status as a Real Estate Investment Trust under the Code. Subject to certain further restrictions and except as expressly provided in the Corporation's articles of incorporation, as amended, any transfer of any share of capital stock of the Corporation will be void and of no legal effect if such transfer would result in (i) the ownership by five or fewer individuals of more than fifty percent of the aggregate value of all shares of capital stock of the Corporation or (ii) beneficial ownership of all shares of common stock would be held by less than 100 persons. Any shares of capital stock purported to be transferred in violation of these restrictions will be automatically transferred to the Corporation, as trustee, for the benefit of one or more charitable beneficiaries. A copy of the Corporation's articles of incorporation, as amended, including the
foregoing restrictions on transfer, will be sent without charge to each shareholder who so requests."
The street address of the current registered office of the Corporation is 1200 South Pine Island, Plantation, Florida 33324, and the name of the Corporation's current registered agent at that address is CT Corporation Systems.
The Corporation shall have two directors initially. The number of directors may be either increased or diminished from time to time, as provided in the bylaws, but shall never be less than one. The names and street addresses of the initial directors are:
Name Address ---- ------- Steven R. Day 1549 Ringling Boulevard, Third Floor Sarasota, Florida 34236 Robert J. Wolsey 1549 Ringling Boulevard, Third Floor Sarasota, Florida 34236 ARTICLE IX. BYLAWS ------------------- |
The power to adopt, alter, amend or repeal bylaws shall be vested in the Board of Directors and the shareholders, except that the Board of Directors may not amend or repeal any bylaws or article or provision thereof without the affirmative vote of the holders of the outstanding stock of each voting group entitled to vote thereon if the bylaws provide that they or such article or provision is not subject to amendment or repeal by the Board of Directors.
The Corporation reserves the right to amend, alter, change or repeal any provision in these Articles of Incorporation in the manner prescribed by law, and all rights conferred on shareholders are subject to this reservation.
IN WITNESS WHEREOF, the undersigned has executed these Amended and Restated Articles of Incorporation this 29th day of October, 1999.
CERTIFICATE TO AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF PINNACLE TOWERS III INC.
The undersigned, Steven R. Day, Secretary of PINNACLE TOWERS III INC., a Florida corporation (the "Corporation"), does hereby certify as follows:
1. In accordance with Sections 607.1006 and 607.1007 of the Florida Statutes, the foregoing Amended and Restated Articles of Incorporation were duly adopted by the Board of Directors and by the holders of a majority of the Voting Common and Series A Preferred of the Corporation on October 28th, 1999. The number of votes cast for the amendment by the Corporation's shareholders, constitutes a sufficient number of votes to approve the amendment.
2. The undersigned officer of the Corporation has been duly authorized to submit these Amended and Restated Articles of Incorporation of the Corporation to the Department of State of Florida for filing in accordance with Section 607.1007 of the Florida Statutes.
PINNACLE TOWERS III INC.
By:_________________________________
Steven R. Day, Secretary
Exhibit 10.9
NEITHER THIS CONVERTIBLE PROMISSORY NOTE NOR THE VOTING COMMON STOCK INTO WHICH IT IS CONVERTIBLE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PINNACLE TOWERS III INC.
CONVERTIBLE PROMISSORY NOTE
$39,200,000 ____________, __________ October __, 1999
PINNACLE TOWERS III INC., a Florida corporation (the "Company"), the principal office of which is located at 1549 Ringling Boulevard, Third Floor, Sarasota, Florida 34236, for value received hereby promises to pay to Pinnacle Towers Inc., or its registered assigns, the sum of Thirty Nine Million Two Hundred Thousand Dollars ($39,200,000), or such lesser amount as shall then equal the outstanding principal amount hereof and any unpaid accrued interest hereon, as set forth below. The outstanding principal under this Note shall be due and payable in full within 30 days of the date demand is made therefor by the Holder. Demand under this Note shall be given by the Holder to the Company by written notice thereof in accordance with Section 11 below. Payment for all amounts due hereunder shall be made at the Company's option by either wire transfer or by mail to the registered address of the Holder.
The following is a statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof, by the acceptance of this Note, agrees:
1. Definitions. As used in this Note, the following terms, unless the context otherwise requires, have the following meanings:
(a) "Company" includes any corporation which shall succeed to or assume the obligations of the Company under this Note.
(b) "Holder," when the context refers to a holder of this Note, shall mean any Person who shall at the time be the registered holder of this Note.
