EXHIBIT 10.10
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FORM OF 12.875% TERM NOTES DUE 2008
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT IN COMPLIANCE
THEREWITH.
THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS, INCLUDING RESTRICTIONS
ON TRANSFER, AS SET FORTH IN THE FOURTH AMENDED AND RESTATED STOCKHOLDERS
AGREEMENT DATED AS OF MAY 15, 2002 (AS AMENDED FROM TIME TO TIME), A COPY OF
WHICH MAY BE OBTAINED UPON REQUEST FROM THE ISSUERS OR ANY SUCCESSORS THERETO.
THIS DEBT INSTRUMENT IS BEING ISSUED WITH "ORIGINAL ISSUE DISCOUNT" WITHIN THE
MEANING OF SECTION 1273(a) OF THE UNITED STATES INTERNAL REVENUE CODE. THE
"ISSUE PRICE" OF THIS DEBT INSTRUMENT IS $[ ], THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT ON THIS DEBT INSTRUMENT IS [ ]%, THE "ISSUE DATE" IS [ ], 2002 AND THE
YIELD TO MATURITY IS [ ]%.
No. 1 $[ ]
SPECTRASITE HOLDINGS, INC.
SPECTRASITE INTERMEDIATE HOLDINGS, LLC
12.875% CONVERTIBLE TERM NOTES DUE 2008
THIS TERM NOTE (this "TERM NOTE") is one of a duly authorized issue of
Term Notes of SPECTRASITE HOLDINGS, INC., a corporation duly organized and
existing under the laws of the State of Delaware (together with any Successor
Issuer to such Issuer pursuant to Section 7.01 of this Term Note, the "PARENT"),
and SPECTRASITE INTERMEDIATE HOLDINGS, LLC, a limited liability company duly
organized and existing under the laws of the State of Delaware (together with
any Successor Issuer to such Issuer pursuant to Section 7.01 of this Term Note,
"INTERMEDIATE HOLDCO" and, together with the Parent, the "ISSUERS"), designated
as their 12.875% Convertible Term Notes Due 2008, in an aggregate principal
amount of [ ] Million U.S. Dollars (U.S. $[ ]) (the "TERM NOTES"). This Term
Note is issued pursuant to the Funding Agreement and in conjunction with the
Stockholders Agreement (each as defined hereafter), and the Holder hereof is
intended to be afforded the benefits thereof, including the representations and
warranties set forth therein, and be bound by the obligations therein to the
extent a party thereto. The Issuers shall use the proceeds of the issuance and
sale of this Term Note solely in accordance with the provisions set forth in and
as required by the Funding Agreement.
FOR VALUE RECEIVED, the Issuers, on a joint and several basis, promise
to pay to [ ], the holder hereof, or its order (together with its successors and
permitted assigns, the "HOLDER"), the principal sum of [ ] Million Dollars ($[
]) on the Maturity Date and to pay interest (each, an "INTEREST PAYMENT") on the
principal sum outstanding from time to time under this Term Note, as adjusted as
described below (as so adjusted, the "OUTSTANDING PRINCIPAL AMOUNT"), at the
rate of 12.875% per annum, subject to adjustment pursuant to Section 11.18
herein, which shall be cumulative, accrue daily from the Issue Date and, except
as described below, be due and payable in arrears on each [January 1] and [July
1] commencing with the [July 1] immediately following the Issue Date (each, an
"INTEREST PAYMENT DATE"). If an Interest Payment Date is not a Business Day,
then the Interest Payment otherwise payable on such Interest Payment Date shall
be due and payable on the Business Day immediately following such Interest
Payment Date. Interest payable on any Interest Payment Date shall, at the
Issuers' option, be payable in cash or accrued and added to the Outstanding
Principal Amount for purposes of calculating the Interest Payments due on the
succeeding Interest Payment Dates (and for the purpose of determining the number
of votes to which the Holder is entitled pursuant to Section 17.01(b), but not
for other purposes). Any accrued and unpaid interest shall be paid in full on
the earliest to occur of the Maturity Date or the date required pursuant to
Articles 4, 5, 6, 11 or Article 1616. Such interest shall be paid in cash,
except as otherwise provided in Article 4. Any principal or accrued and unpaid
interest which is not paid when due shall bear interest, payable on demand, at a
rate per annum equal to the otherwise applicable interest rate plus 2% (or, if
less, the maximum interest rate then permitted by applicable law) from the due
date (whether at maturity, upon acceleration or otherwise) until the same is
paid in full.
Interest will be computed on the basis of a 360-day year of twelve
30-day months. Interest Payments will be paid to the Person in whose name this
Term Note (or one or more predecessor Term Notes) is registered on the records
of the Issuers regarding registration and transfers of the Term Notes (together,
the "TERM NOTES REGISTER") on the Business Day prior to the applicable payment
date. The Issuers shall maintain a Term Notes Register at their principal office
in which they shall provide for the registration of Term Notes and of transfers
and exchanges.
This Term Note is subject to the following additional provisions:
ARTICLE 1
EXCHANGE
This Term Note is exchangeable for an equal aggregate principal amount
of Term Notes of different denominations (in integral multiples of $1,000
principal amount), as requested by the Holder surrendering the same. No service
charge will be charged to the Holder for such registration, transfer or
exchange.
ARTICLE 2
TRANSFERS
This Term Note has been issued subject to investment representations of
the original purchaser hereof and may be transferred or exchanged in the United
States only in compliance with the Securities Act, applicable state securities
laws and the provisions of the Related Agreements. Prior to due presentment for
transfer of this Term Note, the Issuers may treat the Person in whose name this
Term Note is duly registered on the Term Notes Register as the owner hereof for
the purpose of receiving payment as herein provided and all other purposes,
whether or not this Term Note be overdue, and the Issuers shall not be affected
by notice to the contrary.
