Exhibit 10
AGREEMENT TO CONTRIBUTE, LEASE AND SUBLEASE
AMONG
SPRINT CORPORATION,
THE SPRINT SUBSIDIARIES NAMED HEREIN
AND
GLOBAL SIGNAL INC.
DATED AS OF FEBRUARY 14, 2005
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS....................................................................................2
ARTICLE 2 CONTRIBUTION, CONVEYANCE/GRANT OF LEASEHOLD, SUBLEASEHOLD OR OTHER INTEREST AND CONSIDERATION.16
SECTION 2.1 Contribution, Conveyance/Grant of Leasehold, Subleasehold or Other Interest.......16
SECTION 2.2 Items Excluded from Contribution, Conveyance/Grant of Leasehold,
Subleasehold or Other Interest....................................................17
SECTION 2.3 Consideration.....................................................................17
SECTION 2.4 AS IS, WHERE IS...................................................................18
SECTION 2.5 Closing Place and Dates...........................................................18
SECTION 2.6 Initial Closing...................................................................19
SECTION 2.7 Technical Closings; Contributions to Lessor.......................................21
SECTION 2.8 Site Designation Supplements......................................................22
SECTION 2.9 Prorating of Expenses.............................................................23
SECTION 2.10 Deposits..........................................................................23
SECTION 2.11 Re-Recordation....................................................................23
ARTICLE 3 PRE-CLOSING PROCEDURES FOR SITES..............................................................24
SECTION 3.1 Contributable Sites; Master Lease Sites...........................................24
SECTION 3.2 Certain Procedures with respect to Identifying and Curing Exceptions..............24
SECTION 3.3 Shared Sites; Contributors' Cure Rights...........................................26
SECTION 3.4 Certain Procedures with respect to Shared Ground Lease Payments...................27
SECTION 3.5 Arbitration.......................................................................28
SECTION 3.6 Special Zoning Sites..............................................................28
SECTION 3.7 Casualty Sites....................................................................29
SECTION 3.8 Recordation of Documents; Signage.................................................30
SECTION 3.9 Allocation of Rent and Pre-Lease Rent; Multiple Lease Agreements..................30
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS AND SPRINT.....................................32
SECTION 4.1 Organization......................................................................32
SECTION 4.2 Authority; No Conflicts...........................................................32
SECTION 4.3 Real Property.....................................................................33
SECTION 4.4 Title; Ownership and Related Matters..............................................34
SECTION 4.5 Material Agreements...............................................................34
SECTION 4.6 Litigation; Orders................................................................35
SECTION 4.7 Environmental Matters.............................................................35
SECTION 4.8 Brokers, Finders, Etc.............................................................36
SECTION 4.9 Financial Statements..............................................................36
SECTION 4.10 Per Tower Data....................................................................37
SECTION 4.11 Compliance with Laws and Governmental Authorizations..............................38
SECTION 4.12 No Implied Representations........................................................38
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF LESSEE......................................................38
SECTION 5.1 Incorporation.....................................................................38
SECTION 5.2 Authority.........................................................................39
SECTION 5.3 No Conflicts......................................................................39
SECTION 5.4 Approvals, Other Authorizations, Consents, Reports, Etc...........................39
SECTION 5.5 Litigation; Orders................................................................40
SECTION 5.6 Brokers, Finders, Etc.............................................................40
SECTION 5.7 SEC Reports.......................................................................40
SECTION 5.8 Financial Statements..............................................................40
SECTION 5.9 Independent Review................................................................41
SECTION 5.10 Financial Capability..............................................................42
ARTICLE 6 COVENANTS OF SPRINT, CONTRIBUTORS AND LESSEE..................................................42
SECTION 6.1 Investigation of Sites Prior to Initial Closing; Access to Properties and
Records...........................................................................42
SECTION 6.2 Efforts to Close; Cooperation.....................................................44
SECTION 6.3 Further Assurances................................................................45
SECTION 6.4 Conduct of Collocation Business and the Sites.....................................46
SECTION 6.5 Public Announcements..............................................................47
SECTION 6.6 Corporate Names...................................................................47
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SECTION 6.7 Actions by Lessee, Sprint and Contributors Subsidiaries...........................48
SECTION 6.8 Environmental Matters.............................................................48
SECTION 6.9 Title Insurance Commitments.......................................................49
SECTION 6.10 Other Documentation...............................................................49
SECTION 6.11 Master Collocation Agreements.....................................................50
SECTION 6.12 Confidentiality...................................................................50
SECTION 6.13 Lessee's Efforts..................................................................52
SECTION 6.14 Employee Matters..................................................................53
SECTION 6.15 2004 Audited Financials; Unaudited Stub Period Financials.........................55
SECTION 6.16 Exclusivity; Return of Confidential Information...................................56
SECTION 6.17 Notices of Certain Events.........................................................56
SECTION 6.18 Sprint and its Affiliates' Rights.................................................56
ARTICLE 7 CONDITIONS TO LESSEE'S OBLIGATION TO CLOSE....................................................57
SECTION 7.1 Representations, Warranties and Covenants of Contributors and Sprint..............57
SECTION 7.2 HSR Filings.......................................................................57
SECTION 7.3 No Injunction or Proceedings......................................................57
SECTION 7.4 Collateral Agreements and Additional Closing Deliveries...........................58
SECTION 7.5 Contributable Sites and Master Lease Sites........................................59
SECTION 7.6 Individual Site Closing Conditions................................................59
ARTICLE 8 CONDITIONS TO CONTRIBUTORS', SPRINT'S AND LESSOR'S OBLIGATIONS TO CLOSE.......................59
SECTION 8.1 Representations, Warranties and Covenants of Lessee...............................60
SECTION 8.2 HSR Filings.......................................................................60
SECTION 8.3 No Injunction or Proceedings......................................................60
SECTION 8.4 Collateral Agreements.............................................................60
ARTICLE 9 SURVIVAL; INDEMNIFICATION.....................................................................61
SECTION 9.1 Indemnification Obligations of Contributors and Sprint............................61
SECTION 9.2 Indemnification Obligations of Lessee.............................................62
SECTION 9.3 Indemnification Procedure for Third Party Claims..................................63
SECTION 9.4 Indemnity Period..................................................................64
SECTION 9.5 Liability Limits..................................................................65
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SECTION 9.6 Exclusive Remedies................................................................65
SECTION 9.7 Netting of Losses.................................................................66
ARTICLE 10 TERMINATION..................................................................................66
SECTION 10.1 Termination of Agreement..........................................................66
SECTION 10.2 Effect of Termination.............................................................67
ARTICLE 11 MISCELLANEOUS................................................................................68
SECTION 11.1 Counterparts......................................................................68
SECTION 11.2 Governing Law.....................................................................68
SECTION 11.3 Entire Agreement..................................................................68
SECTION 11.4 Fees and Expenses.................................................................68
SECTION 11.5 Notices...........................................................................68
SECTION 11.6 Assignment; Successors and Assigns; Third-Party Beneficiaries.....................70
SECTION 11.7 Headings; Definitions.............................................................70
SECTION 11.8 Amendment; Modification...........................................................71
SECTION 11.9 Time of Essence...................................................................71
SECTION 11.10 Specific Performance..............................................................71
SECTION 11.11 Mutual Drafting...................................................................71
SECTION 11.12 Limitation of Liability...........................................................71
SECTION 11.13 Disclosures.......................................................................71
SECTION 11.14 Jurisdiction and Consent to Service...............................................72
SECTION 11.15 Waiver of Jury Trial..............................................................72
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Schedules
Schedule 1 Included Equipment
Schedule 2 Excluded Equipment
Schedule 3 Qwest Sites
Exhibits
Exhibit A Schedule of Owned Sites
Exhibit B Schedule of Leased Sites and Other Interest Sites
Exhibit C Form of LLC Agreement
Exhibit C-1 Form of Separateness Agreement
Exhibit D Form of Lease and Sublease Agreement
Exhibit D-1 Rent and Pre-Lease Rent Allocation Principles
Exhibit D-2 Option Purchase Price Allocation Principles
Exhibit E Form of Property Use Agreement
Exhibit F Material Terms of Transition Services Agreement
Exhibit G Individual Site Closing Conditions
Exhibit H Form of Lessee General Assignment and Assumption Agreement
Exhibit I Form of LLC General Assignment and Assumption Agreement
Exhibit J Form of Ground Lessor Estoppel
Exhibit K Form of Non-Disturbance Agreement
AGREEMENT TO CONTRIBUTE, LEASE AND SUBLEASE
AGREEMENT TO CONTRIBUTE, LEASE AND SUBLEASE (this "Agreement"), dated as of
February 14, 2005, among GLOBAL SIGNAL INC., a Delaware corporation ("Lessee"),
SPRINT CORPORATION, a Kansas corporation ("Sprint"), and the Subsidiaries of
Sprint named on the signature pages to this Agreement (such Subsidiaries,
collectively, "Contributors").
WHEREAS, Contributors operate throughout the United States and its
territories the Sites, which include Towers and related Equipment and
Contributors either own, lease or otherwise occupy or use the tracts, pieces or
parcels of land or structures on or in which such Towers are located, all such
Sites as of September 30, 2004 being described in the attached Exhibit A ("Owned
Sites") and Exhibit B (which includes both "Leased Sites" and "Other Interest
Sites");
WHEREAS, Lessee desires to Lease the Leased Property of the Sites, or
otherwise operate the Sites, on the terms and conditions set forth in this
Agreement, including the assumption of certain obligations under the Ground
Leases with respect to the Leased Sites Land and Other Interest Sites Land and
certain other related liabilities;
WHEREAS, as a condition to, and simultaneously with, the Initial Closing,
Contributors will enter into one or more Limited Liability Company Agreements,
substantially in the form attached as Exhibit C (individually and collectively,
the "LLC Agreement"), for each newly-formed special purpose entity (individually
and collectively, "Lessor") to be formed and operated pursuant to the terms of
this Agreement and the LLC Agreement;
WHEREAS, as a condition to, and simultaneously with, the Initial Closing,
Contributors will contribute to Lessor all of their respective interests in the
Leased Property of the Sites (including (a) an assignment by the applicable
Contributors of their leasehold or other interests in the Ground Leases with
respect to the Leased Sites Land and the Other Interest Sites Land, and (b) the
transfer by the applicable Contributors of their interests in the Owned Sites
Land); provided, that with respect to the Non-Contributable Sites, Contributors
will not assign or transfer to Lessor the Ground Lease and related Collocation
Agreements unless all consents required for assignment or transfer have been
obtained;
WHEREAS, as a condition to, and simultaneously with, the Initial Closing,
Contributors, Lessor and Lessee will enter into Lease and Sublease Agreements
(individually and collectively, the "Lease Agreement"), in accordance with the
provisions of Section 3.9(b), substantially in the form attached as Exhibit D
(as modified by Section 3.9(b)), pursuant to which (a) Lessor will Lease the
Leased Property of the Master Lease Sites to Lessee, (b) certain Contributors
will sublease back from Lessee the Sprint Collocation Space, and (c) Lessee will
operate for and on behalf of Lessor the Pre-Lease Sites (until such time as the
Pre-Lease Sites will have become Master Lease Sites thereunder);
WHEREAS, as a condition to, and simultaneously with, the Initial Closing,
Contributors and Lessor will enter into the Property Use Agreement (the
"Property Use Agreement"), substantially in the form attached as Exhibit E,
pursuant to which Contributors will grant to Lessor as of the Initial Closing
Date, the right to operate the Leased Sites Land or Other Interest Sites Land,
as applicable, and administer the related Collocation Agreements with respect to
each Non-Contributable Site; and
WHEREAS, as a condition to, and simultaneously with, the Initial Closing,
Contributors, Lessor and Lessee will enter into the Transition Services
Agreement, on mutually acceptable terms and conditions with respect to the
services described on Exhibit F (the "Transition Services Agreement"), pursuant
to which Contributors, Lessor and Lessee will provide each other certain
transition services for an interim period following the Initial Closing.
NOW THEREFORE, in consideration of the foregoing and the representations,
warranties, and agreements contained in this Agreement, and intending to be
legally bound by this Agreement, the parties agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms will have the following
respective meanings:
"AAA" has the meaning set forth in Section 3.5.
"Accountants" has the meaning set forth in Section 6.1(d).
"Additional Deposit" means an additional deposit in the amount of Twelve
Million Five Hundred Thousand Dollars ($12,500,000).
"Affiliate" (and, with a correlative meaning, "Affiliated") means, with
respect to any Person, any other Person that directly, or indirectly through one
or more intermediaries controls, is controlled by, or is under common control
with, such Person. As used in this definition, "control" means the beneficial
ownership (as such term is defined in Rules 13d-3 and 13d-5 of the Securities
Exchange Act of 1934, as amended) of more than fifty percent (50%) of the voting
interests of the Person.
"Agreement" has the meaning set forth in the preamble, and will include,
except where the context otherwise requires, all of the attached Schedules and
Exhibits.
"Antitrust Laws" means the HSR Act or any other antitrust, competition or
trade regulatory Laws.
"Assumed Liabilities" means all Liabilities arising during the term of the
Lease Agreement related to, or arising in connection with the operation, use or
occupancy of, any Master Lease Site or Pre-Lease Site thereunder, including
fifty percent (50%) of any Shared Ground Lease Payments, but specifically
excluding all Excluded Liabilities.
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Without limiting the generality of the foregoing, Assumed Liabilities will
include, without limitation, all Liabilities (other than Excluded Liabilities)
of Contributors, Lessor or any of their respective Affiliates arising during the
term of the Lease Agreement under or related to each Collocation Agreement (or
in the case of Master Collocation Agreements bifurcated pursuant to Section
6.11, the portion of the Master Collocation Agreement assigned to Lessee). It is
understood and agreed that, as of the Initial Closing Date, pursuant and subject
to the Lease Agreement, the obligations of Contributors or Lessor, as
applicable, under the Ground Leases will be performed by Lessee in accordance
with the terms of the Ground Leases and/or related agreements with respect to
the Leased Sites Land and the Other Interest Sites Land, including, without
limitation, except as set forth herein or in the Lease Agreement, the direct
payment of ground rent and other charges thereunder accrued on and after the
Initial Closing Date, but excluding the Contributors', Lessor's, or any Sprint
Collocator's fifty percent (50%) share of any Shared Ground Lease Payments
(which is an Excluded Liability).
"Auction" has the meaning set forth in Section 6.16(a).
"Authorization" means, with respect to each Site, each consent, approval or
waiver from, or a notice to or filing with, any Person or Governmental Authority
required in order to consummate the transactions contemplated by this Agreement,
including, if applicable, a consent, approval or waiver from the Ground Lessor
under the applicable Ground Lease.
"Available Space" has the meaning set forth in the Lease Agreement.
"Casualty Site" means a Site with respect to which a Force Majeure event
occurs prior to the Initial Closing Date for the applicable Site, which event or
occurrence renders the Tower on such Site unusable as a communications tower or
that otherwise materially impairs the value of such Site.
"Closing" means the Initial Closing, a Conversion Closing or Technical
Closing.
"Closing Date" means the date on which a Closing occurs.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Collateral Agreements" means the Lease Agreement, the Property Use
Agreement, the Transition Services Agreement, and, if entered into, any other
agreements, certificates and documents entered into in connection with the
transactions contemplated by this Agreement and the other Collateral Agreements.
"Collocation Agreement" means an agreement pursuant to which a Contributor
or Lessor rents to a third party space at any Site (including space on a Tower),
including all amendments, modifications, supplements, assignments, guaranties,
and side letters related thereto.
"Collocation Business" means the business of Contributors of (a) marketing
available capacity at any Site to wireless communications services providers
(including Contributors and their respective Affiliates), (b) administering the
Collocation
3
Agreements and Master Collocation Agreements with such wireless communications
services providers, and (c) managing the use and occupancy of such capacity by
Contributors and their respective Affiliates.
"Communications Equipment" means, as to any Site, transmitting and/or
receiving equipment and other equipment installed at the Sprint Collocation
Space or any Available Space or any other portion of the Site (with respect to a
Tower Subtenant), which is used in providing current and future wireless and
wireline communication services, including without limitation, switches,
antennas, microwave dishes, panels, conduits, flexible transmission lines,
cables, radio, amplifiers, filters and other transmission or communications
equipment (including interconnect transmission equipment, transmitter(s),
receiver(s) and accessories) and such other equipment and associated software as
may be necessary in order to provide such wireless and wireline communication
services, including without limitation, voice or data. Communications Equipment
will include any existing, replaced and upgraded Communications Equipment.
"Competing Transaction" has the meaning set forth in Section 6.16(a).
"Confidential Information" has the meaning set forth in Section 6.12(b).
"Confidentiality Agreement" means the Confidentiality Agreement, dated as
of July 21, 2004, as amended, by and between Sprint and an Affiliate of Lessee.
"Contributable Site" has the meaning set forth in Section 3.1(a).
"Contribution Exception" means, with respect to a Site, any Authorization
that must be satisfied or fulfilled in order for the applicable Contributor to
contribute the Leased Property and the related Collocation Agreements and Tower
Related Assets of such Site to Lessor.
"Contributors" has the meaning set forth in the preamble.
"Contributors Benefit Plans" means any "employee benefit plan" (as defined
in Section 3(3) of ERISA) maintained by Contributors or their Affiliates for the
benefit of the employees of the Collocation Business and each other employee
benefit, bonus or fringe benefit plan maintained by Contributors or their
Affiliates for the benefit of the employees of the Collocation Business.
"Contributors Deductible" has the meaning set forth in Section 9.5(b).
"Contributors Disclosure Letter" means the disclosure letter delivered by
Contributors to Lessee simultaneously with the execution and delivery of this
Agreement, as supplemented or amended by Contributors pursuant to the terms and
conditions of this Agreement.
"Contributors Indemnified Parties" means Contributors, Lessor, Sprint and
the other Affiliates of Contributors and Lessor, and their respective directors,
officers, employees, agents and representatives.
4
"Conversion Closing" has the meaning set forth in Section 2.5(b).
"Conversion Closing Date" means, with respect to each Conversion Closing,
the date on which such Conversion Closing occurs.
"Corrective Assignment" has the meaning set forth in Section 2.6(a).
"De Minimis Claim" has the meaning set forth in Section 9.5(a).
"Deposit" means the initial deposit in the amount of Fifty Million Dollars
($50,000,000) together with any Additional Deposit(s) made by Lessee pursuant to
Section 10.1(c).
"Disclosee" has the meaning set forth in Section 6.12(a).
"Disclosing Party" has the meaning set forth in Section 6.12(a).
"Environmental Conditions" means, with respect to any Site, that Lessee has
commissioned and obtained: (i) a clean Phase 0 environmental report; or (ii) a
Phase I environmental report that recommends no further action is required, or
(iii) a Phase II environmental report that either recommends no further action
or is otherwise acceptable to Lessee.
"Environmental Law" means all federal, state and local Laws relating to the
protection of surface or ground water, drinking water supply, soil, surface or
subsurface strata or medium or ambient air, pollution control and Hazardous
Substances. Zoning Laws (including any rules or regulations promulgated pursuant
to any Zoning Law relating to the (a) placement, construction and modification
of communications towers as applied through Zoning Laws or (b) aesthetic
character of a communications tower) are not Environmental Laws.
"Environmental Permits" means all material Governmental Approvals required
for the operation of a Site under applicable Environmental Law.
"Equipment" means all physical assets (other than real property and
interests in real property) located at the applicable Site on or in, or attached
to, Owned Sites Land, Leased Sites Land, Other Interest Sites Land, Improvements
or Towers Leased to, or operated by, Lessee pursuant to the Lease Agreement, and
includes, without limitation, all of the items described on the attached
Schedule 1. With respect to any item of or interest in real property included in
the Leased Property of any Site, any fixture (other than Towers) attached to
that real property is "Equipment" related thereto. "Equipment" does not include
any intellectual property or intangible rights or Excluded Equipment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means Bank of America, N.A., or any successor escrow agent
under the Escrow Agreement.
5
"Escrow Agreement" means that certain Escrow Agreement executed
concurrently herewith between Bank of America, N.A., as escrow agent,
Contributors, Sprint and Lessee, as the same may hereafter be amended, modified
or supplemented by the parties thereto pursuant to its terms.
"Exception" means a Contribution Exception and/or Leasing Exception.
"Excluded Assets" means the following:
(a) all Excluded Equipment, Excluded Sites and Strategic Sites;
(b) any of Contributors' or Lessor's right, title or interest in or to the
Owned Sites Land (other than any leasehold or other interest in the Owned Sites
Land granted to Lessee under the Lease Agreement);
(c) any of Contributors' or Lessor's right, title or interest in or to the
Leased Sites Land (other than any leasehold or other interest in the Leased
Sites Land granted to Lessee under the Lease Agreement);
(d) any of Contributors' or Lessor's right, title or interest in or to the
Other Interest Sites Land (other than any leasehold or other interests or rights
in the Other Interest Sites Land granted to or otherwise made available to
Lessee under the Lease Agreement);
(e) any and all licenses granted by the FCC to Contributors or their
respective Affiliates;
(f) any receivables of Contributors, Lessor or their respective Affiliates
under any Collocation Agreement accrued for periods ending prior to the Initial
Closing Date;
(g) any intellectual property of Contributors, Lessor or their respective
Affiliates;
(h) any condemnation or eminent domain proceeds received after the date of
this Agreement with respect to a taking of any Owned Sites Land, Leased Sites
Land or Other Interest Sites Land that are Excluded Sites or Strategic Sites;
(i) the Qwest Asset Purchase Agreement and any rights of Contributors
thereunder; and
(j) any cash, cash equivalents or marketable securities and all rights to
any bank accounts of Contributors, Lessor or their respective Affiliates.
"Excluded Equipment" means (a) Contributors', Lessor's or any of their
respective Affiliates' right, title or interest in or to any Equipment located
at any Site that is used or held for use by Contributors or Lessor as of the
Initial Closing Date in connection with its use and occupancy of the Sprint
Collocation Space pursuant to the Lease Agreement (including, without
limitation, Communications Equipment of Contributors, Lessor or their respective
Affiliates located on any Tower and any
6
Equipment which supports such Communications Equipment located on land or on any
Tower or in any building that is part of any Improvements), except for any such
Equipment actively used by Contributors, Lessor or such Affiliates exclusively
in connection with the operation or maintenance of the Towers (and not in
connection with any Contributor's, Lessor's or their respective Affiliates'
other businesses or as support for any Contributor's, Lessor's or their
respective Affiliates' actively used Communications Equipment on the Towers),
(b) any Equipment belonging to third parties, including tenants under
Collocation Agreements, or relating to Contributors' tariff services, (c)
Contributors', Lessor's and their respective Affiliates' antennas, generators,
wireless and wireline cable runs and equipment shelters that contain only
Contributors' or Lessor's Equipment and, (d) all of the Equipment described on
the attached Schedule 2.
"Excluded Liabilities" means all Liabilities of Contributors, Lessor or any
of their respective Affiliates (a) to their employees in their capacity as
employers or related to any Contributors Benefit Plan, (b) related to Excluded
Assets, (c) related to, or arising in connection with the ownership, operation,
use or occupancy prior to the Initial Closing Date of any Site (d) fifty percent
(50%) of any Shared Ground Lease Payments, or (e) which are "Excluded
Liabilities" pursuant to Section 3.3(b)(ii)(4)(A).
"Excluded Site" has the meaning set forth in Section 3.3(b)(i).
"FCC" means the United States Federal Communications Commission, or any
successor Governmental Authority.
"Final Closing Date" has the meaning set forth in Section 2.7(e).
"Financeable Site" has the meaning set forth in the Lease Agreement.
"Financial Statements" has the meaning set forth in Section 4.9(a).
"Financing Commitments" has the meaning set forth in Section 5.10.
"FIRPTA Certificate" has the meaning set forth in Section 7.4(c)(i).
"First Milestone Date" has the meaning set forth in Section 10.1(c).
"Force Majeure" means any occurrence, nonoccurrence or set of
circumstances that is beyond the reasonable control of Contributors, including,
without limitation, condemnation or other taking, flood, ice, earthquake,
tornado, hurricane, windstorm or eruption, fire, explosion, invasion, civil war,
domestic or foreign terrorist act, commotion or insurrection, sabotage or
vandalism, military or usurped power, or act of God or of a public enemy or
foreclosure, deed-in-lieu of foreclosure, or similar proceeding with respect to
a Ground Lessor Lien; provided, that, after the Initial Closing, Lessee is not
in monetary default under the Lease Agreement.
"GAAP" means generally accepted accounting principles in the United
States, consistently applied.
7
"Governmental Antitrust Authority" means the Antitrust Division of the
United States Department of Justice, the United States Federal Trade Commission
and any State attorney general, or any successor thereto.
"Governmental Approvals" means all licenses, permits, franchises,
certifications, waivers, variances, registrations, consents, approvals,
qualifications and other authorizations to, from or with any Governmental
Authority.
"Governmental Authority" means any foreign, domestic, federal, territorial,
state or local governmental authority, administrative body, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, board, administrative hearing body, arbitration panel, tribunal or
organization or any regulatory, administrative or other agency, or any political
or other subdivision, department or branch of any of the foregoing.
"Ground Lease" means, as to a Leased Site or Other Interest Site, the
ground lease and/or any related easement, license or other agreement, pursuant
to which a Contributor or Lessor holds a leasehold interest, leasehold estate,
easement, license or other real property interest including all amendments,
modifications, supplements, assignments, guarantees, and side letters related
thereto.
"Ground Lessor" means, as to a Leased Site or Other Interest Site, the
"lessor", "landlord", "licensor", or similar Person under the related Ground
Lease.
"Ground Lessor Estoppel" means, as to a Ground Lease, an estoppel from the
Ground Lessor thereunder for the benefit of Lessee, its successor and assigns,
lenders and rating agencies, in substantially the form of Exhibit J attached
hereto.
"Ground Lessor Lien" means, with respect to any asset, any mortgage, lien,
guaranty, pledge, security interest, charge, attachment, restriction or
encumbrance of any kind in respect of the interest of a Ground Lessor in a
Leased Site or Other Interest Site and that exists prior to the Initial Closing
Date.
"Ground Lessor Mortgage" means any mortgage, deed of trust or similar Lien
on the interest of a Ground Lessor that is superior to the interest of a
Contributor in a Leased Site or Other Interest Site and that exists prior to the
Initial Closing Date.
"GSI Financing Subsidiary" means any Person formed by or on behalf of
Lessee to act as the "Lessee" under the Lease Agreement or under any "Severable
Lease" (as defined in the Lease Agreement).
"Hazardous Substance" means any waste, pollutant, contaminant, hazardous
substance, toxic or corrosive substance, hazardous waste, special waste,
industrial substance, by-product, process-intermediate product or waste,
petroleum or petroleum-derived substance or waste, chemical liquids or solids,
liquid or gaseous products, or any constituent of any such substance or waste,
the use, handling or disposal of which is governed by or subject to applicable
Environmental Law.
8
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Improvements" has the meaning set forth in the Lease Agreement.
"Indemnified Party" means a Contributors Indemnified Party or a Lessee
Indemnified Party, as the case may be.
"Indemnifying Party" has the meaning set forth in Section 9.3(a).
"Indemnity Period" means the period during which a claim for
indemnification may be asserted pursuant to Article 9 by an Indemnified Party.
"Individual Site Closing Conditions" means the conditions set forth on
Exhibit G.
"Initial Closing" has the meaning set forth in Section 2.5(a).
"Initial Closing Date" means the date on which the Initial Closing occurs.
"Initial Closing Shared Ground Lease Payment" means any Shared Ground Lease
Payment that is payable to a Ground Lessor and that is quantified by Lessee
pursuant to this Agreement on or prior to the Initial Closing Date.
"Insurable Sites" has the meaning set forth in Section 6.9.
"Interim Balance Sheet Date" has the meaning set forth in Section 4.9(a).
"Last Milestone Date" has the meaning set forth in Section 10.1(c).
"Law" means any statute, rule, code, regulation, ordinance or Order of, or
issued by, any Governmental Authority.
"Lease" or "Leased" means the act of leasing, subleasing or otherwise
granting to Lessee by Lessor the right to use the Leased Property of a Site
pursuant to the Lease Agreement.
"Lease Agreement" has the meaning set forth in the preamble.
"Leased Property" means with respect to each Site (a) the Owned Sites Land,
Leased Sites Land or Other Interest Sites Land (as the case may be) related to
such Site, (b) the Tower located on such Site (including the Sprint Collocation
Space, which the parties specifically acknowledge and agree will be Leased by
Lessor to Lessee and subleased back (with respect to Master Lease Sites) or
otherwise made available by Lessee to Lessor and Contributors (with respect to
Pre-Lease Sites) pursuant to the Lease Agreement), in each case, together with
the related Equipment, Improvements (excluding the Improvements of any Tower
Subtenant and Sprint's Improvements) and (c) the Tower Related Assets with
respect to such Site, excluding in each instance, the assets, rights and other
interests set forth in Section 2.2.
"Leased Sites" has the meaning set forth in the preamble.
9
"Leased Sites Land" means the tracts, pieces or parcels of land leased by
Contributors or Lessor on which Towers are located, together with all easements
and other rights appurtenant thereto.
"Leasing Exception" means any Authorization that must be satisfied or
fulfilled in order for Lessor to Lease the Leased Property and assign the
Collocation Agreements and Related Tower Assets of a Site to Lessee.
"Legal Action" means, with respect to any Person, any and all litigation or
legal or other pending actions, arbitrations, claims, counterclaims,
investigations, proceedings (including condemnation proceedings) or suits, at
Law or in arbitration, equity or admiralty, whether or not purported to be
brought on behalf of such Person, affecting such Person or any of such Person's
business, property or assets.
"Lessee" has the meaning set forth in the preamble and, will also include,
as the context requires, any GSI Financing Subsidiary to whom Lessee assigns all
or a portion of its rights or interests hereunder or under the Lease Agreement;
it being contemplated and agreed that a GSI Financing Subsidiary and not Global
Signal Inc. will enter into the Lease Agreement at the Initial Closing, however
the obligations hereunder, including indemnification obligations, will remain
the obligations of Global Signal Inc. and will not be assumed by any such GSI
Financing Subsidiary.
"Lessee Deductible" has the meaning set forth in Section 9.5(a).
"Lessee Disclosure Letter" means the disclosure letter delivered by Lessee
to Contributors simultaneously with the execution and delivery of this Agreement
as supplemented or amended by Lessee pursuant to the terms and conditions of
this Agreement.
"Lessee Financial Statements" has the meaning set forth in Section 5.8(a).
"Lessee General Assignment and Assumption Agreement" means a General
Assignment and Assumption Agreement substantially in the form attached as
Exhibit H.
"Lessee Indemnified Parties" means Lessee, any GSI Financing Subsidiary,
and their respective Affiliates and its and their respective directors,
officers, employees, agents and representatives.
"Lessee Interim Balance Sheet Date" has the meaning set forth in Section
5.8(a).
"Lessee Material Adverse Effect" means a material adverse effect on the
assets, operations or condition (financial or otherwise) of Lessee taken as a
whole; provided, that for purposes of this Agreement, a Lessee Material Adverse
Effect will not include changes to the assets, operations or condition of Lessee
resulting from (a) changes to the wireless communications industry or the tower
ownership, operation, leasing, management and construction business not uniquely
related to Lessee, (b) the announcement or disclosure of the transactions
contemplated by this Agreement, (c) general economic, regulatory or political
conditions, (d) military action or any act of terrorism, or (e) compliance with
the terms of this Agreement.
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"Lessee Pension Plan" has the meaning set forth in Section 6.14(c)(ii).
"Lessee 401(k) Plan" has the meaning set forth in Section 6.14(b)(ii).
"Lessor" has the meaning set forth in the preamble.
"Liabilities" means, with respect to any Person, any and all debts
(including interest thereon and any prepayment penalties applicable thereto),
damages, liabilities, claims, demands and obligations, whether fixed, contingent
or absolute, matured or unmatured, liquidated or unliquidated, accrued or not
accrued, known or unknown, whenever or however arising (including, without
limitation, whether arising out of any contract or tort based on negligence or
strict liability) and whether or not the same would be required by GAAP to be
reflected in financial statements or disclosed in the notes thereto.
"Lien" means, with respect to any asset, any mortgage, lien, guaranty,
pledge, security interest, charge, attachment, restriction or encumbrance of any
kind in respect of such asset.
"LLC Agreement" has the meaning set forth in the preamble.
"LLC General Assignment and Assumption Agreement" means a General
Assignment and Assumption Agreement substantially in the form attached as
Exhibit I.
"Loss" has the meaning set forth in Section 9.1(a).
"Master Collocation Agreement" has the meaning set forth in Section 6.11.
"Master Lease Site" has the meaning set forth in Section 3.1(b).
"Master Services Agreement" means the Master Services Agreement, dated as
of December 31, 2004, by and between Sprint Spectrum L.P. and Sitemaster, Inc.
with respect to the maintenance of the Sites, other than the Qwest Sites.
"Material Adverse Effect" means a material adverse effect on the assets,
operations or condition (financial or otherwise) of the Leased Property of all
the Sites (other than the Excluded Sites and Strategic Sites) taken as a whole;
provided, that for purposes of this Agreement, a Material Adverse Effect will
not include changes to the assets, operations or condition of the Leased
Property of all the Sites (other than the Excluded Sites and Strategic Sites)
taken as a whole resulting from (a) changes to the wireless communications
industry or the tower ownership, operation, leasing and management business
generally, (b) the announcement or disclosure of the transactions contemplated
by this Agreement, (c) general economic, regulatory or political conditions, (d)
military action or any act of terrorism, (e) changes in Law, or (f) compliance
with the terms of this Agreement.
"Material Agreement" means each of the Master Services Agreement, the Qwest
Option Agreement, and any Ground Lease or Collocation Agreement, including in
each
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case all amendments, modifications, supplements, assignments, guaranties, side
letters and other documents related thereto.
"Milestone Dates" means the First Milestone Date, the Second Milestone Date
and the Last Milestone Date.
"Names" means, collectively, all names, marks, trade names and trademarks.
"Non-Contributable Site" means any Site that is not a Contributable Site.
"Non-Disturbance Agreement" means, as to a Ground Lease for a Site that is
subject to a Ground Lessor Mortgage, a non-disturbance agreement from the lender
with respect to such Ground Lessor Mortgage, in substantially the form of
Exhibit K attached hereto.
"Notice of Dispute" has the meaning set forth in Section 3.5.
"Order" means an administrative, judicial, or regulatory injunction, order,
decree, judgment, sanction, award or writ of any nature of any Governmental
Authority of competent jurisdiction.
"Option Purchase Price Allocation Principles" means the allocation
principles set forth on Exhibit D-2.
"Other Interest Sites" has the meaning set forth in the preamble.
"Other Interest Sites Land" means the tracts, pieces or parcels of land
occupied or used by Contributors or Lessor pursuant to a license, easement,
permit or similar arrangement, on which Towers are located, together with all
easements and other rights appurtenant thereto.
"Owned Sites" has the meaning set forth in the preamble.
"Owned Sites Land" means the tracts, pieces or parcels of land (as
described in Exhibit A) of Owned Sites on which Towers are located.
"Permitted Encumbrances" means, collectively, (a) liens in respect of
Property Taxes or similar assessments, governmental charges or levies that (i)
relate solely to the interests of a Ground Lessor and are not, in the aggregate,
in excess of $10 million, or (ii) are not yet due and payable; (b) liens of
landlords', laborers', shippers', carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed by law, (i) that relate
solely to the interests of a Ground Lessor and are not in excess of $15,000, or
(ii) arising in the ordinary course of business and securing obligations that
are not yet due and payable, (c) any easements, rights of public utility
companies, rights-of-way, covenants, conditions, licenses, restrictions,
reservations of mineral rights (with surface rights being waived) or similar
non-monetary encumbrances that do not impair the use or operation of the
applicable Site as a communications tower facility, including the rental of such
Site to Tower Subtenants, (d) rights of tenants in possession of the applicable
Site pursuant to Collocation Agreements, (e) Ground Lessor Mortgages, and (f)
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other matters filed in the public real estate records which do not materially
impair, in Lessee's reasonable discretion, the use or operation of such Site as
a communication tower facility, including the rental of such Site to Tower
Subtenants.
"Person" means any individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization, including a
Governmental Authority.
"Pre-Lease Rent" has the meaning set forth in the Lease Agreement.
"Pre-Lease Site" has the meaning set forth in Section 2.6(d).
"Property Taxes" means all real property Taxes, personal property Taxes and
similar ad valorem Taxes.
"Property Use Agreement" has the meaning set forth in the preamble.
"Qwest Asset Purchase Agreement" means the Asset Purchase Agreement, dated
as of March 26, 2004, by and between Sprint Spectrum, L.P. and Qwest Wireless,
LLC.
"Qwest Option Agreement" means the Option Agreement, dated as of March 26,
2004, by and between Sprint Spectrum, L.P. and Qwest Wireless, LLC.
"Qwest Sites" means the Owned Sites, Leased Sites and Other Interest Sites
listed on Schedule 3 acquired by Contributors from Qwest Communications
International, Inc. and its Affiliates.
"Recordation Notice" has the meaning set forth in Section 3.8(a).
"Rent" has the meaning set forth in the Lease Agreement.
"Rent and Pre-Lease Rent Allocation Principles" means the allocation
principles set forth on Exhibit D-1.
"Representatives" has the meaning set forth in Section 6.12(a).
"Required Financial Statements" has the meaning set forth in Section
6.1(d).
"Retirement Pension Plan" has the meaning set forth in Section 6.14(c)(i).
"Retirement Savings Plan" has the meaning set forth in Section 6.14(b)(i).
"SEC Documents" has the meaning set forth in Section 5.7.
"Second Milestone Date" has the meaning set forth in Section 10.1(c).
"Separateness Agreement" means an agreement in substantially the form of
Exhibit C-1 attached hereto.
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"Shared Ground Lease Payment" means any amounts payable, from time to time,
to any Ground Lessor, whether as revenue sharing under any Ground Lease, as
percentage rent, as an additional lump sum payment or otherwise, as a result of,
or otherwise triggered by: (i) the contribution, Lease or grant of right to use
the Leased Property as contemplated hereunder, including the payment to Lessor
(or the receipt by a Contributor or any other Affiliate of Lessor) of the Rent
or the Pre-Lease Rent, or (ii) the payment by the Sprint Collocators of the
Sprint Collocation Charge, or (iii) the fact that Contributors and Lessee have
agreed to share any other Shared Ground Lease Payment with respect to the
payment of the Pre-Lease Rent, Rent and Sprint Collocation Charge on a 50/50
basis (i.e., a 'gross-up' payment).
"Shared Site" means a Site (other than an Excluded Site or a Strategic
Site) where the applicable Contributor's interest therein is shared, as to any
real property interest, with another party who is not a Contributor and whose
interest will not be Leased to Lessee pursuant to the Lease Agreement.
"Site Designation Supplement" has the meaning set forth in the Lease
Agreement.
"Sites" means the Owned Sites, the Leased Sites and the Other Interest
Sites.
"Special Zoning Site" means a Site (a) that received a zoning variance or
exemption which permits its current use as a result of the applicable
Contributor's status as a public utility or common carrier, (b) would lose such
variance or exemption if the Leased Property of such Site were to be Leased to
Lessee in the manner contemplated by this Agreement, and (c) would not lose such
variance or exemption if the Leased Property of such Site were retained by
Contributors and managed by Lessee in accordance with the terms of the Lease
Agreement.
"Sprint" has the meaning set forth in the preamble.
"Sprint Collocation Space" has the meaning set forth in the Lease
Agreement.
"Sprint Collocators'" has the meaning set forth in the Lease Agreement.
"Sprint Confidentiality Agreement" means the Confidentiality Agreement,
dated as of February 3, 2005, by and between Sprint and Lessee.
"Sprint's Improvements" has the meaning set forth in the Lease Agreement.
"Strategic Site" means those Sites which Contributors have, by written
notice to Lessee delivered as promptly as practicable following the date of this
Agreement, but in no event shall do so later than the earlier to occur of (x) 90
days after the date of this Agreement, and (y) at least ten days prior to the
Initial Closing, elected to retain and exclude altogether from the transactions
contemplated by this Agreement because the primary importance of such Site to
Contributors relates to a quality of such Site other than its use as a tower
upon which communications antennas are placed; provided, that the number of
Strategic Sites will not exceed fifty (50) in the aggregate.
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"Subsidiary" of a Person means any corporation or other Person more than
50% of whose outstanding voting securities or other equity interests are
directly or indirectly owned by the first Person.
"Tax" means all forms of taxation, whenever created or imposed, whether
imposed by a local, municipal, state, foreign, Federal or other Governmental
Authority, and whether imposed directly by a Governmental Authority or
indirectly through any other Person, and, without limiting the generality of the
foregoing, will include any income, gross receipts, ad valorem, excise,
value-added, sales, use, transfer, franchise, license, stamp, occupation,
withholding, employment, payroll, property or environmental tax, levy, charge,
assessment, fee or premium, together with any interest, penalty, addition to tax
or additional amount imposed by a Governmental Authority.
"Tax Return" means any return, report, statement, schedule or other
document required to be filed with any Taxing Authority.
"Taxing Authority" means any Governmental Authority exercising any
authority to impose, regulate or administer the imposition of Taxes.
"Technical Closing" has the meaning set forth in Section 2.5(b).
"Technical Closing Date" means, as to each Technical Closing, the date on
which such Technical Closing occurs.
"Term" has the meaning set forth in the Lease Agreement.
"Title Commitments" has the meaning set forth in Section 6.9.
"Title Company" means one or more national title insurance companies (or
agents thereof) designated by Lessee.
"Title Policies" has the meaning set forth in Section 6.9.
"to Contributors' knowledge" or "to the knowledge of Contributors" means
all facts actually known, after reasonable inquiry of appropriate employees, by
any of those individuals set forth in Section 2 of the Contributors Disclosure
Letter.
"to Lessee's knowledge" or "to the knowledge of Lessee" means all facts
actually known, after reasonable inquiry of appropriate employees, by any of
those individuals set forth in Section 1 of the Lessee Disclosure Letter.
"Tower Liability" means a condition resulting in (a) a Loss at a single
Site of more than $250,000, or (b) Losses at one or more Sites of more than
$5,000,000.
"Tower Related Assets" means, with respect to each Tower, (a) to the extent
such rights are assignable, all rights to any warranties held by Contributors
with respect to such Tower (or the related Site), (b) to the extent such rights
are assignable, all rights under any Governmental Approvals held exclusively
with respect to the ownership or operation of such Tower (and of the related
Site if such Site is an Owned Site), and that
15
are not used by Contributors in any part of their respective businesses and
operations other than the Collocation Business, (c) to the extent such rights
are assignable, a sublicense or other right to use any Governmental Approvals
not held exclusively with respect to, but held in part for the benefit of, the
ownership or operation of such Tower (and of the related Site if such Site is an
Owned Site), and (d) copies of, or extracts from, all current files and records
of Contributors and Lessor solely related to the ownership, construction,
occupancy, leasing or subleasing of such Tower (and of the related Site if such
Site is an Owned Site), or, to the extent not so solely related, appropriate
extracts thereof. "Tower Related Assets" does not include any intellectual
property or intangible rights or Excluded Assets.
"Tower Removal Bonds" means, collectively, any bonds, letters of credit,
deposits or other security interests relating to the removal of a Tower from a
Site.
"Tower Subtenant" means, as to any Site, any Person (other than a
Contributor or Lessor), which: (a) subleases, licenses or otherwise accepts from
a Contributor under any Collocation Agreement affecting such Site (prior to the
Initial Closing); or (b) subleases, licenses or otherwise accepts from Lessee
the right to use Available Space at such Site (from and after the Initial
Closing).
"Towers" means the communications towers on the Sites located at the
property identified on the attached Exhibit A and Exhibit B.
"Transferred Employee" has the meaning set forth in Section 6.14(a).
"Transition Services Agreement" has the meaning set forth in the preamble.
"Zoning Laws" means any zoning, land use or similar Laws, including,
without limitation, Laws relating to the use or occupancy of any property,
building codes, development orders, zoning ordinances and land use regulations.
"2004 Financial Statements" has the meaning set forth in Section 6.15.
ARTICLE 2
CONTRIBUTION, CONVEYANCE/GRANT OF LEASEHOLD,
SUBLEASEHOLD OR OTHER INTEREST AND CONSIDERATION
SECTION 2.1 Contribution, Conveyance/Grant of Leasehold, Subleasehold or
Other Interest.
Subject to and upon the terms and conditions set forth in this Agreement:
(a) on or prior to the Initial Closing Date, Contributors will form Lessor,
and Contributors will enter into the LLC Agreement;
(b) at the Initial Closing, Contributors will contribute, convey, assign,
transfer and deliver to Lessor all of the right, title and interest of
Contributors in and to the Leased Property of the Sites (including the Master
Lease Sites) and the related
16
Collocation Agreements, Tower Related Assets and Tower Removal Bonds; provided,
that with respect to any Non-Contributable Site, Contributors will not assign or
transfer to Lessor the Ground Lease and related Collocation Agreements;
(c) at the Initial Closing, pursuant to the Property Use Agreement,
Contributors will grant to Lessor the right to use and operate the Leased Sites
Land or Other Interest Sites Land, as applicable, and administer the related
Collocation Agreements, for each Non-Contributable Site;
(d) at the Initial Closing, pursuant to the Lease Agreement and the Lessee
General Assignment and Assumption Agreement, as applicable, Lessor will (i)
Lease to Lessee the Leased Property of the Master Lease Sites, and (ii)
transfer, assign and set over to Lessee all Collocation Agreements and Tower
Related Assets and all Assumed Liabilities relating to the Master Lease Sites;
and (iii) grant to Lessee the right to operate for and on behalf of Lessor the
Pre-Lease Sites, and all Collocation Agreements and Tower Related Assets
relating to the Pre-Lease Sites; and (iv) assign to Lessee all Assumed
Liabilities with respect to the Pre-Lease Sites;
(e) at the Initial Closing, pursuant to the Lease Agreement, Lessee will
lease or otherwise make available the Sprint Collocation Space to certain
Contributors designated by Sprint for each Master Lease Site and Pre-Lease Site;
and
(f) until the Final Closing Date, (i) Contributors will use commercially
reasonable efforts to contribute to Lessor the Ground Leases and related
Collocation Agreements for all Non-Contributable Sites, (ii) the parties will
cooperate and use commercially reasonable efforts, as provided in Section 3.2,
to cause all Pre-Lease Sites to become Master Lease Sites and otherwise satisfy
the Individual Site Closing Conditions and (iii) at each Technical Closing,
Lessor will assign to Lessee the Collocation Agreements for each Pre-Lease Site
that has been converted into a Master Lease Site since the previous Closing;
provided, that such assignment will be deemed effective as of the applicable
Conversion Closing Date for each such Site.
SECTION 2.2 Items Excluded from Contribution, Conveyance/Grant of
Leasehold, Subleasehold or Other Interest.
Notwithstanding anything to the contrary contained in Section 2.1, the
Leased Property of the Sites will not include any of the following and Lessee
will not lease or assume: (a) the Excluded Assets; (b) any and all rights or
obligations that accrue or will accrue to Contributors or Lessor or any of their
respective Affiliates under this Agreement or any Collateral Agreement,
including, without limitation, the payments due to Lessor under the Lease
Agreement; (c) any and all rights or obligations retained by and/or granted to
Contributors or Lessor or any of their respective Affiliates pursuant to this
Agreement or any Collateral Agreement; (d) any Governmental Approvals relating
to the Excluded Equipment; (e) the Strategic Sites; (f) the Excluded Sites, (g)
any Tower Removal Bonds and (h) the Excluded Liabilities.
SECTION 2.3 Consideration.
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The aggregate consideration payable by Lessee to Lessor for the Lease of
the Leased Property of the Master Lease Sites under this Agreement will be the
applicable Rent and other obligations to be paid and performed by Lessee with
respect to the Master Lease Sites under the Lease Agreement, including the
assumption of the Assumed Liabilities with respect to the Master Lease Sites.
The aggregate consideration payable by Lessee to Lessor for the current
operation and eventual Lease of the Leased Property of the Pre-Lease Sites will
be the Pre-Lease Rent and other obligations to be paid and performed by Lessee
with respect to the Pre-Lease Sites under the Lease Agreement, including the
assumption of the Assumed Liabilities with respect to the Pre-Lease Sites. In
the event that any Site becomes an Excluded Site or a Strategic Site, as
provided in this Agreement, the aggregate consideration payable by Lessee at the
Initial Closing will be reduced by the Rent or the Pre-Lease Rent allocated to
such Site as set forth on Exhibit H to the Lease Agreement pursuant to the Rent
and Pre-Lease Rent Allocation Principles as set forth on Exhibit D-1.
SECTION 2.4 AS IS, WHERE IS.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, (A) IT IS THE
EXPLICIT INTENT OF EACH PARTY THAT THE LEASED PROPERTY OF THE SITES IS BEING
CONTRIBUTED BY CONTRIBUTORS, LEASED BY LESSOR AND ACCEPTED BY LESSEE "AS IS,
WHERE IS," WITH ALL FAULTS, AND THAT NO CONTRIBUTOR OR LESSOR IS MAKING ANY
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, OTHER THAN THOSE
EXPRESSLY GIVEN IN THIS AGREEMENT (WHICH WILL SURVIVE ONLY TO THE EXTENT SET
FORTH IN SECTION 9.4 OF THIS AGREEMENT), INCLUDING, BUT NOT LIMITED TO, ANY
IMPLIED WARRANTY OR REPRESENTATION AS TO THE VALUE, CONDITION, MERCHANTABILITY
OR SUITABILITY AS TO ANY OF THE PROPERTIES OR ASSETS COMPRISING THE LEASED
PROPERTY OF THE SITES (OR THE COLLOCATION AGREEMENTS) AND (B) PURSUANT TO THE
LEASE AGREEMENT AND OTHER COLLATERAL AGREEMENTS, LESSEE WILL ASSUME AND AGREE TO
PAY, HONOR AND DISCHARGE WHEN DUE IN ACCORDANCE WITH THEIR TERMS ANY AND ALL
ASSUMED LIABILITIES. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, NO REPRESENTATION OR WARRANTY CONTAINED IN THIS AGREEMENT IS INTENDED
TO, OR DOES, COVER OR OTHERWISE PERTAIN TO ANY EXCLUDED ASSETS OR ANY
LIABILITIES THAT ARE NOT INCLUDED IN THE ASSUMED LIABILITIES.
SECTION 2.5 Closing Place and Dates.
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(a) The Leasing of the Leased Property of the Master Lease Sites, the
granting of the right to operate the Pre-Lease Sites, the assignment of the
related Collocation Agreements and Tower Related Assets and the assumption of
the Assumed Liabilities will take place at a closing (the "Initial Closing")
which will take place within ten (10) business days following the date that the
applicable conditions set forth in Articles 7 and 8 have been duly satisfied or
waived. The Initial Closing will be held at the offices of King & Spalding LLP,
1185 Avenue of the Americas, New York, New York, or such other place upon which
the parties may agree.
(b) The conversion of (i) a Non-Contributable Site to a Contributable Site
and/or (ii) a Pre-Lease Site into a Master Lease Site subsequent to the Initial
Closing Date will occur automatically upon the cure of all of the Exceptions and
the satisfaction (or waiver by Lessee) of the Individual Site Closing Conditions
with respect to each Pre-Lease Site, (each a "Conversion Closing"). From the
Initial Closing Date until the Final Closing Date, Lessee will use its
commercially reasonable efforts to provide Lessor, no less frequently than once
every two (2) weeks, written notice of the Conversion Closings that occurred
during the period since the prior notice. In addition, as provided in Section
2.7, the parties will hold a closing (each a "Technical Closing") to confirm the
occurrence of a Conversion Closing with respect to each applicable
Non-Contributable Site or Pre-Lease Site, as the case may be.
(c) At each Technical Closing, Lessor will assign to Lessee the Collocation
Agreements and Tower Related Assets for each Pre-Lease Site that has been
converted into a Master Lease Site since the previous Closing; provided, that,
in each case, such assignment will be deemed effective as of the applicable
Conversion Closing Date for such Site.
SECTION 2.6 Initial Closing.
At the Initial Closing:
(a) Contributors will contribute, convey, assign, transfer and deliver to
Lessor all of the right, title and interest in and to the Leased Property of the
Sites (including the Master Lease Sites) and the related Collocation Agreements
and Tower Related Assets (provided, that with respect to each Non-Contributable
Site, Contributors will not assign or transfer to Lessor the Ground Lease and
related Collocation Agreements and Tower Related Assets (except for the
applicable portion of any Master Collocation Agreement bifurcated pursuant to
Section 6.11) unless all consents required for such assignment or transfer have
been obtained) by delivery of each of the following, each duly executed by the
applicable Contributor(s) and Lessor: (i) the LLC Agreement, (ii) the LLC
General Assignment and Assumption Agreement; and (iii) such other instruments of
assignment as may be necessary for Contributors to contribute to Lessor the
Leased Property (and all intermediate assignments from the original lessee under
a Ground Lease to the Contributor that currently holds such Ground Lease, that
have not been recorded [the "Corrective Assignments"]) and the related
Collocation Agreements and Tower Related Assets of the Sites, in each case, in
form and substance reasonably acceptable to the parties and, with respect to
assignments of Ground Leases and Corrective Assignments, in form sufficient for
recordation. The Contributors shall provide Lessee, (x) promptly
19
following the date hereof, with all information and documentation necessary to
prepare the Corrective Assignments, and, (y) promptly following request
therefor, information reasonably requested with respect to the assignments of
Ground Leases. Lessee shall prepare the assignments of Ground Leases and
Corrective Assignments and Lessor shall have such documents executed and
notarized;
(b) Contributors will grant to Lessor, pursuant to the Property Use
Agreement, the right to operate the Leased Sites Land or Other Interest Sites
Land, as applicable, and to administer the related Collocation Agreements and
Tower Related Assets (including, if applicable, any Master Collocation
Agreements bifurcated pursuant to Section 6.11) for each Non-Contributable Site;
(c) With respect to the Master Lease Sites to be Leased to Lessee at the
Initial Closing, Lessor will (i) Lease to Lessee the Leased Property of such
Master Lease Sites by execution and delivery of the Lease Agreement (including
Site Designation Supplements to the Lease Agreement), and (ii) transfer, assign
and set over to Lessee all Collocation Agreements (including, if applicable, any
Master Collocation Agreements bifurcated pursuant to Section 6.11) and Tower
Related Assets and all Assumed Liabilities relating to the Master Lease Sites by
execution and delivery of the Lessee General Assignment and Assumption
Agreement, in each case, in form and substance reasonably acceptable to the
parties;
(d) Sprint Collocators, Lessor and Lessee will enter into the Lease
Agreement with respect to all Sites (other than Strategic Sites and Excluded
Sites) then subject to unsatisfied or addressed Leasing Exceptions (the
"Pre-Lease Sites") and Lessee will have the right to operate the Pre-Lease Sites
and to administer the related Collocation Agreements (including, if applicable,
any Master Collocation Agreements bifurcated pursuant to Section 6.11) for each
Pre-Lease Site as set forth in the Lease Agreement;
(e) Subject to the adjustments and prorations described in Section 2.3 and
Section 2.9, Lessee will deliver to Lessor (i) the Rent with respect to each
Master Lease Site, and (ii) the Pre-Lease Rent with respect to each Pre-Lease
Site (less the Deposit and earnings thereon), in each case, in immediately
available funds by wire transfer to an account designated by Contributors (on
behalf of Lessor) by written notice to Lessee delivered not later than three (3)
business days prior to the Initial Closing Date;
(f) At the Initial Closing, each Contributor, or Lessor, as applicable will
pay (or cause to be paid) its applicable share of any Initial Closing Shared
Ground Lease Payments;
(g) Pursuant and subject to the Lease Agreement, Lessee will assume from
Lessor the due payment, performance and discharge of all Assumed Liabilities
relating to, or arising in connection with the operation, use or occupancy of,
the Leased Property of the Master Lease Sites and Pre-Lease Sites, by delivery
of the following, each duly executed by Lessee: (i) the Lease Agreement
(including Site Designation Supplements to the Lease Agreement); (ii) the Lessee
General Assignment and Assumption Agreement; and (iii) such other instruments of
assumption as may be necessary to cause Lessee to
20
assume the Assumed Liabilities relating to such Sites included in the Initial
Closing, in each case, in form and substance reasonably acceptable to the
parties;
(h) Pursuant and subject to the Lease Agreement, Lessee will lease or
otherwise make available the Sprint Collocation Space to certain Contributors
designated by Sprint for each Master Lease Site and Pre-Lease Site, and the
aggregate number of Master Lease Sites so leased and Pre-Leased Sites so
occupied by such Contributors shall, in the aggregate, not be less than 6,409
(less any Excluded Sites or Strategic Sites), and Exhibit A to the Lease
Agreement shall reflect same and the initial aggregate monthly Sprint
Collocation Charge for such Sites shall be not less than $8,972,600 (less $1,400
per month for each Excluded Site and Strategic Site listed as occupied by a
Contributor in Section 4.10(a)(ii) of the Contributors Disclosure Letter) and
such charge, for the month in which the Initial Closing occurs (or ratable
portion thereof) shall be prepaid by such Contributors at the Initial Closing;
and
(i) Contributors, Lessor and Lessee will deliver the certificates and other
contracts, documents and instruments required to be delivered under Articles 7
and 8, including, without limitation, the Collateral Agreements.
SECTION 2.7 Technical Closings; Contributions to Lessor.
(a) The parties will hold a Technical Closing when the parties have
determined pursuant to Section 3.2(d) that there are at least 500 new Master
Lease Sites since the prior Technical Closing (or since the Initial Closing, if
a Technical Closing has not occurred). The Technical Closings will be on such
dates as the parties mutually agree; provided, that the effective Closing Date
for each Site that is converted from a Pre-Lease Site to a Master Lease Site
will be the Conversion Closing Date for such Site. If there are fewer than 500
Pre-Lease Sites in the aggregate for which a Conversion Closing, but not a
Technical Closing, has occurred as of the Final Closing Date, then the final
Technical Closing will occur on the Final Closing Date and include such Sites.