(c) "Person" means any individual, Company, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
2. Interest. Commencing on ___________________, and on each ________________ and _________________ thereafter until all outstanding principal and interest on this Note shall have been paid in full, the Company shall pay interest at the rate of eighteen percent (18%) per annum (the "Initial Interest Rate") on the principal of this Note outstanding during the period beginning on the date of issuance of this Note and ending on the date that the principal amount of this Note becomes due and payable. In the event that the principal amount of this Note is not paid in full when such amount becomes due and payable, interest at the same rate as the Initial Interest Rate plus _____ percent (___%) shall continue to accrue on the balance of any unpaid principal until such balance is paid.
3. Conversion.
3.1 Conversion. Any Holder of this Note has the right, at the Holder's option (the "Option"), at any time prior to payment in full of the principal balance of this Note, to convert this Note, in accordance with the provisions of Section 3.2 hereof, in whole or in part, into fully paid and nonassessable shares of the Company's Voting Common Stock, par value $0.001 per share or Nonvoting Common Stock, par value $0.001 per share (the "Common Stock"), at the option of the Holder from time to time. The number of shares of Common Stock into which this Note may be converted ("Conversion Shares") shall be determined by dividing the aggregate principal amount of this Note together with all accrued interest to the date of conversion elected to be converted by the Holder by the Conversion Price (as defined below) in effect at the time of such conversion. The initial Conversion Price shall be equal to $25 (the "Conversion Price").
3.2 Notice of Conversion Pursuant to Section 3.1. Before the Holder shall be entitled to convert this Note into shares of Common Stock, it shall surrender this Note at the office of the Company and shall give written notice to the Company at its principal corporate office of the election to convert all or a portion of the same pursuant to this Section 3 ("Notice of Conversion"), and shall state therein the amount of the Note to be converted and the name or names in which the certificate or certificates for shares of Common Stock are to be issued. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Note, and the Person or Persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date.
3.3 Mechanics and Effect of Conversion. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal that is not so converted, such payment to be in the form as provided below. Upon the conversion of this Note pursuant to Section 3.1 above, the Holder shall surrender this Note, duly endorsed, at the principal office of the Company. At its expense, the Company shall, as soon as practicable thereafter, issue and deliver to such Holder at such principal office a certificate or certificates for the number of shares of such Common Stock to which the Holder shall be entitled upon such conversion (bearing such legends as are required by applicable state and federal securities laws in the opinion of counsel to the Company), together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note, including a check payable to the Holder for any cash amounts payable as described above and a replacement Note representing any amount of the Note not converted. Upon the complete conversion of all of this Note, the Company shall be forever released from all its obligations and liabilities under this Note, except that the Company shall be obligated to pay the Holder, within ten (10) days after the date of such conversion, any interest accrued and unpaid or unconverted to and including the date of such conversion, and no more.
4. Prepayment. Prepayment of the principal of this Note is permitted, in whole or in part, without premium or penalty of any kind; provided the Company provides the Holder with thirty (30) days' prior written notice (unless notice is waived in writing by the Holder) of its intention to prepay the principal of this Note, in whole or in part, during which time the Holder may exercise the Option by delivering to the Company the Notice of Conversion.
5. Conversion Price Adjustments.
5.1 Adjustments for Stock Splits and Subdivisions. In the event the Company should at any time or from time to time after the date of issuance hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as "Common Stock Equivalents") without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of this Note shall be appropriately decreased so that the number of shares of
Common Stock issuable upon conversion of this Note shall be increased in proportion to such increase of outstanding shares.
5.2 Adjustments for Reverse Stock Splits. If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for this Note shall be appropriately increased so that the number of shares of Common Stock issuable on conversion hereof shall be decreased in proportion to such decrease in outstanding shares.
5.3 Notices of Record Date, etc. In the event of:
(a) Any taking by the Company of a record of the holders of any class of securities of the Company for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend payable out of earned surplus at the same rate as that of the last such cash dividend theretofore paid) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; or
(b) Any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all of the assets of the Company to any other Person or any consolidation or merger involving the Company; or
(c) Any voluntary or involuntary dissolution, liquidation or windingup of the Company, the Company will mail to the holder of this Note at least seven (7) days prior to the earliest date specified therein, a notice specifying:
(i) The date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right; and
(ii) The date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or windingup is expected to become effective and the record date for determining shareholders entitled to vote thereon.
5.4 Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of this Note such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of the Note; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the
conversion of the entire outstanding principal amount of this Note, in addition to such other remedies as shall be available to the holder of this Note, the Company will use its best efforts to take such corporation action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.
6. Representations and Warranties of the Holder.
(a) The Holder by its acceptance of this Note acknowledges that it is aware that this Note and the shares of Common Stock issuable to it by the Company upon conversion of this Note have not been registered under the Securities Act of 1933, as amended ("Act"), or the securities laws of any state or other jurisdiction.