ARTICLE 3
DEFINITIONS
For purposes of this Term Note, the location of defined terms in this
Term Note is set forth on the Index of Terms attached hereto and the following
terms shall have the following meanings:
"ADJUSTED EBITDA" as of any date of determination means the sum of (i)
the EBITDA of the Parent for the four most recent full fiscal quarters ending
prior to such date, less the Parent's Tower EBITDA for such four-quarter period,
plus (ii) the product of four times the Parent's Tower EBITDA for the most
recent quarterly period, which Tower EBITDA for the most recent quarterly period
shall be determined on a pro forma basis after giving effect to (A) all
acquisitions or dispositions of assets made by the Parent and its Subsidiaries
from the beginning of such quarter through and including such date of
determination (including any related financing transactions) as if such
acquisitions and dispositions had occurred at the beginning of such quarter, (B)
any new lease or Site Management Contract entered into by the Parent or any
Restricted Subsidiary in the ordinary course of business with respect to Tower
Assets from the beginning of such quarter through and including such date of
determination as if such new lease or Site Management Contract had been signed
at the beginning of such quarter and the rent required by the terms of such
lease or Site Management Contract for such quarter had been received by the
Parent or a Restricted Subsidiary during such quarter, (C) the loss from the
beginning of such quarter through and including such date of determination of
any lease or Site Management Contract of the Parent or a Restricted Subsidiary
with respect to any Tower Assets that was in effect on the first day of such
quarter as if such lease or Site Management Contract had not been in effect
during such quarter and no rent under such lease had been received during such
quarter and (D) any rent increases received by the Parent or any Restricted
Subsidiary during the period beginning on the first day of such quarter and
ending on the date of determination related to leases or Site Management
Contracts on Tower Assets as if such increased rental rate had been in effect at
the beginning of such quarter and such increased amount of rent had
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been received by the Parent or a Restricted Subsidiary during such quarter. For
purposes of making the computation referred to above, (1) acquisitions that have
been made by the Parent or any of its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing transactions,
during the reference period or subsequent to such reference period and on or
prior to the date of determination shall be deemed to have occurred on the first
day of the reference period and EBITDA for such reference period shall be
calculated without giving effect to clause (ii) of the proviso set forth in the
definition of Consolidated Net Income, and (2) the EBITDA attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the date of determination shall be excluded.
"AFFILIATE" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"ASSET DISPOSITION" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Parent or any Restricted Subsidiary, including any disposition by means of a
merger, consolidation or similar transaction (each referred to for the purposes
of this definition as a "disposition"), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares or shares
required by applicable law to be held by a Person other than the Parent or a
Restricted Subsidiary), (ii) all or substantially all the assets of any division
or line of business of the Parent or any Restricted Subsidiary or (iii) any
other assets of the Parent or any Restricted Subsidiary outside of the ordinary
course of business of the Parent or such Restricted Subsidiary (other than, in
the case of (i), (ii) and (iii) above, (u) a disposition by a Restricted
Subsidiary to the Parent or by the Parent or a Restricted Subsidiary to another
Restricted Subsidiary, (w) for purposes of Section 11.06 only, a disposition
that constitutes a Restricted Payment permitted by Section 11.04 (or a
disposition that would be a Restricted Payment but for any parenthetical
contained in the definition thereof, including any Permitted Investment), (x) a
disposition of assets with a fair market value of less than $5.0 million, (y)
grants of leases or licenses in the ordinary course of business, and (z)
disposals of cash equivalents).
"ATTRIBUTABLE INDEBTEDNESS" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by this Term Note, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
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"AVERAGE LIFE" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the product of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"BOARD OF DIRECTORS" means the Board of Directors of the Parent or any
committee thereof duly authorized to act on behalf of such Board.
"BUSINESS DAY" means any day other than Saturday, Sunday or any other
day on which commercial banks in The City of New York are authorized or required
by law to remain closed.
"CAPITALIZED LEASE OBLIGATION" means an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP.
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as such term is used in
Rules 13(d)-3 and 13(d)-5 of the Exchange Act, except that for purposes
of this clause (i) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of the Parent; PROVIDED, that the Permitted
Holders "beneficially own", directly or indirectly, in the aggregate a
lesser percentage of the total voting power of the Voting Stock of the
Parent than such other person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election
a majority of the board of directors of the Parent (for the purposes of
this clause (i), (a) such other person shall be deemed to beneficially
own any Voting Stock of a specified entity held by a parent entity, if
such other person is the beneficial owner, directly or indirectly, of
more than 35% of the voting power of the Voting Stock of such parent
entity and the Permitted Holders "beneficially own", directly or
indirectly, in the aggregate a lesser percentage of the total voting
power
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of the Voting Stock of such parent entity than such other person, and
do not have the right or ability by voting power, contract or otherwise
to elect or designate for election a majority of the board of directors
of such parent entity and (b) the Permitted Holders shall be deemed to
beneficially own any Voting Stock of an entity held by any other parent
entity, so long as the Permitted Holders beneficially own, directly or
indirectly, in the aggregate, a majority of the voting power of the
parent entity's Voting Stock); provided that a transaction or event
shall not constitute a "change of control" under this clause (i) if
such transaction or event is solely a result of the sale, transfer or
other disposition of the Term Notes, common stock or other securities
by one or more Noteholders or any Affiliate thereof unless such
transaction or event is approved by a majority of the disinterested
members of the Board of Directors;
(ii) the Parent shall at any time cease to be the legal
and beneficial owner of 100% of the Capital Stock of Intermediate
Holdco;
(iii) during any period of two consecutive years (or, in
the case this event occurs within the first two years after the Issue
Date, such shorter period as shall have begun on the Issue Date),
individuals who at the beginning of such period constituted the board
of directors of the Parent (together with any new directors whose
election by such board of directors or whose nomination for election by
the shareholders of the Parent was approved by a vote of a majority of
the directors of the Parent then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of such board of directors then in
office;
(iv) the merger or consolidation of the Parent with or
into another Person or the merger of another Person with or into the
Parent (or any merger or consolidation, of any Person with or into any
Subsidiary of Parent, if Capital Stock of Parent is issued in
connection therewith), unless holders of the securities of the Parent
that are outstanding immediately prior to such transaction and which
represent 100% of the aggregate voting power of the Voting Stock of the
Parent hold securities of the surviving corporation that represent,
immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving
corporation;
(v) the sale of all or substantially all of either
Issuer's assets to another Person, other than a Permitted Holder or a
Person that is controlled by the Permitted Holders; and
(vi) the sale of all or substantially all of Intermediate
Holdco's assets to another Person other than a Person to whom has been
transferred all or substantially all of the assets of the Parent.