(b) At each Technical Closing, Contributors, Lessor and Lessee will deliver
amended schedules and/or exhibits to the following: (i) the Lease Agreement
(including Site Designation Supplements to the Lease Agreement); (ii) the Lessee
General Assignment and Assumption Agreement; and (iii) the LLC General
Assignment and Assumption Agreement.
(c) Contributors, Lessor and Lessee also will deliver the certificates and
other contracts, documents and instruments required to be delivered under
Articles 7 and 8.
(d) In addition, following the Initial Closing Date, with respect to each
Non-Contributable Site existing as of the Initial Closing, as promptly as
practicable following the earlier of (x) Contributors' acknowledgment that the
Contribution Exceptions with respect to such Site have been corrected or
addressed pursuant to Section 3.2 or Section 3.3 or (y) the expiration of
Contributors' notice period in the second sentence of Section 3.2(d),
Contributors will contribute, convey, assign, transfer and deliver to Lessor all
of the right, title and interest of Contributors in and to the Ground Leases and
related Collocation Agreements and Tower Related Assets by delivery of: (i) an
LLC General
21
Assignment and Assumption Agreement, and (ii) such other instruments of
assignment as may be necessary for Contributors to contribute to Lessor the
Leased Property and the related Ground Leases, Collocation Agreements and Tower
Related Assets with respect to the applicable Sites, in each case, in form and
substance reasonably acceptable to the parties.
(e) Any party may, on at least ten (10) business days notice to be
effective on any day (the "Final Closing Date") after the date that is eighteen
(18) months after the date of this Agreement, terminate the obligations of
Lessee, Lessor and Contributors under this Agreement to use commercially
reasonable efforts to cause any remaining Pre-Lease Site (including any Special
Zoning Site) to be converted to a Master Lease Site under this Agreement and the
Lease Agreement; provided that the terminating party did not cause the delay in
conversion with respect to such Site(s). From and after the Final Closing Date,
Lessee may, in its discretion, continue any efforts, from time to time, to cause
the conversion of any or all remaining Pre-Lease Sites to Master Lease Sites and
Contributors and Lessor will provide Lessee with such reasonable assistance as
may be reasonably requested by Lessee from time to time with respect thereto,
including, without limitation, further Technical Closings with respect to any
further conversions, provided the reasonable out-of-pocket costs of the same
will be at Lessee's expense.
SECTION 2.8 Site Designation Supplements.
(a) Prior to the Initial Closing Date, Contributors will assist Lessee in
collecting the data relating to the applicable Master Lease Sites, such that
Lessee may adequately describe such Master Lease Sites (including the Sprint
Collocation Space) and prepare the appropriate exhibits for all Site Designation
Supplements relating to such Master Lease Sites. The parties will use their
respective commercially reasonable efforts to permit Lessee to prepare such
exhibits for all Site Designation Supplements. Lessee will deliver such exhibits
for all Site Designation Supplements to Sprint. Sprint, on behalf of the
applicable Contributors, will review and comment as promptly as practicable
following delivery thereof with consideration to the number of such Site
Designation Supplements delivered at any given time.
(b) Following the Initial Closing Date, and prior to each Technical Closing
Date, Lessee will collect the data relating to the Master Lease Sites to be
included in such Technical Closing, adequately describe such Master Lease Sites
(including the Sprint Collocation Space) and prepare the appropriate exhibits
for all Site Designation Supplements relating to such Master Lease Sites. Lessee
will deliver such exhibits for all Site Designation Supplements to Lessor and,
if applicable, Sprint on behalf of the Contributors. Sprint, on behalf of the
applicable Contributors, may review and comment on the same within ten (10)
business days after delivery thereof.
(c) Where any discrepancy in the appropriate exhibits requires verification
in the field the parties will provide adequate resources and personnel to
resolve such discrepancy within ninety (90) days after the Initial Closing Date
or Technical Closing Date, as applicable.
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(d) If in the review of any Site Designation Supplement any party
identifies any corrections that in such party's reasonable judgment necessitate
further revisions to such Site Designation Supplement, the parties may at any
party's request effect the correction of such Site Designation Supplement, and
defer the recordation of such Site Designation Supplement until such revisions
are made, for up to ninety (90) days following such request.
(e) In addition, the parties will have the right to review and make
corrections, if necessary, to any and all exhibits to the Site Designation
Supplements after the applicable Closing. After making any such corrections,
Lessee will re-record any such Site Designation Supplements to reflect such
corrections, if requested by Contributors or Lessor or if elected by Lessee.
SECTION 2.9 Prorating of Expenses.
Except as otherwise provided in the Lease Agreement, as of the Initial
Closing Date, prorations of expenses relating to the use, occupancy and
operation of the Master Lease Sites and Pre-Lease Sites will be made on an
accrual basis, with Contributors obligated for any payments, and entitled to any
receivables, accrued prior to the Initial Closing Date and Lessee obligated for
any payments, and entitled to any receivables, accrued on and subsequent to the
Initial Closing Date. The net amount of the prorations set forth in this Section
2.9 will be credited to (or debited from) to the Rent and Pre-Lease Rent payable
by Lessee at the Initial Closing and the parties will use good faith efforts to
finalize and settle any other amounts due under this Section 2.9 within sixty
(60) days following the Initial Closing Date.
SECTION 2.10 Deposits.
On the date of this Agreement, Lessee will deliver to Contributors the
initial Deposit by wire transfer of immediately available funds to an escrow
account held by Escrow Agent pursuant to the Escrow Agreement. Additional
Deposits may be delivered to Escrow Agent as provided in Section 10.1(c). As
provided in the Escrow Agreement, the Deposit will be invested in insured money
market accounts, certificates of deposit, United States Treasury Bills or such
other instruments as Lessee may instruct from time to time. At the Initial
Closing, the Deposit, together with all earnings thereon, will be paid to Lessor
(or Contributors on behalf of Lessor) and applied to the aggregate Rent and/or
Pre-Lease Rent.
SECTION 2.11 Re-Recordation.
Whenever in this Agreement any party is required or has the right to record
or re-record any document, including without limitation any Site Designation
Supplement, Ground Lease or a memorandum of Ground Lease, such party will, or
will cause the agent effecting such recordation to, deliver a copy of the
document to the other party promptly after receipt of such notice, and in any
event contemporaneously with its first delivery of such notice to the recording
party.
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ARTICLE 3
PRE-CLOSING PROCEDURES FOR SITES
SECTION 3.1 Contributable Sites; Master Lease Sites.
(a) If (i) there are no Contribution Exceptions with respect to a Site
(other than any Excluded Site or Strategic Site), or (ii) all of the
Contribution Exceptions with respect to a Site have been corrected or addressed
pursuant to Section 3.2 or Section 3.3, then, except as otherwise provided in
this Article 3, such Site will thereafter be deemed to be a "Contributable
Site."
(b) With respect to each Contributable Site, if (i) there are no Leasing
Exceptions with respect to such Site, or (ii) all of the Leasing Exceptions with
respect to such Site have been corrected or addressed pursuant to Section 3.2 or
Section 3.3, then, except as otherwise provided in this Article 3, such Site
will thereafter be deemed to be a "Master Lease Site."
SECTION 3.2 Certain Procedures with respect to Identifying and Curing
Exceptions.
(a) As promptly as practicable following the date of this Agreement, Lessee
will seek to identify all Exceptions with respect to each Site and any Shared
Sites and to notify Sprint on behalf of Contributors thereof. Contributors and
Sprint (and, following the Initial Closing, Lessor) will be actively involved
and cooperate with Lessee in all material aspects of such efforts to identify
all Exceptions and Shared Sites and will provide to Lessee in electronic form
(or if requested by Lessee, hard copy) a list of Ground Lessor names and current
addresses, a December 31, 2004 rent roll, and any other information in their
possession with respect to the Sites that is reasonably requested by Lessee in
connection with its review and analysis of the Sites and identification of the
related Exceptions. In the event that the parties do not agree in good faith as
to whether (or not) one or more Exceptions exist, they will work in good faith
to resolve such dispute as soon as practicable and, if such dispute cannot be
resolved any party may elect to proceed to arbitration as described in Section
3.5.
(b) Lessee will use commercially reasonable efforts to correct or address
any Exception identified pursuant to Section 3.2(a), including by obtaining
Ground Lessor Estoppels with respect to the Leased Sites and Other Interest
Sites, but without obligation to pay any costs, expenses or fees in respect
thereof or related thereto; provided, however, that (i) Lessee will promptly
notify Contributors in the event that any such costs, expenses or fees are
requested or required and provide Contributors and, after the Initial Closing
Date, Lessor, the opportunity, in their sole discretion, to fund such costs, and
(ii) each party will promptly notify others in the event that any Ground Lessor
makes a claim or demand for a Shared Ground Lease Payment. It is understood and
agreed that Lessee may contact Ground Lessors, Tower Subtenants and/or any other
Person in connection with the transactions contemplated by this Agreement in
order to identify and cure Exceptions including obtaining Ground Lessor
Estoppels, whether in person or by
24
telephone, mail or other means of communication, and Contributors (for
themselves and, after the Initial Closing, Lessor) hereby authorize such
contacts.
(c) Sprint, on behalf of Contributors and, after the Initial Closing Date,
Lessor, will use commercially reasonable efforts and will cooperate with Lessee
in all efforts of Lessee to obtain Ground Lessor Estoppels and to cause any
Exception to be cured, in each case, as promptly as practicable; provided that,
none of Sprint, Contributors or Lessor will have any obligation to correct or
address any Exception (other than by using the commercially reasonable efforts
described herein). It is understood and agreed that in order to facilitate an
organized process of addressing Exceptions, Contributors, Sprint and, after the
Initial Closing, Lessor, will not, except at Lessee's request, initiate contact
with Ground Lessors in order to address Exceptions or relating to Ground Lessor
Estoppels and will agree upon talking points with Lessee for situations where
such parties initiate contact with Contributors, Sprint or Lessor.
(d) Upon cure of any Exceptions with respect to a Site, Lessee will provide
written notice to Sprint on behalf of Contributors and, after the Initial
Closing Date, Lessor, identifying the Site together with related Exceptions and
a brief statement regarding how such Exceptions were cured. If Contributors or,
after the Initial Closing Date, Lessor, do not object within ten (10) business
days of receipt of such notice to the assertion by Lessee that such Exceptions
have been cured and (i) if such Exceptions included all required Contribution
Exceptions, and without any further action being required by the parties, such
Site will automatically convert into a Contributable Site, and (ii) if such
Exceptions included all required Leasing Exceptions and the Individual Site
Closing Conditions have been satisfied or waived with respect to such Site, and
without any further action being required by the parties, such Site will
automatically convert into a Master Lease Site. All disputes over the method of
cure with respect to an Exception will be resolved by arbitration as described
in Section 3.5, it being agreed that the burden of proof will fall on Lessee to
show that the Exception has been adequately cured by the method of cure
indicated in Lessee's notice.
(e) Lessee will provide to Sprint, on behalf of Contributors and, after the
Initial Closing Date, Lessor, written information in reasonable detail on a
weekly basis with respect to the actions taken by Lessee pursuant to this
Section 3.2 and any actions, waivers, consents or documents that Lessee is
requesting from Contributors and Lessor with respect to the Exceptions.
(f) Following the date hereof until the Initial Closing Date, Sprint, on
behalf of Contributors and, after the Initial Closing Date, Lessor, will (i)
provide at its cost at least one employee to act as the primary contact for
Lessee (and another employee if such primary employee contact is unavailable to
assist Lessee) and to provide such employee sufficient resources and authority
to assist Lessee in connection with the identification and curing of Exceptions
in a timely manner and (ii) will respond as soon as practicable but in any event
within five (5) business days, with respect to any actions, waivers, consents or
documents that Lessee requests from Contributors or Lessor with respect to the
identification and curing of Exceptions, including in connection with obtaining
Ground Lessor Estoppels and Non-Disturbance Agreements.
25
(g) Each party will be responsible for all out-of-pocket costs and expenses
incurred by such party in connection with identifying and curing Exceptions as
described above.
(h) Nothing contained herein will be construed to prevent Lessee from
seeking estoppels from Ground Lessors containing terms or provisions additional
or varied to those in the Ground Lessor Estoppel, however no such additional
terms will alter the form of Ground Lessor Estoppel for purposes of satisfying
the requirements for Ground Lessor Estoppels under the definition of Financeable
Site or Section 7.5 hereof.
SECTION 3.3 Shared Sites; Contributors' Cure Rights.
(a) Contributors will use commercially reasonable efforts to cause any
Shared Site to be bifurcated but without obligation to pay any costs, expenses
or fees in respect thereof or related thereto; provided, however, that if such
Shared Site is not bifurcated prior to the Initial Closing Date in a manner
reasonably satisfactory to Lessee, such Shared Site will be an Excluded Site
hereunder.
(b) With respect to each Site subject to an Exception not cured or waived
pursuant to Section 3.2 above, Contributors may, in their sole discretion, but
only upon written request of Lessee, elect any of the following options with
respect to any such Exception:
(i) Excluded Site. Contributors may elect, by written notice to Lessee
given at any time within ten (10) business days prior to the Initial
Closing Date, to exclude such Site from the transactions contemplated by
this Agreement (any such excluded Site, an "Excluded Site"); provided that
there will be no more than fifty (50) Excluded Sites. If Contributors elect
to designate a Site as an Excluded Site pursuant to this Section 3.3(b)(i),
Lessee may, at any time prior to the Initial Closing, require Contributors
to contribute their right, title and interest to the Leased Property of
such Site to Lessor and cause Lessor to Lease the Leased Property of such
Site to Lessee pursuant to the terms and conditions of the Lease Agreement;
provided, that in such event, notwithstanding anything to the contrary in
this Agreement, Contributors and Lessor will not be responsible for, and
Lessee agrees to indemnify Contributors and Lessor from and against, any
Liabilities resulting from or arising in connection with any Exceptions
applicable to such Site and no such Exception will be considered when
determining whether a Material Adverse Effect has occurred or is reasonably
likely to occur. Subject to the preceding sentence, all references to any
Site designated by Contributors as an Excluded Site in this Agreement and
the Schedules or Exhibits attached to this Agreement will be deemed to have
been deleted, all Exceptions related to such Excluded Site will no longer
be Exceptions, and such Excluded Site will no longer be a "Site" to be
operated or Leased pursuant to this Agreement and the Lease Agreement.
(ii) Cure. Contributors and, after the Initial Closing Date, Lessor
may cure an Exception or Exceptions with respect to a Site in accordance
26
with the terms of this Section 3.3(b)(ii). An Exception will be deemed to
have been cured by Contributors and/or Lessor:
(1) Corrective Action - if, subject to Lessee's prior approval in its
reasonable discretion, Contributors and/or Lessor will have taken
corrective action with respect thereto (including, by way of example, by
obtaining required consents or approvals from third parties, by acquiring
rights or property from third parties, by obtaining or providing any
affidavits or certificates, or otherwise) in such a manner as is reasonably
acceptable to Lessee and, if applicable, Title Company;
(2) Title Insurance - if such Exception relates solely to title, if
Title Company will have committed to issue to the Lessee and its lenders,
without indemnity from Lessee, a leasehold title insurance policy (or
lender's policy, as applicable) (which policy is acceptable, including as
to coverage amount, to Lessee in its reasonable discretion) without
exception for such Exception (other than standard printed exceptions), or
with affirmative coverage over such Exception;
(3) Insurance - if Contributors or Lessor will have obtained insurance
coverage (which coverage is acceptable to Lessee in its reasonable
discretion) on behalf of Lessee and its lenders, which insures Lessee and
its lenders against, or insures over, such Exception; or
(4) Indemnification - (A) if Contributors, Sprint or Lessor, as
requested and determined by Lessee, will have agreed to indemnify Lessee,
to Lessee's satisfaction, against all Liabilities which may arise from such
Exception (such indemnification not being subject to the limitations on
Contributors' liability pursuant to Section 9.5), in which event such
Liabilities will be deemed "Excluded Liabilities" hereunder, or (B) if the
applicable Contributor or, after the Initial Closing, Lessor, will have
agreed to cancel the Lease of the Leased Property of such Site and refund
the applicable Rent for the Leased Property of such Site, or Pre-Lease
Rent, as the case may be, in question within six (6) months after the
applicable Technical Closing if the Exception is not cured pursuant to any
of the other clauses of this Section 3.3(b) within such six (6) month
period.
(c) Contributors will be responsible for all out-of-pocket expenses
incurred by Contributors relating to their cooperation and/or cure of Exceptions
in accordance with the terms of this Section 3.3.
SECTION 3.4 Certain Procedures with respect to Shared Ground Lease
Payments.
(a) The parties acknowledge and agree that it is the interest of each to
establish on or prior to the Initial Closing whether or not any Shared Ground
Lease Payments exist and, where possible, to quantify the same. As a result,
Lessee will use
27
commercially reasonable efforts, concurrently with the addressing of Exceptions
and the obtaining of Ground Lessor Estoppels to identify and resolve situations
that could involve Shared Ground Lease Payments.
(b) Sprint, on behalf of Contributors and, after the Initial Closing Date,
Lessor, will use commercially reasonable efforts and will cooperate with Lessee
in all efforts of Lessee to identify and resolve situations that could involve
Shared Ground Lease Payments, in each case, as promptly as practicable and in
any event will respond within five (5) business days with respect to any
actions, waivers, consents or documents that Lessee requests from Contributors
or Lessor; provided that, none of Sprint, Contributors or Lessor will have any
right or obligation to directly resolve situations that could involve Shared
Ground Lease Payments (other than by using the commercially reasonable efforts
to assist Lessee as described herein).
(c) Lessee may settle or compromise any claim or consent with respect to
Shared Ground Lease Payments without the prior written consent of the
Contributors, Lessor or Sprint whether before, at or after the applicable
Closing Date.
SECTION 3.5 Arbitration.
If there is any dispute or controversy relating to this Article 3,
Contributors (and, if after the Initial Closing, Lessor) or Lessee, as the case
may be, will deliver to the other parties one or more written notices (a "Notice
of Dispute") that will specify in reasonable detail the dispute that such party
wishes to have resolved. If the parties are not able to resolve the dispute
within thirty (30) days of each party's receipt of an applicable Notice of
Dispute, within ten (10) days following the expiration of such 30-day period,
the parties will initiate arbitration proceedings with an individual arbitrator
mutually selected by the parties, each party acting reasonably. The arbitration
will be held in Chicago, Illinois or such other location as is mutually
agreeable to Contributors (and, if after the Initial Closing, Lessor) and
Lessee. All arbitrations will be governed by the applicable commercial rules of
the American Arbitration Association ("AAA") for accelerated arbitration
proceedings. The arbitrator will prepare in writing, and provide to the parties,
such arbitrator's determination, including factual findings and the reasons on
which the determination was based. The decision of the arbitrator will be final,
binding and conclusive and will not be subject to review or appeal and may be
enforced in any court having jurisdiction over the parties.
SECTION 3.6 Special Zoning Sites.
If prior to the Closing with respect to a Site, Contributors, Lessor or
Lessee discover that a Site constitutes a Special Zoning Site, Contributors,
Lessor or Lessee, as the case may be, will promptly inform the other parties
that it considers such Site to be a Special Zoning Site, and provide reasonable
specificity as to the reasons therefor. If such other parties do not object
within ten (10) business days of receipt of such notice, such Site will be
deemed to be a Special Zoning Site. All disputes concerning the designation of a
Site as a Special Zoning Site will be resolved by arbitration as described in
Section 3.5. If a Site is a Special Zoning Site, Lessee may, upon notice to
Contributors and Lessor, attempt to remedy the circumstances therefor prior to
the Final Closing Date.
28
If Lessee does not remedy such circumstances prior to the Final Closing Date,
the provisions of Section 2.7(e) will apply.
SECTION 3.7 Casualty Sites.
If prior to the Initial Closing, Contributors or Lessee discover that a
Site constitutes a Casualty Site, Contributors or Lessee, as the case may be,
will promptly notify the other parties in writing that it considers such Site to
be a Casualty Site, with reasonable specificity as to the reasons therefor. If
such other parties do not object within ten (10) business days of receipt of
such notice, such Site will be deemed to be a Casualty Site. All disputes
concerning the designation of a Site as a Casualty Site will be resolved by
arbitration as described in Section 3.5, it being agreed that the burden of
proof will fall on the party asserting the existence of a Casualty Site. If a
Site is deemed a Casualty Site, then:
(a) Excluded Site. If such Site is a Casualty Site as a result of a
condemnation (or pending condemnation) or a foreclosure, deed-in-lieu of
foreclosure, or similar proceeding involving a Ground Lessor Lien, any party may
elect by written notice to others given at any time prior to the Initial Closing
to exclude such Casualty Site from the transactions contemplated by this
Agreement (any such Casualty Site no longer being referred to as a Casualty Site
and being referred to as an Excluded Site). If Contributors elect to designate a
Site as an Excluded Site pursuant to this Section 3.7(a), Lessee may, at any
time prior to the Final Closing Date with respect to any Site that does not
contain any Sprint Collocation Space, require Contributors to contribute their
right, title and interest in and to the Leased Property of such Site to Lessor
and cause Lessor to Lease the Leased Property of such Site to Lessee pursuant to
the terms and conditions of the Lease Agreement; provided, that in such event,
notwithstanding anything to the contrary in this Agreement, Contributors and
Lessor will not be responsible for, and Lessee agrees to indemnify Contributors
and Lessor from and against, any Liabilities resulting from or arising in
connection with the structure of such Site and no structural defects of such
Site will be considered when determining whether a Material Adverse Effect has
occurred or is reasonably likely to occur. Subject to the preceding sentence,
all references to any Site designated by Contributors and/or, after the Initial
Closing, Lessor as an Excluded Site in this Agreement and the Schedules or
Exhibits attached to this Agreement will be deemed to have been deleted, and
such Excluded Site will no longer be a "Site" to be Leased or operated by Lessee
pursuant to this Agreement and the Lease Agreement.
(b) Damaged Sites. With respect to Sites physically damaged by Force
Majeure, Contributors may elect to repair the Tower prior to the Initial Closing
Date so as to bring the condition of such Tower to substantially the same (or
better) condition that it was in immediately prior to the event or occurrence of
the event causing such Tower to be designated as a Casualty Site, or, in lieu
thereof, if the Tower has not been so repaired by the Initial Closing Date,
Contributors and/or Lessor may elect to pay or reimburse Lessee at the Initial
Closing for the amount of the actual out-of-pocket costs incurred or to be
incurred by Lessee to repair the Tower if the Tower has not been repaired by the
Initial Closing in the manner described above or the amount estimated by Lessee
in good faith to be required to so repair the Tower if the Tower has not been
repaired by the Initial Closing.
29
With respect to each damaged Casualty Site, if Contributors and/or Lessor
do not, or do not elect to, repair the Tower or pay Lessee to repair the Tower
pursuant to this Section 3.7(b) prior to the Initial Closing, then, in each such
case, such Casualty Site will be treated as an Excluded Site as if Contributors
had elected to exclude such Casualty Site pursuant to Section 3.7(a) unless
Lessee will elect to cause Lessor to Lease the Leased Property of such Site in
accordance with Section 3.7(a).
SECTION 3.8 Recordation of Documents; Signage.
(a) Contributors acknowledge that Lessee will be permitted to undertake to
record any Ground Lease, memorandum of Ground Lease, assignment of Ground Lease
to Lessor, Ground Lessor Estoppels, Non-Disturbance Agreements and Site
Designation Supplements. Lessee will deliver to Contributors written notice of
such recordation with supporting documentation (the "Recordation Notice") (not
more often than once per month) setting forth in reasonable detail the actual
costs recording costs incurred by Lessee in connection with any such
recordation. Within ten (10) business days following receipt of such invoices,
Contributors will pay to Lessee an amount equal to fifty percent (50%) of such
actual costs incurred by Lessee as set forth in the Recordation Notice;
provided, that the total amount of Contributors' reimbursement obligations set
forth in this Section 3.8 will not exceed $1,325,000 in the aggregate.
Contributors shall also pay one hundred percent (100%) of the actual recordation
costs incurred by Lessee for recording Corrective Assignments, which shall also
be set forth in the Recordation Notice, but the costs of recording the
Corrective Assignments shall not be subject to the provisions of the prior
sentence.
(b) Contributors and Lessor will execute documents reasonably requested by
Lessee to effect any such recordation and will cooperate with Lessee in pursuing
such recordation (subject to the cost limitations in clause (a) above).
(c) Lessee, after the applicable Closing with respect to a Site, will have
the right to place, at its sole cost and expense, accurate signage on such Site
to put third parties on notice of its interest in such Site, subject to
compliance with applicable Laws and any Ground Lease for the Site in question.
SECTION 3.9 Allocation of Rent and Pre-Lease Rent; Multiple Lease
Agreements
(a) On or before May 15, 2005, Contributors will cause to be delivered to
Lessee, for Lessee's review and approval, a draft of Exhibit H to each Lease
Agreement, which will set forth (i) the Rent and the Pre-Lease Rent for each
Site based on the Rent and Pre-Lease Rent Allocation Principles, (ii) the Rent
and the Pre-Lease Rent allocation under Section 467 of the Code to each year of
the Term for each Site, based on a level allocation, (iii) the proportional Rent
and Pre-Lease Rent under Section 467 for each year of the Term for each Site,
(iv) the Section 467 loan balance for each year of the Term for each Site, (v)
the Section 467 interest component for each year of the Term for each Site, and
(vi) the Option Purchase Price for each Site based on the Option Purchase Price
Allocation Principles; in each case based on financial information for the Sites
through and including March 31, 2005. The parties hereto agree to reasonably
cooperate to
30
finalize Exhibit H to each Lease Agreement as soon as practicable, but in no
event less than ten (10) days prior to the Initial Closing Date, which shall
reflect valuation of the Sites as of the Initial Closing Date. Any disputes
regarding the form of Lease Agreement, including the items described on Exhibit
H, will be resolved by arbitration as described in Section 3.5; provided that
the amounts determined by the appraisal and the choice of American Appraisal
Associates as appraiser will not be subject to arbitration (it being understood
and agreed that the process and cooperation requirements set forth in Exhibits
D-1 and D-2 shall be subject to arbitration). If the aggregate Option Purchase
Price for the 6,628 Sites currently listed on Exhibit A and B hereto, as
determined by American Appraisal Associates and delivered in accordance with the
Option Purchase Price Allocation Principles, shall exceed two billion five
hundred fifty million dollars ($2,550,000,000), then (i) if the Option Purchase
Price is equal to or greater than two billion five hundred fifty million dollars
($2,550,000,000), but less than two billion six hundred million dollars
($2,600,000,000), the aggregate Rent and Pre-Lease Rent shall be reduced by one
million eight hundred thousand dollars ($1,800,000); (ii) if the Option Purchase
Price is equal to or greater than two billion six hundred million dollars
($2,600,000,000), but less than two billion six hundred fifty million dollars
($2,650,000,000), the aggregate Rent and Pre-Lease Rent shall be reduced by
three million six hundred thousand dollars ($3,600,000); (iii) if the Option
Purchase Price is equal to or greater than two billion six hundred fifty million
dollars ($2,650,000,000), but less than two billion seven hundred million
dollars ($2,700,000,000), the aggregate Rent and Pre-Lease Rent shall be reduced
by five million four hundred thousand dollars ($5,400,000); (iv) if the Option
Purchase Price is equal to or greater than two billion seven hundred million
dollars ($2,700,000,000), but less than two billion eight hundred million
dollars ($2,800,000,000), the aggregate Rent and Pre-Lease Rent shall be reduced
by nine million four hundred thousand dollars ($9,400,000); (v) if the Option
Purchase Price is equal to or greater than two billion eight hundred million
dollars ($2,800,000,000), but less than two billion nine hundred million dollars
($2,900,000,000), the aggregate Rent and Pre-Lease Rent shall be reduced by
thirteen million four hundred thousand dollars ($13,400,000); and (vi) if the
Option Purchase Price is equal to or greater than two billion nine hundred
million dollars ($2,900,000,000), but less than three billion dollars
($3,000,000,000), the aggregate Rent and Pre-Lease Rent shall be reduced by
seventeen million four hundred thousand dollars ($17,400,000). If the aggregate
Rent and Pre-Lease Rent is so reduced at the Initial Closing, such reduction
shall be allocated among the Rent and Pre-Lease Rent attributable to all of the
Sites that are the subject of the Initial Closing, in accordance with the Rent
and Pre-Lease Rent Allocation Principles. If the Option Purchase Price exceeds
three billion dollars ($3,000,000,000), Lessee shall have the option to
terminate this Agreement, and Escrow Agent shall return the Deposit, together
with all earnings thereon, to Lessee.
(b) Contributors may, on notice to Lessee, at least thirty (30) days prior
to the Initial Closing, elect at Closing to enter into up to seven (7) separate
Lease Agreements, each with a separate Lessor, and such notice shall set forth
the Sites subject to each such Lease Agreement (which Sites shall be divided
based on geography and not other factors), provided that (i) each Site will be
leased or pre-leased under only one Lease Agreement, (ii) under each such Lease
Agreement, the "Global Parent Maximum Obligation" (as defined therein) shall
mean an amount equal to the product of (x) two hundred million dollars
($200,000,000) and (y) a fraction the numerator of which is the aggregate sum of
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the Rent and the Pre-Lease Rent for the Sites subject to such Lease Agreement
and the denominator of which is the aggregate sum of the Rent and the Pre-Lease
Rent for all Sites leased or pre-leased at the Closing, (iii) the obligations of
"Sprint" and "Lessor" under, and as defined in, each Lease Agreement,
respectively, may, at the election of Lessee be cross-defaulted with the
obligations of "Sprint" and "Lessor" under the other Lease Agreements and (iv)
any Collocation Agreements bifurcated so a Collocation Agreement does not cover
any sites held by more than one Lessor, provided, however, if Contributors can
demonstrate to Lessee a material economic reason for having additional Lease
Agreements, and same does not cause material incremental costs to Lessee (which
hardship Lessee shall describe to Contributors, by written notice, delivered at
least fifteen (15) days prior to the Initial Closing Date), Contributors may
enter into up to fifteen (15) Lease Agreements, each with a separate lessor, in
accordance with the other provisions of this sentence. The Parties shall, in
good faith, resolve any disputes under the prior sentence. Lessor and Lessee
will agree in good faith upon the structure and components of each separate form
of Lease Agreement, including the exhibits and schedules thereto.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS AND SPRINT
Subject to the terms, conditions and limitations set forth in this
Agreement, each Contributor and Sprint represents and warrants to Lessee as
follows:
SECTION 4.1 Organization.
Each Contributor and Sprint is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the state of
its organization with full corporate or other power and authority to carry on in
all material respects its business (including, if applicable, the ownership,
lease and operation of the Leased Property of the Sites) as it is now being
conducted and is duly qualified and in good standing as a foreign entity in each
jurisdiction in which the character of the Leased Property owned, leased or
operated by it requires such qualification, except for such qualifications the
failure of which to obtain, individually or in the aggregate, has not had and
would not reasonably be expected to have a Material Adverse Effect.
SECTION 4.2 Authority; No Conflicts.
(a) Each Contributor and Sprint has the corporate power and authority to
execute and deliver this Agreement, to perform its obligations under this
Agreement, and to consummate the transactions contemplated by this Agreement,
and each Contributor and Sprint has or will have the corporate or other power
and authority to execute and deliver each Collateral Agreement to which it is a
party, to perform its obligations thereunder and to consummate the transactions
contemplated thereby. The execution and delivery by each Contributor and Sprint
of this Agreement, and the consummation of the transactions contemplated by this
Agreement have been and the execution and delivery by each Contributor and
Sprint of the Collateral Agreements to which it is a party and the consummation
of the transactions contemplated thereby on or prior to the Initial Closing Date
will have been, duly authorized by all requisite corporate or other action of
each
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Contributor and Sprint. Each Contributor and Sprint (i) has duly executed and
delivered this Agreement, (ii) on the Initial Closing Date will have duly
executed and delivered each of the Collateral Agreements to which it is a party
(if any), and (iii) on each Technical Closing Date will have duly executed and
delivered the amended schedules and exhibits to the existing, or new, Collateral
Agreements to which it is a party, as the case may be. Assuming the due
execution and delivery of each such agreement by each party thereto other than
each Contributor and Sprint, this Agreement is the legal, valid and binding
obligation of each Contributor and Sprint, and on the Initial Closing Date each
of the Collateral Agreements to which each Contributor and Sprint is a party (as
theretofore amended) will be the legal, valid and binding obligation of such
Person, in each case enforceable against it in accordance with its respective
terms subject to the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally and to the effect of the application of general principles
of equity.
(b) The execution, delivery and performance by each Contributor and Sprint
of this Agreement and each of the Collateral Agreements to which it is a party,
and the consummation of the transactions contemplated by this Agreement and by
the Collateral Agreements, do not and will not with or without the giving of
notice or the passage of time, or both, conflict with, or result in a breach or
violation of, or constitute a default under, or permit the acceleration of any
obligation or liability in (i) any provision of the Articles of Incorporation,
Bylaws or other organizational documents of each Contributor and Sprint, (ii)
except as set forth in Section 4.2(b)(ii) of the Contributors Disclosure Letter,
any provision of Law or a Governmental Approval or (iii) any material agreement
of any applicable Contributor or Sprint or relating to the Sites (other than
Excluded Sites or Strategic Sites) or the Leased Property.
SECTION 4.3 Real Property.
(a) With respect to each Site, except for (i) Permitted Encumbrances and
Liens created by, through or under a Person other than Sprint, Contributors or
their respective Affiliates, and (ii) such breaches and inaccuracies as have not
had and would not reasonably be expected to result in a Tower Liability, the
applicable Contributor holds good and marketable fee simple title in the case of
Owned Sites Land, or a valid and subsisting leasehold or other valid interest or
right in the case of Leased Sites Land and Other Interest Sites Land, free and
clear of all Liens created by Contributors. Except as disclosed in Section
4.3(a) of Contributors Disclosure Letter: (A) no Contributor or Affiliate of any
Contributor owns the fee or any superior interests in any Leased Site or Other
Interest Site, (B) no Site is a Shared Site, (C) no Contributor is a party to
any agreement with any Person (other than this Agreement) to transfer or
encumber all or any portion of any Site (excluding, for these purposes the
rights of the Tower Subtenants under the Collocation Agreements) and (D) none of
the lenders of Sprint, Contributors or any of their Affiliates has a security
interest in such Site.
(b) Except as disclosed on Section 4.3(b) of the Contributors Disclosure
Letter, to Contributors' knowledge, no condemnation or re-zoning proceedings
have been instituted or are threatened, with respect to any Site.
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SECTION 4.4 Title; Ownership and Related Matters.
(a) The applicable Contributor owns all right, title and interest in and
to, or has a valid leasehold interest in or other right to use, all of the
Equipment (other than the Excluded Equipment), Towers and Tower Related Assets,
free and clear of any Liens, except for Permitted Encumbrances and Liens created
by, through or under a Person other than Sprint, Contributors or their
respective Affiliates. Except as disclosed in Section 4.4(a) of the Contributors
Disclosure Letter, the interests being Leased by Lessor to Lessee at the Initial
Closing with respect to the Leased Property include, or will include as of the
Initial Closing Date, the Lease or assignment, as applicable, of all personal
property, both tangible and intangible, rights and agreements reasonably
necessary to operate such Equipment, Towers and Tower Related Assets in all
material respects as operated on or immediately prior to the date of this
Agreement, except where the failure to do so would not reasonably be expected to
result in a Tower Liability.
(b) As of the Initial Closing Date, with respect to each Master Lease Site
for which the Leased Property of such Site is to be Leased by Lessor to Lessee
at the Initial Closing, the Leased Property will not be subject to any
Exceptions or Liens, other than Permitted Encumbrances.
(c) Except as disclosed in Section 4.4(c) of the Contributors Disclosure
Letter, each Site includes a Tower that is operational and in good order and
repair (consistent with industry standards for wireless communications tower
sites) and each Site includes Equipment and Tower Related Assets that are in
satisfactory working order.
(d) Except as disclosed in Section 4.4(d) of the Contributors Disclosure
Letter, each Site has, pursuant to an easement or other valid agreement running
with the land on which such Site is located, for the benefit of one or more of
the Contributors, the rights to install, maintain, and use utilities for
provision of electric power and telephone service.
(e) Except as disclosed in Section 4.4(e) of the Contributors Disclosure
Letter, each Site has vehicular ingress and egress to public streets or private
roads pursuant to an easement or other valid agreement running with the land on
which such Site is located, that is suitable for four wheel drive vehicles.
SECTION 4.5 Material Agreements.
Except as set forth in Section 4.5 of the Contributors Disclosure Letter,
true, correct and complete (in all material respects) copies of all Material
Agreements have been provided to Lessee. Except as set forth in Section 4.5 of
the Contributors Disclosure Letter:
(a) each Material Agreement (i) is in full force and effect, (ii) has been
duly authorized, executed and delivered by Contributors and, to Contributor's
knowledge, the other parties thereto and (iii) is a legal, valid and binding
obligation and enforceable against each of the parties thereto in accordance
with its terms;
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(b) no Contributor nor, to Contributors' knowledge, any other party to a
Material Agreement has, or to Contributors' knowledge has been alleged to have,
defaulted, breached or violated any material term or condition thereof and no
Contributor has received notice, whether written, oral or otherwise, of
cancellation, termination, non-renewal or rejection in bankruptcy of such
Material Agreement;
(c) no Material Agreement contains any restriction or limitation on the
ability of a Contributor to compete with any Person or to engage in any line of
business with any Person that will be binding on Lessee or its Affiliates from
and after the Initial Closing;
(d) except as provided in the Collateral Agreements, at the Initial
Closing, there will be no marketing, management or other contracts pursuant to
which any Person other than the Contributors or Sprint on behalf of the other
Contributors has the right to market or lease tower space to any Person at a
Site;
(e) except for the Material Agreements, there is no other material contract
or agreement, other than any Collateral Agreement, relating to the construction,
acquisition ownership, lease, operation, marketing, monitoring or maintenance of
the Sites (other than Excluded Sites or Strategic Sites); and
(f) no Contributor holds or has right to obtain, as a security deposit or
similar collateral or security under a Collocation Agreement, any cash, cash
equivalents, letters of credit or marketable securities; and
(g) no Master Collocation Agreement provides reciprocal rights for a
Contributor to collocate on a wireless communication tower owned or leased by a
Tower Subtenant.
SECTION 4.6 Litigation; Orders.
Except as disclosed in Section 4.6 of the Contributors Disclosure Letter,
there is no action, suit or proceeding pending or, to Contributors' knowledge,
threatened against any Contributor or any portion of the Leased Property by or
before any Governmental Authority or by any Person. Except as disclosed in
Section 4.6 of the Contributors Disclosure Letter, there are no Orders or
stipulations of or by any Governmental Authority or any Person against any
Contributor with respect to the Leased Property of any of the Sites or otherwise
binding on any Leased Property of any of the Sites that would reasonably be
expected to result in a Tower Liability. To Contributors' knowledge, there are
no Orders, and there are no actions or proceedings by any Governmental Authority
pending or threatened in writing, that are reasonably expected to have the
result set forth in Section 8.3.
SECTION 4.7 Environmental Matters.
Except as disclosed in Section 4.7 of the Contributors Disclosure Letter,
to Contributors' knowledge, the applicable Contributor holds, and is in material
compliance with, all Environmental Permits required by Law to be held by it with
respect to the applicable Sites. Each Contributor otherwise operates the Leased
Property of the Sites that are owned or operated by such Contributor in material
compliance with all applicable
35
Environmental Laws, except where the failure to be in such compliance would not
reasonably be expected to result in a Tower Liability. To the knowledge of
Contributors, Contributors have provided to Lessee true, correct, complete and
accurate copies of all Phase I and Phase II environmental site assessment
reports, ground water monitoring reports, remedial action plans and regulatory
correspondence related to the Sites that are in the files, custody or control of
Contributors. No Hazardous Material will have been present in, on, over or
under, and there will have been no escape, seepage, leakage, spillage,
discharge, emission or Release on or from any Site of any Hazardous Materials
resulting from the operations or activities of any Sprint Contributor, or Sprint
Collocator or any Affiliate of such Persons; (vi) there has been no violation of
any Environmental Laws relating to or affecting any Site caused by the
operations or activities of any Sprint Contributor, Sprint Collocator or any
Affiliate of such Persons; and (vii) there will have been no Release of any
Hazardous Materials or the violation of any of the Environmental Laws prior to
the Initial Closing Date in connection with any other property not consisting of
the Sites owned, operated or used by or on behalf of any Sprint Contributor or
Sprint Collocator or any Affiliate of such Persons, which violation or Release
gives or may give rise to any rights whatsoever in any Party with respect to any
Site by virtue of any of the Environmental Laws.
SECTION 4.8 Brokers, Finders, Etc.
Contributors have not employed any broker, finder, investment banker, or
other intermediary or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees, finders' fees, or other similar fees
for which Lessee would be responsible in connection with the transactions
contemplated by this Agreement or any of the Collateral Agreements.
SECTION 4.9 Financial Statements.
(a) Contributors have made available to Lessee true and correct copies of
the audited consolidated balance sheet of the Sites as of December 31, 2003 and
December 31, 2002, the audited consolidated statements of operations, net equity
and cash flows of the Sites for each of the fiscal years ended December 31,
2003, December 31, 2002 and December 31, 2001, including the notes thereto, the
unaudited consolidated balance sheet of the Sites, dated September 30, 2004 (the
"Interim Balance Sheet Date"), and the unaudited consolidated statements of
operations and cash flows of the Sites for the nine (9) month period ended
September 30, 2004 presented on a basis consistent with the year end audited
financial statements. All of the foregoing financial statements are collectively
referred to in this Agreement as the "Financial Statements." Except as disclosed
in the Financial Statements, the Financial Statements present fairly in all
material respects the financial position, results of operations, net equity and
cash flows of the Sites on a consolidated basis as of the dates and for the
applicable periods indicated, in each case in conformity with GAAP consistently
applied except as noted in the Financial Statements. The Financial Statements
(including the notes thereto) were prepared from the books, accounts and
financial records of Contributors.
(b) Except as disclosed in Section 4.9(b) of the Contributors Disclosure
Letter, since the Interim Balance Sheet Date, each Contributor has operated the
Sites that are
36
owned or operated by such Contributor in the ordinary course and has maintained
and preserved the Leased Property and has not disposed of any of the Leased
Property, except in the ordinary course of business, and there has not been any
event, occurrence or development which would reasonably be expected to result in
a Tower Liability.
(c) Notwithstanding any other provision in this Agreement, Contributors
make no representation or warranty with respect to the operations, net equity,
cash flows or other financial measures related to the Qwest Sites and the
parties acknowledge that the "Financial Statements" referred to in this Section
do not reflect any information or results relating to the Qwest Sites.
SECTION 4.10 Per Tower Data.
(a) Section 4.10(a) of the Contributors Disclosure Letter contains a true
and correct schedule of the following items with respect to each Site (other
than any Excluded Site, Strategic Site or Qwest Site) as of September 30, 2004:
(i) each Tower and its cascade number;
(ii) whether Contributors occupy any collocation space on such Site;
(iii) the Collocation Agreement number and identity of each Tower
Subtenant (including any Affiliate of a Contributor that is not another
Contributor) on the Tower of such Site and the monthly revenue currently
being billed related to the Tower Subtenants on the Tower of such Site
along with the commencement date of the Collocation Agreement and the
frequency, basis of calculation (either fixed amount or percentage) and
amount of any rent escalation clauses associated with the Collocation
Agreement;
(iv) the amount of ground lease expense, including revenue share but
excluding ground rent leveling expense recorded under SFAS 13, related to
such Site; and
(v) the Tower height and Tower-type category.
(b) Section 4.10(b) of the Contributors Disclosure Letter contains a true
and correct schedule of the following items with respect to each Qwest Site:
(i) each wireless communications tower and its cascade number;
(ii) whether Contributors occupy any collocation space on such Qwest
Site
(iii) the number and identity of collocation tenants on such Qwest
Site and the monthly revenue currently being billed related to such
tenants; and
37
(iv) the amount of ground lease expense, including revenue share but
excluding ground rent leveling expense recorded under SFAS 13, related to
such Site.
SECTION 4.11 Compliance with Laws and Governmental Authorizations
(a) Except as set forth in Section 4.11(a) of the Contributors Disclosure
Letter, the Contributors have operated and are operating each Site (and all
related Tower Assets) materially in accordance with all necessary Authorizations
and in compliance with applicable Laws (excluding for this purpose any
Environmental Laws) affecting such Site, except where the failure to have such
Authorizations or be in such compliance would not reasonably be expected to
result in a Tower Liability.
(b) None of the Contributors has received notice of any Legal Action from
any Governmental Authority or other Person as to the condition, operation of, or
any Authorizations with respect to, any Site that would reasonably be expected
to result in a Tower Liability.
(c) Section 4.11(c) of the Contributors Disclosure Letter sets forth all of
the Contributors' Ground Lessors that may be utilities regulated by the
California Public Utilities Commission or subject to Section 851 as described
thereon.
SECTION 4.12 No Implied Representations.
NOTWITHSTANDING ANY OTHERWISE EXPRESS REPRESENTATIONS AND WARRANTIES MADE
BY CONTRIBUTORS OR SPRINT IN THIS AGREEMENT, NEITHER SPRINT NOR ANY CONTRIBUTOR
MAKES ANY REPRESENTATION OR WARRANTY TO LESSEE WITH RESPECT TO:
(a) ANY PROJECTIONS, ESTIMATES OR BUDGETS HERETOFORE DELIVERED TO OR MADE
AVAILABLE TO LESSEE RELATING TO FUTURE REVENUES, EXPENSES OR EXPENDITURES OR
FUTURE RESULTS OF OPERATIONS; OR
(b) EXCEPT AS EXPRESSLY COVERED BY A REPRESENTATION AND WARRANTY CONTAINED
IN THIS ARTICLE 4, ANY OTHER INFORMATION OR DOCUMENTS (FINANCIAL OR OTHERWISE)
MADE AVAILABLE TO LESSEE OR ITS COUNSEL, ACCOUNTANTS OR ADVISERS WITH RESPECT TO
SPRINT, CONTRIBUTORS OR ANY OF THEIR RESPECTIVE AFFILIATES, THE LEASED PROPERTY
OF THE SITES OR THE ASSUMED LIABILITIES.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF LESSEE
Lessee represents and warrants to Contributors and Sprint as follows:
SECTION 5.1 Incorporation.
38
Lessee is a corporation or other entity duly organized, validly existing
and in good standing under the laws of the state of its organization with full
corporate or other power and authority to carry on in all material respects its
business as it is now being conducted and is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the character of Lessee's
business requires such qualification, except for such qualifications the failure
of which to obtain, individually or in the aggregate, has not had and would not
reasonably be expected to have a Lessee Material Adverse Effect.
SECTION 5.2 Authority.
Lessee has the corporate power and authority to execute and deliver this
Agreement, to perform its obligations under this Agreement, to consummate the
transactions contemplated by this Agreement and to lease the Leased Property or
otherwise operate the Sites, and Lessee has or will have the corporate or other
power and authority to execute and deliver each Collateral Agreement, to perform
its obligations thereunder, and to consummate the transactions contemplated
thereby. The execution and delivery by Lessee of this Agreement and the
consummation of the transactions contemplated by this Agreement have been, and
the execution and delivery by Lessee of the Collateral Agreements and the
consummation of the transactions contemplated thereby on or prior to the Initial
Closing Date will have been, duly authorized by all requisite corporate or other
action of Lessee. Lessee (a) has duly executed and delivered this Agreement, (b)
on the Initial Closing Date will have duly executed and delivered each of the
Collateral Agreements, and (c) on each Technical Closing Date will have duly
executed and delivered the amended schedules and exhibits to the Collateral
Agreements. Assuming the due execution and delivery of each such agreement by
each party thereto other than Lessee, this Agreement is the legal, valid and
binding obligation of Lessee, and on the Initial Closing Date each of the
Collateral Agreements (as theretofore amended) will be the legal, valid and
binding obligation of such Person, in each case enforceable against it in
accordance with its respective terms subject to the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally and to the effect of the application
of general principles of equity.
SECTION 5.3 No Conflicts.
The execution, delivery and performance by Lessee of this Agreement and
each of the Collateral Agreements to which it is a party, and the consummation
of the transactions contemplated by this Agreement and by the Collateral
Agreements, do not and will not with or without the giving of notice or the
passage of time, or both, conflict with, or result in a breach or violation of,
or constitute a default under, or permit the acceleration of any obligation or
liability in (a) any provision of the Articles of Incorporation, Bylaws or other
organizational documents of Lessee, (b) any provision of Law or a Governmental
Approval or (c) any material agreement of Lessee.
SECTION 5.4 Approvals, Other Authorizations, Consents, Reports, Etc.
Section 5.4 of the Lessee Disclosure Letter contains a list of all
Governmental Approvals and other filings, applications or notices required to be
made, filed, given or
39
obtained by Lessee or any of its Affiliates with, to or from any Governmental
Authorities or other Persons in connection with the consummation of the
transactions contemplated by this Agreement, except for (a) the filing of any
notification and report form required under the HSR Act, (b) those that become
applicable solely as a result of the specific regulatory status of Contributors,
or (c) those failures to make, file, give or obtain which do not adversely
affect or restrict, or would not reasonably be expected to adversely affect or
restrict, Lessee's ability to consummate the transactions contemplated by this
Agreement.
SECTION 5.5 Litigation; Orders.
Except as disclosed in Section 5.5 of the Lessee Disclosure Letter, there
is no action, suit or proceeding pending or, to Lessee's knowledge, threatened
against Lessee by or before any Governmental Authority or by any Person which
challenges the validity of this Agreement or which would reasonably be likely to
adversely affect or restrict Lessee's ability to consummate the transactions
contemplated by this Agreement. To Lessee's knowledge, there are no Orders and
there are no actions or proceedings by any Governmental Authority or any other
Person, pending or threatened in writing, that adversely affects or restricts,
or would reasonably be expected to adversely affect or restrict, Lessee's
ability to consummate the transactions contemplated by this Agreement.
SECTION 5.6 Brokers, Finders, Etc.
Lessee has not employed any broker, finder, investment banker, or other
intermediary or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees, finders' fees, or other similar fees
for which Contributors or Sprint would be responsible in connection with the
transactions contemplated by this Agreement or any of the Collateral Agreements.
SECTION 5.7 SEC Reports.
Lessee has filed all material forms, reports and documents, together with
any required amendments thereto, required to be filed by it with the SEC since
January 1, 2003 (collectively, the "SEC Documents"). The SEC Documents (a) were
prepared, in all material respects, in accordance with the requirements of the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, as the case may be, and the rules and regulations promulgated
thereunder, and (b) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such SEC Documents or necessary in order to make the statements made
in such SEC Documents, in the light of the circumstances under which they were
made, not misleading.
SECTION 5.8 Financial Statements
(a) Lessee has made available to Contributors true and correct copies of
the audited consolidated balance sheet of Lessee as of December 31, 2003,
December 31, 2002 and December 31, 2001, the audited consolidated statements of
income, shareholders' equity and cash flows of Lessee for each of the fiscal
years then ended,
40
including the notes thereto, the unaudited consolidated balance sheet of Lessee,
dated September 30, 2004 (the "Lessee Interim Balance Sheet Date"), and the
unaudited consolidated statements of income and cash flows of Lessee for the
nine month period then ended presented on a basis consistent with the year end
audited financial statements. All of the foregoing financial statements are
collectively referred to in this Agreement as the "Lessee Financial Statements."
Except as disclosed in Section 5.8(a) of the Lessee Disclosure Letter or the
Lessee Financial Statements, the Lessee Financial Statements present fairly in
all material respects the financial position, results of operations,
shareholders' equity and cash flows of Lessee on a consolidated basis as of the
dates and for the applicable periods indicated, in each case in conformity with
GAAP consistently applied except as noted in the Lessee Financial Statements.
The Lessee Financial Statements (including the notes thereto) were prepared from
the books, accounts and financial records of Lessee.
(b) Except as disclosed in Section 5.8(b) of the Lessee Disclosure Letter,
since the Lessee Interim Balance Sheet Date, Lessee has conducted its business
in the ordinary course and there has not been any event, occurrence or
development which has had or would reasonably be expected to have a Lessee
Material Adverse Effect.
SECTION 5.9 Independent Review.
Lessee has conducted its own independent review and analysis of the
Collocation Business and the Sites, their condition, cash flow and prospects and
the Assumed Liabilities. In entering this Agreement, Lessee has relied solely
upon its own investigation and analysis and the representations and warranties
contained in this Agreement and the Collateral Agreements, and Lessee:
(a) acknowledges that all materials and information requested by Lessee
with respect to the Sites have been provided to Lessee to Lessee's satisfaction;
(b) acknowledges that it has undertaken such due diligence (including a
review of the assets, liabilities, books, records and contracts of Contributors)
as Lessee deems adequate;
(c) acknowledges that neither Contributors nor any of their respective
Subsidiaries nor any of their directors, officers, employees, Affiliates, agents
or representatives makes any representation or warranty, either express or
implied as to the accuracy or completeness of any of the information provided or
made available to Lessee or its agents or representatives prior to the execution
of this Agreement except as expressly set forth in this Agreement or the
Collateral Agreements; and
(d) agrees, to the fullest extent permitted by Law, that neither
Contributors nor any of their respective directors, officers, employees,
affiliates, agents or representatives will have any liability or responsibility
whatsoever to Lessee on any basis (including in contract or tort, under federal
or state securities laws or otherwise) based upon any information provided or
made available, or statements made, to Lessee prior to the execution of this
Agreement, except as expressly set forth in this Agreement.
41
SECTION 5.10 Financial Capability.
Prior to the date of this Agreement, Lessee has delivered to Contributors
(a) written documentation evidencing Lessee's ability to draw upon available
capacity under existing credit facilities, and/or (b) true, complete and correct
copies of executed commitment letters, in either case, to provide to Lessee
financing for the transactions contemplated by this Agreement (the "Financing
Commitments"). As of the date of this Agreement, the Financing Commitments are
in full force and effect, have not been withdrawn or terminated, and Lessee has
no reason to believe that any Financing Commitment will not lead to the
financing contemplated by such Financing Commitment, subject to the terms and
conditions contained in such Financing Commitments. The financing contemplated
by the Financing Commitments constitutes all of the financing required to be
provided by Lessee for the consummation of the transactions contemplated by this
Agreement and the payments of all fees and expenses incurred by Lessee in
connection therewith. Subject to the receipt of the funds contemplated by, and
on the terms set forth in, the Financing Commitments, Lessee will have available
as of the Initial Closing Date funds sufficient to pay the aggregate Rent and
Pre-Lease Rent payable at the Initial Closing and to discharge the Assumed
Liabilities. Lessee knows of no circumstance or condition that is reasonably
likely to prevent the availability at the Initial Closing of such cash or
availability, except as otherwise provided in the Financing Commitments.
ARTICLE 6
COVENANTS OF SPRINT, CONTRIBUTORS AND LESSEE
SECTION 6.1 Investigation of Sites Prior to Initial Closing; Access to
Properties and Records.
(a) Prior to the Initial Closing, but subject to contractual and legal
restrictions applicable to Contributors and applicable Law, Contributors will
make their personnel available to representatives of Lessee and afford to such
representatives and, with respect to the transactions contemplated by this
Agreement and the Financing Commitments, advisors and current and prospective
lenders and investors of Lessee, reasonable access to their respective offices,
properties, books and records, of and relating to the Sites during normal
business hours, as Lessee may reasonably request in its review of the Sites,
such access not to damage, or unreasonably interfere with or disrupt,
Contributors' business, including, without limitation, the operation of the
Sites. In no event will Lessee take or permit any action in its investigation of
any Site which impairs or otherwise interferes with the use and operation of any
active Equipment on or communications operations being conducted at a Site. All
requests for access to the offices, properties, books and records, of and
relating to the Sites will be made to a representative of Contributors as
designated by Contributors from time to time, who will be solely responsible for
coordinating all such requests and all access permitted under this Agreement and
who will have the right to accompany Lessee on any actual inspections. It is
further understood and agreed that Contributors will cooperate and consult with
Lessee in connection with its due diligence review of the Sites, and neither
Lessee nor its representatives will contact any employees, customers or
suppliers of Contributors or any of their respective Affiliates in connection
with the transactions contemplated by this
42
Agreement or Lessee's investigation of the Sites, whether in person or by
telephone, mail or other means of communication, without the specific prior
written authorization of Contributors, not to be unreasonably withheld,
conditioned or delayed. The restrictions and provisions of this clause (a) with
be applicable only prior to the Initial Closing, after which the provisions of
the Lease Agreement will set forth the rights and obligations with respect to
access to the Sites. Lessee will indemnify Contributors and their respective
Affiliates for any claims, losses or causes of action as a result of physical or
tangible damages or injuries caused by, or incurred in connection with, Lessee's
inspection of the Sites prior to the Initial Closing Date; provided, that Lessee
will not indemnify Contributors or their respective Affiliates for any claim,
loss or cause of action caused by (i) the gross negligence or willful misconduct
of any Contributor or such Affiliate or (ii) any physical condition existing on
any Site prior to Lessee's or its agent's entry thereon (except for any
incremental damage caused by Lessee or its agents with respect to any such
physical condition).
(b) Prior to the Initial Closing, any information provided to Lessee or its
representatives pursuant to this Agreement will not be used for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement, and will be held by Lessee and its representatives in accordance
with, and will be subject to the terms of, Section 6.12.