(b) The Holder warrants and represents to the Company that it has acquired this Note, and, upon conversion of the Note, it will be acquiring the Common Stock, for investment and not with a view to or for sale in connection with any distribution of this Note or such Common Stock or with any intention of distributing or selling this Note or such Common Stock.
(c) The Holder has no right to demand that the Company register this Note or the shares of Common Stock issued or issuable under this Note.
7. Assignment. Subject to the restrictions on transfer described in
Section 11 below, the rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
8. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.
9. Transfer of This Note or Securities Issuable on Conversion Hereof. With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such Holder's counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Promptly upon receiving such written notice and reasonably satisfactory opinion, if so requested, the Company, as promptly as practicable, shall notify such Holder that such Holder may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 9 that the opinion of counsel for the Holder is not reasonably satisfactory to the Company, the Company shall so notify the Holder promptly after such determination has been made. Each Note thus transferred and each certificate
representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Act, unless in the opinion of counsel for the Company such legend is not required. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
10. Treatment of Note. To the extent permitted by generally accepted accounting principles, the Company will treat, account and report the Note as debt and not equity for accounting purposes and with respect to any returns filed with federal, state or local tax authorities.
11. Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if (and then two business days after) mailed by registered or certified mail, postage prepaid, at the respective addresses of the parties as set forth herein. Any party hereto may by notice so given change its address for future notice hereunder.
12. No Shareholder Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or any other Person the right to vote or to consent or to receive notice as a shareholder in respect of meetings of shareholders for the election of directors of the Company or any other matters or any rights whatsoever as a shareholder of the Company; and no dividends or interest shall be payable or accrued in respect of this Note or the interest represented hereby or the Conversion Shares obtained hereunder until, and only to the extent that, this Note shall have been converted.
13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, excluding that body of law relating to conflict of laws.
14. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.
IN WITNESS WHEREOF, the Company has caused this Note to be issued this _____ day of ___________, 1999.
PINNACLE TOWERS III INC.
By_________________________________
Steven R. Day, Vice President
Name of Holder:____________________
Address:___________________________
Exhibit 10.10
THIS COST AND EXPENSE SHARING AND REIMBURSEMENT AGREEMENT (this "Agreement") is effective as of the 31st day of August, 1999, by and between PINNACLE TOWERS INC., a Delaware corporation ("PTI") and Pinnacle Towers III Inc., a Florida corporation ("PT3").
WHEREAS, PT3 owns certain assets which it acquired from PTI; and
WHEREAS, in connection with the conduct of its business, PT3 considers it necessary or convenient to avail itself of certain of PTI's personnel, facilities and general and administrative overhead, and PTI is willing to make such available to PT3; and
WHEREAS, PT3 has agreed to reimburse PTI for its allocable share of the cost and expense of such shared personnel, facilities and general and administrative overhead as determined in the manner hereinafter provided;
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements herein contained, the parties agree as follows:
(a) With respect to any Shared Costs and Expenses directly attributable solely to PT3, an amount equal to the marginal or incremental cost or expense thereof incurred by PTI; and
(b) With respect to any Shared Costs and Expenses not described in
(a) above, the pro rata share of such Shared Costs and Expenses based on
the product obtained by multiplying the gross amount of such Shared Costs
and Expenses by the quotient obtained by dividing the gross revenues of PT3
for the year by the sum of the gross revenues for the year of both PTI and
PT3, or an amount determined on such other reasonable basis as the parties
may mutually agree.
The Reimbursement Amount for each calendar year shall be determined no later than three months after the end of such calendar year and payment of the Reimbursement Amount shall be due on or before the April 10/th/ of the year following the end of such calendar year.
(a) PTI and its Affiliates, and the officers, directors,
employees, shareholders, partners, representatives, consultants and
agents of PTI and its Affiliates (collectively, "Providing Parties")
shall not be liable to the party on whose behalf the Shared Costs and
Expenses are incurred, its Affiliates, or to any officer, director,
employee, shareholder, partner, representative, consultant or agent of
such party or its Affiliates (collectively, "Receiving Parties"), for
any liability, cost, damage, expense or loss, including, without
limitation, any special, indirect, consequential or punitive damages
(i) arising or allegedly arising out of any actions or failures to act
by any of the Providing Parties with respect to the Shared Costs and
Expenses to be provided hereunder, or (ii) as a result of the reliance
by any of the Receiving Parties on any advice or data that any of the
Providing Parties may provide pursuant to this Agreement; provided,
however, that the foregoing shall not apply to limit liability of a
party to the extent caused by such party's gross negligence or willful
misconduct.