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"CLOSING PRICE" means, with respect to one share of Common Stock on any
day, the closing sale price per share of Common Stock, regular way, on such day
or, in case no such sale takes place on such day, the average of the reported
closing bid and asked prices per share of Common Stock, regular way, in each
case as quoted on NASDAQ or, if the Common Stock is not quoted or listed or
admitted to trading on NASDAQ, on the principal national securities exchange or
quotation system on which the Common Stock is quoted or listed or admitted to
trading or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing bid and
asked prices, per share of Common Stock on the over-the-counter market on the
day in question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in such
manner as furnished by any NYSE member firm selected from time to time by the
Board of Directors for that purpose, or a price determined in good faith by the
Board of Directors (including a majority of the disinterested directors).
"COMMON STOCK" means the Common Stock, par value $0.001 per share, of
the Parent (or any security into which this Note may be converted in lieu
thereof pursuant to Article 4).
"COMPLETED BROADCAST TOWER" means a communications tower of at least
500 feet, other than a Completed Tower, with, as of the date of determination,
(i) at least one broadcast tenant that has executed a definitive lease or Site
Management Contract with the Parent or any of its Restricted Subsidiaries and
(ii) capacity for at least one other tenant.
"COMPLETED TOWER" means a communications transmission tower with, as of
any date of determination, (i) at least one anchor tenant that has executed a
definitive lease or Site Management Contract with the Parent or any of its
Restricted Subsidiaries and (ii) capacity for at least three tenants.
"CONSOLIDATED INDEBTEDNESS" as of any date of determination means
(without duplication) (i) the total amount of Indebtedness of the Parent and its
Restricted Subsidiaries, (ii) the total amount of Indebtedness of any other
Person, to the extent that such Indebtedness has been Guaranteed by the Parent
or one or more of its Restricted Subsidiaries, (iii) the aggregate liquidation
value of all Disqualified Stock of the Parent and all Preferred Stock of
Restricted Subsidiaries of the Parent not owned by the Parent or a Restricted
Subsidiary, in each case, determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total
interest expense of the Parent and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Parent or its Restricted Subsidiaries, without
duplication, (i) interest expense attributable to capital leases and to leases
constituting part of a Sale/Leaseback Transaction, (ii) amortization of debt
discount and debt issuance cost, (iii) capitalized interest, (iv) non-cash
interest expense, (v) commissions, discounts
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and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (vi) net costs associated with Hedging Obligations
(including amortization of fees), (vii) Preferred Stock dividends paid in
respect of all Preferred Stock of the Parent and its Subsidiaries held by
Persons other than the Parent or a Wholly Owned Subsidiary, (viii) interest
incurred in connection with Investments in discontinued operations, (ix)
interest accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by (or secured by the assets of) the Parent or any
Restricted Subsidiary and (x) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the Parent)
in connection with Indebtedness Incurred by such plan or trust.
"CONSOLIDATED NET INCOME" means, for any period, the net income (loss)
of the Parent and its consolidated Subsidiaries; PROVIDED, that there shall not
be included in such Consolidated Net Income:
(i) any net income (loss) of any Person (other than the Parent) if
such Person is not a Restricted Subsidiary, except that subject to the exclusion
contained in (iv) below, the Parent's equity in the net income of any such
Person for such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Person during such
period to the Parent or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid to a
Restricted Subsidiary, to the limitations contained in clause (iii) below),
(ii) any net income (loss) of any Person acquired by the Parent or
a Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition,
(iii) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions (other than any restrictions permitted in
Section 11.05), directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary, directly or indirectly,
to the Parent, except that (A) subject to the exclusion contained in clause (iv)
below the Parent's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Restricted Subsidiary
during such period to the Parent or another Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other distribution
paid to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) solely for purposes of calculating the Indebtedness to Adjusted
EBITDA Ratio, the Parent's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income,
(iv) any gain or loss realized upon the sale or other disposition
of any assets of the Parent, its consolidated Subsidiaries or any other Person
(including
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pursuant to any Sale/Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business and any gain or loss realized
upon the sale or other disposition of any Capital Stock of any Person,
(v) any net income or loss of any Unrestricted Subsidiary, except
to the extent distributed to the Parent or one of its Subsidiaries,
(vi) any extraordinary gain or loss, and
(vii) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 11.04 only,
there shall be excluded from Consolidated Net Income any dividends, repayments
of loans or advances or other transfers of assets from Unrestricted Subsidiaries
to the Parent or a Restricted Subsidiary to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
under such covenant pursuant to clause (a)(3)(D) thereof.
"CONSOLIDATED TANGIBLE ASSETS" means, with respect to the Parent, the
total consolidated tangible assets of the Parent and its Restricted
Subsidiaries, as shown on the most recent internal consolidated balance sheet of
the Parent and such Restricted Subsidiaries calculated on a consolidated basis
in accordance with GAAP.
"CONVERSION FAILURE" means that for any reason the Holder has not
received all of the shares of Common Stock to which the Holder is entitled prior
to the fifth day after the Share Delivery Date with respect to any conversion of
this Term Note.
"CONVERSION PRICE" means $0.65, as adjusted from time to time in
accordance with the provisions of Article 4.
"CREDIT FACILITY" means any debt or credit facility or commercial paper
facility providing for revolving credit loans, term loans, accounts receivable
financing (including through the sale of accounts receivable to such lenders or
to special purpose entities formed to borrow from such lenders against such
accounts receivable) or letters of credit, or other non-convertible debt
securities or other form of debt financing, in each case, as amended, restated,
supplemented, extended, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time, including any such amendment, restatement,
supplement, extension, modification, renewal, refunding, replacement or
refinancing that increases the amount borrowable thereunder or alters the
maturity thereof.
"CURRENCY AGREEMENT" means, in respect of a Person, any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values as to which such
Person is a party or a beneficiary.