(c) Lessee agrees to (i) hold all of the books and records received from
Lessor relating to the Sites and not to destroy or dispose of any thereof for a
period of ten (10) years from the Initial Closing Date, and thereafter, if it
desires to destroy or dispose of the non-privileged books and records, to offer
first in writing, at least thirty (30) days prior to such destruction or
disposition, to surrender them to Lessor, and (ii) afford Lessor, its
accountants and legal counsel, during normal business hours, upon reasonable
request, reasonable access to such non-privileged books and records, to other
data and to the employees of Lessee to the extent that such access may be
requested for any legitimate purpose, unless such non-privileged books and
records have been disposed of in accordance with this Section 6.1(c). Lessee
will have the same rights, and Contributors, Sprint and Lessor, respectively,
the same obligations, as are set forth above in this Section 6.1(c) with respect
to any non-privileged books and records of such Person pertaining to the Sites
(other than Excluded Sites and Strategic Sites), with the exception of Tax
Returns (or portions thereof) relating to Taxes that are not the responsibility
of Lessee.
(d) Contributors and Sprint agree to cooperate with Lessee and to provide
to Lessee and its Affiliates, from time to time, at no out-of-pocket cost to
Contributors or Sprint upon reasonable advance written notice from Lessee, (i)
access to all financial and other information pertaining to the Sites, which
information is in Contributors' or Sprint's possession and relevant and
reasonably necessary, in the opinion of Lessee or its Affiliates' outside, third
party accountants ("Accountants") to enable Lessee or its Affiliates and their
Accountants (or at Lessee's discretion the accountants of Contributors) to
prepare financial statements in compliance with any and all of (A) Rule 3-14
(or, if required by applicable authorities, Rule 3-05) of Regulation S-X of the
SEC, as applicable to Lessee or its Affiliates (collectively, the "Required
Financial Statements"); (B) any other rule issued by the SEC and applicable to
Lessee or its Affiliates; and (C)
43
any registration statement, report or disclosure statement filed with the SEC by
or on behalf of Lessee or its Affiliates; and (ii) a representation letter, in
form substantially consistent with the representation letter customarily
provided by Sprint to its outside accountants so long as such form is otherwise
reasonably satisfactory to the Accountants or else with such changes as the
Accountants may reasonably require (based on what the Accountants otherwise
generally require from clients of the size and caliber of Sprint), signed by the
individual(s) responsible for Contributors' financial reporting, as prescribed
by generally accepted auditing standards promulgated by the Auditing Standards
Division of the American Institute of Certified Public Accountants, which
representation letter may be required by the Accountants in order to render any
opinion or to issue any report concerning Contributors' financial statements for
any date and/or period as of or prior to the Initial Closing Date. Contributors
will, upon the reasonable request of Lessee and at no out-of-pocket expense to
Contributors, provide reasonable assistance in order to enable Lessee or its
Affiliates to (i) file any documents with the SEC (including any registration
statement or report, or any amendments thereto), (ii) respond to any requests
for information from the SEC, (iii) comply with the Sarbanes-Oxley Act of 2002
or (iv) satisfy the New York Stock Exchange's or other applicable stock exchange
listing requirements.
SECTION 6.2 Efforts to Close; Cooperation.
(a) Subject to the provisions of Article 3, Contributors and Lessee each
agree to use their commercially reasonable efforts to (i) take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement, and to cooperate with the other in
connection with the foregoing, and (ii) refrain from taking, or cause to be
refrained from taking, any action and to refrain from doing or causing to be
done, anything which would reasonably be expected to impede or impair the
consummation and the making effective as promptly as practicable of the
transactions contemplated by this Agreement, including using commercially
reasonable efforts to (A) obtain all necessary waivers, consents, releases and
approvals that are required for the consummation of the transactions
contemplated by this Agreement, (B) obtain all consents, approvals and
authorizations that are required by this Agreement to be obtained under any Law,
(C) lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
by this Agreement, (D) effect all necessary registrations and filings,
including, but not limited to, filings and submissions of information requested
or required by any Governmental Authority, including, without limitation, any
Governmental Antitrust Authority, and (E) fulfill all conditions to this
Agreement. Contributors and Lessee further covenant and agree, with respect to
any threatened or pending preliminary or permanent injunction or other order,
decree or ruling or statute, rule, regulation or executive order that would
adversely affect the ability of the parties to consummate the transactions
contemplated by this Agreement, to use their respective commercially reasonable
efforts to prevent the entry, enactment or promulgation thereof, as the case may
be. In no event, however, will Contributors or Lessee or any of their respective
Affiliates be obligated to divest or hold separate any business or assets in
connection with the consummation of the transactions contemplated by this
Agreement or to pay any money to any Person or to offer or grant other financial
or other accommodations to any
44
Person in connection with its obligations under this Section 6.2, other than
with respect to any payments required to be made in connection with Shared
Ground Lease Payments in a Ground Lease as set forth in this Agreement and the
Lease Agreement. In addition, notwithstanding anything to the contrary in this
Section 6.2 or otherwise, nothing in this Agreement will prevent or restrict
Lessee or Contributors or any of their respective Affiliates from engaging in
any merger, acquisition or business combination transaction, or any disposition
of any assets, other than a disposition to a Person other than Lessee of Leased
Property, or any other corporate transaction except, in each case, as would
prevent the consummation of the transactions contemplated by this Agreement and
the Collateral Agreements.
(b) Contributors and Lessee will keep the other party apprised of the
status of matters relating to the completion of the transactions contemplated by
this Agreement and work cooperatively in connection with obtaining the requisite
Governmental Approvals of any Governmental Antitrust Authority, including,
without limitation, by: (i) cooperating with the other party in connection with
filings under the Antitrust Laws, including, with respect to the party making a
filing, (A) by providing copies of all such documents to the non-filing party
and its advisors prior to filing (other than documents containing confidential
business information), and (B) if requested, by considering in good faith all
reasonable additions, deletions or changes suggested in connection with any such
filing; (ii) furnishing to the other party all information required for any
application or other filing to be made pursuant to any Antitrust Law in
connection with the transactions contemplated by this Agreement; (iii) promptly
notifying the other party of, and if in writing furnishing the other party with
copies of, any communications from or with any Governmental Antitrust Authority
with respect to the transactions contemplated by this Agreement; (iv) permitting
the other party to review in advance and considering in good faith the views of
the other party in connection with any proposed communication with any
Governmental Antitrust Authority in connection with proceedings under or
relating to any Antitrust Law, to the extent not prohibited by Law; (v) not
agreeing to participate in any meeting or discussion with any Governmental
Antitrust Authority in connection with proceedings under or relating to any
Antitrust Law unless it consults with the other party in advance to the extent
not prohibited by Law, and, to the extent permitted by such Governmental
Antitrust Authority, gives the other party the opportunity to attend and
participate; and (vi) consulting and cooperating with the other party in
connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any party
in connection with proceedings under or relating to any Antitrust Law. If either
party or any Affiliate thereof receives a request for additional information or
documentary material from any such Governmental Antitrust Authority with respect
to the transactions contemplated by this Agreement, then such party will
endeavor in good faith to make, or cause to be made, as soon as practicable and
after consultation with the other party, an appropriate response in compliance
with such request. Each party will advise the other party promptly in respect of
any understandings, undertakings or agreements (oral or written) which such
party proposes to make or enter into with any Governmental Antitrust Authority
in connection with the transactions contemplated by this Agreement.
SECTION 6.3 Further Assurances.
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Contributors and Lessee agree that, from time to time, whether before, at
or after the applicable Closing Date, each of them will execute and deliver such
further instruments of conveyance and assignment and take such other actions as
may be necessary to carry out the purposes and intents of this Agreement and the
transactions contemplated by this Agreement. Without limiting the foregoing,
Sprint and Contributors acknowledge that in connection with the Closings and its
financings of the Sites, Lessee may require legal opinions (or updates thereof
or reliance letters or similar items with respect thereto) from its counsel, at
Lessee's expense, with respect to certain bankruptcy-related matters and in
connection therewith Sprint and Contributors' will, and will cause Lessor to,
cooperate (whether before, at or after the applicable Closing Date) in taking
such actions as may be reasonably required to give such opinions as Lessee may
reasonably request and to provide customary undertakings, representations and
certificates (including without limitation, as corporate structure charts,
certifications that the requirements of the LLC Agreement will be, and have at
all times been, complied with), such cooperation and provision at the expense of
Contributors prior to the Final Termination Date and thereafter at Lessee's
expense.
SECTION 6.4 Conduct of Collocation Business and the Sites.
From the date of this Agreement and until the Initial Closing and except as
contemplated by this Agreement or set forth in Section 6.4 of the Contributors
Disclosure Letter, Contributors will operate the Collocation Business and the
Sites in the ordinary course of business consistent with past practice and, at
their expense, will use commercially reasonable efforts in accordance with past
practice to (i) resolve Liabilities relating to (A) Liens (other than Permitted
Encumbrances) on interests of a Contributor or (B) the Sites prior to the
Initial Closing Date; (ii) to resolve the condemnation or rezoning procedures
described on Section 4.3(a) of Contributors Disclosure Letter (and Lessee will
be entitled to any proceeds with respect to such proceedings (other than with
respect to Excluded Sites or Strategic Sites) after the date of this Agreement
unless such Site becomes an Excluded Site or a Strategic Site hereunder); (iii)
complete and close out the non-operational sites listed on Section 4.4(c) of
Contributor's Disclosure Letter; and (iv) locate the missing Collocation
Agreements listed on Section 4.5 of Contributor's Disclosure Letter (and deliver
copies of any Collocation Agreements so located to Lessee). From the date of
this Agreement and until the Initial Closing (or the applicable Technical
Closing with respect to Pre-Lease Sites) and except as contemplated by this
Agreement or set forth in Section 6.4 of the Contributors Disclosure Letter,
Contributors and their respective Affiliates will not, without the consent of
Lessee (which consent will not be unreasonably withheld or delayed):
(a) (i) sell, dispose of, transfer, lease or encumber the Leased Property
of any of the Sites, other than (x) Permitted Encumbrances incurred or entered
into in the ordinary course of business consistent with past practice, or (y)
conveyances that are immaterial with respect to the Leased Property of the
affected Site, (ii) except in the ordinary course of business, consistent with
past practice, enter into, modify, accelerate, amend, or grant any waiver or
release under any Material Agreement, including any Collocation Agreement (but
in no event terminate or cancel any Material Agreement, or modify, accelerate,
amend or grant any waiver or release with respect to any revenue sharing
provisions in such agreements without the consent of Lessee), or (iii)
accelerate
46
or delay collection of accounts receivable or payment of any account payable in
advance of or beyond their regular due dates or the dates when the same would
have been collected or paid, as applicable, except in the ordinary course of
business consistent with past practice; provided that Contributors will provide
prompt notice to Lessee of any such action described in this clause (a);
(b) agree, so as to legally bind Lessee whether in writing or otherwise, to
take any of the actions set forth in Section 6.4(a) and not otherwise permitted
by this Agreement.
Notwithstanding the provisions of this Section 6.4, nothing in this
Agreement will be construed or interpreted to prevent Contributors in their sole
discretion from (i) engaging in any activity with respect to any of its
businesses other than the Collocation Business, (ii) taking any action with
respect to the Leased Property of any Sites contemplated under Article 3,
including, without limitation, designating a Site as an Excluded Site, (iii)
removing Excluded Assets or Excluded Equipment from Leased Property of the
Sites, or (iv) taking any action with respect to any Excluded Site or Strategic
Site.
SECTION 6.5 Public Announcements.
Except as otherwise agreed to by the parties, the parties will not issue
any report, statement or press release or otherwise make any public statements
with respect to this Agreement and the transactions contemplated by this
Agreement, except as in the reasonable judgment of a party that may be required
by Law or by the rules of a national securities exchange, and in any event a
party will use its reasonable best efforts to consult with the other party at a
reasonable time in advance of such required disclosure. Within four (4) days of
the date hereof, Sprint shall file with the SEC a form 8-K attaching thereto
this Agreement and the form of Lease Agreement.
SECTION 6.6 Corporate Names.
(a) Lessee acknowledges that Sprint, Contributors and their respective
Affiliates have, and will at all times have, the absolute and exclusive
proprietary right to all Names incorporating "Sprint" by itself or in
combination with any other Name, including, without limitation, the corporate
design logo associated with "Sprint", and that none of the rights thereto or
goodwill represented thereby or pertaining thereto are being Leased, or
otherwise assigned or transferred, hereby or in connection herewith. Lessee
agrees that it will not, nor will it permit any of its Affiliates to, use any
Name, phrase or logo incorporating "Sprint" or such corporate design logo in or
on any of its literature, sales materials, agreements or products or otherwise
in connection with the sale of any products or services or in the operation of
the Sites.
(b) Sprint and Contributors acknowledge that Lessee and its Affiliates
have, and will at all times have, the absolute and exclusive proprietary right
to all Names incorporating "Global Signal" by itself or in combination with any
other Name, including, without limitation, the corporate design logo associated
with "Global Signal", and that none of the rights thereto or goodwill
represented thereby or pertaining thereto are being
47
Leased, or otherwise assigned or transferred, hereby or in connection herewith.
Lessee agrees that it will not, nor will it permit any of its Affiliates,
including Lessor, to, use any Name, phrase or logo incorporating "Global Signal"
or such corporate design logo in or on any of its literature, sales materials,
agreements or products or otherwise in connection with the sale of any products
or services or in the operation of the Sites.
SECTION 6.7 Actions by Lessee, Sprint and Contributors Subsidiaries.
Lessee, Sprint and each Contributor will ensure that each of their
respective Subsidiaries (if any) take all actions necessary to be taken by such
Subsidiary in order to fulfill Lessee's, Sprint's or such Contributor's
respective obligations under this Agreement.
SECTION 6.8 Environmental Matters.
(a) Lessee may commission, at Lessee's cost and expense, Phase I (and if
permitted under the applicable Ground Lease, Phase II) environmental audits of
all Sites. Contributors have heretofore made available and furnished to Lessee
true, correct and complete copies of all Phase I and Phase II environmental
assessments (including attachments, appendices, exhibits and schedules) and all
other documents related to environmental matters, including without limitation,
notices of violations, claims and correspondence with consultants and
Governmental Authorities of the Sites that Contributors have been able to locate
as of the date of this Agreement using their good faith efforts. Lessee will
indemnify Contributors and Lessor and their respective Affiliates for any
claims, losses or causes of action as a result of physical or tangible damages
or injuries caused by, or incurred in connection with, Lessee's Phase I or Phase
II environmental audits of any Site; provided, that Lessee will not indemnify
Contributors or their respective Affiliates for any claim, loss or cause of
action caused by (i) the gross negligence or willful misconduct of any
Contributor or such Affiliate or (ii) any physical condition existing on any
Site prior to Lessee's or its agent's entry thereon (except for any incremental
damage caused by Lessee or its agents with respect to any such physical
condition).
(b) Lessee will promptly provide (at Lessee's sole cost and expense) to
Contributors and Lessor (i) the results of any and all environmental sampling
and other analytical testing that may be conducted and (ii) any and all
environmental reports (including the results of the aforementioned Phase I and,
if applicable, Phase II reports) generated by Lessee as a result of these
studies. Unless otherwise required by applicable Law, neither any reports nor
any information contained in said reports or otherwise generated by Lessee under
this Agreement, will be released to any other party without the prior written
consent of Lessee, Lessor and Contributors, except that either Lessee, Lessor or
Contributors may release such reports to their respective Representatives or in
connection with any merger or other corporate transaction of Lessee or any
Contributor, or disposition of assets, that includes the Sites to which the
reports apply (or Liability with respect thereto). If this Agreement is
terminated pursuant to Section 10.1 or if any Site becomes an Excluded Site,
Lessee will if requested by Contributors (x) turn over to Contributors (at
Contributors' cost) all reports, documents, data and other writings and
information, including copies and, if available, electronic format thereof,
relating to any
48
and all investigations or studies conducted with respect to environmental
conditions or compliance associated with such (or all, in the event of
termination of this Agreement) Sites, and such reports, documents and/or
writings will become the exclusive property of Contributors, provided that
Contributors may not rely thereon and Lessee will have no obligations or
liability with respect thereto, or (y) destroy such documentation and
information in accordance with Section 6.12(d).
SECTION 6.9 Title Insurance Commitments.
If Lessee elects to purchase title insurance for a Site, Contributors and
Lessee will work together and cooperate in order to obtain and cause to be
delivered to Lessee (for Lessee's use for purposes of obtaining title insurance)
as promptly as practicable following execution of this Agreement, copies of
commitments (and will provide non-privileged copies (or electronic access)
thereof to Contributors or Lessor) to issue leasehold and/or leasehold lenders
title insurance policies ("Title Commitments") for each such Site as to which
any Contributor has an insurable real property interest ("Insurable Sites"). The
costs of obtaining the Title Commitments and title insurance policies pursuant
to the Title Commitments (the "Title Policies") will be borne by Lessee (except
as provided in Section 3.3(b)(ii)), and at the Closings, Lessee will reimburse
Contributors for any out-of-pocket costs related thereto that were incurred and
paid by Contributors at the request of Lessee. If, prior to the Initial Closing
or Technical Closing, as the case may be, relating to any Insurable Site for
which a Title Commitment will have been issued, Lessee will be unable to obtain
a Title Policy (or a marked Title Commitment) insuring its interest and/or the
interest of its lender in such Site (subject only to Permitted Encumbrances)
notwithstanding Lessee's having exercised its commercially reasonable efforts to
do so, then, provided that Lessee will continue to exercise commercially
reasonable efforts to obtain such Title Policy (or a marked Title Commitment),
Lessee will have the right to treat such as a Pre-Lease Site. At each Closing
Lessor or Contributors, as applicable, will deliver to Title Company such
documents including Property Tax forms and any other certificates and
documentation as may be reasonably and customarily required by the Title Company
for issuance of owners' and lenders' policies of leasehold title insurance
(subject only to Permitted Encumbrances) in favor of Lessee and/or Lessee's
lenders.
SECTION 6.10 Other Documentation.
Prior to the Initial Closing, Contributors will use commercially reasonable
efforts to deliver or cause to be delivered to Lessee (a) copies of all written
(and effective) Ground Leases, Collocation Agreements and material Governmental
Approvals solely related to the Leased Property or, to the extent not solely
related, appropriate extracts thereof, and (b) copies of, or extracts from, all
current files and records of Contributors solely related to the ownership,
occupancy or leasing of the Leased Property or, to the extent not so solely
related, appropriate extracts thereof; provided, that (i) the failure to deliver
any of the foregoing that is not located by Contributors after using good faith
efforts to do so will not be considered a breach of this Agreement, (ii)
Contributors will not be required to deliver to Lessee any privileged document,
and (iii) Contributors will cooperate with Lessee in delivering such documents
in electronic form in a manner to allow integration and compatibility with
Lessee's systems.
49
SECTION 6.11 Master Collocation Agreements
The parties acknowledge that certain Collocation Agreements permit a Tower
Subtenant to occupy space (including on a Tower) at more than one Site (each a
"Master Collocation Agreement"). At the Initial Closing and each Technical
Closing in which the Leased Property of a Master Lease Site subject to a Master
Collocation Agreement is Leased to Lessee and in which the Leased Property of
some of the Sites applicable to such Master Collocation Agreement is retained by
Contributors or Lessor, to the extent permitted under the applicable Master
Collocation Agreement or consented to by the applicable counterparty, the
applicable Master Collocation Agreement will be bifurcated into two separate
Master Collocation Agreements, the first applicable to the Sites subject to the
existing Master Collocation Agreement that are retained by Contributors or
Lessor at the applicable Closing (under which the applicable Contributor or
Lessor will remain the lessor) and the second applicable to the Master Lease
Sites subject to the existing Master Collocation Agreement that are Leased to
Lessee at the applicable Closing (under which Lessee will be the lessor). To the
extent practicable, when requesting consent to a bifurcation, the parties will
also request consent to a future further bifurcation of any such Master
Collocation Agreement such that further severance thereof is possible in
connection with any post-closing conversion of a Pre-Lease Site to a Master
Lease Site as well as a future assignment (in whole or part) of Lessee's
interests under the Lease Agreement in connection with a financing. Lessee,
Lessor and Contributors will cooperate and each use commercially reasonable
efforts to effectuate the terms of this Section 6.11.
SECTION 6.12 Confidentiality.
(a) The parties acknowledge and agree that in the course of their
discussions and negotiations of this Agreement and the transactions contemplated
by this Agreement, a party to this Agreement (the "Disclosing Party") may
already have disclosed or may hereafter disclose Confidential Information (as
defined below) to one or more of the other parties to this Agreement (each, a
"Disclosee"). Each party agrees that if the transactions contemplated by this
Agreement are not consummated, it will either return to the Disclosing Party all
written Confidential Information furnished to it or destroy such Confidential
Information. Each party further agrees to maintain the confidentiality of any
and all Confidential Information of a Disclosing Party and not disclose or give
any Confidential Information to any Person or use such Confidential Information
for any purpose unrelated to the consummation of the transactions contemplated
by this Agreement and the Collateral Agreements; provided, that the foregoing
will not prohibit (i) use of such Confidential Information (A) as is required by
Law, (B) as is necessary to prepare Tax Returns (including Tax Returns of
Lessee, Contributors, Lessor or their respective Affiliates) or other filings
with Governmental Authorities or to defend or object to any reassessment of
Taxes, (C) as is necessary for Lessee, Contributors, Lessor or their respective
Affiliates (or their representatives) to prepare and disclose, as may be
required, accounting statements or (D) to assert or protect any rights of
Lessee, Sprint, Contributors, Lessor or their respective Affiliates under this
Agreement or under any applicable Law or (ii) disclosing to any and all Persons,
without limitation of any kind, the U.S. federal and state tax treatment and tax
structure (tax structure will mean any fact that may be applicable to
understanding the U.S. federal or state tax treatment of the
50
transaction) contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to Lessee, Sprint or
Contributors or their respective Affiliates relating to such tax treatment and
tax structure provided that no information will be disclosed that could waive
the attorney-client privilege, the privilege under Section 7525 of the Internal
Revenue Code, or other privileges. Without limiting the generality of the
foregoing, each party agrees that, when acting as a Disclosee, it may disclose
the Confidential Information of the Disclosing Party to those employees,
attorneys, accountants, consultants, bankers, financial advisers and any
representatives of such advisers (collectively, "Representatives") of Disclosee
who require such information for the purposes contemplated under this Agreement;
provided, that it must (i) notify all of its Representatives to whom
Confidential Information of the Disclosing Party is disclosed not to use or
disclose such Confidential Information in violation of this Agreement, (ii)
prevent use or disclosure by its Representatives of the Confidential Information
of the Disclosing Party, except as provided in this Agreement, and (iii) if
requested or required by Law to disclose any Confidential Information, provide
the Disclosing Party with prompt written notice of such request or requirement
so that the Disclosing Party may seek an appropriate protective order. If,
failing the entry of a protective order, the Disclosee is, in the opinion of its
counsel, required to disclose Confidential Information, it may disclose that
portion of the Confidential Information that its counsel advises that it is
required to disclose and will exercise reasonable efforts to obtain assurance
that confidential treatment will be accorded to that portion of the Confidential
Information that is being disclosed. In any event, the Disclosee will not oppose
action by the Disclosing Party to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Confidential Information.
(b) For purposes of this Section 6.12, "Confidential Information" means any
and all technical, business and other information regarding the business,
finances, operations, products, services and customers of a party and its
Affiliates, whether in written electronic, oral or any other form, which derives
value from not being generally known to the public, including, without
limitation, technical or nontechnical data, compositions, devices, methods,
techniques, drawings, inventions, processes, financial data, financial plans,
product plans, lists or information concerning actual or potential customers or
suppliers, information regarding business plans and operations, methods and
plans of operation, marketing strategies, and acquisition and investment plans
together with the analyses, compilations, studies or other documents prepared by
the Disclosee using such information; provided, however, that the term
"Confidential Information" will not include any information that (i) was in the
possession of or known to the Disclosee without any obligation of
confidentiality prior to receiving the information from the Disclosing Party,
(ii) is, or subsequently becomes, legally and publicly available other than by
breach of this Agreement, (iii) is obtained by the Disclosee without any
obligation of confidentiality from a source other than the Disclosing Party and
the applicable source is not in breach of an obligation of confidentiality owed
to the Disclosing Party or to any other party, or (iv) is developed by or for
the non-disclosing party without the use of Confidential Information.
(c) Lessee acknowledges and agrees that the databases respecting the Sites
maintained on behalf of Contributors are owned by Contributors may contain trade
51
secrets of Contributors. Any data from such databases provided to Lessee may
only be used by Lessee in accordance with the terms of this Agreement,
including, without limitation, this Section 6.12.
(d) Each party agrees that if this Agreement is terminated prior to the
Initial Closing, then within fifteen (15) business days after being so requested
by the Disclosing Party, the Disclosee will return or destroy (at its option)
all documents thereof furnished by the Disclosing Party. Except to the extent
the Disclosee is advised by counsel such destruction is prohibited by Law, the
Disclosee will also destroy all written material, memoranda, notes, copies,
excerpts and other writings or recordings whatsoever in its possession prepared
by it or its Representatives based upon, containing or otherwise reflecting any
Confidential Information. Any destruction of materials will be confirmed in
writing by the Disclosee. Any Confidential Information that is not returned or
destroyed, including, without limitation, any oral Confidential Information,
will remain subject to the confidentiality obligations set forth in this Section
6.12. Notwithstanding the foregoing, (i) Lessee will not be required to destroy
or return any Confidential Information related to any Leased Property of each
Site converted into a Master Lease Site at a Closing following such Closing or
to any Pre-Lease Site, (ii) following any Closing hereunder, Contributors and
Sprint will be deemed to be the Disclosee and Lessee will be deemed to be the
Disclosing Party with respect to all Confidential Information included in or
related to the Leased Property of each Site converted into a Master Lease Site
at each applicable Closing and to each Pre-Lease Site for all purposes under
this Agreement and (iii) the Disclosee may retain one (1) archival copy of the
Disclosing Party's Confidential Information solely for the purpose of use, to
the extent necessary, in the prosecution or defense of any litigation, dispute
resolution, arbitration, mediation or as may be necessary, in the reasonable
discretion of the Disclosee, for the reason of resolving any threatened
litigation, dispute resolution, arbitration or mediation or other dispute.
(e) Effective as of the date of this Agreement, the Confidentiality
Agreement and the Sprint Confidentiality Agreement will terminate automatically
and will be of no further force or effect, except as expressly provided in the
Confidentiality Agreement or the Sprint Confidentiality Agreement, respectively.
(f) Nothing contained in this Section 6.12 will be deemed to prohibit (i)
any disclosure deemed by Lessee to be necessary or desirable in connection with
curing or addressing any Exceptions or obtaining Ground Lessor Estoppels prior
to the Initial Closing Date or (ii) from and after the Initial Closing, any use
or disclosure of information relating to this Agreement, the Sites or the Leased
Property as Lessee may deem necessary or desirable in connection with the
operation of its business and the Sites (including, without limitation, in
connection with any financing), except, in each case, with respect to those
matters that Sprint reasonably has informed Lessee constitute Sprint's or
Contributors' trade secrets (as defined by applicable Law), provided that any
information related to the conduct or operation of the Collocation Business or
the Sites will not constitute such trade secrets.
SECTION 6.13 Lessee's Efforts.
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(a) Lessee will promptly notify Contributors of any proposal by any of the
institutions party to a Financing Commitment to withdraw, terminate or make a
material change in the amount or terms of such Financing Commitment that could
reasonably be expected to adversely affect the ability of Lessee to consummate
the financing contemplated by such Financing Commitment in accordance with its
terms. In addition, upon Contributors' reasonable request, Lessee will advise
and update Contributors, in a level of detail reasonably satisfactory to
Contributors, with respect to the status, proposed closing date, and material
terms of the Financing Commitments. Lessee will not consent to any amendment,
modification or early termination of any Financing Commitment that could
reasonably be expected to adversely affect the ability of Lessee to consummate
the transactions contemplated by this Agreement.
(b) Lessee will, and will cause its Affiliates to, use commercially
reasonable efforts to (i) maintain the effectiveness of the Financing
Commitments in accordance with their terms and obtain alternative financing if
necessary to consummate the transactions contemplated by this Agreement, (ii)
enter into definitive documentation with respect to the Financing Commitments,
or any alternative financing necessary to consummate the transactions
contemplated by this Agreement, (iii) satisfy all funding conditions to the
Financing Commitments or any alternative financing set forth in the definitive
documentation with respect to the financing contemplated by the Financing
Commitments, or alternative financing necessary to consummate the transactions
contemplated by this Agreement, (iv) consummate the financing contemplated by
the Financing Commitments (including by extension of the Financing Commitments
on substantially equivalent or better terms) or, if the Financing Commitments
expire, obtaining alternative financing in an aggregate principal amount equal
to the amounts set forth in, and on terms substantially equivalent to or better
than the terms of, the Financing Commitments.
SECTION 6.14 Employee Matters.
(a) At any time prior to the Initial Closing, Lessee may, or may cause an
Affiliate to, make offers of employment to be effective as of the Initial
Closing to all or certain employees of the Collocation Business (each employee
who accepts Lessee's offer will be referred to as a "Transferred Employee");
provided, that Lessee and its Affiliates will have no obligation to make any
such offers. If made, such offer(s) will include for each Transferred Employee
(i) benefits under Lessee's 401(k) Plan and benefit accruals for service after
the Initial Closing under Lessee's Pension Plan which are the same benefits
Lessee provides for its employees who work in Lessee's business, and (ii)
welfare benefits under Lessee's welfare plans (as defined in Section 3(1) of
ERISA), which are the same to the maximum extent practicable as the welfare
benefits Lessee provides for its similarly situated employees.
(b) 401(k) Plans.
(i) Contributors will make contributions on behalf of the Transferred
Employees to the Contributors Benefit Plan which is the Contributors
Retirement Savings Plan (the "Retirement Savings Plan") through the Initial
Closing, but Contributors will take such action as necessary or appropriate
to
53
assure that no Transferred Employee will be eligible to make or receive
contributions under such plan for any period ending after the Initial
Closing and that no Transferred Employee will be eligible to otherwise
actively participate in such plan after the Initial Closing. Contributors
will take whatever action is necessary or appropriate with respect to each
Transferred Employee to provide the same opportunity to each applicable
Transferred Employee to repay his or her loan or loans, if any, from the
applicable plan as currently provided under the terms of the Retirement
Savings Plan upon a termination of employment.
(ii) The Transferred Employees will be eligible as of the Initial
Closing to participate in a plan established, maintained or adopted by
Lessee or the applicable Affiliate which is described in Section 401(k) of
the Code (individually a "Lessee 401(k) Plan") and which will provide for
elective deferrals (as the deferrals are described in Section 402(g)(3)(A)
of the Code) by participants under Section 401(k) of the Code and for
matching contributions (as described in Section 401(m)(4)(A)(ii) of the
Code) by Lessee or such Affiliate with respect to the elective deferrals.
The Lessee 401(k) Plan will provide that the Transferred Employees will
have the right to make direct rollovers to the applicable plan of their
vested accounts in the Retirement Savings Plan to the extent those
rollovers constitute "eligible rollover distributions" within the meaning
of Section 402(c)(4) of the Code. The Transferred Employees will receive
credit under the Lessee 401(k) Plan for all service with Contributors for
purposes of satisfying any service requirement to participate in the
applicable plan and any service requirement to earn a nonforfeitable
benefit under the applicable plan.
(c) Pension Plans.
(i) Contributors will take such action as necessary or appropriate to
assure that Transferred Employees will be eligible to accrue any benefits
for service completed or compensation paid for periods before the Initial
Closing under the Contributors Benefit Plan which is the Contributors
Retirement Pension Plan (the "Retirement Pension Plan") and that no
Transferred Employee will be eligible to otherwise actively participate in
the applicable plan after the Initial Closing.
(ii) If any employees of Lessee (as determined in accordance with the
rules under Section 414(b) and Section 414(c) of the Code) participate in
any defined benefit plan (as defined in Section 414(j) of the Code) other
than a multiemployer plan (as defined in Section 414(f) of the Code)
(individually a "Lessee Pension Plan"), the Transferred Employees will be
eligible to participate in the applicable plan as of the Initial Closing.
If there is more than one Lessee Pension Plan, the Transferred Employees
will be eligible to participate in the Lessee Pension Plan which in
Lessee's reasonable judgment provides benefits which in the aggregate are
more like the benefits provided under the Retirement Pension Plan than the
benefits provided under any other Lessee Pension Plan. The Transferred
Employees will receive credit under the Lessee Pension Plan in which the
Transferred Employees participate for all service with
54
Contributors for purposes of satisfying any service requirement to
participate in the applicable plan and any service requirement to earn a
nonforfeitable benefit under the applicable plan, but Lessee will have no
obligation to provide the applicable service credit for purposes of
computing any Transferred Employee's accrued benefit under the applicable
plan.
(d) Medical and Related Healthcare Benefits and Life Insurance.
(i) Contributors will continue after the Initial Closing to make
available to each Transferred Employee coverage under the Contributors
Benefit Plans which are welfare plans (as defined in Section 3(1) of
ERISA), including post-retirement health and dental benefit coverage, to
the same extent, and subject to the same terms and conditions, that the
coverage would be continued under the terms of the applicable plans for any
other former employee, and each applicable Transferred Employee who
satisfies the age and service requirements for post-retirement health and
dental benefit coverage immediately prior to the Initial Closing will have
the same opportunity to receive coverage after the Initial Closing as if
the applicable Transferred Employee had terminated employment immediately
prior to the Initial Closing.
(ii) Lessee on the Initial Closing will make available to the
Transferred Employees Lessee's welfare plans (as defined in Section 3(1) of
ERISA) consistent with the requirements of Section 6.14(a)(ii), and each
Transferred Employee will receive full credit under Lessee's welfare plans
for all service completed with Contributors; provided, that Lessee will
have no obligation to provide service credit for purposes of determining
any applicable Transferred Employee's eligibility to receive
post-retirement welfare benefits.
SECTION 6.15 2004 Audited Financials; Unaudited Stub Period Financials.
On or prior to March 31, 2005, regardless of whether the Initial Closing
will have theretofore occurred, Contributors will deliver to Lessee true and
correct copies of the audited consolidated statements of operations of the Sites
for the fiscal year ended December 31, 2004, including the notes thereto,
prepared in compliance with Rule 3-14 of Regulation S-X of the SEC, as
applicable to Lessee or its Affiliates. All of the foregoing financial
statements are collectively referred to in this Agreement as the "2004 Financial
Statements." Except as disclosed in the 2004 Financial Statements, the 2004
Financial Statements will present fairly in all material respects the results of
operations of the Sites on a consolidated basis for the applicable periods
indicated, in each case in conformity with GAAP consistently applied except as
noted in the 2004 Financial Statements. The 2004 Financial Statements (including
the notes thereto) will be prepared from the books, accounts and financial
records of Contributors. As soon as practicable upon request of Lessee (but in
any event within forty (40) days after the end of each fiscal quarter),
Contributors will deliver to Lessee unaudited consolidated statements of
operations of the Sites for the prior stub period(s), provided, that
Contributors will have no obligation to deliver any such stub period statements
for periods beginning after the Initial Closing Date.
55
SECTION 6.16 Exclusivity; Return of Confidential Information.
(a) Except with respect to the Excluded Assets, Strategic Sites or Excluded
Sites, Contributors will not (and will not cause or permit any of their
respective Affiliates, Subsidiaries, directors, officers, employees, or agents
to) (i) solicit, initiate or encourage the submission of any proposal or offer
from any Person relating to the acquisition or lease of all or substantially all
of the Sites (a "Competing Transaction"), including, without limitation, from
any Person (other than Lessee or its Affiliates) that was at any time involved
in the bidding and selection process for the sale or Lease of the Sites (the
"Auction") in 2004 or 2005; or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. Contributors will notify Lessee
immediately if any Person makes any proposal, offer, inquiry, or contact with
respect to any Competing Transaction.
(b) Sprint agrees not to release or permit the release of any Person from,
or to waive or permit the waiver of any provision of, any confidentiality,
"standstill" or similar agreement to which Sprint or any of its Affiliates is a
party with respect to the Auction, and will use its commercially reasonable
efforts to enforce or cause to be enforced each such agreement at the request of
Lessee. Sprint will promptly request each Person that has executed a
confidentiality agreement in connection with the Auction or its consideration of
any other Competing Transaction to return all Confidential Information
heretofore furnished to such Person by or behalf of Sprint or its Affiliates.
SECTION 6.17 Notices of Certain Events.
Contributors will promptly notify Lessee of:
(a) any changes or events with respect to the Leased Property of a Site
which, individually or in the aggregate, have had or would reasonably be
expected to have a Tower Liability;
(b) any notice or other communication from any Governmental Authority in
connection with the transactions contemplated by this Agreement; and
(c) (i) the damage or destruction by fire or other casualty of the Leased
Property of any Site or part thereof, (ii) in the event that the Leased Property
of the Sites or part thereof becomes the subject of any proceeding or, to
Contributors' knowledge, threatened proceeding, for the taking thereof or any
part thereof or of any right relating thereto by condemnation, eminent domain or
other similar governmental action, or (iii) any foreclosure, deed-in-lieu of
foreclosure, or similar proceeding with respect to any Lien against a Site,
including any Ground Lessor Mortgage.
SECTION 6.18 Sprint and its Affiliates' Rights.
Notwithstanding any other provision in this Agreement or any Collateral
Agreement, the parties acknowledge and agree that, except with respect to the
Sites (other than the Excluded Sites and Strategic Sites), nothing in this
Agreement or any Collateral Agreement is intended to create any prohibition or
restriction on Sprint's
56
and/or its Affiliates (other than Lessor) ability to construct, lease or
otherwise obtain the right to use (and lease tower space to third parties)
wireless communications tower sites.
ARTICLE 7
CONDITIONS TO LESSEE'S OBLIGATION TO CLOSE
Lessee's obligation to consummate the transactions contemplated by this
Agreement is subject to the satisfaction on or prior to the applicable Closing
Date (unless otherwise provided below) of each of the following conditions, any
or all of which may be waived in whole or in part by Lessee:
SECTION 7.1 Representations, Warranties and Covenants of Contributors and
Sprint.
(a) The representations and warranties of Contributors and Sprint contained
in Article 4 will be true and correct in all respects, in each case as of the
date of this Agreement and as of the Initial Closing Date, except for
representations and warranties that speak as of a specific date or time other
than the date of this Agreement and the Initial Closing Date (which need only be
true and correct as of such specified date or time); provided, that the
conditions precedent in this Section 7.1 will nevertheless be deemed satisfied
unless the inaccuracy, falsity or incorrectness of such representations or
warranties would reasonably be expected to have a Material Adverse Effect.
(b) The covenants and agreements of Contributors and Sprint to be performed
on or before the Initial Closing Date in accordance with this Agreement will
have been duly performed in all material respects.
(c) Lessee will have received a certificate from (i) Contributors signed on
behalf of each Contributor by an authorized officer of Contributors and (ii) an
authorized officer of Sprint with respect to itself, in each case, to the effect
set forth in paragraphs (a) and (b) above dated the Initial Closing Date.
SECTION 7.2 HSR Filings.
At the Initial Closing Date, any waiting periods applicable to the
consummation of the transactions contemplated by this Agreement under the HSR
Act will have expired or been terminated, or Contributors and Lessee will have
mutually concluded that no filing under the HSR Act is required with respect to
the transactions contemplated by this Agreement, and no action will have been
instituted by the United States Department of Justice or the United States
Federal Trade Commission challenging or seeking to enjoin the consummation of
the transactions contemplated by this Agreement, which action will not have been
withdrawn or terminated.
SECTION 7.3 No Injunction or Proceedings.
At the Initial Closing Date, there will be no Order that is in effect that
prohibits the Initial Closing and no legal proceedings will be pending involving
any challenge to, or seeking material damages or other relief in connection
with, any of the other
57
transactions contemplated by this Agreement and the Collateral Agreements or
that would reasonably be expected to have the effect of preventing, delaying,
making illegal or otherwise materially interfering with the transactions
contemplated by this Agreement and the Collateral Agreements.
SECTION 7.4 Collateral Agreements and Additional Closing Deliveries.
(a) Contributors and Lessor will have executed and delivered to Lessee (i)
the Lease Agreement (including the applicable Site Designation Supplements),
(ii) the Transition Services Agreement in form and substance reasonably
satisfactory to Lessee, (iii) the Property Use Agreement, (iv) the Separateness
Agreement, and (v) such other agreements and documents contemplated by Section
2.6 of this Agreement.
(b) As a condition to each Technical Closing, Contributors and Lessor will
have executed and delivered to Lessee (i) amended schedules and exhibits to each
of the Lease Agreement (including the applicable Site Designation Supplements)
and (ii) such other agreements and documents contemplated by Section 2.7 of this
Agreement.
(c) At the Initial Closing, on the terms and subject to the conditions of
this Agreement, Contributors (individually and jointly, as applicable) will
deliver, or cause to be delivered, to Lessee:
(i) as a protective delivery, a duly executed certification of
non-foreign status of Lessor in a form complying with the requirements of
Section 1445 of the Code (a "FIRPTA Certificate"); provided, however, that
if Lessor fails to deliver such FIRPTA Certificate, Lessee will be entitled
to withhold all requisite amounts, if any, in accordance with Section 1445
of the Code;
(ii) with respect to each Ground Lease and Collocation Agreement, all
correspondence and memoranda related to the same, to the extent that Sprint
and/or Contributors are in possession of such correspondence and memoranda;
(iii) the items that Lessee may have reasonably requested pursuant to
the second sentence of Section 6.3 in order that Lessee's counsel may
provide certain bankruptcy-related opinion letters in connection with
financing transactions undertaken by Lessee;
(iv) a copy of the determination of "No Hazard" to air navigation from
the FAA for each Tower with respect to which such determination is
required, to the extent that such determinations were issued and Sprint
and/or Contributors are in possession of such determinations;
(v) all keys and other security access codes or devices providing
entry to the Towers (other than Sprint's Improvements);
(vi) a copy of the currently existing FCC Form 854R for each Tower
with respect to which such form is required, to that extent that such forms
were created and Sprint and/or Contributors are in possession of such
forms;
58
(vii) the books, files and records required pursuant to this
Agreement;
(viii) certificates of good standing of each Contributor issued as of
a date no more than thirty (30) days prior to the Closing Date by the
appropriate Secretary of State or comparable official in each entity's
State of formation of each Contributor; and
(ix) such other items and certificates contemplated by Section 2.6 or
Section 2.7 as may be reasonably required to consummate the transactions
contemplated hereby.
(d) The condition set forth in the Section 2.6(h) shall have been satisfied
SECTION 7.5 Contributable Sites and Master Lease Sites.
At the Initial Closing, as determined by Lessee in its reasonable
discretion, (i) no less than sixty-five percent (65%) of the Sites will be
Contributable Sites and (ii) no less than fifty percent (50%) of the Sites will
be Master Lease Sites for which the Individual Site Closing Conditions have been
satisfied or waived by Lessee (in Lessee's discretion), such percentages based
on the ratio of the aggregate Rents and Pre-Lease Rents allocable to the Leased
Property at such Contributable Sites and Master Lease Sites, as the case may be,
divided by the aggregate Rents and Pre-Lease Rents payable with respect to all
Sites, in each case as set forth on Exhibit H to the Lease Agreement (which will
be agreed by the parties prior to the Initial Closing as set forth in Section
3.9). Any waiver of the foregoing conditions, in whole or part, will in no event
effect whether (or not) a Site satisfies the conditions for a Financeable Site;
however if Lessee elects to waive an Exception with respect to a Site for
purposes of this Section 7.5 or Section 7.6 below and does not obtain the
consent of the affected Contributor, then, notwithstanding anything to the
contrary in this Agreement, neither Contributors nor Lessor will be responsible
for, and Lessee agrees to indemnify Contributors and Lessor from and against,
any Liabilities resulting from or arising in connection with any such waived
Exception.
SECTION 7.6 Individual Site Closing Conditions.
The Individual Site Closing Conditions with respect to any Master Lease
Site which is to be Leased by Lessor to Lessee at such Closing will have been
satisfied or waived by Lessee (however such waiver will in no event effect
whether (or not) a Site satisfies the conditions for a Financeable Site).
ARTICLE 8
CONDITIONS TO CONTRIBUTORS', SPRINT'S
AND LESSOR'S OBLIGATIONS TO CLOSE
Contributors', Sprint's and Lessor's obligations to consummate the
transactions contemplated by this Agreement are subject to the satisfaction on
or prior to the applicable Closing Date (unless otherwise provided below) of
each of the following
59
conditions, any or all of which may be waived in whole or in part by
Contributors, Sprint and Lessor:
SECTION 8.1 Representations, Warranties and Covenants of Lessee.
(a) The representations and warranties of Lessee contained in Article 5
will be true and correct in all respects, in each case as of the date of this
Agreement and as of the Initial Closing Date, except for representations and
warranties that speak as of a specific date or time other than the date of this
Agreement or the Initial Closing Date (which need only be true and correct as of
such specified date or time); provided, that the conditions precedent set forth
in this Section 8.1(a) will be deemed satisfied unless the inaccuracy, falsity
or incorrectness of such representations and warranties would reasonably be
expected to have a Lessee Material Adverse Effect.
(b) The covenants and agreements of Lessee to be performed on or before the
Initial Closing Date in accordance with this Agreement will have been duly
performed in all material respects.
(c) Contributors will have received a certificate from Lessee signed on
behalf of Lessee by an authorized officer of Lessee with respect to itself to
the effect set forth in paragraphs (a) and (b) above dated the Initial Closing
Date.
SECTION 8.2 HSR Filings.
At the Initial Closing Date, any waiting periods applicable to the
consummation of the transactions contemplated by this Agreement under the HSR
Act will have expired or been terminated, or Contributors and Lessee will have
mutually concluded that no filing under the HSR Act is required with respect to
the transactions contemplated by this Agreement, and no action will have been
instituted by the United States Department of Justice or the United States
Federal Trade Commission challenging or seeking to enjoin the consummation of
the transactions contemplated by this Agreement, which action will not have been
withdrawn or terminated.
SECTION 8.3 No Injunction or Proceedings.
At the Initial Closing Date, there will be no Order that is in effect that
prohibits the Initial Closing and no legal proceedings will be pending involving
any challenge to, or seeking material damages or other relief in connection
with, any of the other transactions contemplated by this Agreement and the
Collateral Agreements or that would reasonably be expected to have the effect of
preventing, delaying, making illegal or otherwise materially interfering with
the transactions contemplated by this Agreement and the Collateral Agreements.
SECTION 8.4 Collateral Agreements.
(a) Lessee will have executed and delivered to Contributors and Lessor (i)
the Lease Agreement (including the applicable Site Designation Supplements),
(ii) the Transition Services Agreement in form and substance reasonably
satisfactory to
60
Contributors and Sprint, (iii) the Separateness Agreement, and (iv) such other
agreements and documents contemplated by Section 2.6.
(b) As a condition to each Technical Closing, Lessee will have executed and
delivered to Contributors and Lessor (i) amended schedules and exhibits to the
Lease Agreement (including the applicable Site Designation Supplements), and
(ii) such other agreements and documents contemplated by Section 2.7.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
SECTION 9.1 Indemnification Obligations of Contributors and Sprint.
(a) Contributors and Sprint will, jointly and severally, indemnify and hold
harmless each of the Lessee Indemnified Parties from, against and in respect of
any and all claims, liabilities, obligations, losses, costs, expenses,
penalties, fines and judgments (at equity or at law) and damages whenever
arising or incurred (including amounts paid in settlement and reasonable
attorneys' fees and expenses) (any of the foregoing, a "Loss") arising out of or
relating to:
(i) any breach or inaccuracy of any representation or warranty made by
Contributors or Sprint in Article 4 of this Agreement;
(ii) any breach or nonperformance of any covenant, agreement or
undertaking made by Contributors or Sprint in this Agreement;
(iii) any Taxes of Sprint, Contributors or Lessor (other than any
Taxes which Lessee expressly assumes or agrees to indemnify against
pursuant to the Lease Agreement);
(iv) the Excluded Assets;
(v) the Excluded Liabilities; and
(vi) the foreclosure, deed-in-lieu of foreclosure or similar action by
the holder of a Ground Lessor Mortgage that results in the Loss of a Site
by Lessee.
(b) Neither Sprint nor Contributors will have any liability under any
provision of this Agreement for any Losses to the extent that such Losses relate
to the negligence, willful misconduct or breach of any representation, warranty,
covenant or agreement of Lessee contained in this Agreement or any Collateral
Agreement or by any other Person (other than Contributors, Lessor, Sprint or
their respective Affiliates) or their respective officers, agents, employees,
representatives, contractors, licensees, tenants or subtenants.
61
(c) Neither Sprint nor Contributors will have any liability under any
provision of this Agreement for Losses to the extent such Losses relate to the
actions or obligations of Lessor under the Lease Agreement, such indemnities
being only as and to the extent set forth in the Lease Agreement.
(d) Lessee will take and will cause its Affiliates to take reasonable steps
to mitigate any Losses upon becoming aware of any event which would reasonably
be expected to or does give rise to any claim for Losses under this Article 9,
but will not be required to incur costs to remedy the breach which gives rise to
the Losses.
(e) In the event of a Loss for which indemnification would be available to
a Lessee Indemnified Party under Section 9.1(a)(vi), the damage for such Loss
shall be measured by reference to the unamortized portion of the Rent or
Pre-Lease Rent allocable to the lost Site as set forth on Exhibit H to the Lease
Agreement.
(f) The rights of the Lessee Indemnified Parties to indemnification under
this Agreement will not be affected by any investigation conducted or actual or
constructive knowledge acquired at any time by a Lessee Indemnified Party,
whether before or after the date hereof or any Closing Date; provided, however,
that if Lessee is aware of any matter or condition that would permit Lessee not
to close the transactions contemplated hereby under Section 7.1(a) and Lessee
nonetheless proceeds to the Initial Closing, then the Lessee Indemnified Parties
will have no right to seek indemnification under Section 9.1(a)(i) with respect
to Losses resulting or arising from such matter or condition.
SECTION 9.2 Indemnification Obligations of Lessee.
(a) Lessee will indemnify and hold harmless each of the Contributors
Indemnified Parties from, against and in respect of any and all Losses arising
out of or relating to:
(i) any breach or inaccuracy of any representation or warranty made by
Lessee in Article 5 of this Agreement; or
(ii) any breach or nonperformance of any covenant, agreement or
undertaking made by Lessee in this Agreement.
(b) Lessee will not have any liability under any provision of this
Agreement for any Losses to the extent that such Losses relate to the
negligence, willful misconduct or breach of any representation, warranty,
covenant or agreement of Contributors or Sprint contained in this Agreement or
any Collateral Agreement or by any other Person (other than Lessee or its
Affiliates) or their respective officers, agents, employees, representatives,
contractors, licensees, tenants or subtenants.
(c) Contributors and Sprint will take and will cause their respective
Affiliates to take all reasonable steps to mitigate any Losses upon becoming
aware of any event which would reasonably be expected to or does give rise to
any claim for Losses under this Article 9, but will not be required to incur
costs to remedy the breach which gives rise to the Losses.
62
(d) The rights of the Contributors Indemnified Parties to indemnification
under this Agreement will not be affected by any investigation conducted or
actual or constructive knowledge acquired at any time by a Contributors
Indemnified Party, whether before or after the date hereof or any Closing Date;
provided, however, that if Contributors is aware of any matter or condition that
would permit Contributors not close the transactions contemplated hereby under
Section 8.1(a) and Contributors nonetheless proceed to the Initial Closing, then
the Contributor Indemnified Parties will have no right to seek indemnification
under Section 9.2(a)(i) with respect to Losses resulting or arising from such
matter or condition.
(e) Indemnification of Contributors with respect to Lessee's failure to
perform, discharge or satisfy any of the Assumed Liabilities will be limited as
and to the extent provided in the Lease Agreement.
(f) Lessee's payment and indemnification obligations with respect to Taxes
will be governed solely under Section 16 and Section 39 of the Lease Agreement
and not this Article 9.
SECTION 9.3 Indemnification Procedure for Third Party Claims.
(a) Promptly after receipt by an Indemnified Party of notice by a third
party of a threatened or filed complaint or the threatened or actual
commencement of any audit, investigation, action or proceeding with respect to
which such Indemnified Party may be entitled to receive payment from the other
party for any Loss, such Indemnified Party will provide written notification to
Lessee, Sprint or Contributors, whoever is the appropriate indemnifying party
under this Agreement (the "Indemnifying Party"), within thirty (30) days of the
Indemnified Party's becoming aware of the threatening or filing of such
complaint or of the Indemnified Party's becoming aware of the threatened or
actual commencement of such audit, investigation, action or proceeding;
provided, that the failure to so notify the Indemnifying Party will relieve the
Indemnifying Party from liability under this Agreement with respect to such
claim only to the extent that such failure to notify the Indemnifying Party
results in (i) the forfeiture by the Indemnifying Party of rights and defenses
otherwise available to the Indemnifying Party with respect to such claim or (ii)
prejudice to the Indemnifying Party with respect to such claim. The Indemnifying
Party will have the right, upon written notice delivered to the Indemnified
Party within thirty (30) days thereafter, to assume the defense of such
complaint, audit, investigation, action or proceeding, including the employment
of counsel and the payment of the fees and disbursements of such counsel
reasonably acceptable to the Indemnified Party. In the event, however, that the
Indemnifying Party declines or fails to assume the defense of the audit,
investigation, action or proceeding on the terms provided above within such
thirty (30) day period, then the Indemnified Party may employ counsel to
represent or defend it in any such audit, investigation, action or proceeding
and the Indemnifying Party will pay the reasonable fees and disbursements of
such counsel as incurred; provided, that the Indemnifying Party will not be
required to pay the fees and disbursements of more than one counsel (in addition
to local counsel) for all Indemnified Parties in any single audit,
investigation, action or proceeding. In any audit, investigation, action or
proceeding with respect to which indemnification is being sought under this
Agreement, the Indemnified Party or the Indemnifying Party, whichever is not
assuming
63
the defense of such action, will have the right to participate in such matter
and to retain its own counsel at such party's own expense. The Indemnifying
Party or the Indemnified Party, as the case may be, will at all times use
reasonable efforts to keep the Indemnifying Party or the Indemnified Party, as
the case may be, reasonably apprised of the status of any matter the defense of
which they are maintaining and to cooperate in good faith with each other with
respect to the defense of any such matter.
(b) No Indemnified Party may settle or compromise any claim or consent to
the entry of any judgment with respect to which indemnification is being sought
under this Agreement without the prior written consent of the Indemnifying
Party, other than with respect to Shared Ground Lease Payments the settlement
and/or compromise of which will be governed by Section 3.4.
(c) In the event an Indemnified Party will claim a right to payment
pursuant to this Agreement not involving a third party claim covered by Section
9.1 or Section 9.2, such Indemnified Party will send written notice of such
claim to the appropriate Indemnifying Party. Such notice will specify in
reasonable detail the basis for such claim. As promptly as possible after the
Indemnified Party has given such notice, such Indemnified Party and the
appropriate Indemnifying Party will establish the merits and amount of such
claim (by mutual agreement, arbitration, litigation or otherwise) and, within
five (5) business days of the final determination of the merits and amount of
such claim, the Indemnifying Party will pay to the Indemnified Party immediately
available funds in an amount equal to such claim as determined under this
Agreement, if any.
SECTION 9.4 Indemnity Period.
The Indemnity Period under this Agreement will begin on the date of this
Agreement and will terminate as follows:
(a) the representations and warranties of the parties applicable to the
Sites for which the Leased Property at such Sites is being Leased to Lessee at
the Initial Closing or Conversion Closing, as the case may be, will survive for
180 days following the applicable Closing Date and all other representations and
warranties of the parties will survive for ninety (90) days following the Final
Closing Date; provided, that the following representations and warranties will
survive indefinitely: Section 4.1 (Organization), Section 4.2 (Authority; No
Conflicts), Section 4.8 (Brokers; Finders, etc.), Section 5.1 (Incorporation),
Section 5.2 (Authority), Section 5.3 (No Conflicts) and Section 5.6 (Brokers,
Finders, etc.);
(b) the covenants and agreements of the parties contemplated to be
satisfied prior to the Initial Closing will not survive the Initial Closing;
(c) the covenants and agreements of the parties applicable to the Sites for
which the Leased Property at such Sites is being Leased to Lessee at a Closing
that are contemplated to be satisfied prior to such Closing will not survive
such Closing;
64
(d) any covenants and agreements (including those set forth in Sections 9.1
and 9.2) that expressly contemplate action to be taken after any such Closing
will survive such Closing in accordance with their terms;
(e) the provisions of Section 9.1(a)(iii) will survive until the date that
is sixty (60) days following the expiration of the applicable statute of
limitations, including as it may be extended from time to time by either of the
parties; and
(f) the provisions of Section 9.1(a)(iv) and Section 9.1(a)(v) will survive
indefinitely.
Notwithstanding the foregoing, if, prior to the close of business on the
last day of the applicable Indemnity Period, an Indemnifying Party has been
properly notified of a claim for Losses under this Agreement and such claim has
not been finally resolved or disposed of at such date, such claim will continue
to survive and will remain a basis for indemnity under this Agreement until such
claim is finally resolved or disposed of in accordance with the terms of this
Agreement.
SECTION 9.5 Liability Limits.
(a) The Lessee Indemnified Parties will not make a claim against
Contributors or Sprint for indemnification under Section 9.1 for any single Loss
less than $15,000 (each, a "De Minimis Claim"), unless and until the aggregate
amount of Losses under Section 9.1, including for this purpose any De Minimis
Claims, exceeds $10,000,000 (the "Lessee Deductible"); provided, that claims for
indemnification (x) for breaches of the representations and warranties of Sprint
or Contributors, as applicable, set forth in Section 4.1 (Organization), Section
4.2 (Authority; No Conflicts), and Section 4.8 (Brokers, Finders, etc.), (y)
under Section 9.1(a)(ii), Section 9.1(a)(iii), Section 9.1(a)(iv) and Section
9.1(a)(v), and (z) as set forth in Section 3.3(b)(ii)(4), will not be subject to
the Lessee Deductible or the De Minimis Claim amount.