(b) The Receiving Parties shall indemnify and hold harmless each and every of the Providing Parties from and against any liability, cost, damage, expense or loss (including court costs and reasonable attorneys' fees) which such Providing Parties may sustain or incur by reason of any claim, demand, suit or recovery by any person or entity, directly resulting from acts or omissions committed by the Receiving Party in connection with this Agreement; provided, however, that no person may benefit from the foregoing indemnity in the event of its gross negligence or willful misconduct.
of delays caused by PT3 or any act of God, war, civil disturbance, court order, strike, labor dispute, law or regulation of any governmental authority, or other cause beyond the reasonable control of PTI. Such nonperformance shall not be a default hereunder. PTI shall take all reasonable actions to resume performance of its obligations hereunder as soon as feasible.
If to PTI:
Pinnacle Towers Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Ben Gaboury
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
If to PT3:
Pinnacle Towers III Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
Any party may change its address or add or change parties for receiving notice by written notice given to the others named above. Notices shall be deemed given as of the date of receipt.
(a) PTI and PT3 mutually desire that friendly collaboration will develop between themselves. Accordingly, they shall try to resolve in a friendly manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement, including any amendments hereof.
(b) (i) To the extent that any misunderstanding or dispute cannot be resolved agreeably in a friendly manner, the dispute will be mediated by a mutually acceptable mediator to be chosen by PTI and PT3 within forty-five (45) days after written notice by one of the parties demanding mediation. Neither party may unreasonably withhold consent to the selection of a mediator, however, by mutual agreement PTI and PT3 may postpone mediation until each has completed specified but limited discovery with respect to a dispute. The parties may also agree to attempt some other form of alternative dispute resolution ("ADR") in lieu of mediation, including by way of example and without limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through
negotiation, mediation or other form of ADR within six months of the
date of the initial demand for it by one of the parties may then be
submitted to the courts for resolution. The use of any ADR procedures
will not be construed under the doctrine of laches, waiver or estoppel
to affect adversely the rights of either party. Nothing in this
Section 15 will prevent either party from resorting to judicial
proceedings if (A) good faith efforts to resolve the dispute under
these procedures have been unsuccessful or (B) interim relief from a
court is necessary to prevent serious and irreparable injury to one
party or to others.
(c) Each of PT3 and PTI shall bear its costs of mediation or ADR, but PT3 and PTI agree to share the costs of the mediation of ADR equally.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
PINNACLE TOWERS INC.
PINNACLE TOWERS III INC.
ARTICLE 5 |
PERIOD TYPE | 9 MOS | 9 MOS |
FISCAL YEAR END | DEC 31 1998 | DEC 31 1999 |
PERIOD START | JAN 01 1998 | JAN 31 1999 |
PERIOD END | SEP 30 1998 | SEP 30 1999 |
CASH | 0 | 151,868,363 |
SECURITIES | 0 | 0 |
RECEIVABLES | 2,502,601 | 11,733,490 |
ALLOWANCES | 356,905 | 4,178,380 |
INVENTORY | 0 | 0 |
CURRENT ASSETS | 3,178,315 | 165,616,062 |
PP&E | 497,463,479 | 946,431,154 |
DEPRECIATION | 21,696,958 | 64,994,681 |
TOTAL ASSETS | 492,078,268 | 1,160,298,216 |
CURRENT LIABILITIES | 26,966,366 | 64,566,621 |
BONDS | 399,642,563 | 698,320,176 |
PREFERRED MANDATORY | 30,543,260 | 0 |
PREFERRED | 32,570,731 | 0 |
COMMON | 378 | 41,695 |
OTHER SE | 2,242,881 | 397,011,179 |
TOTAL LIABILITY AND EQUITY | 492,078,268 | 1,160,298,216 |
SALES | 21,127,633 | 48,816,143 |
TOTAL REVENUES | 21,127,633 | 48,816,143 |
CGS | 0 | 0 |
TOTAL COSTS | 3,965,511 | 11,691,067 |
OTHER EXPENSES | 18,570,441 | 41,549,308 |
LOSS PROVISION | 0 | 0 |
INTEREST EXPENSE | 7,276,265 | 14,439,470 |
INCOME PRETAX | (23,181,336) | (41,951,538) |
INCOME TAX | 0 | 0 |
INCOME CONTINUING | (23,181,336) | (41,951,538) |
DISCONTINUED | 0 | 0 |
EXTRAORDINARY | 0 | 0 |
CHANGES | 0 | 0 |
NET INCOME | (23,181,336) | (41,951,538) |
EPS BASIC | (59.85) | (1.41) |
EPS DILUTED | 0 | 0 |