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"CURRENT MARKET PRICE" means, with respect to one share of Common Stock
on any day, the average of the daily Closing Prices per share of Common Stock
for the ten consecutive Trading Days immediately prior to such day.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable at the option of the holder
thereof for Indebtedness or Disqualified Stock or (iii) is redeemable at the
option of the holder thereof, in whole or in part, in each case on or prior to
the 91st day after the Stated Maturity of this Term Note; PROVIDED, that any
Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of a "change of control" or "asset
sale" occurring prior to the 91st day after the Stated Maturity of this Term
Note shall not constitute Disqualified Stock if the "change of control" or
"asset sale" provisions applicable to such Capital Stock are not materially more
favorable taken as a whole to the holders of such Capital Stock than the
provisions described under Section 6.01 and Section 11.06.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
the following to the extent deducted in calculating such Consolidated Net
Income: (i) Consolidated Interest Expense, (ii) all income tax expense of the
Parent and its consolidated Restricted Subsidiaries, (iii) depreciation expense
of the Parent and its consolidated Restricted Subsidiaries, (iv) amortization
expense of the Parent and its consolidated Restricted Subsidiaries (excluding
amortization expense attributable to a prepaid cash item that was paid in a
prior period), (v) all other non-cash charges of the Parent and its consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent that
it represents an accrual of or reserve for cash expenditures in any future
period), and (vi) any premium or penalty paid in connection with repurchasing,
redeeming, retiring, defeasing or acquiring any Indebtedness prior to maturity
to the extent deducted in calculating Consolidated Net Income, in each case for
such period. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and non-cash charges
of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute
EBITDA only to the extent (and in the same proportion) that the net income of
such Restricted Subsidiary was included in calculating Consolidated Net Income
and only if a corresponding amount would be permitted at the date of
determination to be paid to the Parent in the form of a dividend by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its
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stockholders, without in any event giving effect to any restrictions or
limitations permitted in Section 11.05.
"EQUITY OFFERING" means a public or private issuance by the Parent of
common stock of the Parent for cash.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NOTES" means the 12.875% Convertible Notes due December 15,
2008 to be issued by Parent and Intermediate Holdco, as co-issuers, in the
Transactions in an aggregate principal amount not to exceed $75.0 million
containing terms consistent in all material respects with those described in the
offering circular dated May [ ], 2002, as the same may be amended, modified or
supplemented prior to the Issue Date.
"FUNDING AGREEMENT" means that certain Funding Agreement dated as of
May 15, 2002 among the Issuers and the initial holders of the Term Notes (as
amended from time to time).
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in (i) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation of such other Person (whether arising
by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); PROVIDED, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a correlative meaning.
"HEDGING OBLIGATIONS" of any Person means the actual obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
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"INCUR" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary unless such Indebtedness or
Capital Stock is repaid or redeemed on the date such Person becomes a
Subsidiary. The term "Incurrence" when used as a noun shall have a correlative
meaning.
"INDEBTEDNESS" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal in respect of (A) indebtedness of such Person
for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is responsible or
liable, including, in each case, any premium on such indebtedness to the extent
such premium has become due and payable;
(ii) all Capitalized Lease Obligations of such Person and all
Attributable Indebtedness in respect of Sale/Leaseback Transactions entered into
by such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business);
(iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit and other
contingent liabilities (but only to the extent such contingent liabilities are
not reflected as liabilities on the consolidated balance sheet of such Person)
securing obligations (other than obligations described in clauses (i) through
(iii) above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day
following payment on the letter of credit);
(v) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Stock or, with
respect to any Subsidiary of such Person, the liquidation preference with
respect to, any Preferred Stock (but excluding, in each case, any accrued
dividends);
(vi) all obligations of the type referred to in clauses (i) through
(v) above, of other Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or asset of such
Person
12
(whether or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such property or assets
or the amount of the obligation so secured; and
(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above or the
accreted value thereof, in the case of Indebtedness issued with original issue
discount, and the maximum liability, upon the occurrence of the contingency
giving rise to the obligation, of any contingent obligations at such date.
"INDEBTEDNESS TO ADJUSTED EBITDA RATIO" as of any date of determination
means the ratio of (i) Consolidated Indebtedness as of such date to (ii)
Adjusted EBITDA.
"INTEREST", in respect of the Term Notes, unless the context otherwise
requires, refers to interest and Additional Interest, if any.
"INTEREST RATE AGREEMENT" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement designed to protect such Person against fluctuations in interest
rates as to which such Person is a party or a beneficiary.
"INTERMEDIATE HOLDCO INDEBTEDNESS TO ADJUSTED EBITDA RATIO" as of any
date of determination means the ratio of (i) Consolidated Indebtedness of
Intermediate Holdco as of such date to (ii) Adjusted EBITDA of Intermediate
Holdco. "Consolidated Indebtedness" and "Adjusted EBITDA" of Intermediate Holdco
shall be determined in the same manner as Consolidated Indebtedness and Adjusted
EBITDA of Parent are determined pursuant to this Term Note, with all references
to Parent and/or its Restricted Subsidiaries in such definitions instead
referring to Intermediate Holdco and/or its Restricted Subsidiaries.
"INVESTMENT" in any Person means any direct or indirect advance, loan
(other than advances to customers, lessees or licensees in the ordinary course
of business that are recorded as accounts receivable on the balance sheet of
such Person) or other extension of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For purposes of
the definitions of "Unrestricted Subsidiary" and "Restricted Payment" and
Section 11.04, (i) "Investment" shall include the portion (proportionate to the
Parent's equity interest in such Subsidiary) of the fair market value of the net
assets of any
13
Subsidiary of the Parent at the time that such Subsidiary is designated an
Unrestricted Subsidiary; PROVIDED, that upon a redesignation of such Subsidiary
as a Restricted Subsidiary, the Parent shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if
positive) equal to (x) the Parent's "Investment" in such Subsidiary at the time
of such redesignation less (y) the portion (proportionate to the Parent's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time that such Subsidiary is so re-designated a Restricted
Subsidiary, and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors and
evidenced by a resolution of such Board of Directors.
"ISSUE DATE" means ___________, 2002.
"LIEN" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"MATURITY DATE" means the earlier to occur of (i) June 16, 2008 and
(ii) the 180th day (or, if such day is not a Business Day, the next succeeding
Business Day) following repayment in full of the New Credit Facility.