(b) The Contributors Indemnified Parties will not make a claim against
Lessee for indemnification under Section 9.2 for any De Minimis Claim, unless
and until the aggregate amount of Losses under Section 9.2, including for this
purpose any De Minimis Claims, exceeds $10,000,000 (the "Contributors
Deductible"); provided, that claims for indemnification (x) for breaches of the
representations and warranties of Lessee set forth in Section 5.1
(Incorporation), Section 5.2 (Authority), Section 5.6 (Brokers, Finders, etc.),
and Section 5.10 (Financial Capability), and (y) under Section 9.2(a)(ii), and
Section 9.2(a)(iii) will not be subject to the Contributors Deductible or the De
Minimis Claim amount.
SECTION 9.6 Exclusive Remedies.
Except for fraud, willful and intentional misrepresentation, willful and
intentional breach of any of the representations, warranties or covenants, or
any equitable remedy provided in Section 11.10, the provisions of this Article 9
set forth the exclusive rights and remedies of the Contributors Indemnified
Parties and the Lessee Indemnified Parties to seek or obtain damages or any
other remedy or relief whatsoever from any party with
65
respect to matters arising under or in connection with this Agreement and the
transactions contemplated by this Agreement.
SECTION 9.7 Netting of Losses.
The amount of any Loss for which indemnification is provided under this
Article 9 will take into account (a) any amounts recovered or recoverable by the
Indemnified Party pursuant to any indemnification by, or indemnification
agreement with, any third party, (b) any insurance proceeds or other cash
receipts or sources of reimbursement collectable by the Indemnified Party in
connection with any Losses and (c) any Tax consequences associated with such
Losses and the recovery thereof. If the amount to be netted hereunder from any
payment required under Section 9.1 or Section 9.2 of this Agreement is
determined after payment by the Indemnifying Party pursuant to this Article 9,
the Indemnified Party will repay to the Indemnifying Party, promptly after such
determination, any amount that the Indemnifying Party would not have had to pay
pursuant to this Article 9 had such determination been made at the time of such
payment.
ARTICLE 10
TERMINATION
SECTION 10.1 Termination of Agreement.
This Agreement may be terminated and the transactions contemplated by this
Agreement may be abandoned at any time prior to the Initial Closing Date:
(a) by mutual written consent of Contributors and Lessee;
(b) by either Contributors or Lessee, if the Initial Closing will not have
occurred on or prior to the day that is 180 days after the date of this
Agreement so long as the terminating party had not breached of any of its
obligations under this Agreement in a manner that substantially delayed of the
Initial Closing; provided, that neither party will have the right to terminate
this Agreement pursuant to this paragraph (b) prior to the date that is 270 days
after the date of this Agreement if the principal reason the Initial Closing has
not occurred on or prior to the day that is 180 days after the date of this
Agreement is the failure of the conditions to Closing set forth in Section 7.2
or Section 8.2 to be satisfied.
(c) by Contributors, provided that they are not then in breach of any of
their obligations under this Agreement, if Lessee (i) fails in any material
respect to perform any of its covenants in this Agreement when performance
thereof is due, (ii) has breached in any material respect any of the
representations or warranties contained in Article 5 of this Agreement and does
not cure the failure or breach within forty-five (45) days after Contributors
deliver written notice thereof, or (iii) prior to the date (the "First Milestone
Date") that is 140 days after the date of this Agreement, has failed to obtain
Ground Lessor Estoppels for at least 50% of the Sites (such percentage
calculated as set forth in Section 7.5), unless a significant reason for such
failure is the breach by Contributors or Sprint of their undertakings under
Articles 2 or 3 with respect to the identification and
66
cure of Exceptions and/or related representations or warranties (it being
understood that Lessee has agreed to the Milestones Dates in material reliance
that Contributors and Sprint will provide the resources, materials and
cooperation required to be provided by Contributors and Sprint pursuant to
Article 2 and Article 3 in connection with identifying addressing and curing any
exceptions in a timely manner), or a good faith dispute with Contributors over
the existence or cure of an Exception that results in arbitration, but in any
event provided that all other conditions to the Initial Closing will have been
satisfied (or waived by the applicable party); provided, that (A) Lessee may
elect to extend the First Milestone Date for an additional twenty-five (25) days
(the "Second Milestone Date") by written notice to Contributors and delivery of
an Additional Deposit to Escrow Agent on or before the First Milestone Date and
(B) Lessee may elect to extend the Second Milestone Date until the date that is
180 days after the date of this Agreement (the "Last Milestone Date") by written
notice to Contributors and delivery of an Additional Deposit to Escrow Agent on
or before the Second Milestone Date;
(d) by Lessee, provided that it is not then in breach of any of its
obligations under this Agreement, if Contributors (i) fail in any material
respect to perform any of their covenants in this Agreement when performance
thereof is due or (ii) have breached in any material respect any of the
representations and warranties contained in Article 4 of this Agreement and do
not cure the failure or breach within forty-five (45) days after Lessee delivers
written notice thereof; or
(e) by either Contributors or Lessee, if any permanent injunction, decree
or judgment of any Governmental Authority preventing consummation of the
transactions contemplated by this Agreement and the Collateral Agreements will
have become final and nonappealable or any Law will make consummation of the
transactions contemplated by this Agreement and the Collateral Agreements
illegal or otherwise prohibited.
SECTION 10.2 Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 10.1, this
Agreement (except for the last sentence of Section 6.1(a), Section 6.5 and
Section 6.12 and Section 11.4) will become null and void and have no effect,
without any liability on the part of any party or its directors, officers or
stockholders, except as otherwise provided in this Agreement. In the event of a
termination under Section 10.1(c) or Section 10.1(d), or with respect to the
provisions hereof that expressly survive termination, each of Lessee, Sprint and
Contributors will in all events be entitled to pursue any and all rights and
remedies therefor to which it or they may be entitled at Law or in equity,
including, without limitation, specific performance of the agreements and
covenants of the other parties contained in this Agreement as provided in
Section 11.10.
(b) If this Agreement is terminated for any reason other than (a) a
material breach by Lessee of its obligations under this Agreement, or (b) the
failure of Lessee to obtain all funds required to be provided by Lessee for the
consummation of the transactions contemplated by this Agreement, the Deposit,
together with all earnings thereon, will be returned by Escrow Agent to Lessee.
67
(c) Notwithstanding anything to the contrary contained herein, if this
Agreement is terminated by Lessee, pursuant to the last sentence of Section 3.9,
the Deposit, together with all earnings thereon, will be returned by Escrow
Agent to Lessee.
(d) If this Agreement is terminated as a result of (i) a material breach by
Lessee of its obligations under this Agreement, or (ii) the failure of Lessee to
obtain all funds required to be provided by Lessee for the consummation of the
transactions contemplated by this Agreement, the Deposit, together with all
earnings thereon, will be delivered by Escrow Agent to Contributors.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 Counterparts.
This Agreement may be executed in counterparts, each of which will be
deemed to be an original, but all of which will constitute one and the same
agreement.
SECTION 11.2 Governing Law
This Agreement will be governed by and construed in accordance with the
laws of the State of New York (regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof) as to all
matters, including matters of validity, construction, effect, performance and
remedies.
SECTION 11.3 Entire Agreement.
This Agreement (including the attached Schedules and Exhibits) and the
Collateral Agreements, constitute the entire agreement between the parties with
respect to the subject matter of the Agreement and supersede all prior
agreements, both written and oral, between the parties with respect to the
subject matter of this Agreement. This Agreement will be binding upon and inure
solely to the benefit of each party and its successors and permitted assigns.
SECTION 11.4 Fees and Expenses.
Except as otherwise specifically set forth in this Agreement, whether the
transactions contemplated by this Agreement are or are not consummated, all
legal and other costs and expenses incurred in connection with this Agreement
and the transactions contemplated by this Agreement will be paid by the party
incurring such costs and expenses.
SECTION 11.5 Notices.
All notices, requests, demands, waivers and other communications required
or permitted under this Agreement will be in writing and will be deemed to have
been delivered (a) five (5) business days after being mailed by first-class
mail, postage prepaid, (b) the next business day when sent overnight by a
recognized courier service, (c) upon
68
confirmation when sent by telex, telegram, telecopy or other form of rapid
transmission, confirmed by mailing written confirmation at substantially the
same time as such rapid transmission, or (d) upon delivery when personally
delivered to the receiving party (which if other than an individual will be an
officer or other responsible party of the receiving party). All such notices and
communications will be mailed, sent or delivered as set forth below or to such
other person(s), telex or facsimile number(s) or address(es) as the party to
receive any such communication or notice may have designated by written notice
to the other party.
If to Contributors, to:
Sprint Spectrum, L.P.
1 International Blvd., Suite 800
Mahweh, N.J. 07495
Fax No. 201-684-4195
Attention: Don Mueller
with a copy to:
Sprint Law Department
KSOPHT0101 - Z2020
6931 Sprint Parkway
Overland Park, KS 66251
Fax No. 913-523-9823
Attention: Real Estate Attorney
and a copy to:
King & Spalding LLP
191 Peachtree Street
Atlanta, Georgia 30303-1763
Fax No. (404) 572-5146
Attention: Michael J. Egan
Raymond E. Baltz, Jr.
If to Lessee, to:
Global Signal, Inc.
301 North Cattlemen Road, Suite 300
Sarasota, Florida 34232,
Attn: Greerson G. McMullen, General Counsel
Fax: (941) 308-4294
69
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attn: Joseph A. Coco
Fax: (917) 777-3050
SECTION 11.6 Assignment; Successors and Assigns; Third-Party Beneficiaries.
This Agreement will not be assignable by any party without the express
prior written consent of the other parties to this Agreement and any such
assignment will be null and void, except that (a) each of the parties to this
Agreement may assign all or a portion of its rights and remedies (but none of
its obligations) under this Agreement to one or more of its respective
Affiliates, including, in connection with the formation of any special purpose
entity in connection with the transactions contemplated by this Agreement, (b)
Lessee may assign all or any portion of its rights and remedies to its lenders,
and (c) each of the parties may assign all or a portion of its rights, remedies
and obligations to any entity (including, without limitation, a trust) to the
extent necessary to receive Governmental Approval of any Governmental Antitrust
Authority in connection with the transactions contemplated by this Agreement
(provided that, with respect to the assignments referred to in clause (c): (i)
prior to such assignment, such entity provides the non-assigning party copies of
such entity's most recent financial statements and other information (financial
or otherwise) reasonably requested by the non-assigning party, (ii) if
reasonably requested by the non-assigning party after a review of such financial
information, the assigning party will guarantee the obligations of such entity
under this Agreement and, if applicable, each of the Collateral Agreements,
(iii) with respect to the assignment of the Leased Property of any Sites that do
not contain any Sprint Collocation Space, such entity satisfies the assignment
standards set forth in the Lease Agreement, and (iv) such entity agrees to be
bound by the terms and conditions of this Agreement as if a party to this
Agreement pursuant to an instrument in form and substance reasonably acceptable
to the non-assigning party). This Agreement will be binding upon and inure
solely to the benefit of each party and its successors and permitted assigns,
and nothing in this Agreement, express or implied, is intended to or will confer
upon any Person any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement, except for Section 9.1 which is intended to benefit
and may be enforced by any of the Lessee Indemnified Parties and Section 9.2
which is intended to benefit and may be enforced by any of the Contributors
Indemnified Parties.
SECTION 11.7 Headings; Definitions.
The Section and Article headings contained in this Agreement are solely for
the purpose of reference, are not part of the agreement of the parties and will
not in any way affect the meaning or interpretation of this Agreement. For
purposes of this Agreement, including the Exhibits and Schedules hereto,
whenever the context requires: the singular number will include the plural, and
vice versa; the masculine gender will include the
70
feminine and neuter genders; the feminine gender will include the masculine and
neuter genders; and the neuter gender will include the masculine and feminine
genders.
SECTION 11.8 Amendment; Modification.
This Agreement may be amended, modified or supplemented only by written
agreement of the parties.
SECTION 11.9 Time of Essence.
Time is of the essence in this Agreement, and whenever a date or time is
set forth in this Agreement, the same has entered into and formed a part of the
consideration for this Agreement.
SECTION 11.10 Specific Performance.
Each party recognizes and agrees that if the other party should refuse to
perform any of its obligations under this Agreement, the remedy at Law would be
inadequate and agrees that for breach of such provisions, each party will, in
addition to such other remedies as may be available to it at Law or in equity,
be entitled to injunctive relief and to enforce its rights by an action for
specific performance to the extent permitted by applicable Law. Each party
hereby waives any requirement for security or the posting of any bond or other
surety in connection with any temporary or permanent award of injunctive,
mandatory or other equitable relief. The arbitrator referred to in Section 11.15
will be empowered to enforce this Section 11.10.
SECTION 11.11 Mutual Drafting.
This Agreement is the result of the joint efforts of Lessee, Sprint and
Contributors, and each provision of this Agreement has been subject to the
mutual consultation, negotiation and agreement of the parties and there will be
no construction against any party based on any presumption of that party's
involvement in the drafting of this Agreement.
SECTION 11.12 Limitation of Liability.
Notwithstanding anything in this Agreement or the Collateral Agreements to
the contrary, neither party will be liable to the other party for indirect,
incidental, special or consequential damages, including, without limitation,
diminution in value, loss of anticipated profits and punitive damages.
SECTION 11.13 Disclosures
Disclosure of any fact or item in any Schedule to this Agreement or in the
Contributors Disclosure Letter or the Lessee Disclosure Letter, by reference to
a particular section in this Agreement will be deemed to be disclosed with
respect to every other section in this Agreement if such disclosure would permit
a reasonable person to find such disclosure applicable to such other sections;
however such disclosure will in no event affect whether (or not) a Site
satisfies the conditions for a Financeable Site or
71
otherwise affect the rights or obligations of the parties hereunder except with
respect to the representations and warranties of the disclosing party. The
specification of any dollar amount in the representations or warranties
contained in this agreement or the inclusion of any specific item in any
Schedules to this Agreement or in the Contributors Disclosure Letter or the
Lessee Disclosure Letter is not intended to imply that such other amounts,
higher or lower amounts or the items so included or other items, are or are not
material.
SECTION 11.14 Jurisdiction and Consent to Service.
Without limiting the jurisdiction or venue of any other court, Lessee and
each Contributor (a) agree that any suit, action or proceeding arising out of or
relating to this Agreement will be brought solely in the state or federal courts
of the State of New York, (b) consent to the exclusive jurisdiction of each such
court in any suit, action or proceeding relating to or arising out of this
Agreement, (c) waive any objection which it may have to the laying of venue in
any such suit, action or proceeding in any such court, and (d) agree that
service of any court paper may be made in such manner as may be provided under
applicable laws or court rules governing service of process.
SECTION 11.15 Waiver of Jury Trial.
(a) EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY COURT ACTION ARISING
AMONG ANY OF THE PARTIES, WHETHER UNDER OR RELATING TO THIS AGREEMENT, AND
WHETHER MADE BY CLAIM, COUNTER CLAIM, THIRD PARTY CLAIM OR OTHERWISE. If for any
reason the jury waiver is held to be unenforceable, the parties agree to binding
arbitration for any dispute arising out of this Agreement or any claim arising
under any federal, state or local statutes, laws or regulations, under the
applicable commercial rules of the AAA and 9 U.S.C. ss. 1, et. seq. Any
arbitration (other than an arbitration pursuant to Section 3.5) will be held in
the New York, New York metropolitan area and be subject to the Governing Law
provision of this Agreement. Discovery in the arbitration will be governed by
the Local Rules applicable in the United States District Court for the Southern
District of New York.
(b) The agreement of each party to waive its right to a jury trial will be
binding on its successors and assigns and will survive the termination of this
Agreement.
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each
of the parties as of the day first above written.
SPRINT CORPORATION
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
CONTRIBUTORS:
APC REALTY & EQUIPMENT COMPANY, LLC
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
AMERICAN PCS COMMUNICATIONS, LLC
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
AMERICAN PCS, L.P.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
MASSPCSCO
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
73
PCS LEASING COMPANY, L.P.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
PHILLIECO, L.P.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
SPRINT PCS ASSETS L.L.C.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
SPRINT SPECTRUM EQUIPMENT COMPANY L.P.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
74
SPRINT SPECTRUM L.P.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
SPRINT SPECTRUM REALTY COMPANY L.P.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
SPRINT TELEPHONY PCS, L.P.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
SPRINTCOM EQUIPMENT COMPANY L.P.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
75
SPRINTCOM, INC.
By: /s/ Les Meredith
--------------------------------------------
Name: Les Meredith
Title: Vice President Mergers & Acquisitions
GLOBAL SIGNAL INC.
By: /s/ Wesley R. Edens
--------------------------------------------
Name: Wesley R. Edens
Title: Chief Executive Officer and
Chairman of the Board
76
EXHIBIT D
MASTER LEASE AND SUBLEASE
BY AND
AMONG
[SPRINT SPV],
[APPLICABLE SPRINT ENTITIES],
[LESSEE]
AND
GLOBAL SIGNAL INC.
Dated as of [_____________, 2005]
TABLE OF CONTENTS
Page
SECTION 1. Definitions.................................................................................1
SECTION 2. Documents..................................................................................17
SECTION 3. Master Lease Sites and Pre-Lease Sites.....................................................17
SECTION 4. Ground Leases..............................................................................19
SECTION 5. Collocation Agreements.....................................................................24
SECTION 6. Sprint Collocation Space...................................................................26
SECTION 7. Permitted Use..............................................................................29
SECTION 8. Access.....................................................................................30
SECTION 9. Term.......................................................................................30
SECTION 10. Withdrawal.................................................................................32
SECTION 11. Rent and Pre-Lease Rent; Sprint Collocation Charge.........................................32
SECTION 12. Condition of the Sites and Obligations of Lessee...........................................35
SECTION 13. Requirements for Alterations; Title to Alterations; Addition of Equipment;
Work on the Site.....................................................................37
SECTION 14. Damage to the Site, Tower or the Improvements..............................................38
SECTION 15. Tower Subtenants; Interference.............................................................40
SECTION 16. Taxes and Assessments......................................................................42
SECTION 17. Utilities..................................................................................45
SECTION 18. Governmental Permits.......................................................................45
SECTION 19. No Liens...................................................................................47
SECTION 20. Condemnation...............................................................................48
SECTION 21. Waiver of Subrogation; Indemnity...........................................................49
SECTION 22. Subordination of Mortgages.................................................................50
SECTION 23. Environmental Covenants....................................................................50
SECTION 24. Insurance..................................................................................53
SECTION 25. Sprint Right of Alteration and Substitution................................................55
SECTION 26. Assignment and Subletting..................................................................57
SECTION 27. Estoppel Certificate.......................................................................59
SECTION 28. Holding Over...............................................................................59
SECTION 29. Rights of Entry and Inspection.............................................................59
SECTION 30. Right to Act for Lessee....................................................................60
SECTION 31. Defaults and Remedies......................................................................61
SECTION 32. Quiet Enjoyment............................................................................67
SECTION 33. No Merger..................................................................................67
SECTION 34. Broker and Commission......................................................................67
SECTION 35. Recording of Memorandum of Agreement or Site Designation Supplement.......................68
SECTION 36. Purchase Option............................................................................68
SECTION 37. Net Lease..................................................................................70
SECTION 38. Compliance with Specific FCC Regulations...................................................71
SECTION 39. Tax Indemnities............................................................................72
SECTION 40. Lessee Lender Protections..................................................................82
SECTION 41. Financeable Sites and Severed Leases.......................................................85
SECTION 42. Global Parent Guaranty.....................................................................87
i
SECTION 43. General Provisions.........................................................................88
SECTION 44. No Petition; Limited Recourse Against Lessee...............................................91
ii
MASTER LEASE AND SUBLEASE
THIS MASTER LEASE AND SUBLEASE (this "Agreement") is made and entered into
this [____] day of 2005 (the "Effective Date"), [Sprint SPV] ("Lessor"),
[Applicable Sprint Entities] (collectively, "Sprint"), [LESSEE], a
[______________] ("Lessee") and GLOBAL SIGNAL INC., a Delaware corporation
("Global Parent"). Lessor, Sprint, Lessee and Global Parent are sometimes
individually referred to in this Agreement as a "Party" and collectively as the
"Parties".
WHEREAS Sprint operates throughout the United States and its territories
the Sites, which include Towers and related equipment and, in some cases,
buildings, and Sprint either owns, ground leases or otherwise has an interest in
the tracts of land on which such Towers are located;
WHEREAS, Lessee desires to lease or pre-lease the Sites;
WHEREAS the obligations set forth in this Agreement are interrelated and
required in order for Lessee to lease or pre-lease the Sites;
In consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree
as follows:
SECTION 1. Definitions.
For purposes of this Agreement, the following capitalized terms have the
following respective meanings:
"AAA" means the American Arbitration Association or any successor entity.
"Affiliate" (and, with a correlative meaning, "Affiliated") means, with
respect to any Person, any other Person that directly, or indirectly through one
or more intermediaries controls, is controlled by, or is under common control
with, such Person. As used in this definition, "control" means the beneficial
ownership (as such term is defined in Rules 13d-3 and 13d-5 of the Securities
Exchange Act of 1934, as amended) of more than fifty percent (50%) of the voting
interests of the Person.
"After-Tax Basis" has the meaning set forth in Section 39(a)(3)(i).
"Agreement" means this has the meaning set forth in the preamble and
includes all subsequent modifications and amendments hereof. References to this
Agreement in respect of a particular Master Lease Site will include the Site
Designation Supplement therefor; and references to this Agreement in general and
as applied to all Master Lease Sites will include all Site Designation
Supplements.
"Agreement to Lease and Sublease" means the Agreement to Contribute, Lease
and Sublease, dated as of February 14, 2005, by and among Global Parent, Sprint
Parent and Sprint.
"Allocated Rent" has the meaning set forth in Section 11(a).
"Alterations" means the construction or installation of Improvements on any
Site or any part of any Site after the Effective Date, or the alteration,
replacement, modification or addition to all or any component of a Site after
the Effective Date, whether Severable or Non-Severable.
"Assumed Rate" has the meaning set forth in Section 39(a)(1)(v).
"Available Space" means, as to any Site, a Tower location, a portion of the
Land, a portion of the Improvements or any other portion, space or area of such
Site that is available for lease to or collocation by any Tower Subtenant and
all rights appurtenant to such portion, space or area.
"Award" means any amounts paid, recovered or recoverable as damages,
compensation or proceeds by reason of any Taking, including all amounts paid
pursuant to any agreement with any Person which was made in settlement or under
threat of any such Taking, less the reasonable costs and expenses incurred in
collecting such amounts.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which national banks in New York, New York are not open for business.
"Casualty Notice" has the meaning set forth in Section 14(a).
"Claims" means any claims, demands, actions, suits, proceedings,
disbursements, judgments, damages, penalties, fines, losses, liabilities, costs
and expenses, including reasonable attorneys' fees and amounts paid in
settlements.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agreements" has the meaning set forth in the Agreement to Lease
and Sublease.
"Collocation Agreement" means an agreement between a Sprint Contributor
(prior to the date hereof) or Lessee (on or after the date hereof) on the one
hand, and a third party not an Affiliate of a Sprint Group Member (on the date
hereof), on the other hand, pursuant to which such Sprint Group Member or
Lessee, as applicable, rents to such third party space at any Site (including
space on a Tower), including all amendments, modifications, supplements,
assignments, guaranties, side letters and other documents related thereto.
"Communications Equipment" means, as to any Site, transmitting and/or
receiving equipment and other equipment installed at the Sprint Collocation
Space (with respect to any Sprint Collocator) or any other portion of the Site
(with respect to a Tower Subtenant), which is used in providing current and
future wireless and wireline communication services, including without
limitation, switches, antennas, microwave dishes, panels, conduits, flexible
transmission lines, cables, radio, amplifiers, filters and other transmission or
communications equipment (including interconnect transmission equipment,
transmitter(s), receiver(s) and accessories) and such other equipment and
associated software as may be necessary in order to provide such wireless and
wireline communication services, including without limitation, voice or data.
2
Communications Equipment will include any existing, replaced and upgraded
Communications Equipment.
"Communications Facility" means, as to any Site, (i) the Sprint Collocation
Space, together with all of Sprint's Communications Equipment and Sprint's
Improvements at such Site (with respect to any Sprint Collocator) or (ii) any
other portion of the Site leased to or used or occupied by a Tower Subtenant,
together with all of such Tower Subtenant's Communications Equipment and such
Tower Subtenant's Improvements at such Site (with respect to a Tower Subtenant).
"Conversion Closing" has the meaning set forth in the Agreement to Lease
and Sublease.
"Conversion Closing Date" has the meaning set forth in the Agreement to
Lease and Sublease.
"CPI" means the Consumer Price Index for all Urban Consumers, U.S., City
Average (1982-84 = 100) All Items Index, published by the Bureau of Labor
Statistics, United States Department of Labor. If the CPI ceases to be compiled
and published at any time during the Term of this Agreement, but a comparable
successor index is compiled and published by the Bureau of Labor Statistics,
United States Department of Labor, the adjustments to the Sprint Collocation
Charge provided for in Section 11, if any, and any other adjustments provided
for in this Agreement which are based on the CPI Change will be computed
according to such successor index, with appropriate adjustments in the index to
reflect any differences in the method of computation from the CPI. If, at any
time during the Term of this Agreement, neither the CPI nor a comparable
successor index is compiled and published by the Bureau of Labor Statistics, the
index for "all items" compiled and published by any other branch or department
of the federal government will be used as a basis for calculation of the
CPI-related adjustments to the Sprint Collocation Charge provided for in this
Agreement, and if no such index is compiled and published by any branch or
department of the federal government, the statistics reflecting cost of living
increases or decreases, as applicable, as compiled by any institution or
organization or individual generally recognized as an authority by financial and
insurance institutions will be used.
"CPI Change" means an increase, if any (expressed as a positive percentage)
in the most recently published CPI as of any applicable CPI Change Date from the
CPI published as of the corresponding month for the calendar year immediately
preceding the calendar year of publication of such most recently published CPI.
"CPI Change Date" means January 1, 2006 and January 1 of each year
thereafter during the Term of this Agreement.
"Date of Taking" means the earlier of (a) the date upon which title to any
Site, or any portion of such Site, subject to a Taking is vested in the
condemning authority, or (b) the date upon which possession of such Site or
portion such Site is taken by the condemning authority.
"Decision Period" has the meaning set forth in Section 31(h).
"Default Notice" has the meaning set forth in Section 4(f).
3
"Effective Date" has the meaning set forth in the preamble.
"Emergency" has the meaning set forth in Section 30(b).
"Environmental Condition" has the meaning set forth in the Agreement to
Lease and Sublease.
"Environmental Law" has the meaning set forth in Section 23(a).
"Equipment" means all physical assets (other than real property and
interests in real property), located at the applicable Site on or in, or
attached to, the Land, Improvements or Towers leased to or operated by Lessee
pursuant to this Agreement and includes, without limitation, to the extent
existing at a Site on the Effective Date, all of the items listed on the
attached Schedule 1. With respect to any item of or interest in real property
included in the Leased Property of any Site, any fixture (other than Towers)
attached to that real property is "Equipment" related thereto. "Equipment" does
not include any intellectual property or intangible rights or any Excluded
Equipment.
"Excluded Assets" has the meaning set forth in the Agreement to Lease and
Sublease.
"Excluded Equipment" has the meaning set forth in the Agreement to Lease
and Sublease.
"Excluded Purchase Sites" means (i) any Pre-Lease Site pursuant to which
Lessee, in its reasonable discretion, determines that the transfer of such
Pre-Lease Site pursuant to the Purchase Option would violate the terms of the
applicable Ground Lease, license or other agreement pursuant to which the
applicable Sprint Contributor has a possessory right in such Pre-Lease Site,
(ii) any Site where the Ground Lease has previously terminated or (iii) any Site
that Lessee has previously purchased from Lessor.
"Expiring Ground Rent" means the aggregate base Ground Rent payable during
the last term of the expiring Ground Lease for which renewal is being sought.
"FAA" means the United States Federal Aviation Administration or any
successor Federal Governmental Authority performing a similar function.
"FCC" means the United States Federal Communications Commission or any
successor Federal Governmental Authority performing a similar function.
"Federal Depreciation Deductions" has the meaning set forth in Section
39(a)(1)(ii).
"Federal Income Tax Benefits" means the Federal Depreciation Deductions and
the federal income tax deductions described in Section 39(a)(1)(iii).
"Final Non-Financeable Sites Statement" means the means the Preliminary
Non-Financeable Sites Statement as finally determined pursuant to Section 41(c).
"Financial Advisors" has the meaning set forth in Section 34.
4
"Financeable Site" means a Master Lease Site with respect to which: (i)
Lessee, if it so elects, has obtained title insurance insuring its and its
lenders' interests, subject only to Permitted Encumbrances and such other
matters as are reasonably acceptable to Lessee, with a coverage amount equal to
no less than the Rent paid by Lessee for such Master Lease Site, (ii) a Ground
Lessor Estoppel from any ground lessor and a Non-Disturbance Agreement from any
ground lessor lenders, in each case with such modifications or changes as may be
reasonably acceptable to Lessee (so long as such modifications or changes, if
more burdensome to ground lessor or lender, as applicable, than those set forth
on Exhibit J or Exhibit K to the Agreement to Lease and Sublease, as applicable,
will not be required for purposes of establishing whether a "Ground Lessor
Estoppel" has been obtained) has been obtained for the benefit of Lessee, its
lenders and their respective successors and assigns, (iii) the other Individual
Site Closing Conditions have been satisfied, and (iv) any Collocation Agreement
that applies to such Master Lease Site as well as to other Sites that are not
otherwise Financeable Sites (for example, as a result of a failure to satisfy
the Environmental Conditions) may be severed without the consent of any third
party, or has been severed with such consent, in order to permit at least one
separate financing of such Master Lease Site.
"Financial Statements" has the meaning set forth in the Agreement to Lease
and Sublease.
"Global Parent" has the meaning set forth in the preamble.
"Governmental Approval" means all licenses, permits, franchises,
certifications, waivers, variances, registrations, consents, approvals,
qualifications and other authorizations to, from or with any Governmental
Authority.
"Governmental Authority" means any foreign, domestic, federal, territorial,
state or local governmental authority, administrative body, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, board, administrative hearing body, arbitration panel, tribunal or
organization or any regulatory, administrative or other agency, or any political
or other subdivision, department or branch of any of the foregoing.
"Ground Lease" means, as to a Leased Site or Other Interest Site, the
ground lease and/or any related easement, license or other agreement or document
pursuant to which Lessor or any Sprint Contributor holds a leasehold interest,
leasehold estate, easement, license or other interest in such Site, together
with any renewals or extensions of the term thereof (whether by exercise of any
right or option contained therein or by execution of a new ground lease or other
instrument providing for the use of such Site), and including all amendments,
modifications, supplements, assignments, guarantees, side letters and other
documents related thereto.
"Ground Lessor" means, as to a Leased Site or Other Interest Site, the
"lessor", "landlord", "licensor", or similar Person under the related Ground
Lease.
"Ground Lessor Estoppel" means, as to a Ground Lease, an estoppel from the
ground lessor thereunder for the benefit of Lessee, its successor and assigns,
lenders and rating agencies, in substantially the form of Exhibit J attached to
the Agreement to Lease.
5
"Ground Rent" means, as to any Site, all rents, fees and other charges
payable by Lessor to the Ground Lessor under the Ground Lease for such Site.
"GSI Financing Subsidiary" means any Person formed as an Affiliate of
Lessee to be the lessee under a Severed Lease as described in Section 41(e).
"Hazardous Material" has the meaning set forth in Section 23(a).
"Improvements" means, as to each Site, (a) one or more equipment pads or
raised platforms capable of accommodating exterior cabinets or equipment
shelters, huts or buildings, electrical service and access for the placement and
servicing of the Sprint Collocator's and, if applicable, each Tower Subtenant's
Improvements; (b) buildings, huts, shelters or exterior cabinets; (c) generators
and associated fuel tanks; (d) grounding rings; (e) fencing; (f) signage; (g)
connections for utility service up to the meter; (g) hardware constituting a
tower platform to hold the Sprint Collocator's and, if applicable, each Tower
Subtenant's Communications Equipment; (i) access road improvements; (j) common
shelters, if any; (k) all lighting systems and light monitoring devices; and (l)
such other equipment, alterations, replacements, modifications, additions, and
improvements as may be installed on or made to all or any component of a Site
(including the Land and the Tower). Improvements do not include Communications
Equipment.
"Inclusion" means the inclusion in the income of any Sprint Group Member of
any amount realized in connection with the transactions effected by this
Agreement or related documents other than the amounts described in Section
39(a)(1)(iv).
"Individual Site Closing Conditions" has the meaning set forth in the
Agreement to Lease and Sublease.
"Individual Site Prepaid Rent" means the portion of the Rent attributable
to each Site, as set forth in Exhibit H hereto.
"Initial Master Lease Sites" has the meaning set forth in the definition of
"Master Lease Site."
"Land" means, as to each Site, the tract of land constituting a portion of
such Site, together with all easements and other rights appurtenant thereto.
"Landlord Reimbursement Taxes" means, with respect to a Leased Site or
Other Interest Site, if the applicable Ground Lease provides that Ground Lessor
may pass-through any Taxes assessed against the Ground Lessor to the applicable
ground lessee, the amount of such Taxes for which the Ground Lessor seeks
reimbursement from the ground lessee or its assigns under the provisions of the
Ground Lease.
"Law" means any statute, rule, code, regulation, ordinance, interpretation
or Order of, or issued by, any Governmental Authority.
"Leased Property" means, with respect to each Site, (a) the Land related to
such Site, and (b) the Tower located on such Site (including the Sprint
Collocation Space), in each case together with the related Equipment,
Improvements (excluding Sprint's Improvements and any
6
Tower Subtenant's Improvements) and the Tower Related Assets with respect to
such Site; provided, however, that no leasehold, subleasehold or other real
property interest is granted pursuant to Section 3(b) in the Leased Property at
any Pre-Lease Site until the Conversion Closing for such Pre-Lease Site (to the
extent same would cause a default under any Ground Lease).
"Leased Site" means the Sites identified on Exhibit A as Leased Sites.
"Lessee" has the meaning set forth in the preamble.
"Lessee Competitor" means a Person, that conducts as a significant
component of its business, the management, operation or marketing of
communications towers, and does not provide wireless communications services as
a substantial portion of its business.
"Lessee Indemnitee" means Lessee and its Affiliates, and its and their
respective directors, officers, employees, agents and representatives.
"Lessee Lender" means the holder(s) of any loan secured by all or any
portion of Lessee's interests (or any of them) hereunder or with respect to any
Site, including, without limitation, a collateral assignment of any rights of
Lessee hereunder or under any related agreements or secured by the pledge of
equity interests in Lessee (each, a "Secured Lessee Loan"), together with the
heirs, legal representatives, successors, transferees, nominees and assigns of
such holder(s).
"Lessee Negotiated Renewal" has the meaning set forth in Section 4(c).
"Lessee Obligations" has the meaning set forth in Section 42(a).
"Lessee Property Tax Charge" means, as to any Site, the annual amount
payable to Lessor by Lessee for Lessee's portion of Property Taxes with respect
to such Site pursuant to this Agreement in an amount equal to $1,975 per annum
(prorated for partial years) subject to an annual increase on each CPI Change
Date equal to three percent (3%).
"Lessee Permitted Liens" means, as to any Site, collectively: (a) liens in
respect of Property Taxes or other Taxes that are not yet delinquent as long as
no foreclosure, distraint, sale or similar proceedings have been commenced with
respect thereto; (b) general utility, roadway and other easements or rights of
way which do not or would not reasonably be expected to, individually or in the
aggregate, materially adversely affect the use or operation of the Tower and/or
Site as a telecommunications tower facility; (c) rights of, or by, through or
under Persons leasing, licensing or otherwise occupying space on any Tower or
otherwise utilizing any Tower pursuant to any Collocation Agreement as provided
therein; (d) all Liens and other matters of public record against the underlying
real property interest of any ground lessor under any ground lease; (e) the
terms and provisions of any ground lease as provided therein; (f) any Mortgage
granted by Lessee in connection with a Secured Lessee Loan; (g) any Lien or
right created by Persons other than Lessee or its Affiliates prior to the
Effective Date; and (h) any Lien or right otherwise caused or consented to by
Sprint or any other Sprint Group Member.
"Lessee Work" has the meaning set forth in Section 13(b).
7
"Lessor Negotiated Renewal" has the meaning set forth in Section 4(d).
"Liens" means, with respect to any asset, any mortgage, guaranty, lien,
pledge, security interest, charge, attachment, restriction or encumbrance of any
kind in respect of such asset.
"Master Lease Site" means any Site (as defined in the Agreement to Lease
and Sublease) (a) which is subject to this Agreement as a Master Lease Site as
of the Effective Date as identified in Exhibit A (the "Initial Master Lease
Sites"); and (b) any Site added to this Agreement as a Master Lease Site as
provided herein.
"Mortgage" means, as to any Site, any mortgage, deed to secure debt, deed
of trust, trust deed and/or other conveyance of, or encumbrance against, the
right, title and interest of a Party in and to the Land, Tower and Improvements
on such Site as security for any debt, whether now existing or hereafter arising
or created.
"Mortgagee" means, as to any Site, the holder of any Mortgage, together
with the heirs, legal representatives, successors, transferees and assigns of
the holder.
"Non-Collocation Sites" has the meaning set forth in Section 6(c).
"Non-Financeable Site Financing Cost" means, with respect to each
Non-Financeable Site included in the Final Non-Financeable Sites Statement, an
amount equal to the product of (x) 12% of the aggregate Individual Site Prepaid
Rent attributable to the Non-Financeable Sites and (y) a fraction, the numerator
of which is the amount of debt (not to exceed $850,000,000) Lessee obtains in
connection with the consummation of the transactions under the Agreement to
Lease and Sublease and the denominator of which is the aggregate of the Rent and
Pre-Lease Rent, payable on the date hereof.
"Non-Financeable Sites Supporting Documentation" means all relevant
documentation reasonably requested by Lessor to verify the accuracy of the
Preliminary Non-Financeable Sites Statement.
"Non-Restorable Site" means a Site that has suffered a casualty which
damages or destroys all or a Substantial Portion of any Site that constitutes a
non-conforming use under applicable Zoning Laws prior to such casualty and for
which Restoration requires under applicable Zoning Laws either (i) obtaining a
change in the zoning classification of the Site under applicable Zoning Laws or
Zoning Laws would not allow Lessee to rebuild a comparable replacement tower on
the Site substantially similar to the Tower damaged or destroyed by the
casualty, (ii) the filing and prosecution of a lawsuit or other legal proceeding
in a court of law, or (iii) any other permit or approval under applicable Zoning
Laws that cannot be obtained by Lessor, using commercially reasonable efforts,
in a period of time that will enable Restoration to be commenced (and a building
permit issued) within one (1) year after the casualty.
"Non-Severable" means, with respect to any Alteration, any Alteration that
is not a Severable Alteration.
8
"Ongoing Revenue Sharing Payment" means a Sprint Contributor's and/or
Lessor's share of any Shared Ground Rent Increase Payment that is payable to a
Ground Lessor in installments rather than a one-time lump sum payment.
"Option Purchase Price" means, with respect to each Site, the fixed
purchase price for such Site in the event Lessee exercises its purchase option
with respect to such Site under Section 36 of this Agreement, as specified in
Exhibit H.
"Option Sellers" has the meaning set forth in Section 36(a).
"Option Trigger Window" has the meaning set forth in Section 36(a).
"Other Interest Sites" means the Sites identified on Exhibit A as Other
Interest Sites.
"Owned Site" means the Sites identified on Exhibit A as Owned Sites.
"Parties" has the meaning set forth in the preamble.
"Party" has the meaning set forth in the preamble.
"Permitted Act" means any act expressly permitted under the Transaction
Documents; provided that the use and operation of the Leased Property in
commercial service in the manner that the Lessee or its Affiliates currently
uses and operates similar property in the tower business shall be considered to
be expressly permitted (provided that such use and operation is not in violation
of the Transaction Documents); provided further that, notwithstanding the
foregoing, the following shall not be Permitted Acts: (i) any substitution or
replacement of the Leased Property; (ii) any merger or consolidation of the
Lessee or its Affiliates; (iii) any modification, alteration, addition or
improvement to the Leased Property, in each case, which fails to comply with the
provisions of Rev. Proc. 2001-28, 2001-1 C.B. 1156; (iv) any voluntary or
involuntary case or proceeding seeking relief of debts of the Lessee or its
Affiliates, (v) any assignment of the Lessee's interest in the transactions
contemplated by the Transaction Documents; (vi) the entry into a New Lease under
Section 40 of this Agreement; and (vii) any severance of this Agreement under
Section 41.
"Permitted Encumbrances" has the meaning set forth in the Agreement to
Lease and Sublease.
"Permitted Use" means use of each Site for the purposes of: (a)
constructing, installing, operating, repairing, altering, managing, maintaining
and marketing the Tower and Improvements of each Site and making further
Improvements to such Site as permitted under this Agreement, and (b) the use of
such Site by the applicable Sprint Collocator and its Affiliates with respect to
the Sprint Collocation Space or any Available Space at such Site subject to the
terms of the Collocation Agreements and this Agreement, as the case may be, and
(c) the use by Tower Subtenants of any portions of the Land, Tower and
Improvements of such Site (including any Available Space) as is reasonably
necessary for operation of the Communications Facilities of such Tower
Subtenants subject to the terms of the Collocation Agreements and this
Agreement.
9
"Person" means any individual, corporation, limited liability company (or
series thereof), partnership, association, trust or any other entity or
organization, including a Governmental Authority.
"Pre-Lease Rent" has the meaning set forth in Section 11(b).
"Pre-Lease Site" means each Site which is subject to this Agreement as a
Pre-Lease Site as of the Effective Date as identified (and specifically
described with the same amount of detail as would be in a Site Designation
Supplement) in Exhibit A, until such Site is converted to a Master Lease Site as
provided herein. "Preliminary Non-Financeable Sites Statement" has the meaning
set forth in Section 41(c)(i).
"Preliminary Non-Financeable Sites Statement" has the meaning set forth in
Section 41(c)(i).
"Prime Rate" means the rate of interest reported in the "Money Rates"
column or section of The Wall Street Journal (Eastern Edition) as being the
prime rate on corporate loans of larger U.S. Money Center Banks.
"Proceeds" means all insurance moneys recovered or recoverable by Lessor,
Lessee or any Sprint Collocator as compensation for casualty damage to any Site
(including the Tower and Improvements of such Site).
"Property Taxes" means, as to each Site, any and all of the following
levies, assessed or imposed upon, against or with respect to the Site, any part
of the Site, or the use and occupancy of the Site at any time during the Term as
to such Site (whether imposed directly by a Governmental Authority or indirectly
through any other Persons, and including any penalties, fines, and interest
related thereto): (a) real property and personal property ad valorem taxes and
assessments (other than Taxes imposed on Lessee by a Governmental Authority with
respect to Improvements treated as being owned by Lessee); (b) charges made by
any public or quasi public authority for improvements or betterments related to
the Site (other than Taxes imposed on Lessee by a Governmental Authority with
respect to Improvements treated as being owned by Lessee); (c) sanitary taxes or
charges, sewer or water taxes or charges, and (d) any other tax imposed solely
as a result of ownership of the Leased Property similar to the Taxes described
in (a) through (c), in each case other than Landlord Reimbursement Taxes.
"Purchase Option Closing Date" means ________, 2037.
"Purchase Sites" means all Sites then subject to the terms and provisions
of this Agreement that are not Excluded Purchase Sites.
"Qualifying Lessee Transferee" means a Person who has outstanding senior
unsecured debt securities or comparable long term obligations rated B- or higher
by Standard & Poor's Ratings Services or B3 or higher by Moody's Investors
Service.
"Qualifying Sprint Transferee" means a Person who has outstanding senior
unsecured debt securities or comparable long term obligations rated BBB- or
higher by Standard & Poor's Ratings Services or Baa3 or higher by Moody's
Investors Service.
10
"Ratable Global Parent Maximum Obligation" has the meaning set forth in
Section 41(d).
"Reimbursable Costs" has the meaning set forth in Section 18(f).
"Reimbursable Maintenance Expenses" has the meaning set forth in Section
30(a).
"Release" has the meaning set forth in Section 23(a).
"Renewal Ground Rent" means the aggregate base Ground Rent (including any
periodic escalations thereof) payable during the initial term of any Lessee
Negotiated Renewal or Lessor Negotiated Renewal.
"Rent" has the meaning set forth in Section 11(b).
"Rent Payment Period" means, as to each Site, the taxable period set forth
in Exhibit A.
"Restoration" means, as to a Site that has suffered casualty damage or is
the subject of a Taking, such restoration, repairs, replacements, rebuilding,
changes and alterations, including the cost of temporary repairs for the
protection of such Site, or any portion of such Site pending completion of
action, required to restore the applicable Site (including the Tower and
Improvements on such Site but excluding any of Sprint's Communications Equipment
or Improvements the restoration of which shall be the sole cost and obligation
of Sprint) to a condition which is at least as good as the condition which
existed immediately prior to such damage or Taking (as applicable), and such
other changes or alterations as may be reasonably acceptable to the applicable
Sprint Collocator and Lessee or required by Law.
"Revenue Sharing Payment" means any additional amounts payable to any
Ground Lessor as a Shared Ground Lease Payment under (i) any Ground Lease in
effect as of the Effective Date, (ii) renewals and extensions of any Ground
Lease executed after the Effective Date pursuant to terms contained therein on
the Effective Date or (iii) any renewals or extensions of a Ground Lease
executed after the Effective Date that do not increase any revenue sharing
percentage beyond the amount immediately prior to the effectiveness thereof.
"Right of Substitution" means the right of a Sprint Collocator to remove
its Communications Equipment from the Sprint Collocation Space at a Site and
move same to Available Space on such Site by relocation of its Communications
Facility on such Site to a portion of such Available Space not larger than the
Sprint Tower Envelope, in accordance with and subject to the limitations
contained in Section 25.
"Section 467 Loan" has the meaning set forth in Section 11(f).
"Secured Lessee Loan" has the meaning set forth in the definition of
"Lessee Lender".
"Severable" means, with respect to any Alteration, any Alteration that can
be readily removed from a Site or portion of such Site without damaging it in
any material respect or without diminishing or impairing the value, utility,
useful life or condition that the Site or portion of such Site would have had if
such Alteration had not been made (assuming the Site or portion
11
of such Site would have been in compliance with this Agreement without such
Alteration), and without causing the Site or portion of such Site to become
"limited use property" within the meaning of Rev. Proc. 2001-28, 2001-1 C.B.
1156. Notwithstanding the foregoing, an Alteration will not be considered
Severable if such Alteration is necessary to render the Site or portion of such
Site complete for its intended use by Lessee (other than Alterations consisting
of ancillary items of Equipment of a kind customarily furnished by lessees or
operators of property comparable to the Site or portion of such Sites).
"Severed Lease" means a lease and sublease in substantially the form of
this Agreement, with appropriate changes to reflect the fact that this Agreement
has been so severed.
"Severed Site" means the Sites severed from this Agreement pursuant to
Section 41.
"Shared Ground Lease Payment" has the meaning set forth in the Agreement to
Lease and Sublease.
"Shared Ground Rent Increase Payment" means, as to any Site, an amount
equal to (i) fifty percent (50%) of the Renewal Ground Rent under any Lessee
Negotiated Renewal or any Lessor Negotiated Renewal exceeding one-hundred thirty
percent (130%) of the Expiring Ground Rent for such Site up to and including one
hundred sixty percent (160%) of the Expiring Ground Rent for such Site, plus
(ii) one hundred percent (100%) of the portion of the Renewal Ground Rent under
such Lessee Negotiated Renewal or Lessor Negotiated Renewal exceeding one
hundred sixty percent (160%) of the Expiring Ground Rent for such Site. The
foregoing assumes the term of the applicable Ground Lease for which Renewal
Ground Rent and Expiring Ground Rent are calculated are of equivalent length,
and, if not of equivalent length, the period over which the Ground Rent for the
Expiring Ground Lease shall be calculated shall match the length of the term of
the Lessee Negotiated Renewal or Lessor Negotiated Renewal, as applicable.
"Site" means any Master Lease Site or Pre-Lease Site, as applicable, now or
hereafter subject to this Agreement. As used in this Agreement, reference to a
Site (including any reference to a Master Lease Site or a Pre-Lease Site) will
include the Land, the Tower, the Improvements (excluding Severable Alterations)
and Non-Severable Alterations but will not include Sprint's Improvements or
Sprint's Communications Equipment or any Tower Subtenant's Improvements or Tower
Subtenant's Communications Equipment and in each case shall include all of the
Leased Property with respect to such Site.
"Site Designation Supplement" means, as to any Master Lease Site, a
supplement to this Agreement, in substantially the form of Exhibit B attached to
this Agreement.
"Site Expiration Date" means, as to any Site, (a) as to an Owned Site, the
Site Expiration Outside Date and (b) as to a Leased Site or Other Interest Site,
the sooner to occur of (i) one day prior to the expiration of the relevant
Ground Lease (as the same may be extended or renewed pursuant to the terms of
this Agreement), or (ii) the Site Expiration Outside Date.
"Site Expiration Outside Date" means, as to any Site, _________________,
2037.
"Sprint" has the meaning set forth in the preamble.
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"Sprint Buffer Zone" has the meaning set forth in Section 6(b).
"Sprint Collocation Charge" has the meaning set forth in Section 11(b).
"Sprint Collocation Space" means, as to each Site: (a) the portions of the
Land and Improvements comprising the Site used or occupied exclusively by a
Sprint Collocator or its Affiliates, or on which any portion of Sprint's
Communications Facility is located, operated or maintained as of the Effective
Date (including, without limitation, portions of the Land and Improvements on
which switches and other of Sprint's Communications Equipment are located and
the air space above such portion of the Land and Improvements (to the extent
such air space is not occupied by a third party on the Effective Date)), (b) the
portion of the Tower on the Site on or within which any portion of Sprint's
Communications Facility is located, operated or maintained as of the Effective
Date (including without limitation, portions of the Tower on which any antennas,
transmission lines, amplifiers and filters are located), plus (in the event the
Sprint Collocator maintains fewer than nine (9) 1' x 6' panel antennas on such
Tower as of the Effective Date) an additional portion of the Tower on the Site
that will enable the Sprint Collocator to locate, operate and maintain
Communications Equipment on the Tower consisting of an aggregate (or the
equivalent weight and wind loading) of no more than nine (9) 1' x 6' panel
antennas and related equipment extending not more than eight (8) contiguous
vertical feet on such Tower, with no more than nine (9) lines of co-axial cable
not to exceed 1-5/8 inch in diameter (provided any space for such co-axial cable
constitutes a non-exclusive easement, available for use by Lessee and other
Tower Subtenants); and (c) any and all rights pursuant to Sections 6(b) and 25
and all appurtenant rights reasonably inferable to permit the Sprint
Collocator's full use and enjoyment of the Sprint Collocation Space, including
without limitation, the rights specifically described in Section 6, all in
accordance with Section 6.
"Sprint Collocator" means the applicable Sprint Group Member that
subleases, leases back or otherwise uses and occupies the Sprint Collocation
Space at each Site as designated on Exhibit A and such Sprint Collocator's
permitted successors and assigns hereunder, to the extent same are permitted to
succeed to such Sprint Collocator's rights hereunder.
"Sprint Contributor" means each Sprint Group Member that is a Party and
which, at any applicable time during the Term of this Agreement, has not yet
contributed its right, title and interest in the Leased Property at a Pre-Lease
Site to Lessor pursuant to the Agreement to Lease and Sublease.
"Sprint Group" means, collectively, Sprint Parent and its Affiliates
(including Lessor) whose names are set forth in the signature pages of this
Agreement and any Affiliate of Sprint Parent which at any time becomes a
"sublessor" under this Agreement in accordance with the provisions of this
Agreement. Each member of the Sprint Group is herein a "Sprint Group Member".
Solely for purposes of Section 39, the term "Sprint Group" will include each
Sprint Group Member, the affiliated group of corporations and each member of
such group within the meaning of Code Section 1504 of which any Sprint Group
Member is or will become a member if such group will have filed a consolidated
return; if applicable, each member in any entity classified as a partnership for
federal income tax purposes and such entity itself if and to the extent such
entity is treated as the tax owner of any of the Sites or portions of the Sites
or such entity is a direct or indirect partner in another entity classified as a
partnership which is so treated
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(in either case, a "Sprint Partnership"); and, if applicable, any entity owned
by a Sprint Group Member or an Sprint Partnership that for federal income tax
purposes is disregarded as an entity separate from its owner.
"Sprint Indemnitee" means Lessor, each Sprint Contributor, each Sprint
Collocator and their respective Affiliates, directors, officers, employees,
agents and representatives (except Lessee and its Affiliates and any agents of
Lessee or its Affiliates).
"Sprint Market Assignee" has the meaning set forth in Section 26(b).
"Sprint Parent" means Sprint Corporation, a Kansas corporation.
"Sprint Partnership" has the meaning set forth in the definition of "Sprint
Group".
"Sprint Tower Envelope" means, as to each Site, the portion of the Sprint
Collocation Space on the Tower on the Site that will enable the applicable
Sprint Collocator to locate, operate and maintain Sprint's Communications
Equipment on the Tower consisting of an aggregate (or the equivalent weight and
wind loading) of nine (9) 1' x 6' panel antennas and related equipment extending
not more than eight (8) contiguous vertical feet on such Tower.
"Sprint Transfer" has the meaning set forth in Section 26(b).
"Sprint's Communications Equipment" means any Communications Equipment
owned or leased (other than from Lessee) by a Sprint Collocator or its
Affiliates.
"Sprint's Improvements" means any Improvements of a Sprint Collocator or
its Affiliates located at a Site, solely with respect to Sprint's Communications
Equipment.
"Standard Procedures" has the meaning set forth in Section 13(b)(ii).
"Substantial Portion of any Site" means, as to a Site, so much of the such
Site (including the Land, Tower and Improvements of such Site, or any portion of
such Site) as, when subject to a Taking or damage as a result of a casualty,
leaves the untaken or undamaged portion unsuitable for the continued feasible
and economic operation of such Site for the Permitted Use.
"Substitution" means the relocation by any Sprint Collocator on a Site,
pursuant to its Right of Substitution.
"Super Fund" has the meaning set forth in Section 23(a).
"Super Lien" has the meaning set forth in Section 23(a).
"Taking" means, as to any Site, any condemnation or exercise of the power
of eminent domain by any Governmental Authority, or any taking in any other
manner for public use, including a private purchase, in lieu of condemnation, by
a public authority.
"Taxes" means all forms of taxation, whenever created or imposed, whether
imposed by a local, municipal, state, foreign, Federal or other Governmental
Authority, and whether imposed
14
directly by a Governmental Authority or indirectly through any other Person,
and, without limiting the generality of the foregoing, will include any income,
gross receipts, ad valorem, excise, value-added, sales, use, transfer,
franchise, license, stamp, occupation, withholding, employment, payroll,
personal property, real property or environmental tax, levy, charge, assessment,
fee or premium, together with any interest, penalty, addition to tax or
additional amount imposed by a Governmental Authority or indirectly through any
other Person.
"Tax Assumptions" has the meaning set forth in Section 39(a)(1).
"Tax Claim" has the meaning set forth in Section 39(d).
"Tax Indemnitee" has the meaning set forth in Section 39(a)(3)(i).
"Tax Indemnity Notice" has the meaning set forth in Section 39(a)(3)(i).
"Tax Loss" has the meaning set forth in Section 39(a)(3)(i).
"Technical Closing" has the meaning set forth in the Agreement to Lease and
Sublease.
"Ten Year Withdrawal Date" has the meaning set forth in Section 10(a).
"Term" means: (i) as to this Agreement, the term set forth in Section 9(a);
and (ii) as to each Site, the term during which this Agreement is applicable to
such Site.
"Tower Related Assets" means, with respect to each Tower, (a) to the extent
such rights are assignable to Lessee, all rights to any warranties held by
Lessor with respect to such Tower (or the related Site) prior to the date hereof
(and if such rights cannot be granted to Lessee, such rights shall be enforced
by the applicable Sprint Collocator, at Lessee's cost, at the direction of and
for the benefit of Lessee), (b) to the extent such rights are assignable to
Lessee, all rights under any Governmental Approvals held exclusively with
respect to the ownership or operation of such Tower (and of the related Site if
such Site is an Owned Site) prior to the date hereof (and if such rights cannot
be granted to Lessee, such rights shall be enforced by the applicable Sprint
Contributor, at Lessee's cost, at the direction of and for the benefit of
Lessee), (c) to the extent such rights may be granted to Lessee, a sublicense or
other right to use any Governmental Approvals not held exclusively with respect
to, but held in part for the benefit of, the ownership or operation of such
Tower (and of the related Site if such Site is an Owned Site), and (d) copies
of, or extracts from, all current files and records of Lessor or any other
Sprint Group Member solely related to the ownership, occupancy or leasing of
such Tower (and of the related Site if such Site is an Owned Site), or, to the
extent not so solely related, appropriate extracts thereof. "Tower Related
Assets" does not include any intellectual property or intangible rights or
Excluded Assets.
"Tower Removal Bonds" means, collectively, any bonds, letters of credit,
deposits or other security interests relating to the removal of a Tower from a
Site.
"Tower Subtenant" means, as to any Site, any Person (other than any Sprint
Collocator), which: (a) is a "sublessee" under any Collocation Agreement
affecting such Site; or (b) subleases, licenses or otherwise acquires from
Lessee the right to use Available Space on such Site.
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"Tower Subtenant's Communications Equipment" means any Communications
Equipment owned or leased (other than from Lessee) by a Tower Subtenant.