"NASDAQ" means The Nasdaq National Market.
"NET AVAILABLE CASH" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other non
cash form) therefrom, in each case net of (i) all legal, title, accounting,
investment banking and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP, as a consequence of
such Asset Disposition, (ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security arrangement of any kind with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of the
proceeds from such Asset Disposition, (iii) all distributions and other payments
required to be made to minority interest holders in Restricted Subsidiaries or
joint ventures as a result of such Asset Disposition, (iv) the deduction of
appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the assets disposed of in
such Asset Disposition and retained by the Parent or any Restricted Subsidiary
after such Asset Disposition, and (v) any reserves established in
14
respect of the sales price of such asset for post-closing adjustments,
indemnification purposes or employee termination expenses.
"NET CASH PROCEEDS" means, with respect to any issuance or sale of
Capital Stock, the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, printing costs, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees and
expenses actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.
"NEW CREDIT FACILITY" means that certain agreement, dated as of
February 22, 2001, among Spectrasite Communications, Inc., as borrower,
Spectrasite Holdings, Inc., as a guarantor, CIBC World Markets Corp. and Credit
Suisse First Boston, as joint lead arrangers and bookrunners, CIBC World Markets
Corp., Credit Suisse First Boston, Bank of Montreal, Chicago Branch and TD
Securities (USA) Inc., as arrangers, Credit Suisse First Boston, as syndication
agent, Bank of Montreal, Chicago Branch and TD Securities (USA) Inc., as
co-documentation agents, Canadian Imperial Bank of Commerce as Administrative
Agent and Collateral Agent, and the other credit parties party thereto, in each
case, as amended, restated, supplemented, extended, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time, including any such
amendment, restatement, supplement, extension, modification, renewal, refunding,
replacement or refinancing that increases the amount borrowable thereunder or
alters the maturity thereof.
"NON-RECOURSE DEBT" means Indebtedness (i) as to which neither the
Parent nor any Restricted Subsidiary (a) provides any Guarantee or credit
support of any kind (including any undertaking, Guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise) and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Parent or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"NOTEHOLDERS" or "HOLDERS" means the registered holders from time to
time of the Term Notes.
"NYSE" means The New York Stock Exchange, Inc.
"OFFICER" means the Chairman of the Board, the President, the Chief
Executive Officer, any Vice President, the Chief Financial Officer, the
Treasurer or the Secretary of the Parent or Intermediate Holdco, as applicable.
"OFFICER'S CERTIFICATE" means a certificate signed by any Officer.
15
"PARENT NOTES" shall mean, collectively, the Parent's 6-3/4%
Convertible Notes due 2010, the Parent's 10-3/4% Notes due 2010, the Parent's
11-1/4% Notes due 2009, the Parent's 12% Notes due 2008, the Parent's 12-1/2%
Notes due 2010 and the Parent's 12-7/8% Notes due 2010.
"PARENT NOTES INDENTURES" shall mean, collectively, (a) that certain
Indenture dated as of June 26, 1998, between Parent, as issuer, and the
Indenture Trustee, in respect of the Parent's 12% Notes due 2008, (b) that
certain Indenture dated as of April 20, 1999, between Parent, as issuer, and the
Indenture Trustee, in respect of the Parent's 11-1/4% Notes due 2009, (c) that
certain Indenture dated as of March 15, 2000, between Parent, as issuer, and the
Indenture Trustee, in respect of the Parent's 10-3/4% Notes due 2010, (d) that
certain Indenture dated as of March 15, 2000, between Parent, as issuer, and the
Indenture Trustee, in respect of the Parent's 12-7/8% Notes due 2010, (e) that
certain Indenture dated as of November 20, 2000, in respect of the Parent's
6-3/4% Convertible Notes due 2010, and (f) that certain Indenture dated as of
December 20, 2000, in respect of the Parent's 12-1/2% Notes due 2010, in each
case as amended heretofore.
"PERMITTED ACQUISITION INDEBTEDNESS" means Indebtedness or acquired
debt in an aggregate principal amount not to exceed $50.0 million at any one
time outstanding, incurred or assumed in connection with the acquisition of an
entity that is engaged in a Permitted Business and that becomes a Restricted
Subsidiary or the acquisition of any assets constituting a business or line of
business as determined by the Board of Directors, that is a Permitted Business
or incurred by such entity or the owner of such assets and outstanding on the
date of such acquisition.
"PERMITTED BUSINESS" means any business conducted by the Parent and its
Restricted Subsidiaries on the Issue Date and any other business related,
ancillary or complementary to any such business.
"PERMITTED HIGH-YIELD SECURITIES" shall mean, collectively, (a)
preferred equity securities issued by Parent, and (b) other debt securities
issued by Parent (including, without limitation, any debt securities convertible
into Capital Stock of Parent), as an "add-on" under the Parent Notes Indentures
or otherwise; PROVIDED, that in each case, the terms and conditions of such
securities (i) shall not be substantially more onerous (taken as a whole) on
Parent (as determined in good faith by Parent's Board of Directors) than the
terms of the Parent Notes Indentures (except for an increase in the interest
rate payable thereon to the extent provided in clauses (ii)(A)(II) and (ii)(B)
below); and (ii) shall provide, among other things, that (A) in the case of
discount notes, neither dividends nor interest shall be payable (I) in cash at
any time prior to the third anniversary of the Issue Date or (II) at a rate
greater than eighteen percent (18%) per annum; (B) in the case of any such debt
or equity securities with a cash pay component thereof, the aggregate principal
amount thereof and the interest or dividend rate applicable thereto shall be no
greater than the principal amount and/or the interest or dividend rate with
respect to which SpectraSite Communications Inc. has
16
demonstrated pro forma compliance with the terms of the New Credit Facility to
the extent required by the New Credit Facility and (C) such securities shall
have no required cash redemptions (other than customary change of control and
asset sale redemption provisions) or principal maturities prior to the day after
the first anniversary of the Maturity Date.
"PERMITTED HOLDERS" means any or all of Stephen H. Clark, David P.
Tomick, Welsh, Carson, Anderson & Stowe, VIII, L.P., Welsh, Carson, Anderson &
Stowe IX, L.P., WCAS Management Corporation, WCAS Information Partners, L.P.,
WCAS Capital Partners III, L.P., their respective general partners, employees of
Welsh, Carson, Anderson & Stowe, and the respective Affiliates of each of the
foregoing.
"PERMITTED INVESTMENT" means an Investment by the Parent or any
Restricted Subsidiary in (i) the Parent, a Wholly Owned Subsidiary or a Person
which will, upon the making of such Investment, become a Wholly Owned
Subsidiary, PROVIDED that a loan or other extension of credit by the Parent or a
Restricted Subsidiary to a Restricted Subsidiary that is not a Wholly Owned
Subsidiary also will constitute a "Permitted Investment"; and PROVIDED FURTHER
that a Permitted Business is the primary business of the Person in which any
such Investment is made; (ii) another Person if as a result of such Investment
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Parent or a Restricted
Subsidiary; PROVIDED, that such Person's primary business is a Permitted
Business, (iii) Temporary Cash Investments, (iv) receivables owing to the Parent
or any Restricted Subsidiary, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;
PROVIDED, that such trade terms may include such concessionary trade terms as
the Parent or any such Restricted Subsidiary deems reasonable under the
circumstances, (v) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business,
(vi) loans or advances to employees made in the ordinary course of business
consistent with past practice of the Parent or such Restricted Subsidiary, but
in any event not to exceed $2.0 million in the aggregate outstanding at any one
time, (vii) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Parent or any
Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of a
debtor, (viii) any Person to the extent such investment represents the non-cash
portion of the consideration received for an Asset Disposition as permitted
pursuant to Section 11.06, (ix) Capital Stock of the Parent or any Restricted
Subsidiary purchased, redeemed or otherwise acquired or retired for value from
members of either of the Issuers' management or employees, but in any event not
to exceed $2.0 million in the aggregate in any twelve-month period, (x) other
Investments in Permitted Businesses not to exceed, at any one time outstanding
(each such Investment being measured as of the date made and without giving
effect to subsequent changes in value), the sum
17
of (1) $10.0 million and (2) 10% of the Parent's Consolidated Tangible Assets,
(xi) any Interest Rate Agreement or Currency Agreement, (xii) any acquisition of
assets to the extent consideration therefor consists of Capital Stock (other
than Disqualified Stock) of the Parent, (xiii) prepaid expenses, negotiable
instruments held for collection and lease, utility and workers' compensation,
performance and other similar deposits, (xiv) deposits of proceeds from Asset
Dispositions with a "qualified intermediary," "qualified trustee" or similar
person for purposes of facilitating a "like-kind" exchange made in accordance
with the applicable provisions of the Internal Revenue Code of 1986, as amended;
PROVIDED, that the making of any Permitted Investment pursuant to this clause
(xiv) will not in any manner violate Section 11.06, (xv) Investments made out of
the Net Cash Proceeds or Qualified Proceeds of the issuance or sale, other than
to a Subsidiary of the Parent, of Capital Stock of the Parent, other than
Disqualified Stock, since the Issue Date, to the extent that such Net Cash
Proceeds or Qualified Proceeds have not been applied to make a Restricted
Payment or to effect other transactions pursuant to Section 11.04 or to the
extent such Net Cash Proceeds or Qualified Proceeds have not been used to Incur
Indebtedness and (xvi) other Investments not to exceed at any one time
outstanding $75.0 million.
"PERMITTED LIENS" means, with respect to any Person, (i) pledges or
deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case incurred in the ordinary course of business, (ii) Liens imposed by
law, such as carriers', warehousemen's, landlords' and mechanics' Liens, in each
case for sums not yet due or being contested in good faith by appropriate
proceedings, or judgment Liens not giving rise to an Event of Default so long as
any appropriate legal proceedings which may have been duly initiated for the
review of such judgment shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have expired, (iii)
Liens for property taxes not yet subject to penalties for non-payment or which
are being contested in good faith by appropriate proceedings, (iv) Liens in
favor of issuers of surety bonds or letters of credit issued pursuant to the
request of and for the account of such Person in the ordinary course of its
business, (v) survey exceptions, encumbrances, easements or reservations of, or
rights of others for, licenses, rights of way, sewers, electric lines, telegraph
and telephone lines and other similar purposes, or zoning or other restrictions
as to the use of real properties or liens incidental to the conduct of the
business of such Person or to the ownership of its properties which were not
incurred in connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person, (vi) Liens securing
Hedging Obligations so long as the related Indebtedness is, and is permitted to
be under the Term Notes, secured by a Lien
18
on the same property securing such Hedging Obligations, (vii) leases and
subleases of real property which do not interfere with the ordinary conduct of
the business of the Parent or any of its Restricted Subsidiaries, and Liens
securing the obligations (other than Indebtedness) of the Parent or any of the
Restricted Subsidiaries under any such leases and subleases of real property,
(viii) Liens existing as of the Issue Date and Liens securing the Term Notes,
(ix) Liens created solely for the purpose of securing the payment of all or a
part of the purchase price of assets or property acquired or constructed in the
ordinary course of business after the Issue Date; PROVIDED, that (A) the
Indebtedness secured by such Liens shall have otherwise been permitted to be
issued under this Term Note and (B) such Liens shall not encumber any other
assets or property of the Parent or any of its Restricted Subsidiaries, (x)
Liens on the assets or property of a Restricted Subsidiary of the Parent
existing at the time such Restricted Subsidiary became a Subsidiary of the
Parent and not incurred as a result of (or in connection with or in anticipation
of) such Restricted Subsidiary becoming a Subsidiary of the Parent; PROVIDED,
that (A) any such Lien does not by its terms cover any property or assets after
the time such Restricted Subsidiary becomes a Subsidiary which were not covered
immediately prior to such transaction, (B) the Incurrence of the Indebtedness
secured by such Lien shall have otherwise been permitted to be issued under this
Term Note, and (C) such Liens do not extend to or cover any other property or
assets of the Parent or any of its Restricted Subsidiaries, (xi) Liens securing
Indebtedness outstanding under a Credit Facility and any other Liens securing
Indebtedness permitted under this Term Note to be Incurred by a Restricted
Subsidiary, (xii) Liens extending, renewing or replacing in whole or in part a