"Tower Subtenant's Improvements" means the Improvements of any Tower
Subtenant located at any Site.
"Towers" means the communications towers on the Sites.
"Transaction Documents" means this Agreement, the Agreement to Lease and
Sublease, the Collateral Agreements and all other documents to be executed by
the Parties in connection with the consummation of transactions contemplated by
the Agreement to Lease and Sublease and this Agreement.
"Transfer Taxes" has the meaning set forth in Section 16(d).
"Transition Services Agreement" has the meaning set forth in Section 12(c).
"Unamortized Rent" means, for any applicable Site, an amount equal to the
product of (x) the Rent or Pre-Lease Rent, as applicable for such Site, and (y)
a fraction, the numerator of which is the number of years (to three decimal
places) remaining from and after the applicable measuring date to the Site
Expiration Outside Date and the denominator of which is thirty-two (32).
"Unpaid Amount" has the meaning set forth in Section 11(d).
"Withdrawal Cause" means, as to any Site, the inability of the Sprint
Collocator (after using commercially reasonable efforts) to obtain or maintain
any Governmental Approval necessary for the operation of Sprint's Communications
Facility at such Site; provided, however, that a Sprint Collocator may not
assert Withdrawal Cause if such Sprint Collocator (i) cannot maintain or obtain
or otherwise forfeits a Governmental Approval as a result of the violation of
any Laws by such Sprint Collocator or its Affiliates or any enforcement action
or proceeding brought by any Governmental Authority against Sprint or its
Affiliates because of any alleged wrongdoing by Sprint or its Affiliates or (ii)
does not have such Governmental Approval on the Effective Date and such
Governmental Approval was required on the Effective Date.
"Withdrawal Date" means the effective date of any Sprint Collocator's
election to terminate its leaseback or other use and occupancy of the Sprint
Collocation Space at any Site pursuant to a Withdrawal Notice.
"Withdrawal Notice" has the meaning set forth in Section 10(a).
"Withdrawal Rights" means the rights of a Sprint Collocator to elect to
terminate its leaseback or other use and occupancy of the Sprint Collocation
Space with respect to a Site as described in Section 10(a).
"Zoning Laws" means any zoning, land use or similar Laws, including,
without limitation, Laws relating to the use or occupancy of any communications
towers or property, building codes, zoning ordinances and land use regulations.
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"90 Day Lessee Notice" has the meaning set forth in Section 16(c).
Any other capitalized terms used in this Agreement will have the respective
meanings given to them elsewhere in this Agreement.
SECTION 2. Documents.
(a) This Agreement will consist of the following documents, as amended from
time to time as provided herein:
(i) this Agreement;
(ii) the following Exhibits, which are incorporated herein by this
reference:
Exhibit A List of Sites
Exhibit B Form of Site Designation Supplement
Exhibit C Form of Memorandum of Agreement
Exhibit D Form of Officer's Certificate of
Sprint Corporation
Exhibit E Form of Officer's Certificate of
Global Signal Inc.
Exhibits F and G Intentionally Omitted
Exhibit H Individual Site Rent and Option
Purchase Price Amount
(iii) Schedules to the Exhibits, which are incorporated herein by
reference and Schedule 1 hereto which is Incorporated by reference; and
(iv) such additional documents as are incorporated by reference.
(b) If any of the foregoing are inconsistent, this Agreement will prevail
over the Exhibits, the Schedules and additional incorporated documents.
SECTION 3. Master Lease Sites and Pre-Lease Sites.
(a) Subject to the terms and conditions of this Agreement, Lessor hereby
lets, leases and demises unto Lessee, and Lessee hereby leases, takes and
accepts from Lessor the Leased Property of all of the Master Lease Sites. Each
Master Lease Site in addition to the Initial Master Lease Sites will be made
subject to this Agreement by means of a Conversion Closing (after which Lessor
and Lessee will execute and deliver at a Technical Closing a Master Lease Site
Designation Supplement between Lessor and Lessee and the amendment of Exhibit A
hereto to reflect such Site as a Master Lease Site instead of a Pre-Lease Site).
Lessor and Lessee acknowledge and agree that this single Agreement is
indivisible (except pursuant to Section 41(d)), intended to cover all of the
Sites and is not a separate lease and sublease or agreement with respect to
individual Sites, and in the event of a bankruptcy of any Party, all Parties
intend that this Agreement be treated as a single indivisible Agreement. All
disclaimers of obligations by Sprint under this Agreement are qualified in all
respects by such Parties' representations, warranties and covenants under the
Agreement to Lease and Sublease. In addition, the Parties
17
acknowledge and agree that this Agreement is intended to be treated for U.S.
federal income tax purposes as (i) a lease between Lessee and Lessor, with
respect to the Sites, and (ii) a lease between Lessee and the Sprint
Collocators, with respect to the Sprint Collocation Space; and the Parties
further agree to not take any position on any tax return that is inconsistent
with such treatment.
(b) As to each Master Lease Site, this Agreement is a grant of a leasehold
interest in each Owned Site; and as to Leased Sites and Other Interest Sites,
this Agreement is a grant of a subleasehold or other interest in each Leased
Site or Other Interest Site, as applicable.
(c) As to each Pre-Lease Site, Lessor hereby appoints, and Lessee agrees to
act and will act, as the exclusive operator of the Leased Property at each of
the Pre-Lease Sites during the Term as to each Pre-Lease Site. In performing its
duties as operator of the Pre-Lease Sites, Lessee will manage, administer and
operate each of the Pre-Lease Sites, subject to the provisions of this
Agreement, in a manner (i) which is comparable to and in accordance with prudent
management and quality standards used in the telecommunications industry by
nation-wide communications tower operators operating portfolios of comparable
size and quality as that being leased and operated under this Agreement and (ii)
consistent with the standards used to manage, administer and operate the Master
Lease Sites. Except as specifically provided herein, neither Sprint nor Lessor
shall exercise any rights or take any actions with respect to the operation,
maintenance, leasing or licensing with respect to any Pre-Lease Sites, all such
rights being exclusively reserved to Lessee hereunder.
(d) Lessee hereby accepts the Leased Property at each Site in its "AS IS"
condition, without any representation, warranty or covenant of or from Lessor,
Sprint or their respective Affiliates whatsoever as to its condition or
suitability for any particular use, except as may be expressly set forth in this
Agreement or in the Agreement to Lease and Sublease. Except as set forth in this
Agreement and the Agreement to Lease and Sublease, Lessee hereby acknowledges
that neither Lessor, Sprint nor any agent or Affiliate of Lessor or Sprint has
made any representation or warranty, express or implied, with respect to any of
the Leased Property, or any portion of such Leased Property, or the suitability
or fitness for the conduct of Lessee's business or for any other purpose,
including the Permitted Use, and Lessee further acknowledges that it has had
sufficient opportunity to inspect and approve the condition of the Leased
Property at each of the Sites.
(e) From and after the Effective Date, Lessee will receive and will be
entitled to all of the revenue generated by the Sites and neither Lessor, Sprint
nor any of their respective Affiliates will be entitled to any of such revenue,
and if any such revenue is paid to any such Person, it will remit same to Lessee
as soon as reasonably possible after any Sprint Group Member becomes aware of
its receipt thereof (including, without limitation, by notice from Lessee of
such receipt), but in no event more than ten (10) Business Days. Lessor or the
applicable Sprint Contributor (as applicable) will direct, in writing, all
payors of amounts due with respect to any Sites to pay such amounts to Lessee.
From and after the Effective Date, and except as expressly provided in this
Agreement, Lessee also will be responsible for the payment of, and will pay, all
expenses related to or associated with the Sites, whether ordinary or
extraordinary, and whether foreseen or unforeseen. The rights granted to Lessee
under this Agreement include, with respect to each Tower, the right of Lessee to
use and employ, to the
18
extent such rights may be legally granted to or used by Lessee, the Tower
Related Assets related to the Sites.
(f) Lessee may from time to time make, subject to the requirements of
Section 13, such Alterations as Lessee may deem desirable in the proper conduct
of its business, so long as (i) such Alteration will not disrupt or otherwise
adversely affect the Sprint Collocator's use of the Site in any material respect
and is made in accordance with the requirements set forth in Section 13 of this
Agreement, (ii) such Alteration will not result in any material respect in (y)
the value of the Site or portion of such Site being less than the value of such
Site immediately prior to such Alteration, or (z) the economic life of the Site
or portion of the Site being less than the economic life of the Site or portion
of the Site immediately prior to such Alteration, and (iii) such Alteration will
not cause the Site or portion of such Site to constitute "limited use property"
within the meaning of Rev. Proc. 2001-28, 2001-1 C.B. 1156.
SECTION 4. Ground Leases.
(a) Lessee hereby acknowledges that, as to the Leased Property of each
Leased Site or Other Interest Site, as applicable, this Agreement is subject and
subordinate to all of the terms and conditions of, the applicable Ground Lease
of such Leased Site or Other Interest Site, as applicable. As to any Leased Site
or Other Interest Site, as applicable, neither Lessor nor any other Sprint Group
Member will be deemed to have assumed any duty or obligation of the Ground
Lessor under the applicable Ground Lease and will not be liable or responsible
in any manner whatsoever for any failure of such Ground Lessor to perform any
such duty or obligation. Lessee agrees that it will promptly pay or cause to be
paid the Ground Rent under each of the Ground Leases for the Leased Sites or
Other Interest Sites, as applicable during the Term of this Agreement when such
payments become due and payable and, if Lessee fails to pay Ground Rent under
any Ground Lease on a timely basis, Lessee will be responsible for any
applicable late charges, fees or interest payable to the Ground Lessor;
provided, however, that should any Ground Lessor refuse the payment of Ground
Rent for an applicable Site from any Person other than Lessor or its Affiliate,
as applicable, then Lessor or its Affiliate, as applicable, after written notice
from Lessee of the need for payment from such Person, will promptly pay such
amount, and Lessee will reimburse Lessor therefor within five (5) days after the
date of Lessor's payment. Except as provided in Section 4(c), Lessee will abide
by, comply in all respects with, and fully and completely perform all terms,
covenants, conditions, and provisions of each Ground Lease (including, without
limitation, terms, covenants, conditions, and provisions relating to
maintenance, insurance and alterations) as if Lessee were the "ground lessee"
under the applicable Ground Lease and, to the extent evidence of such
performance must be provided to the Ground Lessor of the applicable Ground
Lease, Lessee will provide such evidence to Ground Lessor. Unless otherwise
directed by Lessee or upon the suspension of the limited power of attorney
granted to Lessee below, neither Lessor, Sprint, nor any of their respective
Affiliates shall take any actions to interfere with Lessee acting as the "ground
lessee" under any Ground Leases as long as Lessee is performing its obligations
with respect to Ground Leases hereunder. To the extent that any Ground Lease
imposes or requires the performance of the "ground lessee" thereunder of any
duty or obligation that is more stringent than or in conflict with any term,
covenant, condition, or provision of this Agreement, the applicable term,
covenant, condition, or provision of the Ground Lease will control and will
constitute the duties and obligations of Lessee under this Agreement as to the
subject matter of such term, covenant, condition, or
19
provision. Lessee will not (and with respect to its activities on the Sprint
Collocation Space, each Sprint Collocator will not) engage in or permit any
conduct that would: (i) constitute a breach of or default under any Ground
Lease; or (ii) result in the Ground Lessor being entitled to terminate the
applicable Ground Lease or to terminate Lessor's right as ground lessee under
such Ground Lease, or to exercise any other rights or remedies to which the
Ground Lessor may be entitled for a default or breach under the applicable
Ground Lease. In no event shall Lessee have any liability to any Sprint Group
Member for any breach of a Ground Lease caused by an act or omission of Lessor
or any Sprint Group Member, before, on, or after the Effective Date, and the
Sprint Collocators hereby indemnify and hold the Lessee Indemnitees harmless
from and against and in respect of any and all Claims (other than Claims, to the
extent arising from actions taken by Lessee or its Affiliates) paid, suffered,
incurred or sustained by any Lessee Indemnitee and in any manner arising out of,
by reason of, or in connection therewith. During the Term as to any Leased Site
or Other Interest Site, as applicable, and subject to Sections 4(c) and 4(f)
below, Lessee agrees to exercise prior to the expiration of the applicable
Ground Lease and in accordance with the provisions of the applicable Ground
Lease, any and all renewal options existing as of the Effective Date and any
further renewal or extension options that may be granted by any Ground Lessor
after the Effective Date for any such Leased Site or Other Interest Site, as
applicable, under the Ground Leases of such Leased Sites or Other Interest
Sites, as applicable; provided, however, that Lessee shall not be required to
exercise any Ground Lease renewal option if the Sprint Collocator at the Site
covered by such Ground Lease is in default of its obligations under this
Agreement as to the Site beyond applicable notice and cure periods provided
herein.
(b) Lessee will not be entitled to act as agent for, or otherwise on behalf
of, Lessor or its Affiliates or to bind Lessor or its Affiliates in any way
whatsoever in connection with any Ground Lease or otherwise except as provided
in this Section 4. Lessor hereby delegates to Lessee the sole and exclusive
right to perform the obligations of and assert the rights of the "ground lessee"
under all Ground Leases and of the Sprint Contributors under all Collocation
Agreements with respect to Pre-Lease Sites, and to exercise all rights
thereunder subject only to the other provisions of this Section 4. In accordance
with the provisions of this Agreement, Lessee will have the right to review,
negotiate and execute on behalf of Lessor amendments and other documentation
relating to Ground Leases and to otherwise act on behalf of Lessor in dealing
with the Ground Lessors under the Ground Leases, and Lessor hereby grants to
Lessee a limited power of attorney and, subject to any limitation on such
appointment herein, appoints Lessee as its agent and attorney to review,
negotiate and execute on behalf of Lessor amendments and other documentation
relating to Ground Leases and to otherwise act on behalf of Lessor in dealing
with the Ground Lessors under the Ground Leases. The foregoing power of attorney
and appointment are subject to the following requirements and limitations: (i)
all amendments and other documentation executed by Lessee, and actions taken by
Lessee on behalf of Lessor must comply in all respects with the requirements and
provisions of this Agreement, (ii) upon request by Lessor, Lessee will provide
Lessor with such summaries, documentation and other information relating to
Lessee's negotiations and other activities pertaining to the Ground Lease and
the Ground Lessors as Lessor may reasonably request, and (iii) the foregoing
power of attorney and appointment granted herein to Lessee may be suspended by
written notice from Lessor to Lessee at any time upon the occurrence of an event
of default by Lessee under this Agreement or if Lessee violates or fails to
comply with the foregoing requirements and limitations and until such violation
or failure is cured. Lessee may use such power of attorney to
20
(i) negotiate and execute any Ground Lease renewal that is for a term of not
more than five (5) years, which may contain successive five (5) year renewal
options and otherwise shall be on commercially reasonable terms, (ii) execute
other modifications, waivers and amendments to Ground Leases that are reasonably
required in the normal business and operations of the Sites or (iii) amend,
modify, enforce or waive any terms of any Collocation Agreements applicable to
Pre-Lease Sites. Lessee will, and does hereby agree to, indemnify, defend and
hold the Sprint Indemnitees harmless from, against and in respect of any and all
Claims paid, suffered, incurred or sustained by any Sprint Indemnitee and in any
manner arising out of, by reason of, or in connection with all deeds and
activities performed by Lessee pursuant to and under the authority granted by
the power of attorney granted in this Section 4(b) (including, without
limitation, a violation failure to comply with the foregoing requirements and
limitations), provided, however, that such indemnity shall not be for amounts
payable under a Ground Lease after the Site Expiration Outside Date, unless
Lessee exercises its rights under Section 36 with respect to a Site or the terms
and provisions of such Ground Lease that extends beyond the Site Expiration
Outside Date are not commercially reasonable. Except as expressly provided in
this Agreement, no amendment, renewal, extension or other change to any Ground
Lease desired by Lessee during the Term pursuant to this Section 4 will be
effected without the prior consent of Lessor, such consent not to be
unreasonably withheld, conditioned or delayed. Lessor or the Sprint
Contributors, as applicable, shall respond to any written request that they
execute or consent to the execution of a Ground Lease amendment within ten (10)
Business Days of written notice thereof, with a failure to respond being deemed
a consent to the execution of such Ground Lease amendment by Lessee.
(c) With respect to any negotiations with a Ground Lessor of the terms of a
renewal or extension of a Ground Lease (other than a renewal or extension
pursuant to an option contained in such Ground Lease which Lessor is obligated
to exercise pursuant to Section 4(a)), Lessee will, at Lessee's sole cost and
expense, use commercially reasonable efforts to negotiate and obtain an
extension or renewal of all Ground Leases of the Leased Sites and Other Interest
Sites on behalf of and for the benefit of Lessor, and Lessor, if requested by
Lessee, will make commercially reasonable efforts to assist Lessee in obtaining
such extension or renewal; provided, however, that such renewal or extension
does not impose any liability or obligation on Lessor, any Sprint Collocator or
any of their respective Affiliates during the Term as to the applicable Site for
which Lessee is not responsible (or subsequently agrees to be responsible) under
the terms of this Agreement. If, at the conclusion of any such negotiations by
Lessee (a "Lessee Negotiated Renewal"), Lessee has obtained a proposal from the
applicable Ground Lessor for the renewal or extension of such Ground Lease that
provides for Renewal Ground Rent under such renewal or extension that does not
exceed one hundred sixty percent (160%) of the Expiring Ground Rent, does not
increase any revenue sharing thereunder and does not impose any other conditions
or responsibilities on the Lessee thereunder materially more onerous than in
such Ground Lease prior to the renewal thereof for such Site, Lessee agrees that
Lessee will be required to accept such proposal and use commercially reasonable
efforts to cause such renewal or extension to be entered into (subject to the
Sprint Collocator not being in default hereunder at such Site beyond applicable
notice and cure periods provided herein); provided, however, that in such event
the Sprint Collocation Charge payable by the Sprint Collocator under this
Agreement for the Sprint Collocation Space at the Site that is subject to such
renewal or extension will increase during the entire period of such renewal or
extension (and any subsequent renewals or extensions thereof exercised prior to
the applicable Withdrawal Date) by the amount
21
of the Shared Ground Rent Increase Payment. If the proposed Lessee Negotiated
Renewal provides for Renewal Ground Rent that exceeds one hundred sixty percent
(160%) of the Expiring Ground Rent or otherwise increases any revenue sharing
thereunder or otherwise imposes any other conditions materially more onerous
than those contained in such Ground Lease prior to the renewal thereof for such
Site, and Lessee does not desire to accept Renewal Ground Rent, Lessee shall so
notify Lessor in writing of the Renewal Ground Rent provided for in such Lessee
Negotiated Renewal, and Lessor shall have right (exercisable by written notice
from Lessor to Lessee within thirty (30) days after receipt of such notice from
Lessee to Lessor) to either (i) require Lessee to accept such proposal and use
commercially reasonable efforts to cause such Lessee Negotiated Renewal to be
entered into (but only at a Renewal Ground Rent not exceeding the amount of the
Renewal Ground Rent contained in the proposed Lessee Negotiated Renewal of which
Lessor was so notified) or (ii) attempt to negotiate the Renewal Ground Rent for
the period of such renewal or extension directly with the applicable Ground
Lessor; provided, however, that in either of such events, if any renewal or
extension is thereafter entered into, the Sprint Collocation Charge payable by
the Sprint Collocator under this Agreement for the Sprint Collocation Space at
the Site that is subject to such renewal or extension will increase during the
entire period of such renewal or extension (and any subsequent renewals or
extensions thereof exercised prior to the applicable Withdrawal Date) by the
amount of the Shared Ground Rent Increase Payment. Lessee at any time may enter
into any renewal or extension of a Ground Lease on any commercially reasonable
terms as it may elect. To the extent that Lessee or any Affiliate of Lessee
succeeds to the interest of any Ground Lessor in and to the Ground Lease located
at any Site, upon the expiration of the term of such Ground Lease (and any
renewal options contained therein), the term of such Ground Lease shall
thereafter be automatically renewed for additional five (5) year terms on the
same terms and conditions as the immediately preceding renewal or extension term
of the Ground Lease, provided, however, that the Ground Rent thereunder shall be
increased by an amount equal to the product of (x) the Ground Rent in the term
then expiring and (y) a fraction (but not less than one), the numerator of which
is the aggregate base Ground Rent payable during the final term of said Ground
Lease (prior to renewal in accordance with this sentence) and the denominator of
which is the aggregate base Ground Rent payable during the term immediately
preceding the final term of said Ground Lease (prior to renewal in accordance
with this sentence), assuming such terms are of equivalent length (or, if not of
equivalent length, then the period over which the base Ground Rent for the
expiring Ground Lease shall be calculated shall match the length of the renewal
or extension, as applicable), or if such Ground Lease had only one term thereto,
then the base Ground Rent shall increase during each year of the renewal or
extension at the periodic escalations, if any, provided for in the immediately
previous five (5) years of the term of such Ground Lease.
(d) Commencing from and after January 1, 2007, if on the date that is six
(6) months prior to the expiration of any Ground Lease, such Ground Lease has
not been renewed or extended, Lessee will so notify Lessor in writing, and
Lessor, at its option, may attempt to negotiate such renewal or extension and if
Lessee has not previously used commercially reasonable efforts pursuant to
Section 4(c) to obtain such renewal or extension, Lessee will reimburse Lessor
for its reasonable out of pocket expenses relating to such negotiation;
provided, however, that Lessor will not in connection with such renewal or
extension, without the approval of Lessee, agree to any revenue sharing in
excess of existing revenue sharing arrangements. If Lessor completes the
foregoing negotiations for, and executes and delivers, such renewal or
22
extension (a "Lessor Negotiated Renewal"), the Term as to such Site shall
continue in full force and effect; provided, however, that the Sprint
Collocation Charge payable by the Sprint Collocator under this Agreement for the
Sprint Collocation Space at the Site that is subject to the Lessor Negotiated
Renewal will increase during the entire period of such Lessor Negotiated Renewal
(and any subsequent renewals or extensions thereof) by the amount of the Shared
Ground Rent Increase Payment. Notwithstanding anything in this Agreement to the
contrary, however, in the event of an increase in the Sprint Collocation Charge
as a result of the payment by the Sprint Collocator of any Shared Ground Rent
Increase Payment under this Agreement, no portion of the Sprint Collocation
Charge attributable to any Shared Ground Rent Increase Payment shall be subject
to the annual increase in the Sprint Collocation Charge provided for in Section
11(b) (except that the Sprint Collocator will be obligated to pay as a part of
the Sprint Collocation Charge any periodic increases in the Shared Ground Rent
Increase Payment based on increased rent, fees and other charges provided for in
the applicable Ground Lease during the period of the applicable renewal or
extension). The foregoing sentence shall not limit the annual increase in the
portions of the Sprint Collocation Charge other than the Shared Ground Rent
Increase Payment as provided in Section 11(b). If Lessor or Lessee is not able
to renew or extend any Ground Lease in accordance with Section 4(c) and this
Section 4(d), then the Parties will permit such Ground Lease to expire on the
applicable expiration date, in which event this Agreement will have no further
force and effect as to the Leased Site or Other Interest Site, as applicable, to
which such Ground Lease applies except for such obligations accruing prior to or
as of such expiration date that are then unperformed.
(e) Notwithstanding anything in this Agreement to the contrary, with
respect to any Lessee Negotiated Renewal or Lessor Negotiated Renewal with
respect to a Site pursuant to which the Sprint Collocator is obligated to pay
any Shared Ground Rent Increase Payment in accordance with the provisions of
Section 4(c) or 4(d), such Sprint Collocator agrees that (i) if such Lessee
Negotiated Renewal or Lessor Negotiated Renewal provides for Renewal Ground Rent
that exceeds one hundred sixty percent (160%) of the Expiring Ground Rent and
the Sprint Collocator exercises its Withdrawal Right with respect to such Site
so that the Withdrawal Date for such Site would occur during the term of such
Lessee Negotiated Renewal or Lessor Negotiated Renewal, the Withdrawal Date for
such Site shall be automatically extended to, and shall be, the expiration date
of the then current term of such Lessee Negotiated Renewal or Lessor Negotiated
Renewal, (or if such Ground Lease has been extended prior to such exercise of
the Withdrawal Right, the Withdrawal Date shall be automatically extended until
the expiration of the next applicable Ground Lease term) and (ii) if such Lessee
Negotiated Renewal or Lessor Negotiated Renewal provides for Renewal Ground Rent
exceeding one hundred thirty percent (130%), but equal to or less than one
hundred sixty percent (160%), of the Expiring Ground Rent for such Site, and the
Sprint Collocator exercises its Withdrawal Right with respect to such Site so
that the Withdrawal Date for such Site would occur during the term of such
Lessee Negotiated Renewal or Lessor Negotiated Renewal the Sprint Collocator
shall continue to pay to Lessee the portion of the Sprint Collocation Charge
attributable to the Shared Ground Rent Increase Payment for such Site (but no
other portion of the Sprint Collocation Charge) in accordance with the
provisions of this Agreement until the earlier of (y) the expiration of the then
current term of such Lessee Negotiated Renewal or Lessor Negotiated Renewal (or
if such Ground Lease has been extended prior to such exercise of the Withdrawal
Right, the Withdrawal Date shall be automatically extended until the expiration
of the next applicable Ground Lease term) or (z) the fifth (5th) anniversary of
the commencement of the then current term of such
23
Lessee Negotiated Renewal or Lessor Negotiated Renewal (or if such Ground Lease
has been extended prior to such exercise of the Withdrawal Right, the Withdrawal
Date shall be automatically extended until the expiration of the next applicable
Ground Lease term). Notwithstanding the foregoing provisions of this Section
4(e), the obligations of the applicable Sprint Collocator in clause (ii) of the
immediately preceding sentence of this Section 4(e) shall not apply with respect
to any Lessor Negotiated Renewal (without in any manner otherwise affecting the
obligations of the applicable Sprint Collocator under clause (i) of the
immediately preceding sentence) if Lessee did not use commercially reasonable
efforts pursuant to Section 4(c) to obtain a renewal or extension of the Ground
Lease that was renewed or extended pursuant to such Lessor Negotiated Renewal.
Lessee's commercially reasonable efforts shall mean providing the Sprint
Collocators evidence, which may be a certification as to item (x), that it
either (x) engaged in active negotiations with the applicable Ground Lessor or
(y) sent regular correspondence to the applicable Ground Lessor with respect to
renewing such Ground Lease, in either case, at least six (6) months prior to the
expiration of such Ground Lease. Any dispute under this Section 4 shall be
subject to arbitration in accordance with the procedures set forth in Section
31(h). If a Withdrawal Right is exercised with respect to a Site that is the
subject of Lessor Negotiated Renewal or a Lessee Negotiated Renewal, Lessee
shall have no obligation to exercise any further extension options under the
Ground Lease applicable to such Site.
(f) Upon receipt by Lessor or any other Sprint Group Member of any notice
of default or notice of an act or omission which could with the passing of time
and/or the giving of notice constitute an event of default under a Ground Lease
or non-compliance with a term of a Ground Lease (the "Default Notice"), Lessor
will, within five (5) Business Days after receipt of the Default Notice or such
shorter time as is reasonably necessary to avoid a termination of such Ground
Lease, provide Lessee with a copy of the Default Notice. If such default or
non-compliance with a term of a Ground Lease is caused by Lessee or any Tower
Subtenant, Lessee will, and will cause the applicable Tower Subtenant to, cure
or otherwise remedy such default or noncompliance. If such default or
non-compliance is caused by any Sprint Collocator, or any other Sprint Group
Member, Lessor or the applicable Sprint Collocator will cause such default or
non-compliance to be cured or otherwise remedied at its sole cost and expense.
Lessor and each Sprint Contributor hereby agree that if because of the failure
of Lessor or any Sprint Contributor to perform of any of its duties,
obligations, liabilities or responsibilities under any Ground Lease that results
in a default under and termination of a Ground Lease (unless such duty,
obligation, liability or responsibility is assumed by Lessee hereunder), the
applicable Sprint Collocators shall pay to Lessee an amount equal to the
Unamortized Rent as of the date of termination of the Ground Lease for the
affected Site; provided, however, that such payment shall be and constitute
liquidated damages (and not as a penalty) to Lessee hereunder on account of such
failure, it being agreed between the Parties that the actual damages to Lessee
in such event are impractical to ascertain and the amount of the Unamortized
Rent is a reasonable estimate thereof, and Lessee hereby expressly waives and
relinquishes any and all other remedies at law or in equity.
SECTION 5. Collocation Agreements.
(a) Without limiting the generality of Section 4, Lessee expressly
acknowledges that, as to each Site, this Agreement is subject to all Collocation
Agreements currently in effect with respect to such Site as are set forth in the
Agreement to Lease and Sublease. In respect of each Master Lease Site, by
execution of this Agreement as to the Initial Master Lease Sites and
24
thereafter as of the Conversion Closing Date for each additional Master Lease
Site, Lessor does transfer, assign and convey over unto Lessee, for the Term as
to such Master Lease Site, all of its rights, title and interest in, to or under
any Collocation Agreements affecting such Master Lease Site. In respect of each
Pre-Lease Site, Lessor and each Sprint Contributor does hereby delegate all of
its respective rights, duties, obligations and responsibilities under the
Collocation Agreements to Lessee for the Term as to such Site for periods
occurring from and after the Effective Date. Lessee does hereby assume and agree
to pay and perform all of the duties, obligations, liabilities and
responsibilities of Lessor and all Sprint Contributors under the Collocation
Agreements affecting each Site arising from and after the Effective Date, and
Lessee will receive all rents payable under such Collocation Agreement for
periods occurring from and after the Effective Date. Lessor, each Sprint
Contributor and Lessee acknowledge and agree that in connection with the
transactions described in this Section 5(a), certain of the Collocation
Agreements may be required to be bifurcated as provided in Section 6.11 of the
Agreement to Lease and Sublease and shall be subject to further bifurcation as
provided in Section 41(f).
(b) Lessee will, and does hereby agree to, indemnify, defend and hold the
Sprint Indemnitees harmless from, against and in respect of any and all Claims,
paid, suffered, incurred or sustained by any Sprint Indemnitee and in any manner
arising out of, by reason of, or in connection with any failure of the duties,
obligations, liabilities and responsibilities of Lessor or the Sprint
Contributors under any of the Collocation Agreements (solely in their role as
"landlord" thereunder and not with respect to the use and operation of the
Sprint Collocation Space or otherwise as the subtenant of a Site) affecting each
Site and arising from and after the Effective Date, to be fully and completely
performed pursuant to the Collocation Agreements; provided, however, that the
foregoing indemnification shall not be deemed to abrogate or impair the
operation or effect of any representations or warranties of the Sprint
Contributor made with respect to the Collocation Agreements in the Agreement to
Lease and Sublease or be applicable to a matter that constitutes an Excluded
Liability under, and as defined in, the Agreement to Lease and Sublease.
(c) The Sprint Collocators hereby agree to indemnify, defend and hold the
Lessee Indemnitees harmless from, against and in respect of any and all Claims,
paid, suffered, incurred or sustained by any Lessee Indemnitee and in any manner
arising out of, by reason of, or in connection with any failure of the duties,
obligations, liabilities and responsibilities of Lessor or any Sprint
Contributor under any of the Collocation Agreements affecting each Site and
arising (i) prior to the date hereof, to be fully and completely performed
pursuant to the Collocation Agreements, (ii) during the Term of this Agreement
and is related to an action or failure to act by the Sprint Contributors or any
of their respective Affiliates required under this Agreement, or (iii) following
the expiration of the Term as to any Site to which any such Collocation
Agreement applies from and after the date that any such Collocation Agreement is
reassigned or deemed reassigned to Lessor or its designee as provided in Section
5(d).
(d) Unless Lessee exercises the purchase option with respect to a Site
under Section 36 of this Agreement, the assignment by Lessor to Lessee of the
Collocation Agreements in respect of each Site will automatically terminate and
expire and such Collocation Agreements will automatically be (or be deemed)
reassigned or assigned, as the case may be, to Lessor or its designee, and
Lessor or its designee will accept such reassignment or assignment, as the case
25
may be, upon the expiration of the Term of, or earlier termination of, this
Agreement in respect of such Site.
SECTION 6. Sprint Collocation Space.
(a) Lessor, each Sprint Collocator and Lessee expressly acknowledge that,
at all times during the Term as to each Master Lease Site, the Sprint
Collocation Space of each Master Lease Site will be deemed to be leased,
subleased or otherwise made available by Lessor to Lessee, and subleased back or
otherwise made available to the applicable Sprint Collocator, pursuant to this
Agreement, and the Sprint Collocation Space at each Pre-Lease Site will be
deemed reserved for or otherwise be made available to the applicable Sprint
Collocator pursuant to this Agreement, in each case for the exclusive possession
and use by such Sprint Collocator and its Affiliates and permitted transferees,
whether or not such Sprint Collocation Space is now or hereafter occupied. As a
part of the Sprint Collocation Space of each Site, Lessee also grants to the
Sprint Collocator as to each Master Lease Site, and the Sprint Collocator
reserves and shall at times retain (for the benefit of the Sprint Collocator or
any of its Affiliates and except to the extent limited by any restrictions
contained in any applicable Ground Lease, the Permitted Encumbrances or by Law):
(i) a non-exclusive right and easement (over the surface of the Site), but
subject to the terms of this Agreement, the Ground Leases, the rights of Tower
Subtenants, any other agreements affecting the Site existing prior to the
Effective Date (not entered into by Lessee or its Affiliates) and such
commercially reasonable rules and regulations as Lessee may from time to time
propagate (such rules and regulations to be applied uniformly by Lessee between
the Sprint Collocators and Tower Subtenants) and applicable Laws, for ingress to
and egress from the entire Site, and access to the entire Tower and all
Improvements to such Site and Tower, at such times (on a 24-hour, seven (7) day
per week basis unless otherwise limited by the Ground Lease), to such extent,
and in such means and manners (on foot or by motor vehicle, including trucks and
other heavy equipment), as the Sprint Collocator deems reasonably necessary in
connection with its full use and enjoyment of the Sprint Collocation Space,
including, without limitation, a right to construct, install, use, operate,
maintain, repair and replace its Communications Equipment on the applicable
Sprint Collocation Space; and (ii) the right, exercisable only during periods
during which the applicable Sprint Collocator is actively performing work at a
Site (and subject to the terms of the applicable Ground Lease and applicable
Laws), to use any unoccupied portion of the ground space at the applicable Site
for purposes of temporary location and storage (but only during the period of
the performance of such work at such Site) of any of its Communications
Equipment and for performing any repairs or replacements (provided that such use
and occupancy of any unoccupied portion of a Site will not materially adversely
affect the use and occupancy by, or interfere with the operations of, a Tower
Subtenant or Lessee of the Site, and, provided further that the Sprint
Collocator will be required to remove any of its stored Communications Equipment
on any unoccupied portion of the Site upon fifteen (15) days prior written
notice from Lessee if such unoccupied portion of the Site is under sublease or
other occupancy arrangement with a Tower Subtenant that is prepared to take
occupancy of such portion of the Site or is otherwise required for use by Lessee
for work or storage at such Site); and (iii) a non-exclusive right and easement
for the use, operation, maintenance, repair and replacement of all utility
lines, Equipment and appurtenances now existing and located on the Site and
providing electrical and any other utility service to Sprint's Communications
Facility on the Site, which right and easement includes the right of the Sprint
26
Collocator and its agents, employees and contractors to enter upon the Site to
repair, maintain and replace such utility facilities.
(b) Notwithstanding the foregoing provisions of this Section 6, except in
the event of an Emergency, a Sprint Collocator shall give Lessee at least ten
(10) days prior written notice of its intention to undertake any activity that
involves having any Sprint Collocator or its contractors, subcontractors,
engineers, agents, advisors, consultants, representatives, or other Persons
authorized by such Sprint Collocator to (i) climb the Tower at any Site (and in
the event of an Emergency the Sprint Collocator will provide such notice of
having climbed the Tower promptly after performed such act), (ii) perform
construction or maintenance activities that might reasonably be expected to
temporarily or permanently affect access or use of a Site or (iii) involves the
use of heavy equipment. No representation is made by Lessee with respect to
whether any Sites are accessible by trucks or other heavy equipment or are
currently capable of being utilized by same, and Lessee shall have no obligation
to any Sprint Collocator to build access roads that are accessible by trucks or
other heavy equipment or to prepare the Site to be utilized by same; provided,
however, that Lessor will be required to maintain in such order and repair as
would be required under industry standards such access roads existing as of the
Effective Date and agrees not to take any action (except as required by Law, a
Governmental Authority, the applicable Ground Lease existing prior to the
Effective Date, any Collocation Agreement existing prior to the Effective Date
or other agreement affecting the Site existing prior to the Effective Date (and
not entered into by Lessee or its Affiliates)) that would materially diminish or
impair any means of access to any Site existing as of the Effective Date. The
Sprint Collocation Space at each Site, on the Land constituting a portion of
such Site, shall include an additional unobstructed buffer area three (3) feet
in width along and around the perimeter of all portions of Sprint's Improvements
located on such Land (collectively, the "Sprint Buffer Zone"); provided,
however, that the Sprint Collocators acknowledge and agree that (i) with respect
Sprint's Improvements located on the Land at any Site on the Effective Date, the
Sprint Buffer Zone is hereby established only to the extent it exists on any
Site as of the Effective Date, (ii) with respect to the portions of Sprint's
Improvements consisting of cable runs, the Sprint Buffer Zone need not
necessarily include an area three (3) feet in width around the perimeter thereof
so long as the applicable Sprint Collocator has reasonable access to such
portions of Sprint's Improvements for the purposes of maintenance, repair and
replacement thereof. If the Sprint Buffer Zone (coupled with applicable zoning,
setback or other Laws or terms in the applicable Ground Lease or agreements with
other Tower Subtenants) effectively limits Lessee's ability to lease, license or
otherwise allow space at a Site to be used by a prospective Tower Subtenant in a
commercially reasonable manner, then the Lessee may, by written notice to the
applicable Sprint Collocator, request such Sprint Collocator to reduce the size
of the Sprint Buffer Zone to accommodate the reasonable requirements of such
prospective Tower Subtenant. Each such request shall be accompanied by
reasonable information that will enable the Sprint Collocator to determine the
nature and location of the requested reduction and the extent of the proposed
encroachment into the Sprint Buffer Zone, and each Sprint Collocator agrees to
not unreasonably withhold, condition or delay its consent to any such request.
If any Sprint Collocator consents to such a reduction in the Sprint Buffer Zone,
then such reduction shall be effective only during the period during which the
permitted encroachment into the Sprint Buffer Zone exists, and at such time as
the Improvements or Equipment at the applicable Site that encroach upon the
Sprint Buffer Zone and are the subject of the permitted reduction are
permanently removed, the Sprint Buffer Zone shall be reinstated to the extent it
existed prior to
27
the time of the permitted reduction. In addition, if at any time the applicable
Sprint Collocator has ceased use of any portion of the Sprint Collocation Space
on the Tower that contained Communications Equipment located outside the Sprint
Tower Envelope on the Effective Date, then Lessee may, by written notice to the
applicable Sprint Collocator, request such Sprint Collocator to permit Lessee to
use such unused portion of the Sprint Collocation Space to accommodate the
reasonable requirements of such prospective Tower Subtenant, and each Sprint
Collocator agrees to not unreasonably withhold, condition or delay its consent
to any such request.
(c) Notwithstanding anything in this Agreement to the contrary, (i) Lessor,
Lessee and Sprint acknowledge and agree that certain Sites identified on Exhibit
A, are either being leased, subleased or otherwise made available by Lessor to
Lessee or being operated by Lessee pursuant to this Agreement but are not
subject to the sublease to or reservation by any Sprint Collocator of any Sprint
Collocation Space (such Sites, along with any Site where the applicable Sprint
Collocator exercises its Withdrawal Rights from and after the Withdrawal Date
for such Site, the "Non-Collocation Sites"), and the duties and obligations of
any Sprint Collocator in this Agreement regarding Sprint Collocation Space shall
not be applicable to the Non-Collocation Sites and (ii) Lessee shall have no
duties to Lessor or Sprint with respect to such Non-Collocation Sites pursuant
to Sections 6 and 25. On the Effective Date, the number of Sites either
subleased back or otherwise made available to the applicable Sprint Collocator
shall not be less than the number of Sites determined in accordance with the
methodology set forth in Section 2.6(h) of the Agreement to Lease and Sublease.
(d) Each Sprint Collocator will, at all times during the Term as to any
Site, at such Sprint Collocator's sole cost and expense, keep and maintain
Sprint's Communications Equipment and Sprint's Improvements in a structurally
safe and sound condition and in working order.
(e) Without limiting any of Lessee's rights or obligations under this
Agreement, Lessee acknowledges and agrees that Lessee will not engage, nor will
it permit any Tower Subtenant to engage, in any conduct or activity that might
reasonably be expected to interfere (excluding electrical interference which
will be governed by Section 15) with the Sprint Collocator's peaceful and quiet
enjoyment of the Sprint Collocation Space or the use and operation of the Sprint
Collocator of Sprint's Communications Equipment at such Site. Notwithstanding
anything to the contrary herein, in no event shall Lessee be required to enforce
any rights against or resolve any disputes with a Tower Subtenant who at the
time of such enforcement action or dispute is an Affiliate of Sprint.
(f) Without limiting the rights or obligations of any Sprint Collocator
under this Agreement, each Sprint Collocator acknowledges and agrees that it
will not engage, nor permit its Affiliates to engage, in any conduct or activity
that might reasonably be expected to interfere (excluding electrical
interference which will be governed by Section 15) with Lessee's or any Tower
Subtenant's peaceful and quiet enjoyment of its space on any Tower or the use
and operation of Communications Equipment by any Tower Subtenant.
(g) Each Sprint Collocator agrees to indemnify and hold the Lessee
Indemnitees harmless from and against and in respect of any and all Claims,
paid, suffered, incurred or
28
sustained by any Lessee Indemnitee and in any manner arising out of, by reason
of, or in connection with the activities of such Sprint Collocator or any of its
Affiliates in connection with any work at any applicable Site performed at by or
at the direction of such Sprint Collocator or its Affiliates (but not including
any work at any Site that Lessee is required to perform pursuant to this
Agreement). The applicable Sprint Collocator shall restore any property damage
to any Site or appurtenant property or any access roads thereto in connection
with any such work caused by motor vehicles, trucks or heavy equipment of such
Sprint Collocator, any of its employees, agents, contractors or designees. If
such restoration work is not performed by such Sprint Collocator within fifteen
(15) days after written notice from Lessee (or if not capable of being performed
within such fifteen (15) day period, then within a reasonable period of time
provided that the Sprint Collocator is actively and diligently pursuing
completion of such restoration work), Lessee may, but shall not be obligated to
perform such work on behalf of an for the account of such Sprint Collocator, and
such Sprint Collocator shall reimburse Lessee for the costs of such restoration
work within fifteen (15) days after demand thereof, together with reasonable
evidence of the incurrence of such costs.
(h) Lessee agrees to and does hereby waive and relinquish any lien of any
kind and any and all rights, including levy, execution and sale for unpaid
rents, that Lessee may have or obtain on or with respect to any of Sprint's
Communications Equipment.
SECTION 7. Permitted Use.
(a) Lessee will use, and will permit the use of, the Leased Property at
each Site only for the Permitted Use.
(b) Lessee will not use, or permit to be used, any Site, or any portion of
such Site, by Lessee, any Person (other than the applicable Sprint Collocator or
its Affiliates) or the public in such manner as might reasonably be expected to
impair Lessor's title to, or interest or rights in, such Site, or any portion of
such Site, or in such manner as might reasonably make possible a Claim or Claims
of adverse usage or adverse possession by the public, as such, or any Person
(other than the applicable Sprint Collocator or any of its Affiliates), or of
implied dedication of any of the Leased Property of such Site. Nothing contained
in this Agreement and no action or inaction by Lessor, any Sprint Collocator or
any of their respective Affiliates will be deemed or construed to mean that
Lessor or any Sprint Collocator has granted to Lessee any right, power or
permission to do any act or make any agreement that may create, or give rise to
or be the foundation for any such right, title, interest, lien, charge or other
encumbrance upon the estate of Lessor in any Site.
(c) Each Sprint Collocator will use the Sprint Collocation Space at each
Site only for installation, use, operation, repair and replacement of Sprint's
Communications Facility. No Sprint Collocator will use the Sprint Collocation
Space at any Site in such manner as might reasonably be expected to impair
Lessee's rights or interest in such Site or in such manner as might reasonably
make possible a Claim or Claims of adverse usage or adverse possession by the
public, as such, or any other Person (other than the Sprint Collocator or any of
its Affiliates), or of implied dedication of such Sprint Collocation Space.
Except as specifically permitted hereunder, Sprint shall have no right to use or
occupy any space at any Site other than the Sprint
29
Collocation Space that it occupies from time to time in accordance with the
terms of this Agreement.
SECTION 8. Access.
Except to the extent limited by any restrictions contained in any
applicable Ground Lease, the Permitted Encumbrances, this Agreement or by Law,
the interest or rights of Lessee in or to each Site under this Agreement
includes, as an appurtenance thereto, a non-exclusive right for access to the
Leased Property of each Site on a 24-hour, seven (7) day per week basis, on foot
or motor vehicle, including trucks and other heavy equipment, for the
installation and maintenance of the Tower and Improvements of such Site and the
Communications Facilities of Tower Subtenants. The Parties acknowledge and agree
that the right to access to any portion of the Leased Property of each Site
granted pursuant to this Section 8 will be granted to Lessee and its authorized
contractors, subcontractors, engineers, agents, advisors, consultants,
representatives, or other persons authorized by Lessee and, under Lessee's
direct supervision, and to Tower Subtenants, subject to any restrictions
contained in the applicable Ground Lease, the Permitted Encumbrances, this
Agreement or by Law.
SECTION 9. Term.
(a) The term of this Agreement, as to each Master Lease Site, will commence
on the Effective Date with respect to the Initial Master Lease Sites and
Conversion Closing Date (as acknowledged and confirmed in the applicable Site
Designation Supplement) with respect to all other Master Lease Sites and will
expire on the Site Expiration Date for such Site. The term of this Agreement, as
to each Pre-Lease Site, will commence on the Effective Date and will expire on
the Site Expiration Date for such Site; provided; however, that the term of this
Agreement as to any Pre-Lease Site shall automatically expire as a result of a
Conversion Closing under the provisions of the Agreement to Lease and Sublease,
in which event the Pre-Lease Site will automatically be converted to and become
a Master Lease Site hereunder as of the Conversion Closing Date for such Site,
and no further instrument will be required to evidence such conversion;
provided, however, that upon the request of any Party, the Parties will promptly
execute such instruments as may be reasonably required to further evidence such
conversion. This Agreement will remain in full force and effect until the
expiration or earlier termination of the term of this Agreement as to all Sites.
(b) No surrender by Lessee to Lessor of the Leased Property of any Master
Lease Site or any portion of such Site, prior to the expiration of the Term as
to such Master Lease Site will be valid or effective unless agreed to and
accepted in writing by Lessor, and no act by Lessor, other than such a written
acceptance, will constitute an acceptance of any such surrender.
(c) Upon expiration or earlier termination of the Term as to any Master
Lease Site or as to any Pre-Lease Site prior to any Conversion Closing for such
Pre-Lease Site, Lessee, if requested by Lessor, will, at its cost and expense
and in accordance with instructions of Lessor, within a reasonable period of
time, but in no event less than thirty (30) days or such shorter period of time
as may be required under any applicable Ground Lease, (i) cause the Tower
Subtenants on such Site to stop and cease the operation of their respective
Communications Facilities on such Site (but only to the extent that any such
Tower Subtenant, in Lessee's
30
reasonable judgment, does not occupy such Site pursuant to a commercially
reasonable Collocation Agreement) and (ii) to the extent permitted by the
applicable Ground Lease, remove all of Lessee's Severable Alterations from such
Site and restore each Site substantially to the condition it was in on the
Effective Date, subject to the addition of any permitted Non-Severable
Alterations; provided, however, that upon expiration or earlier termination of
the Term as to any Site upon the expiration or termination of any Ground Lease,
if required by the applicable Ground Lease, Lessee will remove the Tower and any
Improvements (whether or not constituting Severable Alterations) from such Site
and otherwise restore such Site to the condition required under the applicable
Ground Lease. The Tower and any Improvements so removed (to the extent not
constituting Severable Alterations of Lessee) will either be (i) delivered by
Lessee to any Person designated by Lessor for disposition by Lessor or its
designee, who shall pay to Lessee its cost of removal thereof, up to the net
sales proceeds such Person receives from the dispositions thereof, or (ii) sold
or otherwise disposed of by Lessee for not less than their salvage value, and
the net proceeds of such sale or other disposition after deducting Lessee's cost
of removal thereof will be paid to Lessor when and as received by Lessee. Any
Severable Alterations not removed by Lessee within such 30-day period will, at
Lessor's option, be deemed abandoned by Lessee and title to such Severable
Alterations will automatically, without further action, vest in Lessor. Except
as set forth in Section 41, in the event of the expiration of the Term as to any
Site prior to the Site Expiration Outside Date, and without limiting any of
Lessee's other rights or remedies hereunder, Lessee will have no right or claim
to any refund or credit of any portion of the prepaid Rent for such Site. Each
Site shall be delivered by Lessee to Lessor at the end of the Term as to such
Site in the condition required by this Agreement and shall otherwise be
delivered to Lessor in good condition, repair and order, reasonable wear and
tear and casualty and condemnation which Lessee is not required to repair
excepted, but without any implied warranties.
(d) Upon expiration or earlier termination of the Term as to any Master
Lease Site or any Pre-Lease Site (other than as a result of the conversion of
such Pre-Lease Site to a Master Lease Site hereunder), Lessee, if requested by
Lessor, will deliver or cause to be delivered to Lessor (i) copies of all
written (and effective) Ground Leases, Collocation Agreements and material
Governmental Approvals solely related to such Site or, to the extent not solely
related, appropriate extracts thereof, and (ii) copies of, or extracts from, all
current files and records of Lessee solely related to the ownership, occupancy
or leasing of such Site or, to the extent not so solely related, appropriate
extracts thereof; provided, that Lessee will not be required to deliver to
Lessor any privileged document and Lessee, in its sole discretion, may deliver
such documents in electronic form.
(e) Unless and until Lessee has exercised its purchase option under Section
36, Lessor will maintain or replace all Tower Removal Bonds as are in existence
as of the Effective Date with respect to the Sites (and provide Lessee copies of
same), unless any such Tower Removal Bond is no longer required with respect to
a Site. Lessee will, and does hereby agree to, indemnify, defend and hold the
Sprint Indemnitees harmless from, against and in respect of any and all Claims
paid, suffered, incurred or sustained by any Sprint Indemnitee and in any manner
arising out of, by reason of or in connection with the failure of Lessee to
comply with the conditions of the Tower Removal Bonds or any claim made by an
obligee on, or any payment made to, such obligee under any Tower Bond.
31
SECTION 10. Withdrawal.
(a) The Sprint Collocator at each Site will have Withdrawal Rights, which
will be exercisable in respect of any Site only if the applicable Withdrawal
Date is (i) on the tenth (10th) anniversary of the Effective Date (the "Ten Year
Withdrawal Date"), (ii) on the last day of each successive five (5) year period
thereafter or (iii) at any time after the Ten Year Withdrawal Date if there is
an occurrence of a Withdrawal Cause. To exercise any such Withdrawal Rights with
respect to any Site, the applicable Sprint Collocator will give Lessee written
notice of such exercise (the "Withdrawal Notice"), as applicable (A) not less
than one (1) year prior to the Ten Year Withdrawal Date, (B) one hundred eighty
(180) days prior to any applicable Withdrawal Date pertaining to any five (5)
year period following the Ten Year Withdrawal Date, and (C) ninety (90) days
prior to any Withdrawal Date occurring as a result of the occurrence of
Withdrawal Cause. If a Sprint Collocator exercises the Withdrawal Rights as to
any Site, the Sprint Collocator will not be required to pay the Sprint
Collocation Charge with respect to such Site for the period occurring after the
Withdrawal Date specified in the applicable Withdrawal Notice. Not later than
the Withdrawal Date of any Site, the Sprint Collocator will vacate the Sprint
Collocation Space of such Site and remove, at such Sprint Collocator's cost and
expense, all of Sprint's Communications Equipment at such Site (and otherwise
leave the vacant Sprint Collocation Space in good condition, repair and order
(reasonable wear and tear and loss by casualty and condemnation excepted) and
shall remove all of Sprint's Communications Equipment therefrom and restore any
damage thereto caused by, through or under any Sprint Group Member), if such
Sprint Collocation Space is occupied, whereupon the Sprint Collocator's right to
occupy and use the Sprint Collocation Space of such Site pursuant to this
Agreement will be terminated. At the request of either the applicable Sprint
Collocator or Lessee, the appropriate Parties will enter into documentation, in
form and substance reasonably satisfactory to such Parties, evidencing any
withdrawal effected pursuant to this Agreement.
(b) In addition to, and not in limitation of any right of any Sprint
Collocator under Section 10(a), and notwithstanding anything in this Agreement
to the contrary, without limiting or diminishing Sprint's payment obligations
hereunder in any manner, including its obligation to pay Sprint Collocation
Charge, no Sprint Collocator will have any obligation to occupy, or to operate a
Communications Facility on, the Sprint Collocation Space of any Site, and each
Sprint Collocator will have the right, exercisable at any time during the Term
as to any Site, to cease occupying or operating Sprint's Communications Facility
on the Sprint Collocation Space of such Site, and retain its right to such
Sprint Collocation Space and may permit any of its Affiliates to occupy such
Sprint Collocation Space, so long as the Sprint Collocator remains the primary
obligor for the Sprint Collocation Charge in respect of such Site and such
Affiliates' use of the Sprint Collocation Space is in accordance with all the
terms and conditions of this Agreement. In no event shall such use and occupancy
by an Affiliate of Sprint diminish the applicable Sprint Collocator's rights and
obligations hereunder.
SECTION 11. Rent and Pre-Lease Rent; Sprint Collocation Charge.
(a) Lessee will prepay Rent in respect of the Leased Property of each of
the Initial Master Lease Sites for the entire Term as to such Master Lease Site
on the Effective Date. Lessee will prepay the Pre-Lease Rent in respect of the
Leased Property of each Pre-Lease Site for the entire Term as to such Pre-Lease
Site on the Effective Date for each Pre-Lease Site. Such
32
Rent and Pre-Lease Rent will be specifically allocated to the periods as set
forth in Exhibit H ("Allocated Rent"); provided, however, that if any Pre-Lease
Site becomes a Master Lease Site as a result of a Conversion Closing, then the
remaining portion of the Pre-Lease Rent attributable to the periods from and
after the Conversion Closing Date will thereafter be credited to and constitute
Rent for such Master Lease Site for the corresponding periods after such
Conversion Closing Date; and provided, further, that such allocation of Rent and
Pre-Lease Rent shall in no event fail to qualify for the uneven rent test
provided for in Treasury Regulations ss.1.467-3(c)(4). For each calendar month
during the Term as to each Site, the Sprint Collocator at each Site will pay the
Sprint Collocation Charge with respect to the Sprint Collocation Space for such
Site (or if there is more than one Tower at such Site on which Sprint maintains
Sprint Collocation Space, with respect to the Sprint Collocation Space of each
Tower at such Site), in advance on the first day of each such month, beginning
on the Effective Date. Lessee agrees that, except pursuant to the terms of
Sections 4(f) and 41 and any provision contained in the Agreement to Lease and
Sublease that expressly provides for the same, the Rent and the Pre-Lease Rent
are non-refundable and that Lessee will have no right of abatement, reduction,
setoff, counterclaim, rescission, refund, defense or deduction with respect
thereto. The Sprint Collocators each agree that they will have no right of
abatement (except as set forth in Section 14), reduction, setoff, counterclaim,
rescission, refund, defense or deduction with respect to any payment of the
Sprint Collocation Charge (including any Shared Ground Rent Increase Payment) or
any amount payable by a Sprint Collocator pursuant to Section 11(g).
(b) The following terms will have the following definitions:
"Pre-Lease Rent" means, as to any Pre-Lease Site, the amount prepaid by
Lessee to Lessor with respect to such Pre-Lease Site pursuant to this Agreement
and as specified in Exhibit H, and "Rent" means, as to any Master Lease Site,
the amount prepaid by Lessee to Lessor with respect to such Master Lease Site
pursuant to this Agreement and as specified in Exhibit H (and as credited in
Section 11(a)). Pre-Lease Rent and Rent are intended to constitute "fixed rent"
(as such term is defined in Treasury Regulations ss.1.467-1(h)(3)).
"Sprint Collocation Charge" means, as to any Sprint Collocation Space at
any Site, the monthly amount payable to Lessee by the applicable Sprint
Collocator for the sublease, use and occupancy, as applicable, of the Sprint
Collocation Space at such Site pursuant to this Agreement in an amount equal to
$1,400 per month subject to an annual increase on each CPI Change Date equal to
the lesser of (a) three percent (3%) or (b) the applicable CPI Change plus two
percent (2%).
(c) If the Effective Date is a day other than the first day of a calendar
month, the applicable Sprint Collocation Charge for the period from the
Effective Date through the end of the calendar month during which the Effective
Date occurs will be prorated on a daily basis, and will be included in the
calculation of and payable with the Sprint Collocation Charge for the first full
calendar month of the Term. If the date of the expiration of the Term as to any
Site is a day other than the last day of a calendar month, the applicable Sprint
Collocation Charge for such calendar month will be prorated on a daily basis. On
the Effective Date, the aggregate number of Sites for which the Sprint
Collocation Charge is payable on the Effective Date shall not be less than the
number of Sites determined in accordance with the methodology set forth in
Section 2.6(h) of the Agreement to Lease and Sublease.