Lien permitted by the Term Notes; PROVIDED, that (A) such Liens do not extend
beyond the property subject to the existing Lien and improvements and
construction on such property and (B) the Indebtedness secured by the Lien may
not exceed the Indebtedness secured at the time by the existing Lien, (xiii)
Liens Incurred in the ordinary course of business by the Parent or any
Restricted Subsidiary of the Parent with respect to obligations that do not
exceed $25.0 million at any one time outstanding and that (A) are not Incurred
in connection with the borrowing of money or the obtaining of advances of credit
(other than trade credit in the ordinary course of business) and (B) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Parent or such
Restricted Subsidiary, (xiv) Liens in favor of Intermediate Holdco or a Wholly
Owned Subsidiary, (xv) any interest in or title of a lessor to any property
subject to Capitalized Lease Obligations permitted to be Incurred under this
Term Note, (xvi) Liens on the Capital Stock of Unrestricted Subsidiaries, (xvii)
the Liens granted pursuant to the terms of the Security and Subordination
Agreement, as amended, modified or supplemented from time to time, entered into
pursuant to the terms of the Agreement and Plan of Merger, dated as of February
10, 1999, among Parent, SpectraSite Communications, Inc., SHI Merger Sub, Inc.,
Nextel Communications, Inc. and certain of its subsidiaries; (xviii) Liens,
rights of set-off or similar rights and remedies as to deposit accounts or other
funds maintained with a depository or other financial institution, (xix) Liens
on property subject to
19
Capitalized Lease Obligations to the extent the related Capitalized Lease
Obligation is permitted to be incurred under Section 11.02 or Section 11.03 of
this Term Note, (xx) Liens on property of an Issuer or a Restricted Subsidiary
at the time such Issuer or Restricted Subsidiary acquired the property,
including any acquisition by means of a merger or consolidation with or into
either Issuer or any Restricted Subsidiary; provided that such Liens are not
created, incurred or assumed in connection with, or in contemplation of, such
acquisition, and PROVIDED further that such Liens may not extend to any other
property owned by the Parent or any Restricted Subsidiary, and (xxi) Liens on
government securities that secure Indebtedness, to the extent that such
government securities are purchased with the proceeds of such Indebtedness.
"PERMITTED TRANSFEREE" has the meaning assigned to such term in the
Stockholders Agreement.
"PERSON" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"PLEDGE AGREEMENT" means the Pledge Agreement dated as of the Issue
Date among Parent, the lenders party to the New Credit Facility and the
Noteholders and [ ], as Collateral Agent, as amended, amended and restated or
otherwise modified from time to time.
"PREFERRED STOCK" means, as applied to the Capital Stock of any Person,
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"QUALIFIED PROCEEDS" means assets that are used or useful in, or
Capital Stock of any Person engaged in, a Permitted Business.
"RECORD DATE" means, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have the right
to receive any cash, securities or other property or in which the Common Stock
(or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
"REFINANCE" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, purchase, defease or retire, or to
issue other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
20
"REFINANCING INDEBTEDNESS" means Indebtedness that Refinances any
Indebtedness of the Parent or any Restricted Subsidiary existing on the date of
this Term Note or Incurred in compliance with this Term Note (including
Indebtedness of the Parent that Refinances Indebtedness of any Restricted
Subsidiary, and Indebtedness of any Restricted Subsidiary that Refinances
Indebtedness of another Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary that Refinances Indebtedness of a Restricted Subsidiary guaranteed or
co-issued by the Parent) including Indebtedness that Refinances Refinancing
Indebtedness; PROVIDED that (i) the Refinancing Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the Indebtedness being
Refinanced, (ii) the Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Indebtedness being Refinanced and (iii) such Refinancing
Indebtedness is Incurred in an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is equal to or less than
the sum of the aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding or committed (plus fees
and expenses, including any premium and defeasance costs) under the Indebtedness
being Refinanced; PROVIDED FURTHER that Refinancing Indebtedness shall not
include (x) Indebtedness of a Subsidiary of the Parent that Refinances
Indebtedness of the Parent (it being understood that Indebtedness of a
Subsidiary may refinance Indebtedness of a Subsidiary co-issued or guaranteed by
Parent), (y) Indebtedness of a Subsidiary of the Parent other than Intermediate
Holdco that refinances Indebtedness of Intermediate Holdco or (z) Indebtedness
of the Parent or a Subsidiary of the Parent that refinances Indebtedness of an
Unrestricted Subsidiary.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of the Issue Date among the Parent and the other parties thereto (as
amended from time to time).
"RELATED AGREEMENTS" means the Funding Agreement and the "Ancillary
Agreements", as such term is defined in the Funding Agreement, in each case as
amended from time to time.
"REQUIRED NOTEHOLDERS" means, as of any date, Noteholders holding at
least a majority of the Outstanding Principal Amount of Term Notes outstanding
on such date.
"RESTRICTED PAYMENT" means, with respect to any Person, (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock or similar payment to the direct or indirect
holders of its Capital Stock in respect thereof (other than (a) dividends or
distributions payable solely in its Capital Stock (other than Disqualified
Stock), (b) dividends or distributions payable solely to a Restricted
Subsidiary, and (c) pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the
21
case of a Subsidiary that is an entity other than a corporation)), (ii) the
purchase, redemption or other acquisition or retirement for value of any Capital
Stock of the Parent held by any Person or of any Capital Stock of a Restricted
Subsidiary held by any Person (other than the Parent or a Restricted
Subsidiary), other than the exercise by the Parent of any option to convert or
exchange any Capital Stock into Indebtedness so long as such Indebtedness is
permitted to be Incurred as of the date of such exercise pursuant to this Term
Note, and other than as permitted by clause (ix) of the definition of "Permitted
Investments", (iii) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment of any Indebtedness of the Parent
(excluding the Term Notes and any other Indebtedness consisting of a guarantee
or co-issuance of Indebtedness of a Subsidiary), the Exchange Notes or any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Indebtedness of the Parent, the Exchange Notes or Subordinated
Obligations purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of the
date of acquisition), or (iv) the making of any Investment in any Person (other
than a Permitted Investment).