33
(d) If any Sprint Collocator does not pay all or any portion of the Sprint
Collocation Charge (the "Unpaid Amount") or any Ongoing Revenue Sharing Payment
when due and payable, the Sprint Collocator will pay Lessee a late charge equal
to the product of (i) the lesser of (A) the Prime Rate plus one and one-half
percent (1.5%) or (B) twelve percent (12%) per annum and (ii) the Unpaid Amount
calculated for each day from the date on which the outstanding Unpaid Amount was
due until the date of payment of such Unpaid Amount in full.
(e) Notwithstanding that Rent and Pre-Lease Rent shall be prepaid in
accordance with Section 11(a), the Parties agree that, for Tax purposes only,
the Allocated Rent for each Site shall represent and be the amount of Rent or
Pre-Lease Rent, as applicable, for which Lessee becomes liable on account of the
use of each applicable Site for each calendar year, in whole or in part, of the
Term.
(f) It is the intention of the Parties that the allocation of Rent or
Pre-Lease Rent to each Rent Payment Period as provided in Exhibit H constitutes
a specific allocation of fixed rent within the meaning of Treasury regulations
ss. 1.467-1(c)(2)(ii)(A), with the effect that pursuant to Treasury regulation
ss.ss. 1.467-1(d) and 1.467-2, Lessor and Lessee, on any federal income tax
returns filed by each of them (or on any Tax return on which their income is
included), shall accrue the amounts of rental income and rental expense,
respectively, set forth for each Rent Payment Period in Exhibit H under the
caption "Proportional Rent." Because Lessee is prepaying the Rent or Pre-Lease
Rent in respect of each Site for the entire Term pursuant to Section 11(a),
there shall be considered to exist a loan from Lessee to Lessor for purposes of
Section 467 of the Code with respect to each Site equal to the amount set forth
in Exhibit H under the caption "Section 467 Loan" (the "Section 467 Loan").
Lessor shall deduct interest expense and Lessee shall accrue interest income, in
each case, in an amount equal to that set forth in Exhibit H under the caption
"Section 467 Interest" for the applicable Rent Payment Period. In no event shall
any principal or interest on any Section 467 Loan be separately payable as such
(including upon any termination of this Agreement with respect to a Site), it
being agreed and understood that these items represent characterizations for Tax
purposes only, and in no event whatsoever shall Lessee be entitled to a
reduction of, or offset against, the amounts of Rent and Pre-Lease Rent payable
pursuant to Section 11(a).
(g) Each Sprint Collocator shall pay, as additional collocation rent, to
Lessee, (i) within fifteen (15) Business Days after demand by Lessee
(accompanied by reasonable evidence that such amounts are due and payable to the
applicable Ground Lessors), an amount equal to one half (1/2) of (A) the lump
sum amount necessary to be paid to lessors under any applicable Ground Leases in
order to relieve Lessee of any obligation to pay Revenue Sharing Payments under
such Ground Leases during the entire Term as to the Site covered by any such
Ground Lease, and (B) any Ongoing Revenue Sharing Payment during the Term of
this Agreement; provided, however, that if at the time Lessee notifies any
Sprint Collocator of the existence and amount of such any Ongoing Revenue
Sharing Payment, Lessee also notified the Sprint Collocator of the duration of
such Ongoing Revenue Sharing Payment and the amount of and the dates on which
such Ongoing Revenue Sharing Payments are due and payable to the Ground Lessor,
Lessor will pay to the Ground Lessor or to Lessee for payment to the Ground
Lessor (as directed by Lessee) the amount of such Ongoing Revenue Sharing
Payments so payable on and before the date when they become due and payable for
the duration of such payment period as designated by Lessee. Upon request by any
Sprint Collocator, Lessee will provide Lessor with
34
such supporting documentation as such Sprint Collocator may reasonably require
to evidence that any Revenue Sharing Payments are due and payable to any Ground
Lessor.
SECTION 12. Condition of the Sites and Obligations of Lessee.
(a) Lessee acknowledges that, as between Lessor, Lessee and the Sprint
Collocator, in respect of each Site, Lessee has the obligation, right and
responsibility to repair and maintain such Site except as otherwise provided in
this Agreement, including without limitation, an obligation to monitor each
Tower to maintain the structural integrity of the Tower and the ability of the
Tower to hold and support all Communications Equipment then mounted on the
Tower, in accordance with all applicable Laws and standard industry practices.
Unless any Lessee Indemnitee has received payment for a claim for
indemnification under Article 9 of the Agreement to Lease and Sublease related
to such condition, Lessee shall have no obligation to perform any repair of a
Site with respect to a condition existing prior to the date hereof. Subject to
the other provisions contained in this Agreement, Lessee, at its sole cost and
expense, will monitor, maintain and repair each Site such that the Sprint
Collocator and Tower Subtenants may utilize such Site to the extent permitted in
this Agreement, including, without limitation, the markings on each Tower and
the structural integrity of each Tower. Installation, maintenance and repair of
each Site will comply in all material respects with all Laws and will be
performed in a manner consistent with standard industry practices and so as to
minimize any material disruption in the Sprint Collocator's business conducted,
and use and operation of Sprint's Communications Equipment located, at such
Site. Lessee assumes all responsibilities, as to each Site, for any fines,
levies, and/or other penalties imposed as a result of non-compliance with such
requirements of the applicable Governmental Authorities commencing from and
after the Effective Date with such requirements of the applicable Governmental
Authorities except for non-compliance caused by Sprint or its Affiliates that is
not caused as a result of Lessee's failure to perform its obligations under this
Agreement. Sprint assumes all responsibilities, as to each Site, for any fines,
levies, and/or other penalties imposed as a result of Sprint's or its Affiliates
past, current or future non-compliance with such requirements of the applicable
Governmental Authorities. Subject to the terms of any applicable Collocation
Agreement in existence as of the Effective Date, Lessee will use reasonable
efforts to cause and (if a default would result under any applicable Ground
Lease for a failure to cause) shall cause Tower Subtenants to maintain and
repair all of its Communications Equipment on each Site in accordance with the
requirements of this Agreement; provided, however that nothing herein will
require Lessee to maintain any of Sprint's Communications Equipment or any
Communications Equipment of Tower Subtenants to the extent that such Tower
Subtenants are required to perform such maintenance. Without limiting the
foregoing, Lessee at its own cost and expense, will make (or cause to be made)
all Alterations to the Sites as may be required from time to time to meet in all
material respects the requirements of applicable Laws except for the maintenance
and repair work to be performed by the Sprint Collocator in accordance with
clause (c) of this Section 12.
(b) For each Site, Lessee, at its sole cost and expense, will provide
Lessor, as applicable, all necessary and appropriate information reasonably
requested by Lessor for Lessor to obtain (and Lessor will obtain within a
reasonable amount of time) all of the certificates, permits, and other approvals
which may be required in connection with FCC or FAA regulations. Lessee will
also provide Lessor all appropriate information reasonably requested by Lessor
pertaining to any easements or consents which are required from any third
parties with respect to
35
the operation of such Site (to the extent different from the easements and
consents needed prior to the Effective Date), including with respect to the
lighting system serving such Site, and Lessor will cooperate with Lessee in
connection with such actions, as contemplated by Section 18 (without requirement
that Lessee expend any sums to obtain any such easement or consent).
Notwithstanding anything herein to the contrary, Lessee will have no obligation
to provide any information necessary for Lessor or any Sprint Collocator to
obtain any certificate, permit or other approval relating to Sprint's
Communications Equipment. If, as to any Site, any material certificate, permit,
license, easement, or approval relating to the operation of such Site is
canceled, expires, lapses, or is otherwise withdrawn or terminated (unless the
same is the result of the acts or omissions of Lessor, any Sprint Collocator or
their respective Affiliates, agents or employees) or, if Lessee has breached its
obligation under this Section 12(b), then the applicable Sprint Collocator will
have the right, in addition to its other remedies pursuant to this Agreement, at
law, or in equity, to take appropriate action to remedy any such noncompliance
and demand reimbursement for any expenses incurred in connection with such
actions from Lessee. Notwithstanding anything to the contrary contained herein,
Lessee will have no obligation to obtain or restate (or otherwise provide
information for Lessor or any Sprint Collocator to obtain or restate) any
certificates, permits or approvals that (i) relate exclusively to Sprint's
Communications Equipment or (ii) were rescinded due to a violation by any of the
same by Lessor or any Sprint Collocator. Each applicable Sprint Collocator will,
at all times, keep, operate and maintain Sprint's Communications Equipment at
each Site in a safe condition, in good repair and in accordance with applicable
Laws.
(c) The following provisions will apply with respect to the lighting
systems serving the Sites:
For each Site, Lessee agrees to monitor the lighting system serving such
Site and will notify the appropriate FAA service office of any lighting failure
not existing on the Effective Date or at the time responsibility for such
notification is assumed by Lessee under the Transition Services Agreement of
even date herewith (the "Transition Services Agreement") in accordance with the
requirements of applicable Law. In addition, Lessee agrees, as soon as
practicable, to begin a diligent effort to repair any failed lighting in
accordance with the requirements of applicable Law, and to notify Lessor and the
applicable Sprint Collocator upon successful completion of the repair.
Notwithstanding anything to the contrary contained in this Agreement, Lessee
agrees to indemnify, defend and hold each Sprint Indemnitee harmless from and
against any Claims arising out of or by reason of any failed lighting (unless
such Claim is the result of the action or failure to act of Lessor, the Sprint
Collocator or their respective Affiliates, agents or employees). In addition to
and not in limitation of Sections 31(e) and (f), if Lessee defaults under this
Section 12(c), Lessor or the Sprint Collocator, in addition to their other
remedies pursuant to this Agreement, at law, or in equity, may elect to take
appropriate action to repair or replace lights and invoice Lessee. In addition,
Lessor may subject to arbitration of any dispute pursuant to the provisions of
Section 31(h), terminate this Agreement as to such Site (i) if Lessor or Lessee
is at any time fined by the FAA (pursuant to a final and non-appealable order)
as a result of the occurrence of such default or (ii) if Lessor has given Lessee
notice of such default under Section 31(e)(ii) and Lessee does not cure such
default within the applicable cure period set forth in Section 31(e)(ii), within
sixty (60) days of the occurrence of such event. The foregoing right may not be
exercised by Lessor if (a) such fine occurs during a period where Lessor or a
Sprint Collocator is still providing light monitoring service to Lessee with
respect to
36
a Site and such fine results in whole or in part from the failure of Lessee to
receive timely information with respect to the failure of a lighting system; (b)
such fine occurs during a period where light monitoring service is being
transitioned to Lessee and Lessee takes prompt action to address any
non-compliance of which it is aware; (c) such fine or non-compliance or
underlying failure of the lighting system results from actions or omissions of
Sprint, its Affiliates or agents or (d) such fine or non-compliance results from
the occurrence a force majeure event. Notwithstanding Lessor's agreement to
provide such light monitoring service, Lessee will perform, at Lessee's sole
cost and expense, all repair and maintenance associated with the lighting system
at each Site. Without in any way affecting Lessee's obligations relating to
lighting; (i) during the Term, the applicable Sprint Collocator will have the
right, at its expense, to install and maintain equipment for the purpose of
monitoring (x) the lighting system serving the Tower or the Improvements of each
Site, and/or (y) any device of Lessee's used to monitor the lighting system
serving each Tower (provided that none of the foregoing interferes with Lessee's
monitoring of the lighting system at such Site or any of Tower Subtenant's use
of the Site or does not otherwise result in any material increased costs to
Lessee or any Tower Subtenant); and (ii) Lessee will have the right, at its
expense, to install and maintain equipment for the purpose of monitoring any
device of the Sprint Collocator used to monitor the lighting system servicing
any Tower.
(d) Without limiting Lessee's obligations under this Section 12 and the
other provisions of this Agreement, the Parties acknowledge that each Sprint
Collocator (or its Affiliate) is licensed by the FCC to provide
telecommunications services and that the Sites are used to provide those
services. Nothing in this Agreement will be construed to transfer control of any
FCC authorization held by any Sprint Collocator (or its Affiliate) to Lessee
with respect to telecommunications services provided by Sprint or to limit the
right of any Sprint Collocator (or its Affiliate) to take all necessary actions
to comply with its obligations as an FCC licensee or with any other legal
obligations to which it is or may become subject (subject to the other terms of
this Agreement with respect to actions Sprint may take with respect to a Site).
SECTION 13. Requirements for Alterations; Title to Alterations; Addition of
Equipment; Work on the Site.
(a) All Alterations that are made to a Site (whether required or optional),
including, without limitation, Alterations made to the Sprint Collocation Space
of a Site to the extent required to be performed by Lessee, will comply with the
requirements of Section 3(f) of this Agreement. Title to each Alteration will
without further act or instrument be deemed to constitute a part of the Site and
be subject to this Agreement unless such Alteration is a Severable Alteration.
(b) Whenever Lessee makes Alterations to any Site; constructs, replaces,
maintains or repairs the Tower and Improvements of any Site; installs,
maintains, replaces or repairs, or causes Tower Subtenants to install, maintain,
replace or repair, any Equipment; or reconstruct or restore the Leased Property
(the "Lessee Work"), the following provisions will apply:
(i) No Lessee Work will be commenced until all certificates, licenses,
permits, authorizations, consents and approvals necessary for the Lessee
Work, from all Governmental Authorities having jurisdiction with respect to
any Site or the Lessee Work
37
as set out in Section 3(f) of this Agreement, have been obtained. Lessor
will reasonably cooperate with Lessee, at Lessee's sole cost and expense,
as is reasonably necessary in connection with Lessee's obtaining all such
certificates, licenses, permits, etc. required to be issued by any
Governmental Authorities in connection with Lessee's Work.
(ii) Lessee will commence and perform the Lessee Work in accordance
with then-current industry-standard practices and procedures ("Standard
Procedures").
(iii) Lessee will cause the Lessee Work to be done and completed in a
good, substantial and workmanlike manner and in compliance in all material
respects with all Laws. Lessee will be solely responsible for construction
means, methods, techniques, sequences and procedures, and for coordinating
all activities related to the Lessee Work, and neither Lessor nor any
Sprint Collocator will have any duty or obligation to inspect the Lessee
Work, but will have the right to do so, at reasonable times, upon
reasonable prior notice and in a reasonable manner.
(iv) Lessee will promptly commence the Lessee Work and, once
commenced, diligently and continually pursue the Lessee Work and complete
the Lessee Work within a reasonable time. Lessee will assign such qualified
personnel to the Lessee Work as may be necessary to cause the Lessee Work
to be completed in an expeditious fashion.
(v) All Lessee Work will be performed at Lessee's sole cost and
expense. Lessee will provide and pay for all labor, materials, goods,
supplies, equipment, appliances, tools, construction equipment and
machinery and other facilities and services necessary for the proper
execution and completion of the Lessee Work. Lessee will promptly pay when
due all costs and expenses incurred in connection with the Lessee Work.
Lessee will pay, or cause to be paid, all fees and Taxes required by Law in
connection with the Lessee Work.
(vi) Lessee will be responsible for initiating and maintaining all
necessary safety precautions and programs in connection with the Lessee
Work, and will take necessary protections in accordance with Standard
Procedures to prevent damage, injury or loss to, the Lessee Work, all
persons performing Lessee Work on the Site, all other persons who may be
involved in or affected by the Lessee Work, and all materials and equipment
to be incorporated in the Lessee Work, Tower and Improvements of such Site.
(vii) Lessee will procure and maintain in full force and effect, and
will cause its contractors and subcontractors to procure and maintain in
full force and effect, with respect to the Lessee Work: (x) in the case of
Lessee only but subject to Section 24, full replacement cost "all-risk",
"builder's risk" insurance, insuring the Lessee Work; and (y) the other
types of insurance required to be maintained pursuant to Section 24 of this
Agreement. Such additional insurance policies will meet the requirements
set forth elsewhere in this Agreement with respect to the insurance
policies otherwise required to be obtained and maintained by Lessee under
this Agreement.
SECTION 14. Damage to the Site, Tower or the Improvements.
38
(a) If there occurs a casualty which damages or destroys all or a
Substantial Portion of any Site, then within thirty (30) days after the date of
the casualty, Lessee shall notify Lessor in writing as to whether the Site is a
Non-Restorable Site (it being understood Lessee may waive any condition in the
definition of Non-Restorable Site, if it believes in good faith that Restoration
may be commenced (and a building permit issued) within one year), which notice
will specify in detail the reasons for such determination by Lessee, and if such
Site is not a Non-Restorable Site the estimated time, in Lessee's reasonable
judgment, for Restoration of the Site (a "Casualty Notice"). If Lessee fails to
give Casualty Notice to Lessor within such thirty (30) day period, the affected
Site shall be deemed not to be a Non-Restorable Site. If Lessor or the
applicable Sprint Contributor disagrees with any determination of Lessee in the
Casualty Notice that the Site is a Non-Restorable Site, Lessor or the applicable
Sprint Contributor (as applicable) may institute arbitration proceedings to
determine any such matter in the manner described in Section 31(h). If such Site
is a Non-Restorable Site, then (i) either Lessee or the applicable Sprint
Collocator shall have the right to terminate the applicable Sprint Collocator's
leaseback or other use and occupancy of the Sprint Collocation Space at such
Site, upon written notice to the applicable Sprint Collocator and such leaseback
or other use and occupancy at such Site shall terminate as of the date of such
Notice and (ii) Lessor or the applicable Sprint Contributor, as applicable, will
have the right to terminate this Agreement as to such Site by written notice to
Lessee within thirty (30) days after receipt of such written notice from Lessee,
whereupon the Term as to such Site will automatically expire as of the date of
such notice of termination and, if such right is exercised, the applicable
Sprint Collocator's leaseback or other use and occupancy of the Sprint
Collocation Space shall be terminated by written notice to Lessee within thirty
(30) days after receipt of such written notice from Lessee, whereupon the Sprint
Collocator's rights and obligations as to the leaseback or other use and
occupancy of Sprint Collocation Space at such Site will automatically expire as
of the date of such notice of termination. In all instances Lessee shall have
the sole right to retain all insurance Proceeds related to a Non-Restorable Site
and any other Site.
(b) If there occurs, as to any Site, a casualty which damages or destroys
(i) all or a Substantial Portion of such Site and the Site is not a
Non-Restorable Site, or (ii) less than a Substantial Portion of any Site,
Lessee, at its sole cost and expense, will promptly and diligently commence with
the adjustment of Lessee's insurance Claims with respect to such event within a
period of thirty (30) days after the date of the damage and, thereafter,
promptly commence, and diligently prosecute to completion, the Restoration of
the same. The Restoration will be carried on and completed in accordance with
the provisions and conditions of this Section 14.
(c) If Lessee is required to restore any Site in accordance with Section
14(b), all Proceeds of Lessee's insurance will be held by Lessee or the Lessee
Lender and applied to the payment of the costs of the Restoration and will be
paid out from time to time as the Restoration progresses. Any portion of the
Proceeds of Lessee's insurance applicable to a particular Site remaining after
final payment has been made for work performed on such Site will be retained by
and be the property of Lessee. If the cost of Restoration exceeds the Proceeds
of Lessee's insurance, Lessee will pay the excess cost.
(d) Without limiting Lessee's obligations under this Agreement in respect
of a Site subject to a casualty, if Lessee is required to cause the Restoration
of a Site that has suffered a casualty, Lessee will make available to the Sprint
Collocator a portion of the Leased Property of
39
such Site for the purpose of the Sprint Collocator's locating, at its sole cost
and expense, a temporary communications facility, and will give the Sprint
Collocator priority over Tower Subtenants at such Site as to the use of such
portion; provided, however, that (i) the placement of such temporary
communications facility will not interfere in any material respect with Lessee's
Restoration or the continued operations of any Tower Subtenant; (ii) the Sprint
Collocator will obtain any permits and approvals, at the Sprint Collocator's
cost, required for the location of such temporary communications facility on
such Site; and (iii) there must be Available Space on the Site for locating such
temporary communications facility.
(e) If Lessee fails at any time to diligently pursue the substantial
completion of the Restoration of the Site required under this Agreement (subject
to delay for force majeure events other than inability to obtain Governmental
Approvals), the Sprint Collocator may, in addition to any other available
remedy, terminate this Agreement as to the Sprint Collocator's leaseback or
other use and occupancy of the Sprint Collocation Space at the applicable Site
upon giving Lessee written notice of its election to terminate at any time prior
to completion of the Restoration.
(f) From and after any casualty as to any Site described in this Section 14
and during the period of Restoration at a Site, the Sprint Collocation Charge
with respect to such Site will abate until completion of the Restoration.
(g) The Parties acknowledge and agree that this Section 14 is in lieu of
and supersedes any statutory requirements under the laws of any State applicable
to the matters set forth in this Section 14.
SECTION 15. Tower Subtenants; Interference.
(a) Lessee acknowledges and agrees that Lessee will not permit the addition
of any Tower Subtenants at any Site if such addition would materially and
adversely affect the operation of Sprint's Communications Equipment installed
prior to such Tower Subtenant's addition and the Sprint Collocator's operation,
use or enjoyment of any Sprint Collocation Space on such Site, taking into
account customary and commercially reasonable practices for multi-tenant
wireless communication sites and towers.
(b) Lessee will not and will not permit any Tower Subtenant at any Site to
(i) install or change, alter or improve the frequency, power, or type of the
Communications Equipment that materially and adversely interferes with the
operation of Sprint's Communications Equipment in existence on such Site as of
the date of such installation, change, alteration or improvement or is not
authorized by, or violates, any applicable Laws or is not made or installed in
accordance with good engineering practices (and Lessee will require any Tower
Subtenant who subleases, licenses, or uses any portion of a Site to covenant to
comply with the foregoing); or (ii) implement a configuration which materially
and adversely interferes with the operation of Sprint's Communications Equipment
on such Site in existence as of the date of such implementation.
(c) If any Tower Subtenant installs or operates any Communications
Equipment which is in violation of, any Laws, Lessee will cause such Tower
Subtenant to shut down such
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Communications Equipment as promptly as practicable (but in any event within
fifteen (15) days after having actual knowledge thereof), failing which Lessee
will shut down such Communications Equipment.
(d) If any interference at any Site (at levels above commercially
acceptable levels of interference at multi-tenant wireless communication sites)
occurs as a result of actions of Lessee or Tower Subtenants described in Section
15(b) above as to any Site, Lessee will be responsible for coordinating and
resolving any such interference problems caused by Lessee or Tower Subtenants at
such Site, including, without limitation, using its commercially reasonable
efforts to correct and eliminate the interference within two (2) Business Days
of receipt of notification from the Sprint Collocator and perform an
interference study in accordance with then-current industry-standard procedures.
If the interference cannot be corrected or eliminated within such two (2)
Business Days period, Lessee will cause, at Lessee's option, any of Lessee's or
Tower Subtenants' Communications Equipment or Communications Facility that
interferes with the operation of Sprint's Communications Facility's authorized
frequency spectrum or signal strength, to be immediately powered down or turned
off, with the right to turn such interfering Communications Equipment or
facility back up or on only during off-peak hours in order to determine whether
such interference continues or has been eliminated; provided, that if any
interference continues at the time the power output of the interfering
Communications Equipment is powered down, the Communications Equipment that
interferes with the operation of Sprint's Communication Facility or the Sprint
Collocation Space will be turned off. If Lessee or any Tower Subtenant cannot
reasonably correct or eliminate such interference within thirty (30) days of
receipt of written notice from the Sprint Collocator, Lessee will or will cause
such Tower Subtenant to cease the operations of the applicable Communications
Equipment and to stop providing services from the applicable Communications
Facility or the Leased Property at the applicable Site in its entirety until the
interference problems are resolved.
(e) Notwithstanding the foregoing provisions of this Section 15, (i) the
obligations of Lessee hereunder as to any Site are subject to the rights of any
Tower Subtenant under any Collocation Agreement in existence as of the Effective
Date at such Site, and to the extent that the provisions of any such Collocation
Agreement prohibits Lessee from performing the obligations of Lessee hereunder,
Lessee will be required to perform such obligations only to the extent permitted
under such Collocation Agreement and shall have no liability with respect
thereto to any Sprint Collocator and (ii) Lessee shall have no obligation to
enforce any rights under a Collocation Agreement against an Affiliate of Sprint.
(f) The applicable Sprint Collocator will not, as to any Site, (i) install
or change, alter or improve the frequency, power, or type of Sprint's
Communications Equipment that materially and adversely interferes with the
operation of any Tower Subtenant's Communications Equipment in existence on such
Site as of the date of such installation, change, alteration or improvement or
is not authorized by, or violates, any applicable Laws or is not made or
installed in accordance with good engineering practices or otherwise violates
the terms of any Collocation Agreement existing on the Effective Date; or (ii)
implement a configuration which materially and adversely interferes with the
operation of any Tower Subtenant's Communications Equipment on such Site in
existence as of the date of such implementation.
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(g) If the Sprint Collocator installs or operates any Communications
Equipment which is not authorized by, or is in violation of, any Laws, the
Sprint Collocator will remove such Communications Equipment as promptly as
practicable (but in any event within fifteen (15) days after having actual
knowledge thereof).
(h) If any interference (at levels above commercially acceptable levels of
interference at multi-tenant wireless communication sites) occurs as a result of
actions of the Sprint Collocator described in Section 15(f) above as to Sprint's
Communications Equipment at any Site, the Sprint Collocator will be responsible
for coordinating and resolving any such interference problems caused by the
Sprint Collocator, including, without limitation, using its commercially
reasonable efforts to correct and eliminate the interference within two (2)
Business Days of receipt of notification from Lessee and perform an interference
study in accordance with then-current industry-standard procedures. If the
interference cannot be corrected or eliminated within such two (2) Business Day
period, the Sprint Collocator will cause any of Sprint's Communications
Equipment that interferes with the operation of any Tower Subtenant's
Communications Facility's authorized frequency spectrum or signal strength, to
be immediately powered down or turned off, with the right to turn such
interfering Communications Equipment or facility back up or on only during
off-peak hours specified by Lessee in order to determine whether such
interference continues or has been eliminated; provided, that if any
interference continues at the time the power output of the interfering
Communications Equipment is powered down, the Communications Equipment that
interferes with the operation of the applicable Tower Subtenant's Communication
Facility will be turned off. If the Sprint Collocator cannot correct or
eliminate such interference within thirty (30) days of receipt of written notice
from Lessee, the Sprint Collocator will cease the operations of the applicable
Communications Equipment and to stop providing services from the Sprint's
Communications Facility or the Sprint Collocation Space of the applicable Site
in its entirety until the interference problems are resolved.
SECTION 16. Taxes.
(a) Subject to Sections 16(b) and (c) and 39(b), and except as provided
below, Lessee will be responsible for all Taxes upon or with respect to (A) any
of the Leased Property, any portion of such Leased Property, or any interest
therein, (B) the acquisition, purchase, sale, financing, leasing, subleasing,
ownership, maintenance, repair, redelivery, alteration, insuring, control, use,
operation, delivery, possession, repossession, location, storage, refinancing,
refund, transfer of title, registration, reregistration, transfer of
registration, return, or other disposition of any of the Leased Property or any
portion of such Leased Property, or interest in such Leased Property, (C) the
rental payments, receipts, or earnings arising from the Leased Property, any
portion of such Leased Property, or any interest in such Leased Property, or
payable pursuant to this Agreement, or any other payment or right to receive
payment pursuant to any related document, or (D) any Alteration, removal,
substitution, maintenance, or repair of any of the Leased Property. Subject to
Sections 16(b) and (c) and 39(b), and except as provided below, Lessee will be
responsible for all Taxes upon or with respect to each Site applicable to all
periods occurring after the Effective Date and during the Term as to such Site.
Lessee will receive any refunds for Taxes paid by Lessee pursuant to this
Agreement. Notwithstanding the foregoing, Lessee will not be required to pay any
Taxes payable with respect to a Leased Site or Other Interest Site, if the
applicable Ground Lease provides that the Ground Lessor is responsible for such
Taxes without pass-through to the applicable ground lessee and the Ground
42
Lessor actually pays any such Taxes. If the Ground Lessor does not pay any such
Taxes and either Party becomes aware of it, the Parties will, at Lessee's
expense, cooperate and use commercially reasonable efforts to cause the Ground
Lessor to pay such Taxes.
(b) In the taxable periods occurring during the Term as to any Site, any
Taxes (determined without regard to the Term) for which Lessee is responsible
under this Section 16 and that are calculated or assessed on the basis of a time
period any portion of which is not included within the Term as to such Site
(e.g., Property Taxes assessed annually) will be prorated proportionately
between Sprint and Lessee based on the number of days in each such period during
the time period of assessment that is included within the Term as to such Site.
Lessee's obligations for Taxes under this Section 16 will be limited to that
proportionate amount of such Taxes attributable to the period during which this
Agreement is in effect with respect to such Site; provided, that any Taxes
resulting from special assessments or appraisals of any Site occurring during
the period during which this Agreement is in effect will be the sole
responsibility of Lessee. Any other Taxes that are not calculated or assessed on
the basis of a time period, but for which Lessee is responsible under Sections
16 or 39(b), will be prorated using a fair and equitable proration method that
considers, among other things, the basis upon which such Taxes are assessed.
(c) Notwithstanding anything to the contrary in this Section 16 or in
Section 39, the Parties agree as follows with respect to Property Taxes: (i)
Lessor or Sprint will prepare all returns with respect to Property Taxes in the
ordinary course and with the same degree of diligence that it exercises with
respect to similar tax compliance matters; (ii) Lessor or Sprint will pay all
Property Taxes on a timely basis to the appropriate Governmental Authority and
Lessee shall have no responsibility for Property Taxes other than with respect
to the Lessee Property Tax Charge and Landlord Reimbursement Taxes, (iii) for
each calendar year, or portion thereof, that is included in the Term as to each
Site, Lessee will pay to Lessor the Lessee Property Tax Charge on or before July
1 of the respective calendar year; provided that if the Effective Date is after
July 1, the payment for the first calendar year (or portion thereof) shall be
made on the Effective Date; provided further that if the Term ends prior to July
1, the payment for the final year shall be made on the last day of the Term; and
(iv) by June 15 of each calendar year, Lessor will provide Lessee with an
officer's certificate in the form of Exhibit D. Lessor, Lessee and Sprint will
cooperate with each other, and make available to each other such information as
will reasonably be necessary, in connection with the preparation of tax returns
for Property Taxes and any audit or judicial or administrative proceeding
relating to the same. Lessee will be responsible for all Landlord Reimbursement
Taxes for which the applicable Ground Lessor seeks reimbursement under the
provisions of the Ground Lease after the Effective Date and during the Term with
respect to each Site; provided, however, the Parties will prorate such amounts
relating to tax periods that include the Effective Date or the Site Expiration
Date in a manner consistent with the provisions of Section 16(b) and the paying
Party will be entitled to reimbursement from the non-paying Party for the
non-paying Party's portion of the Landlord Reimbursement Taxes paid, and
provided further that, with respect to the twelve month period beginning on the
Effective Date, Lessor will reimburse Lessee for the amount of the aggregate
Landlord Reimbursement Taxes paid by Lessee (prorated for such twelve month
period with the actual amount of Landlord Reimbursement Taxes during 2005 and
2006 straightlined) that exceed the product of $200 multiplied by the number of
Sites. To the extent either Party is entitled to reimbursement from the other
Party for the payment of prorated Landlord
43
Reimbursement Taxes, such reimbursement shall be due within fifteen (15) days of
the presentation of a statement reflecting amounts due and appropriate other
documentation supporting the calculation and payment of such amounts to the
applicable Ground Lessor. In the event of (1) the non-payment of Taxes when due
(unless such Taxes are being contested in good faith and there is no material
risk of forfeiture of any Site as a result of such non-payment of Taxes) by
Lessor or any of its Affiliates, which could result in a material risk of
forfeiture of a Site (in which case, Lessor will promptly notify Lessee when
Lessor becomes aware of such event) or (2) the failure by Lessor to deliver the
certificate required to be delivered under clause (iv) of the first sentence of
Section 16(c) with respect to any Site by July 15 of the calendar year, Lessee
may notify Lessor in writing of the non-payment of Taxes and request that Lessor
or its Affiliates take action within 90 days to pay such Taxes and remove any
Liens ("90 Day Lessee Notice"). Within 90 days after receipt of the 90 Day
Lessee Notice, Lessor will provide evidence to Lessee to support that Lessor or
its Affiliates have paid such Taxes and started the process of removing any Lien
or have contested such Taxes in good faith with the appropriate Governmental
Authority and are diligently prosecuting such contest, and there is no material
risk of forfeiture of the Site. In the case of a contest, Lessor will provide
periodic updates to Lessee at least every 30 days thereafter until Lessor
provides evidence that such Lien has been removed. In the event that Lessor or
its Affiliates have elected to contest a Tax on a Site in accordance with the
provisions of this Section, Lessor agrees that it or its Affiliates will pay all
Taxes and take all actions necessary to remove any Lien within the time provided
by the appropriate Governmental Authority after a final determination. If, on
the ninety-first day after receipt of the 90 Day Lessee Notice, the Lessor or
its Affiliates have not (x) paid such Taxes and otherwise started the process of
removing any Lien or (y) taken action to contest such Taxes and continuously
prosecuted such contest, and there is no material risk of the forfeiture of the
Site, the Lessee may (but shall be under no obligation to) pay the Tax and cure
any Lien by taking any reasonable action necessary. Lessor will reimburse Lessee
for all costs incurred in paying such Taxes within 15 days of the presentation
to Lessor by Lessee of written documentation evidencing the payment of such
Taxes and the removal of any Lien for which Lessee is requesting reimbursement.
If, at any time after delivery of the 90 Day Lessee Notice, a material risk of
forfeiture of the Site arises, Lessor shall give prompt notice to Lessee and
(whether or not Lessor has provided such notice) Lessee shall have the right to
purchase the individual Site that is the subject of the proceeding for a
purchase price of $100 by giving Lessor written notice of its exercise of such
purchase option (provided that in the case of a 90 Day Lessee Notice described
in clause (1) above, such purchase option shall not be exercisable (j) until 10
days after the earlier of the Lessee delivery of the 90 Day Lessee Notice and
Lessor having actual knowledge of the event giving rise to such 90 Day Lessee
Notice, and (k) unless the material risk of forfeiture is continuing), and such
option shall be exercised pursuant to the provisions of Section 36, mutatis
mutandis, except that the Option Purchase Price shall be $100 and shall apply
only with respect to the individual Site.
(d) Any excise, sales, use, value added, registration, stamp, recording,
documentary, conveyancing, transfer, gains and similar Taxes ("Transfer Taxes")
incurred in connection with the transactions contemplated by this Agreement or
the Collateral Agreements will be borne by Lessee. Lessee will provide Lessor
with a certificate substantially in the form of Exhibit E. The Parties will
cooperate in providing each other with any additional exemption certifications
and other similar documentation as appropriate. The Party that is required by
applicable Law to file
44
the tax returns with respect to any applicable Transfer Taxes will do so at its
own expense, and the other Parties will cooperate with respect thereto as
necessary.
SECTION 17. Utilities.
Except as set forth to the contrary below in this Section 17, Lessor will
have no obligation to make arrangements for or to pay any charges for connection
or use of utilities and similar services to any Site, including but not limited
to, electricity, telephone, power, and other utilities. As among the Sprint
Collocator and all new Tower Subtenants, Lessee will cause utility charges to be
separately metered. The Sprint Collocator will pay to the applicable utility
service provider the charges for all separately metered utility services used by
the Sprint Collocator at each Site in the operation of Sprint's Communications
Facility at such Site. Notwithstanding the foregoing provisions of this Section
17, if the applicable utility service provider will not render a separate bill
for the Sprint Collocator's usage, the Sprint Collocator will reimburse Lessee
monthly for the Sprint Collocator's actual metered usage at the rate charged to
Lessee by the applicable utility service provider, or if Lessee is prohibited
from installing a separate meter to measure the Sprint Collocator's usage, the
Sprint Collocator may use Lessee's utility sources to provide utility service to
the Communications Facility, and the Sprint Collocator will reimburse Lessee
monthly for the Sprint Collocator's actual usage at the rate charged to Lessee
by the applicable service provider (and Lessee and the Sprint Collocator agree
to cooperate in determining a method by which to measure or estimate the Sprint
Collocator's usage if the usage is not capable of actual measurement).
Notwithstanding anything to the contrary contained herein, Lessee shall have no
obligation to provide, maintain or pay for utility services related to Sprint's
Communication Equipment. Sprint shall pay for all utility services utilized by
Sprint and its Affiliates in its operations at each Site prior to delinquency.
For all Sites where a Sprint Collocator leases Sprint Collocation Space, Sprint
and Lessee have agreed to a arrangement in a separate agreement for the
segregation and transfer of responsibility for electrical service serving the
lighting system serving each Site from the Sprint Collocators to Lessee. In
connection with such arrangement, each Sprint Collocator agrees to pay the
utility costs for such electrical power as follows. If not prohibited by
applicable Laws, the Sprint Collocators shall allow Lessee to access the Sprint
Collocator's (or other Person occupying the Sprint Collocation Space's) power
sources at all Sites with lighting systems in order to install lighting
monitoring equipment and maintain Tower lighting as required under this
Agreement and the Transition Services Agreement. Accessing such power sources
shall be at Lessee's sole cost and expense. The cost of all power provided to
Lessee shall be at no cost or expense to Lessee. During each of the first four
(4) years of the Term of this Agreement, Lessee shall obtain its own power
source for its lighting and lighting monitoring equipment and transition from
using power of the Sprint Collocators (or other Persons occupying the Sprint
Collocation Space) for the Sites requiring lighting monitoring equipment
(approximately [1,100] Sites) as of the Effective Date at a rate of twenty-five
percent (25%) of such Sites by the end of each of the first four (4) years of
the Term of this Agreement, all as to be more fully described in the Transition
Services Agreement.
SECTION 18. Governmental Permits.
(a) In addition to and not in limitation of the provisions of Section 12(a)
of this Agreement, Lessee will, at its own cost and expense, provide to Lessor
and any Sprint Collocator or its Affiliates all necessary and appropriate
information reasonably requested by Lessor or such
45
Sprint Collocator or its Affiliates to obtain and maintain in effect all
certificates, permits, licenses and other approvals relating to FAA or FCC
regulations and Lessee will, at its own cost and expense, obtain and maintain in
effect all certificates, permits, licenses and other approvals (other than those
relating to FCC and FAA regulations) and comply with all Laws, required or
imposed by Governmental Authorities (other than those relating to FCC or FAA
regulations), in connection with the operation and maintenance of the Leased
Property at each Site (including the Tower on such Site). As part of Lessee's
obligation to provide information, Lessee will provide Lessor and any Sprint
Collocator or its Affiliates access to data reasonably necessary to monitor the
lighting systems at each Site to the extent in Lessee's possession (to the
extent the Sprint Collocator is not already independently monitoring the same).
(b) Lessee will reasonably cooperate with any Sprint Collocator or its
Affiliates in their efforts to obtain and maintain in effect any certificates,
permits, licenses and other approvals and to comply with any Laws required or
imposed on such Sprint Collocator by Governmental Authorities applicable to the
Sprint Collocation Space of each Site.
(c) Each applicable Sprint Collocator will, at its own cost and expense,
obtain and maintain or cause to be maintained in effect all material
certificates, permits, licenses and other approvals and comply with all Laws
required or imposed by Governmental Authorities in connection with the operation
and maintenance of the Sprint Collocation Space of each Site, including, without
limitation, FCC regulations. The cost of obtaining and maintaining such FCC or
FAA permits or approvals will be reimbursed to Lessor in accordance with Section
18(f).
(d) Lessor and each applicable Sprint Collocator will reasonably cooperate
with Lessee in Lessee's efforts to provide required information and to comply
with all Laws required or imposed by Governmental Authorities applicable to each
Site.
(e) Lessor and any Sprint Collocator will be afforded access, at reasonable
times and upon reasonable prior notice, to all of Lessee's records, books,
correspondence, instructions, blueprints, permit files, memorandum and similar
data relating to the compliance of the Towers with all applicable Laws or if
Lessor or any Sprint Collocator otherwise provides reasonable justification
therefore, except privileged documents or where disclosure is prohibited by Law.
Lessee will also provide Lessor or any Sprint Collocator with an electronic
interface or other real time access to Lessee's Tower administration database
which will enable access to detailed information concerning collocations. Any
information described in this Section 18(e) will be open for inspection upon
reasonable notice by Lessor or such Sprint Collocator, at its cost, and its
authorized representatives at reasonable hours at Lessee's principal office and
will be retained by Lessee for period of three (3) years after the expiration of
this Agreement.
(f) The cost of Lessor's or any Sprint Collocator's or its Affiliates
obtaining and maintaining all FCC and FAA permits and approvals relating to the
operation and maintenance of the Leased Property of each Site (excluding the
Sprint Collocation Space) and Lessee Work, in each case, after the Effective
Date, will be borne by Lessee in accordance with Sections 13(b)(i) and 18(c)
(the "Reimbursable Costs"). Lessor will provide Lessee with an invoice for
Reimbursable Costs on a monthly basis, which amount will be paid by Lessee to
Lessor or the applicable Sprint Collocator, as applicable, within twenty (20)
Business Days of Lessee's receipt of such invoice.
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SECTION 19. No Liens.
(a) Lessee will not create or permit any Lien (other than Lessee Permitted
Liens) against any Site, or any part of any Site. If any such Lien created or
permitted by Lessee (other than Lessee Permitted Liens) is filed against all or
any part of any Site, Lessee will be required to cause the same to be discharged
by payment, satisfaction or posting of bond within thirty (30) days only (i)
after Lessee has obtained knowledge of such Lien and (ii) Lessee has elected not
to contest such Lien in accordance with Section 19(b) hereof. If Lessee fails,
after notice and opportunity to cure, to cause any Lien not being contested as
provided in Section 19(b) (other than Lessee Permitted Liens) to be discharged
within the permitted time, Lessor may cause it to be discharged and may pay the
amount of such Lien in order to do so. If Lessor makes any such payment, all
amounts paid by Lessor will be payable by Lessee to Lessor within ten (10) days
of demand.
(b) To the extent not prohibited under any applicable Ground Lease, Lessee
may, at Lessee's sole cost and expense, in its own name and on its own behalf or
in the name of and on behalf of Lessor, in good faith, contest any claim of Lien
and, in the event of any such contest, may permit such claim of Lien so
contested to remain unpaid, unsatisfied and undischarged during the period of
such contest and any appeal from such contest; provided, that, if any portion of
any Site is subject to imminent danger of loss or forfeiture by virtue of or by
reason of such claim of Lien, such claim of Lien will be complied with as
promptly as practicable, but in any event prior to any loss or forfeiture.
Lessor, at the sole cost and expense of Lessee, will use commercially reasonable
efforts to cooperate fully with Lessee in any such contest.
(c) Any Secured Lessee Loan (including any Mortgage execute in connection
therewith) will be subject to each and every term, covenant, condition,
agreement, requirement, restriction and provision set forth in this Agreement
and subject to all rights of Lessor hereunder.
(d) Lessor will execute any necessary easement or right of way for utilities for
any Owned Site promptly following any request by Lessee, provided such easement
or right of way does not have an adverse effect on any Sprint Collocator's use
or enjoyment of the Sprint Collocation Space of such Site or on the ownership by
Lessor of the Tower on such Site, including without limitation, the operation of
Sprint's Communications Equipment on such Site.
(e) No Sprint Collocator will create or permit (or allow any of its
Affiliates to create or permit) any Lien arising by, through or under the Sprint
Collocator or its Affiliates (other than Permitted Encumbrances) against Site,
or any part of any Site. If any such Lien (other than Permitted Encumbrances) is
filed against all or any part of any Site as a result of the acts or omissions
of any Sprint Collocator or any of its Affiliates, such Sprint Collocator will
cause the same to be discharged by payment, satisfaction or posting of bond
within thirty (30) days after obtaining actual knowledge such Lien. If any such
Sprint Collocator fails to cause any such Lien (other than Permitted
Encumbrances) to be discharged within such thirty (30) day period, Lessee may,
after ten (10) days prior written notice to such Sprint Collocator, cause such
Lien to be discharged and may pay the amount of such Lien in order to do so. If
Lessee makes any such payment, all amounts paid by Lessee will be payable by
such Sprint Collocator to Lessee upon demand.
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SECTION 20. Condemnation.
(a) If there occurs a Taking of all or a Substantial Portion of any Site,
other than a Taking for temporary use, then (i) Lessee will have the right to
terminate this Agreement as to such Site by written notice to Lessor and the
applicable Sprint Collocator within thirty (30) days of the occurrence of such
Taking whereupon the Term will automatically expire as to such Site, on the Date
of Taking, as if such date were the Site Expiration Date as to such Site and
each Party shall be entitled to prosecute, claim and retain the entire Award
attributable to its respective interest in such Site under this Agreement and
(ii) the Sprint Collocator will have the right to terminate this Agreement as to
the Sprint Collocator's leaseback or other use and occupancy of the Sprint
Collocation Space by written notice to Lessee within thirty (30) days of the
occurrence of such Taking, whereupon ) the Sprint Collocator's rights and
obligations as to the leaseback or other use and occupancy of the Sprint
Collocation Space at such Site will automatically expire as of the Date of
Taking.
(b) If there occurs a Taking of less than a Substantial Portion of any
Site, then this Agreement and all duties and obligations of Lessee under this
Agreement in respect of such Site will remain unmodified, unaffected and in full
force and effect. Lessee will promptly proceed with the Restoration of the
remaining portion of such Site (to the extent commercially feasible) to a
condition substantially equivalent to its condition prior to the Taking. Lessee
will be entitled to apply the Award received by Lessee to the Restoration of any
Site from time to time as such work progresses; provided, that Sprint will be
entitled to prosecute and claim an amount of any Award reflecting its interest
under this Agreement. If the cost of the Restoration exceeds the Award recovered
by Lessee, Lessee will pay the excess cost. If the Award exceeds the cost of the
Restoration, the excess will be paid to Lessee.
(c) If there occurs a Taking of any portion of any Site for temporary use,
then this Agreement will remain in full force and effect as to such Site for the
remainder of the Term as to such Site; provided that, notwithstanding anything
to the contrary contained in this Agreement, during such time as Lessee will be
out of possession of such Site, if a Master Lease Site, or unable to operate
such Site, if a Pre-Lease Site, by reason of such Taking, the failure to keep,
observe, perform, satisfy and comply with those terms and conditions of this
Agreement compliance with which are effectively impractical or impossible as a
result of Lessee's being out of possession or unable to operate (as applicable)
such Site will not be an event of default under this Agreement. The Award for
any such temporary Taking payable for any period prior to the Site Expiration
Date will be paid to Lessee and, for any period thereafter, to Lessor.
(d) If there occurs a Taking of any Sprint Collocation Space of any Site or
any portion of such Sprint Collocation Space, for temporary use, then this
Agreement will remain in full force and effect as to such Site for the remainder
of the then-current Term; provided that, notwithstanding anything to the
contrary contained in this Agreement, during such time as the Sprint Collocator
will be out of possession of such Sprint Collocation Space by reason of such
Taking, the failure by the Sprint Collocator to keep, observe, perform, satisfy,
and comply with these terms and conditions of this Agreement compliance with
which are effectively impractical or impossible as a result of the Sprint
Collocator's being out of possession of such Sprint Collocation Space will not
be an event of default under this Agreement, and, in addition, the
48
Sprint Collocator will not be liable for payment of the Sprint Collocation
Charge during the period of the temporary Taking.
SECTION 21. Waiver of Subrogation; Indemnity.
(a) Except as provided in this Agreement, to the extent permitted by
applicable Law, Lessor, Lessee and the Sprint Collocators hereby waive any and
all rights of recovery, claim, action or cause of action against each other,
their respective agents, officers and employees, for any loss or damage that may
occur to any Site or their respective property at any Site, by reason of fire,
the elements, or any other cause insured against, or required to be insured
against, under the terms of policies of property insurance maintained, or
required to be maintained, for such Site, by Lessor, Lessee or the applicable
Sprint Collocator (as the case may be) under the terms of this Agreement,
regardless of cause or origin. In addition, Lessor, Lessee and each Sprint
Collocator will cause each such property insurance policy carried by them
insuring the their respective property at each Site to provide that the insurer
waives all rights of recovery by way of subrogation against any other Party
hereto in connection with any loss or damage covered by the policy.
(b) Subject to the provisions of Section 21(a) above, Lessee agrees to
indemnify and to hold each Sprint Indemnitee harmless from any and all Claims
suffered or incurred by such Sprint Indemnitee by reason of, or arising out of
(i) any default, breach, performance or nonperformance by Lessee of its
respective obligations and covenants under this Agreement, including, without
limitation, Sections 13, 15 and 18; (ii) any Claims against any Sprint
Indemnitee arising out of or resulting from (x) Lessee's use, operation,
maintenance or occupancy of any part of the Site in violation of the terms of
this Agreement or (y) any Tower Subtenant's use, operation, maintenance or
occupancy of its Communications Facility in violation of the terms of this
Agreement; (iii) any failure of Lessee to comply with any applicable Laws or
with the directives of the FCC and FAA that Lessee is required to comply with
pursuant to this Agreement or under applicable Laws; (iv) any Claims arising out
of or resulting from Lessee's acts or omissions, or the acts or omissions of any
of their respective agents, employees, engineers, contractors, subcontractors,
licensees, or invitees; and (v) any other provision of this Agreement which
provides that Lessee will indemnify and hold harmless any Sprint Indemnitee in
respect of the matters contained in such provision. If any action or proceeding
is brought against any Sprint Indemnitee by reason of any such Claim, Lessee
upon notice from such Sprint Indemnitee, covenants and agrees to defend such
action or proceeding at its expense.
(c) Subject to the provisions of Section 21(a) above, the Sprint
Collocators, on a joint and several basis, agree to indemnify and to hold each
Lessee Indemnitee harmless from any and all Claims with respect to bodily
injury, personal injury or property damage suffered or incurred by such Lessee
Indemnitee by reason of, or arising out of (i) any default, breach, performance
or nonperformance of the Sprint Collocator's obligations and covenants under
this Agreement; (ii) any Claims against any Lessee Indemnitee arising out of or
resulting from the Sprint Collocator's use, operation, maintenance or occupancy
of Sprint's Communications Equipment or any portion of the Site (including the
Sprint Collocation Space) in violation of the terms of this Agreement, (iii) the
Sprint Collocator's failure to comply with any applicable Laws or with the
directives of the FCC and FAA as to Sprint's Communications Equipment; (iv) any
Claims against any Lessee
49
Indemnitee arising out of or resulting from the acts or omissions of Lessor, the
Sprint Collocator, their respective Affiliates or any of the Sprint Collocator's
agents, employees, engineers, contractors, subcontractors, licensees or
invitees; and (v) any other provision of this Agreement which provides that the
Sprint Collocator will indemnify and hold harmless any Lessee Indemnitee in
respect of the matters contained in such provision. If any action or proceeding
is brought against any Lessee Indemnitee by reason of any such Claim, the Sprint
Collocator, upon notice from such Lessee Indemnitee, covenants and agrees to
defend such action or proceeding at its expense.
SECTION 22. Subordination of Mortgages.
All Mortgages which at any time during the Term of this Agreement may be
placed upon such Site or any portion of such Site and all documents and
instruments evidencing and securing any Secured Lessee Loan, shall be subject
and subordinate to the terms and conditions hereof.
SECTION 23. Environmental Covenants.
(a) For purposes of this Agreement, the following terms will have the
following meanings: (i) "Hazardous Material" or "Hazardous Materials" means and
includes petroleum products, flammable explosives, radioactive materials,
asbestos or any material containing asbestos, polychlorinated biphenyls, or any
hazardous, toxic or dangerous waste, substance or material defined as such or
defined as a hazardous substance or any similar term, by, in or for the purposes
of the Environmental Laws, including, without limitation Section 101(14) of
CERCLA (hereinafter defined); provided, that the term "Hazardous Materials" will
exclude quantities of materials or substances maintained by Lessor, the
applicable Sprint Collocator, its Affiliates, Lessee and Tower Subtenants on or
about any Site (including Tower and Improvements on such Site) in the ordinary
course of business, so long as such materials are maintained in accordance with
the applicable Environmental Laws: (ii) "Release" will have the meaning given
such term, or any similar term, in the Environmental Laws, including, without
limitation Section 101(22) of CERCLA; and (iii) "Environmental Law" or
"Environmental Laws" will mean any "Super Fund" or "Super Lien" Law, or any
other federal, state or local statute, Law, ordinance, code, rule, regulation,
order or decree, regulating, relating to or imposing liability or standards of
conduct concerning any Hazardous Materials as may now or at any time hereafter
be in effect, including, without limitation, the following, as same may be
amended or replaced from time to time, and all regulations promulgated under or
in connection with: the Superfund Amendments and Reauthorization Act of 1986;
The Comprehensive Environmental Response, Compensation and Liability Act of
1980; The Clean Air Act; The Clean Water Act; The Toxic Substances Control Act;
The Solid Waste Disposal Act, as amended by the Resource Conversation and
Recovery Act; The Hazardous Materials Transportation Act; and The Occupational
Safety and Health Act of 1970.
(b) Lessee covenants and agrees that: (i) Lessee will not conduct or allow
to be conducted upon any Site any business operations or activities, or employ
or use a Site, to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce, or process Hazardous Materials; provided,
that Lessee will have the right to bring, use and keep and allow any Tower
Subtenant to bring and keep on any Site in compliance with all applicable Laws,
batteries, generators and associated fuel tanks and other substances commonly
used in the
50
industry necessary for the operation and maintenance of each Site; (ii) Lessee
will carry on its business and operations at each Site in compliance in all
respects with, and will remain in compliance with, all applicable Environmental
Laws and will ensure that all Tower Subtenants do the same: (iii) Lessee will
not create or permit to be created any Lien against any Site for the costs of
any response, removal or remedial action or clean-up of Hazardous Materials;
(iv) Lessee will promptly conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal, and other actions necessary to
clean up and remove all Hazardous Materials on, from or affecting each Site in
accordance with all applicable Environmental Laws; and (v) Lessee will promptly
notify Lessor and the applicable Sprint Collocator in writing if Lessee receives
any notice, letter, citation, order, warning, complaint, claim or demand that:
(w) Lessee or any Tower Subtenant has violated, or is about to violate, any
Environmental Law, (x) there has been a Release or there is a threat of Release,
of Hazardous Materials at or from the applicable Site, (y) Lessee or any Tower
Subtenant may be or is liable, in whole or in part, for the costs of cleaning
up, remediating, removing or responding to a Release of Hazardous Materials, or
(z) a Site are subject to a Lien favor of any Governmental Authority for any
liability, cost or damages under any Environmental Law.
(c) Lessor covenants and agrees that: (i) Lessor will not conduct, or allow
any Person under the direction or control of Lessor, upon any Site any business
operations or activities, or employ or use a Site, to generate, manufacture,
refine, transport, treat, store, handle, dispose of, transfer, produce, or
process Hazardous Materials; (ii) Lessor will carry on its business and
operations at each Site, if any, in compliance in all respects with, and will
remain in compliance with, all applicable Environmental Laws; and (iii) Lessor
will not create, or permit any Person under the direction or control of Lessor
to create, any Lien against any Site, including for the costs of any response,
removal or remedial action or clean-up of Hazardous Materials; Lessor will
promptly notify Lessee if Lessor receives any notice, letter, citation, order,
warning, complaint, claim or demand that: (w) Lessor or any Tower Subtenant has
violated, or is about to violate, any Environmental Law, (x) there has been a
Release or there is a threat of Release, of Hazardous Materials at or from the
applicable Site, (y) Lessee, Lessor or any Tower Subtenant may be or is liable,
in whole or in part, for the costs of cleaning up, remediating, removing or
responding to a Release of Hazardous Materials, or (z) a Site is subject to a
Lien favor of any Governmental Authority for any liability, cost or damages
under any Environmental Law.
(d) Lessor agrees to indemnify and hold the Lessee Indemnitees harmless
from and against any and all Claims, including Claims of any and every kind
whatsoever paid, incurred, suffered by, or asserted against the Lessee
Indemnitees or the Sprint Collocation Space of any Site for, with respect to, or
as a result of the violation or breach of, or the failure of Lessor or the
applicable Sprint Collocator to fully and completely keep, observe, satisfy,
perform and comply with, any agreement, term, covenant, condition, requirement,
provision or restriction of Section 23(c);
(e) Each Sprint Collocator covenants and agrees that as to each Site upon
which it leases or otherwise uses or occupies any Sprint Collocation Space: (i)
Sprint will not conduct or allow to be conducted upon any such Sprint
Collocation Space of any Site any business operations or activities, or employ
or use a Sprint Collocation Space of any Site, to generate, manufacture, refine,
transport, treat, store, handle, dispose of, transfer, produce, or process
Hazardous Materials; provided, that such Sprint Collocator will have the right
to bring, use and
51
keep on the Sprint Collocation Space of any Site in compliance with all
applicable Laws, batteries, generators and associated fuel tanks and other
substances commonly used in the industry necessary for the operation and
maintenance of each Sprint Collocation Space of any Site; (ii) such Sprint
Collocator will carry on its business and operations on the Sprint Collocation
Space of any Site in compliance in all respects with, and will remain in
compliance with, all applicable Environmental Laws unless non-compliance results
from the acts or omissions of Lessee or any Tower Subtenant; (iii) such Sprint
Collocator will not create or permit to be created any Lien against any Sprint
Collocation Space of any Site for the costs of any response, removal or remedial
action or clean-up of Hazardous Materials unless non-compliance results from the
acts or omissions of Lessee or any Tower Subtenant; (iv) to the extent such
Hazardous Materials were deposited by such Sprint Collocator, such Sprint
Collocator will promptly conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal, and other actions necessary to
clean up and remove all Hazardous Materials on, from or affecting the Sprint
Collocation Space of each Site in accordance with all applicable Environmental
Laws; and (v) such Sprint Collocator will promptly notify Lessee in writing if
such Sprint Collocator receives any notice, letter, citation, order, warning,
complaint, claim or demand that: (w) such Sprint Collocator has violated, or is
about to violate, any Environmental Law, (x) there has been a Release or there
is a threat of Release, of Hazardous Materials at or from the Sprint Collocation
Space of any Site, (y) such Sprint Collocator may be or is liable, in whole or
in part, for the costs of cleaning up, remediating, removing or responding to a
Release of Hazardous Materials, or (z) the Sprint Collocation Space of any Site
is subject to a Lien in favor of any Governmental Authority for any liability,
cost or damages under any Environmental Law.
(f) Except to the extent arising or resulting from the acts or omissions of
Lessor or any Sprint Collocator, Lessee agrees to indemnify and hold the Sprint
Indemnitees harmless from and against any and all Claims, including Claims of
any and every kind whatsoever paid, incurred, suffered by, or asserted against
the Sprint Indemnitees or any Site for, with respect to, or as a result of the
following: (i) the presence in, on, over or under, or the escape, seepage,
leakage, spillage, discharge, emission or Release on or from any Site of any
Hazardous Materials that occurs after the Effective Date and prior to the
applicable Site Expiration Date or earlier date of termination of this
Agreement; (ii) the violation of any Environmental Laws relating to or affecting
any Site that occurs after the Effective Date (relating to a condition first
existing after the Effective Date) and prior to the applicable Site Expiration
Date or earlier date of termination of this Agreement; (iii) a Release of any
Hazardous Materials or the violation of any of the Environmental Laws that
occurs after the Effective Date and prior to the applicable Site Expiration Date
or earlier date of termination of this Agreement in connection with any other
property owned, operated or used by or on behalf of Lessee, which violation or
Release gives or may give rise to any rights whatsoever in any Party with
respect to any Site by virtue of any of the Environmental Laws; (iv) any
warranty or representation made by Lessee in this Section 23 is or becomes false
or untrue in any material respect; or (v) the violation or breach of, or the
failure of Lessee to fully and completely keep, observe, satisfy, perform and
comply with, any agreement, term, covenant, condition, requirement, provision or
restriction of this Section 23.
(g) Except to the extent arising or resulting from the acts or omissions of
Lessee or a Tower Subtenant, each applicable Sprint Collocator agrees to
indemnify and hold the Lessee Indemnitees harmless from and against any and all
Claims, including Claims of any and every
52
kind whatsoever paid, incurred, suffered by, or asserted against the Lessee
Indemnitees or the Sprint Collocation Space of any Site for, with respect to, or
as a result of the violation or breach of, or the failure of the applicable
Sprint Collocator to fully and completely keep, observe, satisfy, perform and
comply with, any agreement, term, covenant, condition, requirement, provision or
restriction of Section 23(e).
(h) Notwithstanding anything to the contrary in this Agreement, in the
event any Claim of a type giving rise to indemnification obligations under this
Section 23 is asserted against a Lessee Indemnitee and it cannot be readily
determined that it was the act or omission of Lessor or any Sprint Collocator or
its Affiliate that gave rise to such Claim, it will be assumed for all purposes
of this Section 23 that it was Lessee's or a Tower Subtenant's act or omission,
Lessee will indemnify the Sprint Indemnitees in respect of such Claim pursuant
to Section 23(e), and neither Lessor nor any Sprint Collocator will have any
obligation or liability to any Lessee Indemnitee in respect of such Claim unless
and until it is finally determined that Lessor's or a Sprint Collocator's act or
omission gave rise to such Claim. The provisions of this Section 23 will survive
the applicable Site Expiration Date or earlier termination of this Agreement.
The foregoing provisions of this Section 23 are not intended to limit the
generality of any of the other provisions of this Agreement.
(i) During the Term, for any dispute or litigation that arises during the
Term in connection with any Ground Lessor, Ground Lease, Collocation Agreement,
Tower Subtenant or any other issue relating to the operation of the Sites
(collectively, "Disputes"), Lessee shall have the right to control, prosecute,
settle and/or compromise such Disputes; provided that Lessee shall not settle or
compromise such Disputes (i) for which Lessee is seeking a claim for
indemnification under the Agreement to Lease, (ii) which would increase the
amounts owed under any Ground Lease or Collocation Agreement during the Term,
which amounts Lessee is not obligated to pay hereunder during the Term, or (iii)
result in the termination of any Ground Lease, without Sprint's consent (not to
be unreasonably withheld, conditioned or delayed); provided further that if
Sprint does reasonably withhold such consent, Lessee shall nevertheless have the
right to settle and/or compromise such Dispute at Lessee's own expense. Upon
request, Lessee shall keep Lessor reasonably informed of the status and of the
activities relating to the Disputes. Lessee shall not be required to seek the
consent of Sprint to settle any matter with a Ground Lessor that relates to the
amount of a Revenue Sharing Payment, and such settlement shall not diminish
Contributor's obligations under Section 11(h) with respect thereto.
SECTION 24. Insurance.
(a) For each Site, Lessee will procure, and will maintain in full force and
effect at all times during the Term as to the applicable Site, the following
types of insurance with respect to each Site, including the Tower and
Improvements on such Site (but excluding Sprint's Communications Equipment),
paying as the same become due all premiums for such insurance:
(i) commercial general public liability insurance insuring against all
liability of Lessee and Lessee's officers, employees, agents, licensees and
invitees arising out of, by reason of or in connection with the use,
occupancy or maintenance of each Site (including Tower and the
Improvements), in an amount of not less than $1,000,000 for
53
bodily injury or property damage or as a result of one occurrence, and not
less than $2,000,000 for bodily injury or property damage in the aggregate;
(ii) umbrella or excess liability insurance with limits not less than
$5,000,000 per occurrence and in the aggregate;
(iii) property insurance in an amount not less than full replacement
cost of the Tower and Improvements of each Site, against direct and
indirect loss or damage by fire and all other casualties and risks covered
under "all risk" insurance respecting the Tower and Improvements (but
excluding any of Sprint's Communications Equipment and Sprint's
Improvements); and
(iv) workers' compensation insurance covering all employees of Lessee
and any employees of its Affiliates performing activities on the Site.
(b) Lessee will pay all premiums for the insurance coverage which Lessee is
required to procure and maintain under this Agreement. Each insurance policy (i)
will name Lessor and the applicable Sprint Collocator as an additional insured;
provided, that such requirement will only apply to liability policies and will
have no application to workers' compensation policies; and (ii) will provide
that the policy cannot be canceled as to Lessor or the Sprint Collocator except
after the insurer gives Lessor or the Sprint Collocator, as applicable, thirty
(30) days' written notice of cancellation. For each Site, Lessee will deliver to
Lessor and the Sprint Collocator certificates of insurance evidencing the
existence of all insurance which Lessee is required to maintain hereunder, such
delivery to be made promptly after such insurance is obtained (but not later
than the Effective Date) and not later than the date which is thirty (30) days
prior to the expiration date of any such insurance.
(c) Each Sprint Collocator will procure, and will maintain in full force
and effect at all times during the Term, the following types of insurance with
respect to its Sprint Collocation Space at the Sites, paying as the same become
due all premiums for such insurance:
(1) commercial general public liability insurance insuring against all
liability of the Sprint Collocator and its officers, employees, agents,
licensees and invitees arising out of, by reason of or in connection with
the use, occupancy or maintenance of the Sprint Collocation Space of each
Site, in an amount of not less than $1,000,000 for bodily injury or
property damage or as a result of one occurrence, and not less than
$2,000,000 for bodily injury or property damage in the aggregate;
(2) umbrella or excess liability insurance with limits not less than
$5,000,000 per occurrence and in the aggregate; and
(3) workers' compensation insurance covering all employees of the
Sprint Collocator or its Affiliates.
(d) The applicable Sprint Collocator Sprint will pay all premiums for the
insurance coverage which the Sprint Collocator is required to procure and
maintain under this Agreement. Each insurance policy (i) will name Lessee as an
additional insured; provided, however, that
54
such requirement will only apply to liability policies and will have no
application to workers' compensation policies; and (ii) will provide that the
policy cannot be canceled as to Lessee except after the insurer gives Lessee
thirty (30) days' written notice of cancellation. Each Sprint Collocator will
deliver to Lessee certificates of insurance evidencing the existence of all
insurance which such Sprint Collocator is required to maintain hereunder, such
delivery to be made promptly after such insurance is obtained (but not later
than the Effective Date) and not later than the date which is thirty (30) days
prior to the expiration date of any such insurance.
(e) All policy amounts set forth in this Section 24 will be evaluated and
increased (if necessary) every five (5) years during the Term of this Agreement
to such amounts as are customarily carried by prudent landlords and tenants in
the telecommunications industry to insure risks associated with their respective
interests in facilities comparable to the Sites. All policies of insurance
required under this Section 24 will be written on companies rated "A:VII" by AM
Best or a comparable rating and licensed in the State where the applicable Site
to which such insurance applies is located.
(f) Neither Lessee nor any Sprint Collocator will, on its own initiative or
pursuant to the request or requirement of any Tower Tenant or other Person, take
out separate insurance concurrent in form or contributing in the event of loss
with that required to be carried by such Party in this Section 24, unless the
other Party is named in the policy as an additional insured. Each Party will
immediately notify the other Party whenever any such separate insurance is taken
out and will deliver to the other Party original certificates evidencing the
same.
SECTION 25. Sprint Right of Alteration and Substitution.
(a) Except as otherwise provided in this Agreement, any Sprint Collocator
will have the right (for the benefit of itself or its Affiliates) to modify
and/or replace, at such Sprint Collocator's expense, Sprint's Communications
Equipment at any Site so long as any such modification or replacement does not
entail the installation of Communications Equipment on any portion of the Tower
located outside the Sprint Tower Envelope that (i) materially differs in type or
use from Sprint's Communications Equipment then located on the Tower at such
Site, (ii) exceeds any limitations contained in Section 6(a), (iii) impairs the
structural integrity of the Tower or (iii) violates the provisions of Section
15. If at any Site the Sprint Collocator desires to modify or replace any
Communications Equipment on the Tower with Communications Equipment that
materially differs in type or use from Sprint's Communications Equipment then
located at such Site, such modification or replacement Communications Equipment
may be installed only with the consent of Lessee, which consent shall not be
unreasonably withheld (and in connection with such consent Lessee may require
the that such Sprint Collocator comply with a reasonable application process and
perform such testing and analysis at the cost of the Sprint Collocator as would
be customary in accordance with industry standard requirements). The Sprint
Collocator at any Site also will have the right, at its cost and expense, to
make any Alterations to the Site that it reasonably deems necessary to increase
the capacity of or otherwise augment, strengthen or enhance a Tower, subject,
however in the case of any structural Alterations to the submission of plans and
specifications to Lessee at least thirty (30) days prior to undertaking any such
Alteration, and the written approval of Lessee, not to be unreasonably withheld.
Any Alterations to a Site shall not adversely impact any existing Tower
Subtenant or materially diminish the marketability of space at a Site to future
tower subtenants, have the
55
practical effect of limiting the number of potential Tower Subtenants or the
amount of Available Space on the Tower for potential use by prospective Tower
Subtenants, or otherwise diminish in any material respect the value of such
Site.
(b) Notwithstanding anything to the contrary contained in this Agreement,
if during the Term, within fifteen (15) Business Days after request by any
Sprint Collocator, Lessee will notify the applicable Sprint Collocator whether
there is any Available Space in respect of any Site. If any such Available Space
then exists, the Sprint Collocator will have the Right of Substitution (for the
benefit of itself or any of its Affiliates) as to such Available Space if, in
the reasonable judgment of Lessee, such relocation will not (i) impair the
structural integrity of the Tower (and in connection with any exercise of the
Substitution Right Lessee may require the that the applicable Sprint Collocator
perform such testing and analysis at the cost of the Sprint Collocator as would
be customary in accordance with industry standard requirements in connection
with such exercise) or cause interference in violation of Section 15 with the
Communications Equipment of any Tower Subtenant or diminish the structural
ability of the Tower to hold additional Tower Subtenants (it being acknowledged
and agreed, however (but subject to clause (ii) immediately below), that the
Sprint Collocator shall be entitled to use at all times the weight and wind
loading equivalent of the Sprint Tower Envelope), or (ii) have the practical
effect of limiting the number of potential Tower Subtenants at such Site (as
compared prior to such Substitution or the rent payable by such Tower
Subtenants), provided, that Lessee may prevent a Sprint Collocator from
exercising its Right of Substitution if such exercise would cause a
configuration of space that may reasonably be expected to limit Lessee's revenue
at any particular Site, including avoiding having any so-called "orphan" space
on a Tower (but with the assumption that no space on the Tower is more expensive
to rent because of its location of the Tower). If the Sprint Collocator elects
to exercise its Right of Substitution, then, upon completion of the relocation,
at the Sprint Collocator's expense, of the Communications Equipment and
Improvements of the Sprint Collocator or its Affiliate on the Site, the
previously existing Sprint Collocation Space of the applicable Site will
automatically be released by the Sprint Collocator or its Affiliate and become a
part of the Available Space of such Site (and Sprint shall deliver such space in
good condition, repair and order, reasonable wear and tear excepted, and shall
remove all of Sprint's Communications Equipment therefrom and restore any damage
thereto caused by, through or under any member of the Sprint Group), subject to
the terms of this Agreement, and concurrently therewith, the Available Space on
such Site to which the Communications Equipment and Improvements of Sprint or
its Affiliate has been relocated (but in no event shall such space be larger
than the Sprint Tower Envelope) will automatically become and constitute the
Sprint Collocation Space (provided, however, that if the Sprint Collocator will
maintain Communications Equipment of less than the equivalent weight and wind
loading of nine (9) 1'x 6' panel antennas on the Tower at such Site as of the
effective date of such relocation, the Sprint Collocation Space will contain an
additional portion of such Tower so that the Sprint Collocation Space will
contain the entire amount of the Sprint Tower Envelope to the extent there is
adequate contiguous space available on the Tower as of the effective date of
such relocation) subject to Section 6; provided, however, that the weight and
wind loading criteria for such Sprint Collocation Space shall continue to be the
same as existed prior to the exercise of the Right of Substitution. The Parties
will at the Sprint Collocator's sole cost and expense promptly execute such
instruments as may be reasonably required to further evidence such Substitution,
including without limitation an amendment to Exhibit A or the applicable Site
56
Designation Supplement. The Sprint Collocator will, at its cost and expense,
complete the relocation of its Communications Equipment.
SECTION 26. Assignment and Subletting.
(a) Without the prior written consent of Sprint, Lessee may not assign this
Agreement or any of Lessee's rights under this Agreement in whole or in part, or
sublease or grant concessions or licenses or other rights for the occupancy or
use of all or any portion of any Site; provided, that, subject to any required
consent of any Ground Lessor but without the consent of Sprint, (i) Lessee may
lease, sublease, license or otherwise make available Available Space to Tower
Tenants for the purpose of the installation, operation and maintenance of
Communications Equipment as contemplated by, and subject to the applicable terms
and provisions of, this Agreement (and in such event Lessee will not be released
from, and will remain fully and completely liable for, payment and performance
of all of its duties, obligations and liabilities under this Agreement); (ii)
Lessee may (A) assign this Agreement in whole or in part to any Qualifying
Lessee Transferee or (B) assign all or any portion of its rights with respect to
a Site to an Affiliate of Lessee or (C) enter into the Severed Leases as
contemplated by Section 41; provided that in the case of the transactions
described in clauses (A) and (B) immediately above the assignee of Lessee must
assume and agree to perform all of Lessee's obligations hereunder to the extent
of such assignment. In the case of an assignment of this Agreement in connection
with any transaction described in clause (B) above (other than an assignment to
a GSI Financing Subsidiary in which case pursuant to Section 41(d), from and
after execution of a Severance Lease, Lessee shall be released from all
obligations with respect to the Sites that are leased or pre-leased under such
Severance Lease), Lessee will not be released from, and will remain fully and
completely liable for payment and performance of, all its duties, obligations
and liabilities under this Agreement. Upon any assignment permitted above to a
Qualifying Lessee Transferee, the obligations of Lessee under this Agreement
with respect to the Sites that are the subject of the assignment will cease and
terminate to the extent of such assignment, and Lessor and Sprint will look only
and solely to the Person that is the Qualifying Lessee Transferee of Lessee's
interest under this Agreement as to such Sites for performance of all of
Lessee's duties and obligations under this Agreement with respect to such Sites
from and after the date of the assignment. Notwithstanding the foregoing, Lessee
may enter into Mortgages in favor of any Lessee Lender, in which case the Lessee
Lender with respect thereto will have the right to exercise remedies under any
such Mortgage in a manner consistent with the provisions of this Agreement and
any other agreement between Lessee and Sprint made in connection with this
transaction.
(b) Except as expressly permitted under this Section 26(b), no Sprint
Collocator may assign sell, convey, transfer, sublease or otherwise dispose of
this Agreement or any of its rights under this Agreement in whole or in part, or
sublease or grant concessions or licenses or other rights for the occupancy or
use of all or any portion of any Site without the consent of Lessee. All of the
Sprint Collocators, only in the aggregate, may sell, convey, transfer, assign,
sublease, or otherwise dispose of their interests in the Sprint Collocation
Space as a whole, not in part, without the consent of Lessee, to a successor
Person by way of merger, consolidation, or other reorganization or to any Person
acquiring substantially all of the assets of all of the Sprint Collocators and
which Person is a wireless communications end user who intends to use
substantially all of the Sprint Collocation Space for its own wireless
communications business.
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In addition, each Sprint Collocator will have the unrestricted right during the
Term to sell, convey, transfer, assign, sublease or otherwise dispose of such
Sprint Collocator's interest in and to the Sprint Collocation Space at any Site,
in whole or in part, without the consent of Lessee to (i) any Affiliate, or (ii)
such Person who is (A) not, and none of whose Affiliates are, a Lessee
Competitor, and (B) is a wireless communication end user in any geographic
market in which such Sprint Collocator has ceased to operate or will cease to
operate after the consummation of transaction that is the subject of the
assignment and subletting (collectively, a "Sprint Market Assignee"), who
intends to use such Site solely for its own wireless communications business,
provided that such Sprint Market Assignee enters into a master collocation
agreement with Lessee, in the form of the then most recent master collocations
agreement between Lessee (or its Affiliates) and the Sprint Market Assignee (or
its Affiliates), or if none exists, in the form of the most recent master
collocation agreement between Global Parent (or its Affiliates) and Sprint, or
if none exists, a then market standard collocation agreement, except that the
term and Withdrawal Rights of the Sprint Market Assignee shall reflect the term
and Withdrawal Rights then applicable to the Sites that are the subject of such
assignment (and the rent shall be described in the next following sentence), and
the Sprint Market Assignee shall have no further rights hereunder and, upon such
assignment, the applicable Sprint Collocator shall vacate such Site, and upon
vacating such Site and removing the Sprint Communications Equipment from same
and restoring the Sprint Collocation Space to the condition required by this
Agreement, such Sprint Collocator shall be relieved of its obligations to pay
the Sprint Collocation Charge with respect to such Site (each such transaction
described in the foregoing provisions of this Section 26(b) being a "Sprint
Transfer"). If, pursuant to any assignment, sublease, conveyance, transfer or
other disposition permitted by this Agreement to a Sprint Market Assignee, a
Sprint Collocator is no longer the tenant of Sprint Collocation Space, the
applicable Sprint Collocation Charge payable shall be an amount equal to the
product of (x) the then current Sprint Collocation Charge and (y) 1.25 and the
foregoing shall thereafter be subject to annual adjustment as provided for in
Section 11(b). If any Sprint Collocator effects a Sprint Transfer, then, in the
case of a Sprint Transfer to a Qualifying Sprint Transferee, the obligations of
the Sprint Collocator or any other Party hereunder constituting Sprint under
this Agreement with respect to the portion of the Sprint Collocation Space that
is the subject of the Sprint Transfer will cease and terminate, and Lessee will
look only and solely to the Person that is the Qualifying Transferee of Sprint
Collocator's interest in and to such portion of the Sprint Collocation Space for
performance of all of the duties and obligations of the Sprint Collocator or any
other Party hereunder constituting Sprint under this Agreement with respect to
such Sprint Collocation Space from and after the date of the Sprint Transfer.
Otherwise, in the event of any Sprint Transfer, the applicable Sprint Collocator
shall remain liable under this Agreement for the performance of such Sprint
Collocator's duties and obligations hereunder as to such applicable Sprint
Collocation Space that is the subject of the Sprint Transfer.
(c) Subject to Section 26 and Section 36, neither Lessor nor any Sprint
Contributor shall, or shall permit any Affiliate thereof to sell, convey,
transfer, assign, sublease, encumber, mortgage or otherwise hypothecate or
dispose of its interest in and to any Site, or grant concessions or licenses or
other rights for the occupancy or use of all or any portion of any Site, during
the Term.
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(d) Each Party hereby agrees that any attempt of any Party to assign its
interest in this Agreement or any of its rights under this Agreement, in whole
or in part, in violation of this Section 26 will constitute a default under this
Agreement and will be null and void ab initio.
SECTION 27. Estoppel Certificate.
Each Party, from time to time upon thirty (30) days' prior request by any
other Party, will execute, acknowledge and deliver to the requesting Party, or
to a Person designated by such requesting Party, a certificate stating that this
Agreement is unmodified and in full effect (or, if there have been
modifications, that this Agreement is in full effect as modified, and setting
forth such modifications) and the dates to which Rent, Pre-Lease Rent, Sprint
Collocation Charges and other sums payable under this Agreement have been paid,
and either stating that to the knowledge of the signer of such certificate no
default exists under this Agreement or specifying each such default of which the
signer has knowledge. The requesting Party, at such Party's cost and expense,
will cause such certificate to be prepared for execution by the requested Party.
Any such certificate may be relied upon by any prospective Mortgagee or
purchaser of any portion of a Site.
SECTION 28. Holding Over.
(a) If Lessee remains in possession of the Leased Property of any Master
Lease Site after expiration or termination of the Term as to such Master Lease
Site without any express written agreement by Lessor, then Lessee will be and
become a tenant at sufferance, and there will be no renewal or extension of the
Term as to such Master Lease Site by operation of Law.
(b) If during the Term of this Agreement any Sprint Collocator remains in
possession of the Sprint Collocation Space of any Site after expiration or
termination of the Sprint Collocator's leaseback of or other right to use and
occupy the Sprint Collocation Space at such Site without any express written
agreement by Lessee, then such Sprint Collocator will be a month-to-month tenant
with the monthly Sprint Collocation Charge equal to one hundred fifty percent
(150%) of the monthly Sprint Collocation Charge last applicable to the Sprint
Collocation Space and subject to all of the other terms set forth in this
Agreement, and there will be no renewal or extension of this Agreement as to the
lease of the Sprint Collocation Space by operation of Law.
SECTION 29. Rights of Entry and Inspection.
(a) Lessor and the applicable Sprint Collocator and their respective
representatives, agents and employees, at such Person's sole cost and expense,
will be entitled to enter any portion of any Site at all reasonable times and
with advance notice in accordance with and to the extent required under Section
6(a) for the purposes of inspecting such Site, making any repairs or
replacements or performing any maintenance, and performing any work on the Site,
to the extent required or permitted by this Agreement. Nothing in this Section
29 will imply or impose any duty or obligation upon Lessor or any Sprint
Collocator to enter upon any Site at any time for any purpose, or to inspect any
Site at any time, or to perform, or pay the cost of, any work which Lessee is
required to perform under any provision of this Agreement, and neither Lessor
nor any Sprint Collocator has any such duty or obligation.
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(b) Each Sprint Collocator will permit Lessee and Lessee's representatives
to inspect Sprint's Communications Equipment located on the Tower in accordance
with industry standard practices to ascertain compliance with the provisions of
this Agreement. Except in the event of an Emergency only, and only for the
purposed of making repairs or replacements to address such Emergency, Lessee
shall not be entitled to have access to or inspect any other of Sprint's
Communications Equipment. Nothing in this Section 29 will imply or impose any
duty or obligation upon Lessee to enter upon any Site at any time for any
purpose, or to inspect the Leased Property at any time, or to perform, or pay
the cost of, any work which Sprint is required to perform under any provision of
this Agreement, and Lessee has no such duty or obligation. The Sprint
Collocators agree to indemnify and hold the Lessee Indemnitees harmless from and
against and in respect of any and all Claims, paid, suffered, incurred or
sustained by any Lessee Indemnitee and in any manner arising out of, by reason
of, or in connection with any entry onto any Site by Sprint or any of its
Affiliates, employees, agents, contractors, subcontractors, engineers, agents,
advisors, consultants or representatives.
SECTION 30. Right to Act for Lessee.
(a) In addition to and not in limitation of any other remedy Lessor or any
Sprint Collocator may have under this Agreement, if Lessee fails to make any
payment or to take any other action (or to cause any Tower Subtenant to take any
action) when and as required under this Agreement, subject to the following
sentence, Lessor or the applicable Sprint Collocator may, without demand upon
Lessee and without waiving or releasing Lessee from any duty, obligation or
liability under this Agreement, make any such payment or take any such other
action required of Lessee. Unless Lessee's failure results in or relates to an
Emergency, Lessor or the Sprint Collocator, as applicable, will give Lessee at
least ten (10) days prior written notice of Lessor's or the Sprint Collocator's
intended action and Lessee will have the right to cure such failure within such
ten (10) day period unless the same is not able to be remedied in such ten (10)
day period, in which event such ten (10) day period will be extended, provided
Lessee has commenced such cure within such ten (10) day period and continuously
prosecutes the performance of the same to completion with due diligence. No
notice will be required in the event of an Emergency. The actions which Lessor
or the Sprint Collocator may take will include, but are not limited to, the
performance of maintenance or repairs and the making of replacements to the
Towers and Improvements on each Site (and Lessor or the Sprint Collocator, as
applicable, will have full access to the Sites for such purpose), the payment of
insurance premiums which Lessee is required to pay under this Agreement, the
payment of Ground Rent which Lessee is required to pay under the Ground Leases
and the payment of Taxes which Lessee is required to pay under this Agreement.
Lessor or the Sprint Collocator may pay all incidental costs and expenses
incurred in exercising its rights under this Agreement, including, without
limitation, reasonable attorneys' fees and expenses, penalties, re-instatement
fees, late charges, and interest. An amount equal to one hundred twenty percent
(120%) of the total amount of the costs and expenses (including salaries and
benefits of employees) incurred by Lessor or the Sprint Collocator in accordance
with this Section 30 is referred to as the "Reimbursable Maintenance Expenses",
and will be due and payable by Lessee upon demand and bear interest at the rate
of twelve percent (12%) per annum from the date five (5) days after demand until
paid by Lessee.
(b) For purposes of this Section 30, the term "Emergency" means any event
that causes, has caused or is likely to cause: (i) any bodily injury, personal
injury or property damage;
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(ii) the immediate suspension, revocation, termination or any other adverse
effect as to any licenses and/or permits; or (iii) any material adverse effect
on the ability of any Sprint Collocator or its Affiliates, or any Tower
Subtenants, to operate Communications Equipment; or (iv) any failure of any Site
to comply in any material respect with applicable FCC or FAA regulations or
other licensing requirements.
SECTION 31. Defaults and Remedies.
(a) The following events constitute events of default by Lessor or any
Sprint Contributor:
(i) if Lessor or any Sprint Contributor fails to perform any
obligation under any Ground Lease (other than any obligation assumed by
Lessee hereunder) that results in a default or breach under such Ground
Lease and such failure continues (x) for more ten (10) days, or (y) if the
cure period under such Ground Lease for such default or breach (A) is less
than ten (10) days, such lesser period of time or, (B) is greater than ten
(10) days, such greater period of time, in each case after written notice
from Lessee;
(ii) if Lessor or any Sprint Contributor violates or breaches, or
fails to observe, keep, satisfy, perform and comply with, any material
agreement, term, covenant, condition, requirement, restriction or provision
of this Agreement in respect of any Site, and (x) Lessor or such Sprint
Contributor (as applicable) does not cure such violation, breach or failure
within thirty (30) days after Lessee gives Lessor written notice of such
violation, breach or failure (or such lesser period provided herein), or
(y) such violation, breach or failure (which is not a failure to pay money)
is incapable of being cured within thirty (30) days, and Lessor or such
Sprint Contributor (as applicable) does not commence to cure such
violation, breach or failure within such thirty (30) day period and
continuously prosecute the performance of the same to completion with due
diligence, provided, if any such default causes Lessee to be in default
under any Collocation Agreement existing prior to the Effective Date, the
thirty (30) day periods referenced above in this Section 31(a)(ii) shall be
reduced to such lesser time period as Lessee notifies Lessor or the
appropriate Sprint Contributor in writing that Lessee has to comply under
such Collocation Agreement;
(iii) if Lessor or any Sprint Contributor becomes insolvent or makes
an assignment for the benefit of creditors; or if any action is brought by
Lessor seeking its dissolution or liquidation of its assets or seeking the
appointment of a trustee, interim trustee, receiver or other custodian for
any of its property; or if Lessor or any Sprint Contributor commences a
voluntary proceeding under the Federal Bankruptcy Code; or if any action or
petition is otherwise brought by Lessor seeking similar relief or alleging
that it is insolvent or unable to pay its debts as they mature; or if any
action is brought against Lessor seeking its dissolution or liquidation of
any of its assets, or seeking the appointment of a trustee, interim
trustee, receiver or other custodian for any of its property, and any such
action is consented to or acquiesced in by Lessor or any Sprint Contributor
or is not dismissed within ninety (90) days after the date upon which it
was instituted; or if any proceeding under the Federal Bankruptcy Code is
instituted against Lessor or any Sprint Contributor and (A) an order for
relief is entered in such proceeding,
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or (B) such proceeding is consented to or acquiesced in by Lessor or any
Sprint Contributor or is not dismissed within ninety (90) days after the
date upon which it was instituted; or if any action or petition is
otherwise brought against Lessor seeking similar relief or alleging that it
is insolvent, unable to pay its debts as they mature or generally not
paying its debts as they become due, and such action or petition is
consented to or acquiesced in by Lessor or any Sprint Contributor or is not
dismissed within ninety (90) days after the date upon which it was brought;
or
(iv) if the lease or pre-lease of any Site to Lessee is rejected under
Section 365 of the Federal Bankruptcy Code.
(b) Upon the occurrence of any event of default by any Sprint Contributor
under Section 31(a)(iii) or 31(a)(iv), Lessee may terminate any Sprint
Collocator's rights with respect to the leaseback or other use and occupancy of
the Sprint Collocation Space at any or all Sites of such Sprint Contributor, by
giving Sprint written notice of termination, and the applicable Sprint
Collocator's rights with respect to the leaseback or other use and occupancy of
the Sprint Collocation Space at the affected Site(s) will be terminated thirty
(30) days after Sprint's receipt of such termination notice, provided, however,
this Agreement shall otherwise remain in full force and effect. Upon the
occurrence of any event of default by Lessor and any Sprint Contributor under
Section 31(a)(i) or 31(a)(ii) in respect of any Site, Lessee may terminate, at
its election, Sprint's rights with respect to the leaseback or other use and
occupancy of the Sprint Collocation Space at the affected Site, by giving Sprint
written notice of termination of Sprint's rights with respect to the leaseback
or other use and occupancy of the Sprint Collocation Space at the affected Site,
and this Agreement will be terminated as to Sprint's rights with respect to
Collocation Space at the affected Site thirty (30) days after Sprint's receipt
of such termination notice, provided, however, this Agreement shall otherwise
remain in full force and effect. Additionally, upon the occurrence of events of
default not cured during the applicable time period for curing same (whether of
the same or different types) by any of Lessor or any Sprint Contributor under
Section 31(a), in respect of more than twenty percent (20%) of the Sites, in the
aggregate, during any consecutive five (5) year period, which (i) results in
material harm to the business and operations of Lessee, and subject to
arbitration under Section 31(h) as to any dispute as to whether any event of
default has occurred and is continuing, and (ii) such default is not the result
of any default of Lessee hereunder or the occurrence of one or more force
majeure events, Lessee shall have the right to (x) purchase all of the Sites for
an aggregate purchase price of $100 by giving Lessor written notice of its
exercise of such purchase option (which notice shall contain a reasonably
specific description of each of such events of default), and such option shall
be exercised pursuant to the provisions of Section 36, mutatis mutandis, except
that the Option Purchase Price shall be $100 and/or (y) terminate any Sprint
Collocator's rights with respect to the leaseback or other use and occupancy of
the Sprint Collocation Space at any or all Sites. Notwithstanding anything to
the contrary contained herein, if Lessor disputes that it is in default
hereunder, and Lessor is determined to be in default pursuant to Section 31(h),
if Lessor, within twenty (20) days following a determination that it is in
default under Section 31(h), commences cure of such default and diligently
completes same, an event of default with respect to Lessor shall not be deemed
to have occurred. Any termination by Lessee of a Sprint Collocator's rights with
respect to any or all Sites pursuant to this Section 31(b) shall not diminish or
limit any obligation of the Sprint Collocator to pay the Sprint Collocation
Charge provided for herein or any other amounts with respect to such Site(s).
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(c) The following events constitute events of default by a Sprint
Collocator:
(i) if the Sprint Collocators fail to timely pay any portion of the
Sprint Collocation Charge, and any such failure continues for ten (10) days
after written notice from Lessee (it being understood the aggregate Sprint
Collocation Charge is a single non-severable payment with respect to all of
the Sites);
(ii) if any Sprint Collocator fails to timely pay any other amount
payable under hereunder not constituting a portion of the Sprint
Collocation Charge, and such failure continues for ten (10) days after
written notice from Lessee;
(iii) if any Sprint Collocator violates or breaches, or fails to
observe, keep, satisfy, perform and comply with, any material agreement,
term, covenant, condition, requirement, restriction or provision of this
Agreement in respect of any Site, and (x) such Sprint Collocator does not
cure such violation, breach or failure within thirty (30) days after Lessee
gives such Sprint Collocator written notice of such violation, breach or
failure, or (y) such violation, breach or failure (which is not a failure
to pay money) is incapable of being cured within thirty (30) days, and such
Sprint Collocator does not commence to cure such violation, breach or
failure within such thirty (30) day period and continuously prosecute the
performance of the same to completion with due diligence;
(iv) if any Sprint Collocator becomes insolvent or makes an assignment
for the benefit of creditors; or if any action is brought by such Sprint
Collocator seeking its dissolution or liquidation of its assets or seeking
the appointment of a trustee, interim trustee, receiver or other custodian
for any of its property; or if such Sprint Collocator commences a voluntary
proceeding under the Federal Bankruptcy Code; or if any action or petition
is otherwise brought by such Sprint Collocator seeking similar relief or
alleging that it is insolvent or unable to pay its debts as they mature; or
if any action is brought against such Sprint Collocator seeking its
dissolution or liquidation of any of its assets, or seeking the appointment
of a trustee, interim trustee, receiver or other custodian for any of its
property, and any such action is consented to or acquiesced in by such
Sprint Collocator or is not dismissed within ninety (90) days after the
date upon which it was instituted; or if any proceeding under the Federal
Bankruptcy Code is instituted against such Sprint Collocator and (A) an
order for relief is entered in such proceeding, or (B) such proceeding is
consented to or acquiesced in by such Sprint Collocator or is not dismissed
within ninety (90) days after the date upon which it was instituted; or if
any action or petition is otherwise brought against such Sprint Collocator
seeking similar relief or alleging that it is insolvent, unable to pay its
debts as they mature or generally not paying its debts as they become due,
and such action or petition is consented to or acquiesced in by such Sprint
Collocator or is not dismissed within ninety (90) days after the date upon
which it was brought; or
(v) If the Sprint Collocator rejects its rights to sublease or right
to use any Site under Section 365 of the Bankruptcy Code.
(d) Upon the occurrence of any event of default by any Sprint Collocator
under Section 31(c)(i), 31(c)(iv) or 31(c)(v), Lessee may terminate this
Agreement as to the leaseback
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or other use and occupancy of the Sprint Collocation Space at any or all Sites
leased, used or occupied by such Sprint Collocator by giving such Sprint
Collocator written notice of termination, and this Agreement will be terminated
as to such Sites thirty (30) days after such Sprint Collocator's receipt of such
termination notice; provided, however that no such notice of termination given
as a result of a failure set forth in Section 31(c)(i) shall be effective unless
and until such failure continues for an additional ten (10) Business Day period
after Lessee has given the Sprint Collocators an additional written notice of
such failure which contains the following statement in capital letters and bold
face type: "THIS NOTICE CONSTITUTES THE FINAL NOTICE OF NON-PAYMENT AND IF YOU
FAIL TO PAY ALL OUTSTANDING AMOUNTS WITHIN TEN (10) BUSINESS DAYS AFTER THIS
NOTICE, YOUR RIGHTS UNDER THE MASTER LEASE AND SUBLEASE AGREEMENT MAY BE
TERMINATED." Upon the occurrence of any event of default by any Sprint
Collocator under Section 31(c)(ii) as to the Sprint Collocation Space of a Site,
Lessee may terminate, at its election, this Agreement as to the applicable Site
or such Sprint Collocator's leaseback or other use and occupancy of the Sprint
Collocation Space at such Site at any time prior to the ninetieth (90) day after
the occurrence of such event of default by giving such Sprint Collocator written
notice of termination, and this Agreement will be terminated as to the
applicable Site or as to the applicable Sprint Collocation Space, as applicable,
thirty (30) days after such Sprint Collocator's receipt of such termination
notice. Additionally, upon the occurrence of events of default not cured during
the applicable time period for curing same (whether of the same or different
types) by the Sprint Collocators (or any of them) under Section 31(c), in
respect of more than twenty percent (20%) of the Sites, in the aggregate, during
any consecutive five (5) year period, which (i) results in material harm to the
business and operations of Lessee, and subject to arbitration under Section
31(h) as to any dispute as to whether any event of default has occurred and is
continuing, and (ii) such default is not the result of any default of Lessee
hereunder or the occurrence of one or more force majeure events, Lessee shall
have the right to (x) purchase all of the Sites for an aggregate purchase price
of $100 by giving Lessor written notice of its exercise of such purchase option
(which notice shall contain a reasonably specific description of each of such
events of default), and such option shall be exercised pursuant to the
provisions of Section 36, mutatis mutandis, except that the Option Purchase
Price shall be $100 and/or (y) terminate any Sprint Collocator's rights with
respect to the leaseback or other use and occupancy of the Sprint Collocation
Space at any or all Sites. Notwithstanding anything to the contrary contained
herein, if the Sprint Collocators disputes that they are in default hereunder,
and a Sprint Collocator is determined to be in default pursuant to Section
31(h), if the Sprint Collocators, within twenty (20) days following a
determination that they are in default under Section 31(h), commences cure of
such default and diligently completes same, an event of default with respect to
the Sprint Collocators shall not be deemed to have occurred.
(e) The following events constitute events of default by Lessee:
(i) (A) if Lessee fails to timely pay Ground Rent as provided in
Section 4(a) or otherwise fails to perform any obligation assumed by Lessee
hereunder under any Ground Lease as provided in Section 4(a) and such
failure continues for more than (x) ten (10) days, or (y) if the cure
period under the Ground Lease is (I) less than ten (10) days, such lesser
period of time or (II) is greater than ten (10) days, such greater period
of time, in each case after written notice from Lessor or the applicable
Sprint Contributor, or (B) if Lessee otherwise fails to make payment of any
amount due under this Agreement and
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such failure continues for more than ten (10) days after written notice
from Lessor (provided, the foregoing shall not be a default if Lessee is in
a good faith dispute under a Ground Lease, and the Ground Lessor thereunder
may not exercise any right to terminate the Ground Lease during the
pendancy of such dispute);
(ii) if Lessee violates or breaches, or fails to fully and completely
observe, keep, satisfy, perform and comply with, any material term,
covenant, condition, requirement, restriction or provision of this
Agreement with respect to any Site, and does not cure such violation,
breach or failure within thirty (30) days after Lessor or any Sprint
Collocator gives Lessee written notice of such failure, or, if such failure
(which is not a failure to pay money) can be cured, but not within thirty
(30) days, and Lessee does not commence to cure such failure within such
thirty (30) day period and continuously prosecute the performance of the
same to completion with due diligence;
(iii) if Lessee becomes insolvent or makes an assignment for the
benefit of creditors; or if any action is brought by Lessee seeking its
dissolution or liquidation of its assets or seeking the appointment of a
trustee, interim trustee, receiver or other custodian for any of its
property; or if Lessee commences a voluntary proceeding under the Federal
Bankruptcy Code; or if any action or petition is otherwise brought by
Lessee seeking similar relief or alleging that it is insolvent or unable to
pay its debts as they mature; or if any action is brought against Lessee
seeking its dissolution or liquidation of any of its assets, or seeking the
appointment of a trustee, interim trustee, receiver or other custodian for
any of its property, and any such action is consented to or acquiesced in
by Lessee or is not dismissed within ninety (90) days after the date upon
which it was instituted; or if any proceeding under the Federal Bankruptcy
Code is instituted against Lessee and (A) an order for relief is entered in
such proceeding, or (B) such proceeding is consented to or acquiesced in by
Lessee or is not dismissed within ninety (90) days after the date upon
which it was instituted; or if any action or petition is otherwise brought
against Lessee seeking similar relief or alleging that it is insolvent,
unable to pay its debts as they mature or generally not paying its debts as
they become due, and such action or petition is consented to or acquiesced
in by Lessee or is not dismissed within thirty (30) days after the date
upon which it was brought; or
(iv) If the leaseback to any Sprint Collocator or other right by any
Sprint Collocator to use and occupy the Sprint Collocation Space is
rejected by Lessee under Section 365 of the Federal Bankruptcy Code.
(f) Upon the occurrence of any event of default by Lessee under Section
31(e) in respect of any Site (or if Lessor or any applicable Sprint Contributor
elects to terminate this Agreement in respect of any Site pursuant to Section
12(c)), Lessor or any applicable Sprint Contributor may terminate this Agreement
as to the applicable Site by giving Lessee written notice of termination, and
this Agreement will be terminated as to such Site, at the time designated by
Lessor or such Sprint Collocator, as applicable, in its notice of termination to
Lessee, unless otherwise provided herein. Upon (i) the occurrence of events of
default not cured during the applicable time period for curing same (whether of
the same or different types), by Lessee under Section 31(e) in respect of more
than twenty percent (20%) of the Sites, in the aggregate, during any consecutive
five (5) year period, which (A) results in material harm to the
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business and operations of Lessor or the Sprint Collocators, and subject to
arbitration under Section 31(h) as to any dispute as to whether any event of
default has occurred and is continuing, and, (B) such default is not the result
of any default of Lessor or any Sprint Collocator hereunder or the occurrence of
one or more force majeure events, and (ii) failure of Guarantor after reasonable
advance notice from Lessor to perform its payment obligations under Section 42
with respect to such event of default, Lessor or any Sprint Collocator may
terminate this Agreement as to all Sites by giving Lessee written notice of
termination (which notice shall contain a reasonably specific description of
each of such events of default), and this Agreement will be terminated as to all
Sites at the time designated by Lessor or such Sprint Collocator in its notice
of termination to Lessee. Notwithstanding anything to the contrary contained
herein, if Lessee disputes that it is in default hereunder, and Lessee is
determined to be in default pursuant to Section 31(h), if Lessee (or Guarantor),
within twenty (20) days following a determination that it is in default under
Section 31(h), commences cure of such default and diligently completes same, an
event of default with respect to Lessee shall not be deemed to have occurred.
(g) Lessor, any Sprint Collocator or Lessee, as applicable, may pursue any
remedy or remedies provided in this Agreement or any remedy or remedies provided
for or allowed by law or in equity, separately or concurrently or in any
combination, including, without limitation, (i) specific performance or other
equitable remedies; or (ii) money damages arising out of such default; or (iii)
in the case of Lessee's default, Lessor or any Sprint Collocator may perform, on
behalf of Lessee, Lessee's obligations under the terms of this Agreement
pursuant to Section 31.
(h) Notwithstanding anything in this Agreement to the contrary, if (i) any
Party receives any notice of a default under this Agreement or (ii) Lessor, or
any Sprint Contributor or Sprint Collocator gives Lessee a notice of termination
pursuant to Section 31(f), or (iii) Lessee gives Lessor or any Sprint
Contributor a notice of termination under Section 31(b) or Section 31(d) (as
applicable) the Party receiving any such notice shall have the right, within ten
(10) days after receipt of such notice (the "Decision Period"), to initiate
arbitration proceedings to determine the existence of any such default or
termination right. Such arbitration proceedings will be initiated with three
Qualified Arbitrators, with one selected by each of Lessor and Lessee and the
third mutually selected by the Parties, each Party acting reasonably, and if the
Parties cannot agree the third arbitrator shall, selected by the two other
arbitrators. The arbitration will be held in Chicago, Illinois or such other
location as is mutually agreeable to the Parties. All arbitrations will be
governed by the applicable commercial rules of the American Arbitration
Association ("AAA") for accelerated arbitration proceedings. The arbitrators
will prepare in writing, and provide to the Parties, such arbitrators'
determination, including factual findings and the reasons on which the
determination was based. The decision of a majority of the arbitrators will be
final, binding and conclusive and will not be subject to review or appeal and
may be enforced in any court having jurisdiction over the Parties. During the
Decision Period and thereafter, if a Party elects to initiate arbitration
proceeding under this Section 31(h), until the conclusion of the arbitration
proceedings and the rendering of the decision of the arbitrators, any right or
remedy provided under this Agreement to the Party alleging the default or
termination right may not be exercised. "Qualified Arbitrator" shall mean a
person with at least ten years experience in the commercial real estate
business, including experience with cellular tower assets.
(i) A Party's pursuit of any one or more of the remedies provided in this
Agreement will not constitute an election of remedies excluding the election of
another remedy or other
66
remedies, or a forfeiture or waiver of any amounts payable under this Agreement
as to the applicable Site by such Party or waiver of any relief or damages or
other sums accruing to such Party by reason of the other Party's failure to
fully and completely keep, observe, perform, satisfy and comply with all of the
agreements, terms, covenants, conditions, requirements, provisions and
restrictions of this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, neither Party will be liable to the other Party for
indirect, incidental, special or consequential damages, including but not
limited to lost profits, however arising, even if a Party has been advised of
the possibility of such damages.
(j) Either Party's forbearance in pursuing or exercising one or more of its
remedies will not be deemed or construed to constitute a waiver of any event of
default or of any remedy. No waiver by either Party of any right or remedy on
one occasion will be construed as a waiver of that right or remedy on any
subsequent occasion or as a waiver of any other right or remedy then or
thereafter existing. No failure of either Party to pursue or exercise any of its
powers, rights or remedies or to insist upon strict and exact compliance by the
other Party with any agreement, term, covenant, condition, requirement,
provision or restriction of this Agreement, and no custom or practice at
variance with the terms of this Agreement, will constitute a waiver by either
Party of the right to demand strict and exact compliance with the terms and
conditions of this Agreement. Except as otherwise provide herein, any
termination of this Agreement pursuant to Sections 31(b), 31(d) or 31(f), or
partial termination of a Parties' rights hereunder, shall not terminate or
diminish any Parties' rights with respect to the obligations that were to be
performed on or before the date of such termination.
SECTION 32. Quiet Enjoyment.
Lessee will, subject to the terms and conditions of this Agreement,
peaceably and quietly hold and enjoy the Leased Property of each Master Lease
Site and shall have the right provided herein to operate each Pre-Lease Site
during the Term thereof without hindrance or interruption from Lessor, any Party
comprising Sprint or any other Sprint Group Member.
SECTION 33. No Merger.
There will be no merger of this Agreement or any subleasehold interest or
estate created by this Agreement in any Site with any superior estate held by a
Party by reason of the fact that the same Person may acquire, own or hold,
directly or indirectly, both the subleasehold interest or estate created by this
Agreement in any Site and such superior estate; and this Agreement will not be
terminated, in whole or as to any Site, except as expressly provided in this
Agreement. Without limiting generality of the foregoing provisions of this
Section 33, there will be no merger of the subleasehold interest or estate
created by this Agreement in Lessee in any Site with any with any underlying fee
interest that Lessee may acquire in any Site that is superior or prior to such
subleasehold interest or estate created by this Agreement in Lessee.
SECTION 34. Broker and Commission.
(a) All negotiations in connection with this Agreement have been conducted
by and between Lessor, Lessee and Sprint without the intervention of any Person
or other party as agent or broker other than Banc of America Securities LLC and
Citigroup Global Markets Inc. (the
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"Financial Advisors"), which are advising Sprint Parent in connection with this
Agreement and related transactions.
(b) Each of Lessor, Lessee and Sprint warrants and represents to the other
that there are no broker's commissions or fees payable by it in connection with
this Agreement by reason of its respective dealings, negotiations or
communications other than the advisor's fee payable to the Financial Advisors
which will be payable by Sprint Parent. Lessor, Lessee and Sprint will, and do
hereby indemnify, defend and hold harmless each other from and against the
Claims of any and all brokers, agents and other intermediaries alleging a
commission, fee or other payment to be owing by reason of their respective
dealings, negotiations or communications in connection with this Agreement.
SECTION 35. Recording of Memorandum of Agreement or Site Designation
Supplement.
(a) Subject to the applicable provisions of the Agreement to Lease and
Sublease, for each Master Lease Site, upon the execution of this Agreement or
after any Conversion Closing, Lessee may, at its cost and expense, cause a
memorandum of agreement in the form attached hereto as Exhibit C to be filed in
the appropriate County property records (unless the Ground Lease for any
applicable Master Lease Site prohibits such recording) to provide constructive
notice to third parties of existence of this Agreement. In addition, Lessee may,
at its cost and expense, promptly following the execution of each Site
Designation Supplement, cause such Site Designation Supplement with respect to
the applicable Master Lease Site to be filed in the appropriate County property
records unless the Ground Lease for the applicable Site prohibits such
recording. The costs of recording the Site Designation Supplements shall be paid
as set forth in Section 3.8 of the Agreement to Lease and Sublease.
(b) In addition to and not in limitation of any other provision of this
Agreement, the Parties will have the right to review and make corrections, if
necessary, to any and all exhibits to this Agreement or to the Site Designation
Supplements. After making such corrections, Lessee will re-record such Site
Designation Supplement to reflect such corrections, if requested by any Party,
at the expense of the requesting Party. The Parties will cooperate with each
other to cause changes to be made in the Site Designation Supplement for such
Site, if such changes are requested by either Party to evidence any permitted
changes in the description of the Sprint Collocation Space respecting such Site,
including, without limitation changes in the Sprint Collocator's antennas or
other parts of its Communications Facility at such Site. In addition to, and not
in limitation of the foregoing, either Party will have the right, at its sole
expense, to cause any amendment to such Site Designation Supplement to be
recorded, including without limitation, in connection with such changes.
SECTION 36. Purchase Option.
(a) Right to Purchase. If this Agreement will not have been earlier
terminated, or an event of default by Lessee will not have occurred and be
continuing at the date of option exercise or the date fixed for purchase (as
such date is specified below), Lessee will have an option, exercisable no
earlier than one (1) year and no later than one hundred twenty (120) days prior
to the Purchase Option Closing Date (the "Option Trigger Window") to elect to
purchase the right,
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title and interest of Lessor and any applicable Party comprising Sprint or any
other Person holding an interest therein by, through or under Sprint or by
acquisition thereof from Sprint from, on and after the Effective Date
(collectively, the "Option Sellers") in all (but not less than all) of the
Purchase Sites (excluding, in all cases, Excluded Purchase Sites, Sprint's
Improvements and any Tower Subtenant's Improvements on such Site(s)) then
subject to this Agreement for the net aggregate Option Purchase Price
attributable to the Purchase Sites (and on the other terms and subject to the
conditions specified in this Agreement). Lessee may exercise such purchase
option by submitting to the Option Sellers in writing an offer for all of the
Purchase Sites within the Option Trigger Window. The Option Sellers will be
obligated to sell, and Lessee will be obligated to buy, all such Master Lease
Sites at a closing to be effective as of the Purchase Option Closing Date.
Except as provided in this Section 36, Lessee will have no right or option to
purchase any Sites subject to this Agreement. The Sprint Collocators acknowledge
on their own behalf and on behalf of all Persons acquiring an interest in any
Site (except for a Sprint Market Assignee who signs a separate collocation
agreement with Lessee) that their rights in and to the Sites are subject to the
provisions of this Section 36.
(b) Payment of the Option Purchase Price. Lessee will pay to the Option
Sellers the net aggregate Option Purchase Price for the Purchase Sites in cash
or immediately available funds on or prior to the closing of such sale. At the
closing of such sale, each of the Option Sellers will transfer or cause to be
transferred its applicable Purchase Sites, at Lessee's expense, to Lessee and
the Term as to the Purchase Sites will end. Risk of loss for the Purchase Sites
purchased pursuant to this Section 36 will pass from the Option Sellers to
Lessee upon payment of the applicable purchase price by Lessee to the Option
Sellers.
(c) Transfer by Lessor. Any transfer of Purchase Sites by the Option
Sellers to Lessee pursuant to this Section 36 will include:
(i) an assignment of each Option Seller's interest in any Ground Lease
for such Purchase Site (which shall contain an assumption by Lessee of all
of the obligations of such Option Seller under such Ground Lease and an
agreement by Lessee to indemnify such Option Seller and each other Sprint
Indemnitee from claims, losses or damages related to such obligations), a
transfer of fee simple title to the Land for any Purchase Site which is an
Owned Purchase Site, a transfer of each such Option Seller' interest in the
applicable Tower and related assets (other than Sprint's Improvements or
Sprint's Communications Equipment) and all appurtenances thereto; provided,
that for so long as the Ground Lease, as amended, modified, or extended, is
still in effect for any Purchase Site, each applicable Sprint Collocator
will be entitled to lease the Sprint Collocation Space on each such
Purchase Site from Lessee for successive five (5) year terms at rental rate
equal to the then-current market rental rates for comparable locations;
provided, that the Sprint Collocation Charge will thereafter be subject to
increase on an annual basis at the beginning of each five (5) year term in
an amount equal to the CPI Change; provided, if Lessee and any such Sprint
Collocator fail to agree on a rental rate for one or more of the Purchase
Sites, such rental rate will be determined for each applicable Purchase
Site by a nationally recognized independent accounting firm mutually
acceptable to such Sprint Collocator and Lessee. The cost of the
determination of the rental rate will be shared equally by such Sprint
Collocator and Lessee. The applicable Sprint Collocator will have the right
to elect to terminate any such lease with respect to a Purchase Site as
69
of the expiration of each five (5) year term by giving no less than sixty
(60) days prior written notice of such termination to Lessee;
(ii) to the extent legally transferable, all rights of each such
Option Seller under or pursuant to warranties, representations and
guarantees made by suppliers or manufacturers in connection with such
Purchase Site, but excluding any rights to receive amounts under such
warranties, representations and guarantees representing reimbursements for
items paid by such Option Seller; and
(iii) to the extent legally transferable, all known and unknown
rights, claims, credits, causes of action, or rights to commence any causes
of action or rights of setoff of each such Option Seller against third
parties relating to such Purchase Site arising on or after the date of
transfer, including unliquidated rights under manufacturers' and vendors'
warranties, but excluding all amounts representing reimbursements for items
paid by such Option Seller.
(d) Evidence of Transfer. Each of the Option Sellers and Lessee will enter
into assignments, deeds (with warranties of title as to such Option Sellers'
actions only), bills of sale and such other documents and instruments as the
other may reasonably request to evidence any transfer of such Purchase Sites.
(e) Transfer Taxes. As provided in Section 16(d), any Transfer Taxes
incurred in connection with the transfer of Purchase Sites by the Option Sellers
to Lessee pursuant to this Section 36 will be divided equally between Lessor and
Lessee.
(f) No Warranties. Any transfer of a Purchase Site by any Option Seller to
Lessee pursuant to this Agreement will be "AS IS" and without any warranty
whatsoever by such Option Seller, except that in any transfer of a Purchase Site
by any such Option Seller to Lessee pursuant to this Agreement, such Option
Seller will warrant that the Option Seller has not previously transferred title
to such Purchase Site that is so transferred and will convey the interest of
such Option Seller with limited warranty stating that the Purchase Site is free
of Liens or other matters created or arising by, through or under the Option
Seller or any other Sprint Group Member from and after the Effective Date.
SECTION 37. Net Lease.
This Agreement, insofar as it relates to the lease or the use and operation
by Lessee of any Site or the Leased Property on any Site is a net lease and,
except as otherwise expressly provided in Sections 14, 20, 31 and 41 of this
Agreement, will not terminate. Neither Lessee nor any Sprint Collocator will be
entitled to any abatement, reduction, setoff, counterclaim, defense or deduction
with respect to any Rent, Pre-Lease Rent, Sprint Collocation Charge, amount
payable under Section 11(h) or other sum payable under this Agreement. Except as
otherwise expressly provided in Sections 14, 20, 31 and 41 of this Agreement,
the obligation of Lessee and each Sprint Collocator under this Agreement will
not be affected by reason of: (a) any damage to or destruction of any Site or
any part of such Site by any cause whatsoever; (b) any condemnation of any Site;
(c) any prohibition, limitation, restriction or prevention of Lessee's use or
enjoyment of a Site by any Person; (d) any matter affecting title to any Site or
any part of
70
such Site; (e) any loss of use or possession by Lessee of a Site or any portion
of such Site, by reason of title paramount or otherwise; (f) the invalidity or
unenforceability of any provision of this Agreement or the impossibility or
illegality of performance by Lessor or Lessee or both; (g) any action of any
Governmental Authority; or (h) any other cause or occurrence whatsoever, whether
similar or dissimilar to the foregoing.
SECTION 38. Compliance with Specific FCC Regulations.
(a) Lessee understands and acknowledges that Tower Subtenants are engaged
in the business of operating Communications Equipment at each Site. The
Communications Equipment is subject to the regulations of the FCC, including
without limitation regulations regarding exposure by workers and members of the
public to the radio frequency emissions generated by Sprint's Communications
Equipment. Lessee acknowledges that such regulations prescribe the permissible
exposure levels to emissions from the Communications Equipment which can
generally be met by maintaining safe distances from such Communications
Equipment. To the extent Lessee is required to do so under applicable FCC
regulations, Lessee will install, or cause the Tower Subtenants to install, at
its or their expense, such marking, signage or barriers to restrict access to
any Site as Lessee deems necessary in order to comply with the applicable FCC
regulations, with respect to Communications Equipment other than Sprint's
Communications Equipment, and with respect to Sprint's Communications Equipment,
the applicable Sprint Collocator will install same. To the extent Lessee is
required to do so under applicable FCC regulations, Lessee further agrees to
post, or to cause the Tower Subtenants to post, prominent signage at all points
of entry to each Site containing instructions as to any potential risk of
exposure and methods for minimizing such risk, with respect to Communications
Equipment other than Sprint's Communications Equipment, and with respect to
Sprint's Communications Equipment the applicable Sprint Collocator will install
same. Lessee will cooperate in good faith with each Sprint Collocator to
minimize any confusion or unnecessary duplication that could result in similar
signage being posted with respect to any of Sprint's Communications Equipment at
or near any Site in respect of any Sprint Collocation Space on such Site.
(b) Lessee further agrees to alert all personnel working at or near each
Site, including Lessee's maintenance and inspection personnel, to heed all of
Lessee's or Tower Subtenant's signage or restrictions with respect to such Site,
to maintain the prescribed distance from the Communications Equipment, and to
otherwise follow the posted instructions. Lessee further agrees to give each
Tower Subtenant at least ten (10) days' advance written notice of any repair or
maintenance work to be performed on any Site which would require work in closer
proximity to the Communications Equipment than prescribed by the signage or
restrictions, to abide by any provisions in the Collocation Agreement related to
such work and allow such work to be monitored by such Tower Subtenant, if
required by such Tower Subtenant.
(c) Lessor and Sprint cooperate with each Tower Subtenant on a
going-forward basis with respect to each Site in order to help insure that such
Tower Subtenant complies with the applicable FCC regulations.
(d) Each Sprint Collocator acknowledges and agrees that Sprint's
Communications Equipment at each Site is subject to the regulations of the FCC,
including, without limitation,
71
regulations regarding exposure by workers and members of the public to the radio
frequency emissions generated by Sprint's Communications Equipment and Sprint
agrees to comply with all FCC Regulations and all other Applicable Laws. Each
Sprint Collocator acknowledges that such regulations prescribe the permissible
exposure levels to emissions from its Communications Equipment which can
generally be met by maintaining safe distances from such Communications
Equipment. Each Sprint Collocator will install at its expense such marking,
signage, or barriers to restrict access to any of Sprint's Communications
Equipment on a Site in respect of any Sprint Collocation Space on such Site as
such Sprint Collocator deems necessary in order to comply with the applicable
FCC regulations. Each Sprint Collocator will cooperate in good faith with Lessee
to minimize any confusion or unnecessary duplication that could result in
similar signage being posted with respect to any of Sprint's Communications
Equipment at or near any Site in respect of any Sprint Collocation Space on such
Site. Each Sprint Collocator, at its option, may also install signage at any
Site identifying Sprint's Communication Facility at such Site and providing for
contact information in the case of emergency.
(e) Each Sprint Collocator further agrees to alert all personnel working at
or near each Site, including such Sprint Collocator's maintenance and inspection
personnel, to maintain the prescribed distance from the Communications
Equipment, and to otherwise follow the posted instructions of Lessee.
SECTION 39. Tax Indemnities.
(a) Income Tax Indemnity.
(1) Tax Assumptions. In entering into this Agreement and related documents,
the Sprint Group has made the following assumptions regarding the
characterization of the transactions contemplated under this Agreement for
federal income tax purposes (the "Tax Assumptions"):
(i) for federal income tax purposes, this Agreement will be treated as
a "true lease" with respect to all of the Leased Property, the members of
the Sprint Group will be treated, directly or indirectly through one or
more entities that are classified as partnerships or disregarded entities
for federal income tax purposes, as the owners and sublessors of the Leased
Property, and Lessee will be treated (or, if Lessee is a disregarded entity
for federal income tax purposes, the entity treated as the owner of Lessee
for federal income tax purposes) as the lessee of the Leased Property;
(ii) following the execution of this Agreement, the Sprint Group will
be entitled to deduct, pursuant to Section 168(b) of the Code, depreciation
deductions with respect to the Sprint Group's adjusted tax basis in the
Leased Property using the same depreciation method(s) as in effect
immediately before the execution of this Agreement ("Federal Depreciation
Deductions");
(iii) prepaid Rent and Pre-Lease Rent with respect to each Site will
be paid under a single lease subject to Section 467 of the Code and will be
characterized in part as a loan under section 467 of the Code and Treasury
Regulations issued under such
72
section and the Sprint Group will be entitled to deduct interest
attributable thereto with respect to each Site as set forth in Exhibit H;
(iv) the only amounts that any Sprint Group Member will be required to
include in gross income with respect to the transactions contemplated by
this Agreement and related documents will be (A) Rent and Pre-Lease Rent as
it accrues as rent in accordance with the terms of this Agreement and the
application of Section 467 of the Code and Treasury Regulations issued
under such section and as set forth in Exhibit H with respect to each Site;
(B) any indemnity (including any gross up) pursuant to this Agreement; (C)
any amounts paid or otherwise recognized pursuant to a voluntary sale or
other disposition by any Sprint Group Member (other than a sale or
disposition attributable to a default by Lessee and/or the exercise of
remedies by Lessor or Sprint or its Affiliates under this Agreement) of any
Leased Property, it being understood for these purposes that a sale or
disposition that may be deemed to have occurred on the Effective Date is
not a sale; (D) proceeds upon Lessee's exercise of the purchase option
pursuant to Section 36 of this Agreement; (E) any costs and expenses of
Lessor or Sprint (and any interest thereon) paid or reimbursed by Lessee
pursuant to this Agreement; (F) income attributable to the reversion of
Alterations made by Lessee to Lessor at the end of the Term; (G) amounts
expressly identified as interest in the Agreement and payable to Lessor or
any Sprint Group Member; (H) any other amount to the extent such item of
income results in an equal and offsetting deduction; and (I) any income or
gain from an acceleration of Rent or Pre-Lease Rent as a result of the
expiration or termination of a ground lease with respect to a Site listed
in paragraphs 9 through 15 of Section 4.5 of the Contributors Disclosure
Letter (as defined in the Agreement to Lease and Sublease); and
(v) the combined effective federal and net state income Tax rate
applicable to each Sprint Group Member will be thirty-nine percent (39%)
(the "Assumed Rate"), comprised of thirty-five percent (35%) for the
assumed federal rate and four percent (4%) (which is net of federal income
Tax benefits) for the assumed state rate.
(2) Lessee's Representations and Covenants. Lessee hereby represents and
covenants to each Sprint Group Member as follows:
(i) Lessee, any Affiliate of Lessee, any assignee or sublessee of
Lessee, and any user (other than Lessor or Sprint or its Affiliates) of any
portion of the Leased Property will not claim depreciation deductions as
the owner of any of the Leased Property for federal income Tax purposes
during the Term (and thereafter unless Lessee purchases such property
pursuant to Section 36 of this Agreement), with respect to such
Leased Property or portion of such Leased Property, except with respect to
Alterations financed by Lessee or such assignee, sublessee, or other user,
nor will they take any other action in connection with filing a Tax return
or otherwise which would be inconsistent with (i) the treatment of the
Sprint Group Members as the direct or indirect owners and lessors of the
Leased Property for federal income tax purposes, (ii) the Tax Assumptions,
or (iii) Section 11 and Exhibit H of this Agreement.
(ii) none of the Leased Property will constitute "tax-exempt use
property" as defined in Section 168(h) of the Code other than solely as a
result of use by Lessor,
73
Sprint or its Affiliates and any other Person that is a Tower Subtenant as
of the date of the Agreement to Lease and Sublease;
(iii) on the Effective Date, no Alterations to any of the Leased
Property will be required in order to render any of the Leased Property
complete for its intended use by Lessee except for ancillary Severable
Alterations that are customarily selected and furnished by lessees of
property similar in nature to the Leased Property;
(iv) Lessee has no current plan or intention of making any Alteration
or repair with respect to any of the Leased Property that would not be
treated as severable improvements or permitted nonseverable improvements
within the meaning of Revenue Procedure 2001-28, 2001-1 C.B. 1156;
(v) Lessee has no current plan or intention of making any Alteration
or repair with respect to any of the Leased Property the value of which as
of the end of the Term with respect to such Leased Property would compel
Lessee to exercise any of the purchase options under Section 36 of this
Agreement; and
(vi) Lessee is not obligated to exercise any of the purchase options
provided in Section 36 of this Agreement, it has not decided whether it
will exercise any of the purchase options provided in Section 36 of this
Agreement, and it has no plans to enter into or incur such obligation or to
make such decision in the immediate future.
(3) Indemnity for Tax Losses.
(i) If, as a result of
(A) the inaccuracy of any representation of Lessee, or the breach
of any covenant of Lessee, set forth in Section 39(a)(2) of this
Agreement;
(B) any act of Lessee, or any assignee or sublessee of Lessee or
any user of the Leased Property (other than Lessor or Sprint or its
Affiliates) during the Term, other than (i) the execution or delivery
of the Transaction Documents and (ii) any act required under the
Transaction Documents or any Permitted Act;
(C) the failure by Lessee to perform any act required of it under
any of the Transaction Documents;
(D) any disposition of Leased Property attributable to a default
by Lessee and/or the exercise of remedies under this Agreement; or
(E) the bankruptcy of Lessee.
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any Sprint Group Member (each a "Tax Indemnitee") will not claim on the relevant
income tax return based upon a written opinion from independent tax counsel
reasonably acceptable to Lessee (setting forth in reasonable detail the facts
and analysis upon which such opinion is based) that there is no reasonable basis
as defined in Treas. Reg. ss.1.6662-3(b)(3) as in effect on the Effective Date
for claiming all or any portion of the Federal Income Tax Benefits, will lose
the right to claim all or any portion of the Federal Income Tax Benefits, will
suffer a loss of, disallowance of, or delay in obtaining all or any portion of
the Federal Income Tax Benefits, or will be required to recapture all or any
portion of the Federal Income Tax Benefits, or any Tax Indemnitee will suffer an
Inclusion (any such event being referred to as a "Tax Loss"), then, within
thirty (30) days after receipt of a written demand from or on behalf of the Tax
Indemnitee describing in reasonable detail the Tax Loss and the computation of
the amount payable (a "Tax Indemnity Notice"), Lessee will pay to such Tax
Indemnitee as an indemnity the amount specified in the Tax Indemnity Notice.
Subject to other adjustments required by this Section 39(a)(3)(i), such
indemnity payment will be calculated in the Tax Indemnity Notice to equal, on an
After-Tax Basis, the sum of (y) the amounts of any additional federal and state
income taxes payable by such Tax Indemnitee for the taxable year (calculated at
the Assumed Rate in the case of a Tax Loss respecting Federal Income Tax
Benefits and calculated at the highest marginal applicable federal and state
rates then in effect in the case of a Tax Loss respecting an Inclusion) and any
interest thereon (calculated to the date such payment is made using the actual
interest rates for underpayments of tax applicable to the relevant periods),
plus (z) the amount of any penalties and additions to tax actually payable as a
result of such Tax Loss and attributable thereto. The indemnity payment will be
a net lump-sum amount, taking into account all past and anticipated future Tax
Losses and Tax savings at the Assumed Rate, and using a discount rate equal to
the Applicable Federal Rate (as defined in Code Section 1274(d)(1) then in
effect) to present value future Tax Losses and Tax savings. Any indemnity
payment made pursuant to this Section 39(a)(3)(i) will be made on an "After-Tax
Basis" which means that any such payment will also include a "gross-up" for any
federal or state income Taxes (determined at the highest marginal applicable
federal and state rates then in effect) payable by such Tax Indemnitee with
respect to the receipt or accrual of such indemnity payment, including such
gross-up. Notwithstanding any other provision of this Section 39(a)(3)(i) to the
contrary, Lessee will not be required to make any payment under this Section
39(a)(3)(i) earlier than, (a) in the case of a Tax Loss that is not being
contested pursuant to Section 39(d) of this Agreement, the date such Tax
Indemnitee (or the common parent of the consolidated group in which it is a
member, as the case may be) files the applicable federal income Tax return,
estimated or final as the case may be, which would first properly reflect the
additional federal income Tax that would be due as a result of the Tax Loss and
(b) in the case of a Tax Loss that is being contested pursuant to Section 39(d)
of this Agreement, thirty (30) days after the date on which a Final
Determination is made (or as otherwise provided in Section 39(d)) and (c) twenty
(20) days after the receipt by Lessee of the Tax Indemnity Notice.
(ii) Verification of Calculations. Lessee may timely request that any
Tax Indemnity Notice be verified by a nationally recognized independent
accounting firm or a lease advisory firm selected by Lessee and reasonably
acceptable to such Tax Indemnitee. Such verification will be at Lessee's
expense unless such accounting firm determines that the amount payable by
Lessee is more than ten percent less than the amount shown on the Tax
Indemnity Notice, in which event the Tax Indemnitee will pay such costs. In
order to enable such independent accountants to verify such amounts, the
Tax Indemnitee will
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provide to such independent accountants (for their confidential use and not
to be disclosed to Lessee or any other person) all information reasonably
necessary for such verification.
(4) Exceptions. Notwithstanding any provision of this Section 39(a) to the
contrary, Lessee will not be required to make any payment to any Tax Indemnitee
in respect of any Tax Loss to the extent that any such Tax Loss occurs as a
result of one or more of the following:
(i) other than as a result of an Alteration by Lessee, the entry into
a New Lease under Section 40 of this Agreement or any severance of this
Agreement under Section 41, the determination that this Agreement is not a
"true lease" for federal income tax purposes or that the members of the
Sprint Group, directly or indirectly through one or more entities that are
classified as partnerships or disregarded entities for federal income tax
purposes, are not the owners or sublessors of the Leased Property, or that
Section 467 of the Code does not apply to this Agreement in accordance with
its terms;
(ii) the voluntary sale, assignment, transfer, or other disposition or
the involuntary sale, assignment, transfer, or other disposition
attributable to the bankruptcy, insolvency or the breach of any covenant or
obligation of the Tax Indemnitee set forth in the Transaction Documents of
or by any such Tax Indemnitee or any of its Affiliates, in either case, of
any of the Leased Property or portion of such Leased Property by any such
Tax Indemnitee or any of its Affiliates other than a sale, assignment,
transfer, or disposition (A) contemplated by the Transaction Documents; (B)
otherwise resulting from the exercise by any Sprint Group Member of its
rights or performance of its obligations under the Transaction Documents;
or (C) attributable to a default by Lessee and/or exercise of remedies
under this Agreement;
(iii) the gross negligence or willful misconduct of such Tax
Indemnitee;
(iv) penalties, interest, or additions to Tax to the extent based upon
issues unrelated to the transactions contemplated by this Agreement and
related documents;
(v) Lessee's exercise of the purchase option provided in Section 36 of
this Agreement;
(vi) the failure by the Sprint Group or any Sprint Group Member timely
or properly to claim any Federal Income Tax Benefits or to exclude income
on the appropriate Tax return other than in accordance with Section
39(a)(3) of this Agreement;
(vii) any failure of the Tax Indemnitee to have taken all the actions,
if any, required of it by Section 39(d) of this Agreement to contest the
Loss and such failure materially prejudices the ability to contest, and
Lessee has a reasonable basis for such contest (other than a failure
attributable in whole or part to the failure of Lessee to follow the
procedures set forth in Section 39(d) of this Agreement);
(viii) any change in Law enacted, adopted or promulgated on or after
the date of the Agreement to Lease and Sublease, provided that this
exclusion shall not apply
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to any (1) change in tax rates applicable to the making of any indemnity
payment for a Tax Loss (a) respecting Federal Income Tax Benefits on an
After-Tax basis or (b) respecting an Inclusion or (2) substitution or
replacement of any Leased Property after a change in Law;
(ix) the failure of the Sprint Group, or any single Sprint Group
Member, to have sufficient income or Tax liability to benefit from the
Federal Income Tax Benefits;
(x) the inclusion of income by a Sprint Group Member as a result of
the reversion of Alterations made by Lessee to Lessor at the end of the
Term;
(xi) a determination that Sprint is not holding the Leased Property in
the ordinary course of a trade or business or that Sprint did not enter
into the transactions contemplated by the Transaction Documents for profit;
(xii) the existence of, or any consequence of, the prepayment of the
Rent, or the application of Section 467 of the Code or the Treasury
regulations promulgated thereunder, provided that the Lessee makes all
payments when due and accrues all rental expense in accordance with the
Allocated Rent as set forth in Exhibit H and provided further that this
exclusion will not apply to the entry into a New Lease under Section 40 of
this Agreement or any severance of this Agreement under Section 41;
(xiii) any tax election by a Sprint Group Member that is inconsistent
with the Tax Assumptions to the extent of a resulting increase in the
Lessee's indemnity obligations hereunder;
(xiv) a Tax Loss with respect to any period occurring after (and not
simultaneously with) (1) the expiration or earlier termination of the Term
with respect to a Site or (2) the return to Sprint of the Leased Property
related to a Site, in either case other than interest, fines, penalties and
additions to tax resulting from a Tax Loss that would not be excluded under
this clause (xvi);
(xv) the breach or inaccuracy of any representation, warranty or
covenant by any Sprint Group Member in any of the Transaction Documents
(except to the extent such breach or inaccuracy is attributed to a breach
or inaccuracy of any representation, warranty or covenant of Lessee or an
Affiliate under the Transaction Documents).
(b) General Tax Indemnity.
(1) Lessee agrees to pay and to indemnify, protect, defend, save, and keep
harmless each Sprint Group Member on an After-Tax Basis, from and against any
and all Taxes upon or with respect to (A) any of the Leased Property, any
portion of such Leased Property, or any interest therein (B) the acquisition,
purchase, sale, financing, leasing, subleasing, ownership, maintenance, repair,
redelivery, alteration, insuring, control, use, operation, delivery, possession,
repossession, location, storage, refinancing, refund, transfer of title,
registration, reregistration, transfer of registration, return, or other
disposition of any of the Leased Property or any portion of such Leased
Property, or interest in such Leased Property, (C) the rental payments,
receipts, or earnings arising from the Leased Property, any portion of such
Leased Property, or any interest
77
in such Leased Property, or payable pursuant to this Agreement, or any other
payment or right to receive payment pursuant to any related document, or (D) any
Alteration, removal, substitution, maintenance, or repair of any of the Leased
Property
(2) Exclusions from General Tax Indemnity. The provisions of Section 16 and
Section 39(b)(1) will not apply to, and Lessee will have no responsibility under
Section 16 and no liability under Section 39(b)(1) with respect to:
(i) Taxes on any Sprint Group Member (other than such Taxes that are
sales, use, rental, property, stamp, document filing, license, or ad
valorem Taxes, or value added Taxes that are in the nature of or in lieu of
such Taxes) imposed on any such member that are franchise Taxes, privilege
Taxes, doing business Taxes, or Taxes imposed on, based on or measured by,
gross or net income, receipts, capital, or net worth of any such member
which are imposed by any state, local, or other taxing authority within the
United States or by any foreign or international taxing authority;
(ii) Taxes imposed by any jurisdiction on any Sprint Group Member
solely as a result of its activities in such jurisdiction unrelated to the
transactions contemplated by this Agreement and related documents;
(iii) Taxes on any Sprint Group Member that would not have been
imposed but for the willful misconduct or gross negligence of any such
member or an Affiliate of any Sprint Group Member or the inaccuracy or
breach of any representation, warranty, or covenant of such Tax Indemnitee
or any of its Affiliates under the Transaction Documents (except to the
extent such inaccuracy or breach is attributed to an inaccuracy or breach
of any representation, warranty or covenant of Lessee or an Affiliate under
the Transaction Documents);
(iv) Taxes which are attributable to any period or circumstance
occurring after the expiration or earlier termination of the Term with
respect to a Site, except to the extent attributable to (I) a failure of
Lessee or any of its transferees or sublessees or users of the Leased
Property (other than Lessor or Sprint or its Affiliates) to fully discharge
its obligations under this Agreement and related documents, (II) Taxes
imposed on or with respect to any payments that are due after the
expiration or earlier termination of the Term with respect to a Site and
which are attributable to a period or circumstance occurring prior to or
simultaneously with such expiration or earlier termination, (III) the entry
into a New Lease under Section 40 of this Agreement; or (IV) any severance
of this Agreement under Section 41;
(v) any Tax that is being contested in accordance with the provisions
of Section 39(d) during the pendency of such contest, but only for so long
as such contest is continuing in accordance with Section 39(d) and payment
is not otherwise required pursuant to Section 39(d);
(vi) Taxes imposed on a Tax Indemnitee that would not have been
imposed but for any act of such Tax Indemnitee (or any Affiliate thereof)
that is expressly
78
prohibited, or omission of an act that is expressly required, as the case
may be, by any Transaction Document;
(vii) Taxes that would not have been imposed but for any voluntary
sale, assignment, transfer, pledge, or other disposition or hypothecation
or the involuntary sale, assignment, transfer, or other disposition
attributable to the bankruptcy, insolvency or the breach of any covenant or
obligation of the Tax Indemnitee set forth in the Transaction Documents of
or by any such Tax Indemnitee, in either case, of any of the Leased
Property or portion of such Leased Property by any such Tax Indemnitee
other than a sale, assignment, transfer, or disposition (A) contemplated by
the Transaction Documents, (B) otherwise resulting from the exercise by any
Sprint Group Member of its rights or performance of its obligations under
the Transaction Documents or (C) attributable to a default by Lessee and/or
exercise of remedies under this Agreement;
(viii) Taxes imposed on a Tax Indemnitee that would not have been
imposed but for such Tax Indemnitee's (or Affiliate's) breach of its
contest obligations under Section 39(d) (but only to the extent such breach
materially prejudices the Lessee's ability to contest such Taxes or results
in an increase in the amount of Lessee's indemnification obligation
hereunder);
(ix) Taxes imposed on a Tax Indemnitee in the nature of interest,
penalties, fines and additions to Tax to the extent based upon issues
unrelated to the transactions contemplated by the Transaction Documents;
(x) Taxes imposed on any Sprint Group Member that are United States
federal, state or local net income Taxes of any such member;
(xi) Taxes imposed in connection with or as a result of the leasing or
use of the Sprint Collocation Space by Sprint or its Affiliates or the
payment or accrual of the Sprint Collocation Charge; or
(xii) Taxes to the extent that they are not the responsibility of
Lessee as described in Section 16(a) without regard to this subsection.
The provisions of this Section 39(b)(2) will not apply to any Taxes imposed in
respect of the receipt or accrual of any payment made by Lessee on an After-Tax
Basis.
(3) Reports. If any report, return, certification, or statement is required
to be filed with respect to any Tax that is the responsibility of Lessee under
Section 16 or is subject to indemnification under this Section 39(b), Lessee
will timely prepare and file the same to the extent permitted by law (except for
(i) any report, return, or statement relating to any net income Taxes or, (ii)
any report, return, or statement relating to any other Taxes not subject to
indemnity under Section 39(b)(2)(i) or any Taxes in lieu of or enacted in
substitution for any of the foregoing, except that, in such cases, Lessee will
timely provide information necessary to file such report, return, or statement,
(iii) any report, return, or statement relating to Property taxes or (iv) any
other report, return, certification, or statement which any Sprint Group Member
has notified Lessee that such member intends to prepare and file); provided,
that any Sprint Group Member will have furnished Lessee, at Lessee's expense,
with such information reasonably
79
necessary to prepare and file such returns as is within such member's control.
Lessee will either file such report, return, certification, or statement and
send a copy of such report, return, certification, or statement to the member,
or, where not so permitted to file, will notify the member of such requirement
within a reasonable period of time prior to the due date for filing (without
regard to any applicable extensions) and prepare and deliver such report,
return, certification, or statement to the member. In addition, within a
reasonable time prior to the time such report, return, certification, or
statement is to be filed, Lessee will, to the extent permitted by law, cause all
billings of such Taxes to be made to each Sprint Group Member in care of Lessee,
make such payment, and furnish written evidence of such payment. Lessee will
furnish promptly upon written request such data, records and documents as any
Sprint Group Member may reasonably require of Lessee to enable such member to
comply with requirements of any taxing jurisdiction arising out of such member's
participation in the transactions contemplated by this Agreement and related
documents.
(4) Payments. With the exception of Property Taxes, any Tax for which
Lessee is responsible under Section 16 or any tax indemnified under this Section
39(b) will be paid by Lessee directly when due to the applicable taxing
authority if direct payment is permitted, or will be reimbursed to the
appropriate Sprint Group Member on demand if paid by such member in accordance
herewith. Property Taxes will be paid in accordance with Sections 16(b) and (c).
Except as explicitly provided in Section 16 or as otherwise provided in this
Section 39(b), all amounts payable to a Sprint Group Member under Section 16 or
this Section 39 will be paid promptly in immediately available funds, but in no
event later than the later of (i) ten (10) business days after the date of such
demand or (ii) two (2) Business Days before the date the Tax to which such
amount payable relates is due or is to be paid and will be accompanied by a
written statement describing in reasonable detail the Tax and the computation of
the amount payable. Such written statement will, at Lessee's request, as long as
payment is not delayed, be verified by a nationally recognized independent
accounting firm selected by such member. Such verification will be at Lessee's
expense unless the accounting firm determines that the amount payable by Lessee
is more than ten percent less than the amount shown on such written statement,
in which event, the applicable Sprint Group Member will pay such costs. In the
case of a Tax subject to indemnification under this Section 39(b) which is
properly subject to a contest in accordance with Section 39(d), Lessee (i) will
be obligated to make any advances with respect to such Tax whenever required
under Section 39(d) and (ii) will pay such Tax (in the amount finally determined
to be owing in such contest) on an After-Tax Basis prior to the latest time
permitted by the relevant taxing authority for timely payment after a final
determination.
(c) Tax Savings. If, by reason of any payment made, or events giving rise
to such payment, to or for the account of any Tax Indemnitee by Lessee pursuant
to Section 39(a) or 39(b), such Tax Indemnitee at any time realizes a reduction
in any Taxes or receives a refund which was not taken into account previously in
computing such payment by Lessee to or for the account of the Tax Indemnitee,
then the Tax Indemnitee will pay to Lessee an amount equal to such actual
reduction in Taxes or such refund (including interest received), plus the amount
of any additional reduction in Taxes of the Tax Indemnitee attributable to the
payment made by the Tax Indemnitee to Lessee pursuant to this sentence;
provided, however, that (A) the Tax Indemnitee will not be obligated to make
such payment with respect to any net Tax savings or refund to the extent that
the amount of such payment would exceed the excess of (x) all prior indemnity
payments (excluding costs and expenses incurred with respect to contests) made
by
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Lessee over (y) the amount of all prior payments by the Tax Indemnitee to
Lessee; provided, that any such excess tax savings realized (or deemed realized)
by such Tax Indemnitee which are not paid to Lessee as a result of this
subclause (A) will be carried forward and reduce Lessee's obligations to make
subsequent payments to such Tax Indemnitee pursuant to Section 39 of this
Agreement; and (B) if any such Tax savings or refund realized by such the Tax
Indemnitee, or any tax savings taken into account for purposes of determining
"After-Tax Basis" will be lost or otherwise determined to be unavailable, such
lost or otherwise unavailable Tax savings or refund will be treated as a Tax for
which Lessee must indemnify the Tax Indemnitee pursuant to Section 39(a) or
39(b), as the case may be (without regard to the exceptions in Section 39(a)(4)
and Section 39(b)(2) other than Section 39(a)(4)(iii), 39(a)(4)(iv),
39(b)(2)(iii) and 39(b)(2)(ix)). For purposes of this Section 39(c), each Tax
Indemnity is assumed to be taxable at the Assumed Rate and an Inclusion is
assumed to be taxable at the actual rate.
(d) Contest Rights. In the event that any Tax Indemnitee receives any
written notice of any potential claim or proposed adjustment against such Tax
Indemnitee that would result in a Tax Loss or a Tax against which Lessee may be
required to indemnify pursuant to Section 39(a) or 39(b) (a "Tax Claim"), such
Tax Indemnitee will promptly notify Lessee of the claim and provide Lessee with
information relevant to such claim; provided, that the failure by the Tax
Indemnitee to provide any such information will not be treated as a failure to
comply with this Section 39(d) unless the failure materially prejudices the
conduct of such contest. With respect to Taxes indemnified under Section 39(b),
Lessee will control the contest at Lessee's expense. With respect to Taxes
indemnified under Section 39(a), the Tax Indemnitee will control the contest at
Lessee's expense but will consult with Lessee in good faith, but Lessee may
require the Tax Indemnitee to contest such Tax Claim at Lessee's expense and, in
that event, the Tax Indemnitee will consult with Lessee in good faith, but the
Tax Indemnitee will retain ultimate control over such contest. The Tax
Indemnitee will not be obligated to contest any Tax Claim unless (i) in the case
of a contest with respect to federal income Taxes, prior to taking the first
such required action, Lessee will have furnished to the Tax Indemnitee an
opinion of a nationally recognized, independent tax counsel chosen by Lessee and
reasonably acceptable to the Tax Indemnitee to the effect that there is a
reasonable basis as defined in Treas. Reg. ss.1.6662-3(b)(3) as in effect (on
the Effective Date) for the position to be asserted in contesting the matter in
question, (ii) no event of default by Lessee under this Agreement will have
occurred and be continuing, (iii) such contest does not involve a material risk
to the Tax Indemnitee of sale, forfeiture, or loss of, or the creation of any
lien on, any of the Leased Property or the imposition of criminal penalties and
(iv) if Lessee reasonably requests, and the Tax Indemnitee elects to pursue, a
contest that requires payment of the Tax as a condition to pursuing the contest,
Lessee will loan, on an interest-free basis, sufficient funds to the Tax
Indemnitee to pay the Tax and any interest or penalties due on the date of
payment, and will fully indemnify the Tax Indemnitee for any adverse Tax
consequences resulting from such advance. The Tax Indemnitee will not make,
accept, or enter into a settlement or other compromise with respect to any Taxes
indemnified pursuant to Section 39(a) or forego or terminate any such proceeding
with respect to Taxes indemnified pursuant to this Section 39(b), without the
prior written consent of Lessee, which consent will not be unreasonably
withheld. The Tax Indemnitee will not be required to appeal any adverse decision
of the United States Tax Court, a Federal District Court, or any comparable
trial court unless Lessee will have furnished to the Tax Indemnitee an opinion
of a nationally recognized, independent tax counsel chosen by Lessee and
reasonably acceptable to the Tax
81
Indemnitee, to the effect that there is substantial authority for the position
to be asserted in appealing the matter in question.
(e) Tax Records. Lessor, Sprint and Lessee agree to furnish or cause to be
furnished to each other, upon request, as promptly as practicable, such
information and assistance relating to the Sites (including, without limitation,
access to books and records) as is reasonably necessary for tax purposes.
Lessor, Sprint and Lessee will retain all books and records with respect to
Taxes indemnifiable under Section 39(b) or payable under Section 16 pertaining
to the Sites for a period of at least seven (7) years following the close of the
tax year to which the information relates, or sixty (60) days after the
expiration of any applicable statute of limitations, whichever is later. At the
end of such period, each Party will provide the other with at least sixty (60)
days' prior written notice before destroying any such books and records, during
which period the Party receiving such notice can elect to take possession, at
its own expense, of any books and records reasonably required by such Party for
tax purposes. Lessor, Sprint and Lessee will cooperate with each other in the
conduct of any audit or other proceeding relating to Taxes involving the Sites.
(f) Survival. The agreements and indemnitees contained in this Section 39
shall survive the termination of this Agreement with respect to any Site.
SECTION 40. Lessee Lender Protections.
For any Lessee Lender, if Lessor is given written notice specifying the
name and address of the Lessee Lender, or its servicing agent, and the
applicable title of an officer or other responsible individual charged with
processing notices of the type required under this Section 40, then the
following provisions shall apply with respect to such Lessee Lender for so long
as any Mortgage granted by Lessee to such Lessee Lender shall remain unsatisfied
of record:
(a) Modification, Termination or Surrender of Agreement.
(i) The Lessee Lender shall not be bound by any modification or
amendment of this Agreement in any respect so as to materially increase the
liability of Lessee hereunder or materially increase the obligations or
materially decrease the rights of Lessee without the prior written consent
of the Lessee Lender, which consent shall no be unreasonably withheld.
Further, this Agreement may not be surrendered or terminated other than in
compliance with the provisions of this Section 40). Any such modification,
amendment, surrender or termination not in accordance with the provisions
of this Section 40 shall not be binding on any such Lessee Lender or any
other Person who acquires title to its foreclosed interest.
(ii) In addition, from time to time upon the request of a Lessee
Lender (but not more than three (3) times in any one (1) year period
(excluding the first year following the Effective Date), Lessor shall
execute and deliver to such Lessee Lender an estoppel certificate in a form
reasonably acceptable to Lessor and the Lessee Lender.
(b) Notice and Cure Rights.
82
(i) Lessor, upon serving Lessee with any notice of default under the
provisions of, or with respect to, this Agreement, shall also serve a copy
of such notice upon the Lessee Lender (in the same manner as required by
for notices to Lessee) at the address specified herein, or at such other
address as a Lessee Lender shall designate in writing to Lessor.
(ii) In the event of a default or breach by Lessee under this
Agreement, the Lessee Lender shall have the right, but not the obligation,
to remedy such event, or cause the same to be remedied, within ten days
(10) days after the expiration of all applicable grace or cure periods
provided to Lessee in this Agreement, in the event of a monetary default or
breach, or within sixty (60) days after the expiration of all applicable
grace or cure periods provided to Lessee in this Agreement in the event of
any other breach or default, and Lessor shall accept such performance by or
at the instance of the Lessee Lender as if the same had been made by
Lessee, provided, that if any such non-monetary default or breach that is
capable of cure requires Lessee Lender to acquire possession of the
Lessee's interest in the Sites that are the subject of such breach or
default, such period will be extended for such reasonable period as may be
required to obtain such possession and cure such default of breach;
provided, however, during such extended period, Lessee Lender must continue
to cure other defaults and breaches in accordance with the provisions of
this Section 40(b)(ii).
(iii) In the event of the termination of this Agreement prior to the
expiration of the Term of this Agreement as provided herein for any reason
(other than Lessee's failure to cure under (ii) above), including pursuant
to Section 365 of the federal bankruptcy code, as amended from time to
time, including any successor legislation thereto, or otherwise, Lessor
shall serve upon Lessee Lender written notice that this Agreement has been
terminated, together with a statement of any and all sums due under this
Agreement and of all breaches and events of default under this Agreement,
if any, then known to Lessor. Lessee Lender thereupon shall have the
option, which option must be exercised by Lessee Lender's delivering notice
to Lessor within then (10) Business Days after the Lessee Lender's receipt
of notice from Lessor that the Lease has been terminated to cure any such
Lessee breaches or Lessee events of default (and any Lessee breaches or
Lessee events of default not susceptible of being cured by the Lessee
Lender shall be deemed to have been waived) and the right to enter into a
new lease (the "New Lease") (i) effective as of the date of termination of
this Agreement, (ii) for the remainder of what otherwise would have been
the Term of this Agreement but for such termination, (iii) at and upon all
the agreements, terms, covenants, and conditions of this Agreement (with no
Rent or Pre-Lease Rent payable thereunder), and (iv) including any
applicable right to exercise the purchase option under Section 36
(collectively, the "New Lease Terms"). Upon the execution and delivery of a
new lease under this Section 40, all Collocation Agreements and other
agreements which theretofore may have been assigned to the Lessor (or
reverted back to Lessor as a matter of law) thereupon shall be assigned and
transferred, without recourse, representation or warranty, by Lessor to the
lessee named in such new lease.
(iv) Any notice or other communication which a Lessee Lender shall
desire or is required to give to or serve upon Lessor shall be deemed to
have been duly given or
83
served if sent to Lessor in accordance with the provisions of this
Agreement at the address set forth herein.
(c) Participation in Certain Proceedings and Decisions. Any Lessee Lender
shall have the right to intervene and become a party, but only with respect to
Lessee's involvement, in any Arbitration, litigation, condemnation or other
proceeding affecting this Agreement to the extent of its security interest
herein. Lessee's right to make any election or decision under this Agreement
that is required or permitted to be made by Lessee with respect to the
negotiation or acceptance of any Award or insurance settlement shall be subject
to the prior written approval of such Lessee Lender.
(d) No Merger. Without the written consent of each Lessee Lender, the
leasehold interest created by this Agreement shall not merge with the fee
interest in all or any portion of the Sites, notwithstanding that the fee
interests and the leasehold interests are held at any time by the same Person.
(e) Encumbrances on Personal Property and Subleases. Lessor hereby consents
to Lessee's grant, if any, to any Lessee Lender of a security interest in the
personal property owned by Lessee and located at the Sites and a collateral
assignment of subleases of the interest of Lessee in all or any portion of the
Sites and the rents, issues and profits therefrom, if any and a pledge of any
equity interests in Lessee. Lessor agrees that any interest that Lessor may have
in such personal property, whether granted pursuant to this Agreement or by
statute, shall be subordinate to the interest of any Lessee Lender.
(f) Notice of Default Under any Secured Lessee Loan. Lessee shall promptly
deliver to Lessor a true and correct copy of any such notice of default, notice
of acceleration or other notice regarding a default by Lessee under a Secured
Lessee Loan after Lessee's receipt of the same.
(g) Casualty and Condemnation Proceeds. Notwithstanding anything in this
Agreement to the contrary, in the event of any casualty to or condemnation of
any Site or any portion thereof during such time as any Secured Lessee Loan
shall remain unsatisfied, the Lessee Lender shall be entitled to receive all
insurance Proceeds and/or condemnation awards (up to the amount of the
indebtedness secured by the Lessee Loan) otherwise payable to Lessee and apply
same to restoration of the Leased Property in accordance with the provisions of
this Agreement (to the extent required by the terms of this Agreement); provided
that if the Leased Property is not required to be restored pursuant to the terms
of this Agreement, such Proceeds may be applied to the Secured Lessee Loan. Upon
the Lessee Lender's request, the name of such Lessee Lender may be added to the
"Loss Payable Endorsement" of any and all insurance policies required to be
carried by Lessee hereunder.
(h) Other. Notwithstanding any other provision of this Agreement to the
contrary, (i) Lessor shall not be obligated to provide the benefits and
protections afforded to Lessee Lenders in this Section 40 to more than two (2)
Lessee Lenders at any given time or (ii) in no event whatsoever will there be
any subordination of the rights and interests of Lessor or of Sprint in and to
the Sprint Collocation Space by virtue of any Mortgage granted by Lessee to any
Lessee Lender and each Lessee Lender will, upon request, confirm such fact in
writing. If there is more
84
than one Lessee Lender subject to the provisions of this Section 40, Lessor
shall recognize the Lessee Lender exercising rights afforded by this Section 40
whose Secured Lessee Loan is most senior in lien (unless a Lessee Lender junior
in lien requires that the holder thereof have a superior entitlement to such
rights, and the other Lessee Lender senior in lien shall agree in writing to
such request, in which event such recognition shall be of the holder of that
Secured Lessee Loan), provided that such Lessee Lender shall have complied with
the provisions of this Section 40; provided, however, that Lessor shall have no
obligation to determine which Lessee Lender is indeed senior in lien and shall
have no liability to either Lessee Lender for an erroneous determination, if
Lessor attempts to make such a determination, so long as such determination is
made in good faith based upon the evidence and information of lien priority
provided to Lessor by the Lessee Lenders. Each Lessee Lender shall have the
right to appear in any arbitration or other material proceedings arising under
this Agreement and to participate in any and all hearings, trials and appeals in
connection therewith, but only to the extent related to the rights or
obligations of Lessee in the matter that is the subject of the arbitration or
proceedings or to protect the security interest of Lessee in the Leased
Property.
(i) Recourse of Lessor. Lessor's recourse against any Lessee Lender shall
be expressly limited to the Lessee Lender's interest in this Agreement and in
the Sites and any and all real, personal and intangible property associated with
the Sites (including without limitation, any revenues from any Collocation
Agreements or any Proceeds or Awards).
SECTION 41. Financeable Sites and Severed Leases.
(a) Non-Financeable Sites. With respect to each Site that is not a
Financeable Site on the Effective Date, Lessee will use commercially reasonable
efforts to make each such Site a Financeable Site prior to the one-year
anniversary of the Effective Date. In connection therewith, Lessee will take
such actions and incur such costs, expenses and fees as are commercially
reasonable in light of Lessee's financing structure.
(b) Mutual Cooperation. In connection with Lessee's efforts under this
Section 41(b), Lessor and the Sprint Contributors shall be actively involved
with Lessee in all material aspects of the efforts to make all Sites Financeable
Sites and shall use commercially reasonable efforts to cooperate with Lessee in
such respect (but without obligation to pay any out-of-pocket costs, expenses or
fees in respect thereof or related thereto). Lessee shall provide to Lessor and
the Sprint Contributors information in reasonable detail from time to time with
respect to the actions taken by Lessee pursuant to this Section 41, and Lessor
and the Sprint Contributors shall have the right to request, which request shall
be reasonably approved by Lessee, to directly contact the applicable Parties in
an effort to cause any Site to become a Financeable Site; provided that the
foregoing shall not obligate Lessor or the Sprint Contributors to expend any
amounts in connection therewith and may not obligate Lessee to expend any
amounts in connection therewith.
(c) Failure of Sites to Be Financeable.
(i) Within thirty (30) days following the one-year anniversary of the
Effective Date, Lessee will deliver to Lessor a written statement listing
all the Sites that are not Financeable Sites (the "Preliminary
Non-Financeable Sites Statement") together
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with any Non-Financiable Site supporting documentation that Lessee deems
relevant to be delivered therewith. Within fifteen (15) Business Days after
receipt by Lessor of the Preliminary Non-Financeable Sites Statement,
Lessor shall have the right to request Non-Financeable Site Supporting
Documentation reasonably required by Lessor. Lessor will have thirty (30)
days following its receipt of the Preliminary Non-Financeable Sites
Statement and all Non-Financeable Site Supporting Documentation requested
by Lessor in a timely manner as provided herein to notify Lessee of any
objection with respect to the inclusion on such statement of a Site as not
being a Financeable Site (and must state any such objection on a
Site-by-Site basis, together with a reasonably detailed explanation of such
objection). If Lessor does not so notify Lessee of any such objection to a
specific Site not being a Financeable Site within such thirty (30) day
period in accordance with this Section 41(c), the Preliminary
Non-Financeable Sites Statement with respect to such Site will be deemed to
be the final non-financeable sites statement (the "Final Non-Financeable
Sites Statement"). All Sites on the Final Non-Financeable Site Statement
shall be deemed to be "Non-Financeable Sites."
(ii) Lessor and Lessee will cooperate in good faith for ten (10)
Business Days to resolve any dispute relating to the Preliminary
Non-Financeable Sites Statement. If the Parties are unable to resolve any
dispute relating to the Preliminary Non-Financeable Sites Statement within
such ten (10) Business Day period, the Parties will initiate arbitration
proceedings in accordance with the provisions of Section 31(h) to seek
final determination of which Sites are included on the Final
Non-Financeable Site Statement.
(iii) If the aggregate amount of the Non-Financeable Sites Financing
Costs for all Non-Financeable Sites included on the Final Non-Financeable
Sites Statement exceeds $10,000,000, the Sprint Contributors will pay to
Lessee an amount equal to fifty percent (50%) of the positive excess of (A)
the aggregate amount of the Non-Financeable Sites Financing Costs over (B)
$10,000,000 by wire transfer of immediately available funds to an account
designated in writing by Lessee; provided, however, that the Sprint
Contributors shall have no obligation to pay any such amount attributable
to any matter for which any Lessee Indemnitee has received payment pursuant
to a claim for indemnification under Article 9 of the Agreement to Lease
and Sublease.
(d) Severance of Agreement. In order for Lessee's Affiliates from time to
time to cause the financing of Sites, Lessee shall have the right to cause the
severance of this Agreement (or future Severance Leases) into multiple Severance
Leases and have the "lessee's/operator's" right under such Severance Lease for
the Severed Sites (as well as the "lessor's" right under the Sprint Collocation
Agreement with respect to the Severed Sites) assumed by a GSI Financing
Subsidiary, provided this Lease shall not be severed into more than three (3)
Severance Leases in the aggregate. Each Severance Lease shall be substantially
in the form of this Lease, with appropriate modifications to reflect the fact
that this Agreement has been severed. The Exhibits for such Severance Leases
shall include the applicable information set forth in the Exhibits for this
Agreement, solely with respect to the Severed Sites. Upon entering into each
Severance Lease, the Parties shall also amend the exhibits to this Agreement to
exclude each of the Severed Sites. Lessee shall also have the right to sever
each of the Master Collocation Agreements with respect to the Severed Sites
(and, if requested by Lessee, Sprint and its Affiliates shall assist
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Lessee in effectuating same). The obligations of the "lessee" under each
Severance Lease to Lessor and Sprint under each Severed Lease shall be separate
and distinct from the obligations of the "lessee" under this Agreement and under
each other Severed Lease, and this lease and the Severed Leases shall not be
cross-defaulted with one another, and the obligations of Lessee and the lessees
under each severance lease (and Global Parent under each Severed Lease) shall be
separate and distinct from one another. If Lessee desires the other Parties to
enter into a Severance Lease, Lessee shall send notice to Sprint informing such
Parties of its desire to enter into a Severed Lease, specifying the applicable
Sites and including with such notice an executable Severed Lease and amendment
hereto, along with amended memoranda of leases or Site Designation Supplements
with respect to the applicable Sites. Sprint shall upon receipt of same, review
and reasonably cooperate with Lessee to effect the execution and delivery of any
Severed Lease. Under each Severance Lease and this Lease, following execution of
a Severance Lease the Global Parent Maximum Obligation hereunder and thereunder
shall be reduced to an amount equal to the Ratable Global Parent Maximum
Obligation hereunder and thereunder, and, if requested by Lessor, Global Parent
will confirm such Ratable Global Parent Maximum Obligation in writing. "Ratable
Global Parent Maximum Obligation" shall mean an amount equal to the product of
(x) the Global Parent Maximum Obligation and (y) a fraction the numerator of
which is the aggregate sum of the Rent and the Pre-Lease Rent for the Sites
remaining under this Lease or a Severance Lease, as applicable and the
denominator of which is the aggregate sum of the Rent and the Pre-Lease Rent
hereunder on the date hereof. Notwithstanding the foregoing, the Parties
acknowledge and agree that for all tax purposes, including Section 467 of the
Code, a Severance Lease shall be treated as a continuation of this Agreement
with respect to the Severed Sites, no Severance Lease will contain any
substantial modifications to this Agreement, and with respect to each Site, any
Severance Lease and this Agreement will be treated as one lease agreement.
(e) Severance of Indemnification Obligations. With respect to all
indemnification obligations of Lessee hereunder (or of a GSI Financing
Subsidiary under a Severed Lease), Lessee, at its election, may elect to have
Global Parent provide such indemnities in lieu of Lessee (or the applicable GSI
Financing Subsidiary), and in connection therewith execute an indemnity
reasonably acceptable to Lessor and Sprint, and upon execution of same, Lessor
will acknowledge that Lessee is relieved of all indemnification obligations
hereunder.
(f) Cooperation with Financing. Sprint and Lessor acknowledge that in
connection with the financings of its interests in the Sites, from time to time,
Lessee may require legal opinions (or updates thereof or reliance letters or
similar items with respect thereto) from its counsel, at Lessee's expense, with
respect to certain bankruptcy-related matters and in connection therewith Sprint
and Lessor will cooperate in taking such actions as may be reasonably required
to give such opinions as Lessee may reasonably request and to provide customary
undertakings, representations and certificates (including without limitation, as
corporate structure charts, certifications that the requirements of the LLC
Agreement will be, and have at all times been, complied with), such cooperation
and provision at Lessee's expense.
SECTION 42. Global Parent Guaranty.
(a) Global Parent unconditionally guarantees to the Sprint Indemnitees the
full and timely payment and performance and observance of all of the terms,
provisions, covenants and
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obligations of Lessee under this Agreement (the "Lessee Obligations"). Global
Parent agrees that if Lessee defaults at any time during the Term of this
Agreement in the performance of any of the Lessee Obligations, Global Parent
shall faithfully perform and fulfill all Lessee Obligations that involve payment
of a fixed sum and shall pay to the applicable beneficiary all attorneys' fees,
court costs, and other expenses, costs and disbursements incurred by the
applicable beneficiary on account of any default by Lessee and on account of the
enforcement of this guaranty. Notwithstanding anything to the contrary contained
herein (but subject to the provisions of Section 41(d)), the maximum aggregate
amount payable hereunder by Global Parent shall be Two Hundred Million Dollars
($200,000,000) (the "Global Parent Maximum Obligation") and following aggregate
payment by Global Parent to the Sprint Indemnitees of such amount, Global Parent
shall have no further obligations hereunder.
(b) The foregoing guaranty obligation of Global Parent shall be enforceable
by any Sprint Indemnitee in an action against Global Parent without the
necessity of any suit, action, or proceedings by the applicable beneficiary of
any kind or nature whatsoever against Lessee, without the necessity of any
notice to Global Parent of Lessee's default or breach under this Agreement, and
without the necessity of any other notice or demand to Global Parent to which
Global Parent might otherwise be entitled, all of which notices Global Parent
hereby expressly waives. Global Parent hereby agrees that the validity of this
guaranty and the obligations of Global Parent hereunder shall not be terminated,
affected, diminished, or impaired by reason of the assertion or the failure to
assert by any Sprint Indemnitee against Lessee any of the rights or remedies
reserved to such Sprint Indemnitee pursuant to the provisions of this Agreement
or any other remedy or right which such Sprint Indemnitee may have at law or in
equity or otherwise.
(c) Global Parent covenants and agrees that this guaranty is an absolute,
unconditional, irrevocable and continuing guaranty. The liability of Global
Parent hereunder shall not be affected, modified, or diminished by reason of any
assignment, renewal, modification or extension of this Agreement or any
modification or waiver of or change in any of the covenants and terms of this
Agreement by agreement of a Sprint Indemnitee and Lessee, or by any unilateral
action of either a Sprint Indemnitee or Lessee, or by an extension of time that
may be granted by a Sprint Indemnitee to Lessee or any indulgence of any kind
granted to Lessee, or any dealings or transactions occurring between a Sprint
Indemnitee and Lessee, including, without limitation, any adjustment,
compromise, settlement, accord and satisfaction, or release, or any bankruptcy,
insolvency, reorganization, arrangements, assignment for the benefit of
creditors, receivership, or trusteeship affecting Lessee. Global Parent does
hereby expressly waive any suretyship defense it may have by virtue of any
statute, Law, or ordinance of any state or other Governmental Authority.
(d) All of the Sprint Indemnitees' rights and remedies under this guaranty
are intended to be distinct, separate and cumulative and no such right and
remedy herein is intended to be the exclusion of or a waiver of any other.
Global Parent hereby waives presentment demand for performance, notice of
nonperformance, protest notice of protest, notice of dishonor, and notice of
acceptance. Global Parent further waives any right to require that an action be
brought against Global or any other Person or to require that resort be had by a
beneficiary to any security held by such beneficiary.
SECTION 43. General Provisions.
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(a) Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed to be an original, but all of which will constitute one and
the same agreement.
(b) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof)
as to all matters, including matters of validity, construction, effect,
performance and remedies.
(c) Entire Agreement; Successors and Assigns. This Agreement (including the
Exhibits), constitutes the entire agreement between the Parties with respect to
the subject matter of this Agreement and supersede all prior agreements, both
written and oral, between the Parties with respect to the subject matter of this
Agreement. This Agreement will be binding upon and inure solely to the benefit
of each Party and its successors and permitted assigns.
(d) Fees and Expenses. Except as otherwise specifically set forth in this
Agreement, whether the transactions contemplated by this Agreement are or are
not consummated, all legal and other costs and expenses incurred in connection
with this Agreement and the transactions contemplated by this Agreement will be
paid by the Party incurring such costs and expenses.
(e) Notices. All notices, requests, demands, waivers and other
communications required or permitted under this Agreement will be in writing and
will be deemed to have been delivered (i) five (5) Business Days after being
mailed by first-class mail, postage prepaid, (ii) the next Business Day when
sent overnight by a recognized courier service, (iii) upon confirmation when
sent by telecopy, confirmed by mailing written confirmation at substantially the
same time as such telecopy, or (iv) upon delivery when personally delivered to
the receiving Party (which if other than an individual will be an officer or
other responsible party of the receiving Party). All such notices and
communications will be mailed, sent or delivered as set forth below or to such
other person(s), telex or facsimile number(s) or address(es) as the Party to
receive any such communication or notice may have designated by written notice
to the other Party. A notice delivered to any of Lessor or any Person comprising
Sprint shall be deemed to have been delivered to all such Persons.
If to Lessor or any Party comprising Sprint, to:
Sprint Contracts and Performance
Mailstop KSOPHT0101 - Z2650
6391 Sprint Parkway
Overland Park, Kansas 66251-2650
Hotline: (800) 357-7641
Fax No. (913) 794-0824
Attention: Marion S. Crable, Manager
with a copy to:
Sprint Law Department
Mailstop KS0PHT0101-Z2020
6391 Sprint Parkway
Overland Park, Kansas 66251
89
Fax No. (913) 523-9823
Attention: Real Estate Attorney
and a copy of any notice given pursuant to Section 31 to:
King & Spalding LLP
191 Peachtree Street
Atlanta, Georgia 30303-1763
Fax No. (404) 572-5146
Attention: Raymond E. Baltz, Jr.
If to Lessee or Global Parent, to:
c/o Global Signal Inc.
301 North Cattlemen Road
Suite 300
Sarasota, Florida 34232
Attention: General Counsel
and a copy of any notice given pursuant to Section 31 to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Fax No. (212) 735-3000
Attention: Joseph A. Coco
(f) Headings. The Section and Article headings contained in this Agreement
are solely for the purpose of reference, are not part of the agreement of the
Parties and will not in any way affect the meaning or interpretation of this
Agreement.
(g) Amendment; Modifications. This Agreement may be amended, modified or
supplemented only by written agreement of the Parties.
(h) Time of the Essence. Time is of the essence in this Agreement, and
whenever a date or time is set forth in this Agreement, the same has entered
into and formed a part of the consideration for this Agreement.
(i) Specific Performance. Each Party recognizes and agrees that if any
other Party should refuse to perform any of its obligations under this
Agreement, the remedy at Law would be inadequate and agrees that for breach of
such provisions, each Party will, in addition to such other remedies as may be
available to it at Law or in equity, be entitled to injunctive relief and to
enforce its rights by an action for specific performance to the extent permitted
by applicable Law. Each Party hereby waives any requirement for security or the
posting of any bond or other surety in connection with any temporary or
permanent award of injunctive, mandatory or other equitable relief. Subject to
Section 43(l) of this Agreement, nothing contained in this Agreement will be
construed as prohibiting any Party from pursuing any other remedies available to
it pursuant to the provisions of this Agreement or applicable Law for such
breach or threatened
90
breach, including without limitation the recovery of damages. The arbitrator
referred to in Section 43(l) will be empowered to enforce this Section 43(i).
(j) Mutual Drafting. This Agreement is the result of the joint efforts of
Lessor, Lessee and Sprint, and each provision of this Agreement has been subject
to the mutual consultation, negotiation and agreement of the Parties and there
will be no construction against any Party based on any presumption of that
Party's involvement in the drafting of this Agreement.
(k) Jurisdiction and Consent to Service. Without limiting the jurisdiction
or venue of any other court, each of the Parties (i) agrees that any suit,
action or proceeding arising out of or relating to this Agreement will be
brought solely in the state or federal courts of the State of New York, (ii)
consents to the exclusive jurisdiction of each such court in any suit, action or
proceeding relating to or arising out of this Agreement, (iii) waives any
objection which it may have to the laying of venue in any such suit, action or
proceeding in any such court, and (iv) agrees that service of any court paper
may be made in such manner as may be provided under applicable Laws or court
rules governing service of process.
(l) WAIVER OF JURY TRIAL.
(i) EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY COURT ACTION
ARISING AMONG ANY OF THE PARTIES, WHETHER UNDER OR RELATING TO THIS
AGREEMENT, AND WHETHER MADE BY CLAIM, COUNTER CLAIM, THIRD PARTY CLAIM OR
OTHERWISE. If for any reason the jury waiver is held to be unenforceable,
the Parties agree to binding arbitration for any dispute arising out of
this Agreement or any claim arising under any federal, state or local
statutes, Laws or regulations, under the applicable commercial rules of the
AAA. Any arbitration will be held in the New York, New York metropolitan
area and be subject to the Governing Law provision of this Agreement.
Discovery in the arbitration will be governed by the Local Rules applicable
in the United States District Court for the Southern District of New York.
(ii) The agreement of each Party to waive its right to a jury trial
will be binding on its successors and assigns and will survive the
termination of this Agreement.
SECTION 44. No Petition; Limited Recourse Against Lessee
Prior to the date that is one year and one day after the date on which this
Agreement has terminated in accordance with its terms, and all obligations of
the Lessee under or in respect to any Secured Lessee Loans have been paid in
full, neither Lessor nor any Sprint Contributors will institute, or join any
other Person in instituting, or authorize a trustee or other Person acting on
its behalf or on behalf of others to institute, any bankruptcy, reorganization,
arrangement, insolvency, liquidation, receivership or similar proceeding under
the laws of the United States of America or any state thereof against the
Lessee. The provisions of this Section 44 will survive any termination of this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
and sealed by their duly authorized representatives, all effective as of the day
and year first written above.
LESSEE:
By_________________________________
Name:
Title:
LESSOR:
By_________________________________
Name:
Title:
SPRINT:
By_________________________________
Name:
Title:
GLOBAL PARENT:
GLOBAL SIGNAL INC.
By_________________________________
Name:
Title:
SIGNATURE PAGE TO LEASE AND SUBLEASE
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