"RESTRICTED SUBSIDIARY" means Intermediate Holdco and any other
Subsidiary of the Parent other than an Unrestricted Subsidiary.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating to property
now owned or hereafter acquired whereby the Parent or a Restricted Subsidiary
transfers such property to a Person and the Parent or a Restricted Subsidiary
leases it from such Person.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Parent within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"SITE MANAGEMENT CONTRACT" means any agreement pursuant to which the
Parent or any Restricted Subsidiary has the right to substantially control Tower
Assets and the revenues derived from the rental or use thereof.
"STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred); PROVIDED that the "STATED MATURITY" of the Term Notes shall be the
date set forth in clause (i) of the definition of "Maturity Date".
22
"STOCKHOLDERS AGREEMENT" means the Fourth Amended and Restated
Stockholders Agreement among the Parent and certain shareholders of the Parent,
dated as of the Issue Date (as amended from time to time).
"SUBORDINATED OBLIGATION" means any Indebtedness of the Parent or
Intermediate Holdco (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to this Term Note
pursuant to a written agreement.
"SUBSIDIARY" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"TEMPORARY CASH INVESTMENTS" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within one year of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $500.0 million (or the foreign currency
equivalent thereof) and whose long-term debt is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
investments in commercial paper, maturing not more than 270 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Parent)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard &
Poor's Ratings Group, and (v) investments in securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by Moody's Investors Service, Inc.
"TOWER ASSET EXCHANGE" means any transaction in which the Parent or a
Restricted Subsidiary exchanges assets for Tower Assets or Tower Assets and
23
cash or cash equivalents where the fair market value (evidenced by a resolution
of the Board of Directors set forth in an Officer's Certificate delivered to the
Noteholders) of the Tower Assets and cash or cash equivalents received by the
Parent and its Restricted Subsidiaries in such exchange is at least equal to the
fair market value of the assets disposed in such exchange.
"TOWER ASSETS" means communication transmission towers and related
assets that are located on the site of a transmission tower.
"TOWER EBITDA" means, for any period, the EBITDA of the Parent and its
Restricted Subsidiaries for such period that is directly attributable to site
rental revenue, license or management fees paid to manage, lease or sublease
space on communication sites owned, leased or managed by the Parent
(collectively, "site leasing revenues"), all determined on a consolidated basis
and in accordance with GAAP. Tower EBITDA will not include revenue derived from
the sale of assets. In allocating, corporate, general, administrative and other
operating expenses that are not allocated to any particular line of business in
the financial statements of the Parent, such expenses shall be allocated to the
Parent's site leasing business in proportion to the percentage of the Parent's
total revenues for the applicable period that were site leasing revenues.
"TRADING DAY" means (i) if the Common Stock is quoted on NASDAQ, a day
on which trades may be made thereon, (ii) if the Common Stock is listed or
admitted for trading on the NYSE or another national securities exchange, a day
on which the NYSE or such other national securities exchange is open for
business or (iii) if the Common Stock is not so listed, admitted for trading or
quoted, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"TRANSACTIONS" means (a) the issue and sale by the Issuers of the Notes
and the use of the proceeds therefrom as contemplated by the Funding Agreement
and (b) the issue and sale of the Exchange Notes in exchange for certain of the
Parent's outstanding Parent High-Yield Debt on the terms described in the
offering circular dated May [__], 2002, as the same may be amended, modified or
supplemented prior to the Issue Date.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Parent that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Parent (including any newly acquired or newly formed Subsidiary of the
Parent but excluding Intermediate Holdco) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or owns or holds any Lien on any property of, the Parent or any
other Restricted Subsidiary of the Parent that is not a Subsidiary of the
Subsidiary to be so designated; PROVIDED, that either (A) the Subsidiary to be
so designated has
24
total consolidated assets of $1,000 or less or (B) if such Subsidiary has
consolidated assets greater than $1,000, then such designation would be
permitted under Section 11.04. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that (a)
immediately after giving effect to such designation, no Default shall have
occurred and be continuing and (b) such designation shall be deemed to be an
Incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if such Indebtedness is permitted under this Term Note. Any such
designation by the Board of Directors shall be evidenced to the Holder by
promptly delivering to the Holder a copy of the Board Resolution giving effect
to such designation and an Officer's Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"VOTING PRICE" means $[ ] (a price equal to the volume-weighted average
price per share of Common Stock for the 5 consecutive Trading Days immediately
prior to [ ], 20021, as published by Bloomberg (using the "volume average price"
function or its equivalent) subject to anti-dilution adjustment from time to
time as provided in Section 4.05(a) or Section 4.05(c).
"VOTING STOCK" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers, or trustee thereof.
"WHOLLY OWNED SUBSIDIARY" means a Restricted Subsidiary of the Parent
all the Capital Stock of which (other than directors' qualifying shares) is
owned by the Parent or another Wholly Owned Subsidiary.
ARTICLE 4
CONVERSION AT THE OPTION OF THE HOLDER
Section 4.01. RIGHT TO CONVERT. (a) Subject to and upon compliance with
the provisions of this Term Note, the Holder shall have the right, at its
option, at any time after Parent Stockholder Approval (as defined in the Funding
Agreement) through the close of business on the Maturity Date to convert the
Outstanding Principal Amount of this Term Note, or any portion of such
- ------------------------
1 Date of signing
25
Outstanding Principal Amount which is $1,000 or an integral multiple thereof,
into that number of fully paid and non-assessable shares of Common Stock (as
such shares shall then be constituted) obtained by dividing the Outstanding
Principal Amount (excluding accrued and unpaid interest) of this Term Note or
portion thereof surrendered for conversion by the Conversion Price in effect at
such time, by surrender of this Term Note so to be converted in whole or in part
in the manner provided in Section 4.02. In connection with any such conversion,
the Holder also shall have the right to receive a payment (each, a "CONVERSION
INTEREST PAYMENT"), at the time and in the manner provided in Section 4.02, of
the accrued and unpaid interest with respect to the portion of the Outstanding
Principal Amount of this Term Note so converted, which payment shall be made as
set forth below. The Holder is not entitled to any rights of a holder of Common
Stock until the Holder has converted this Term Note to Common Stock, and only to
the extent this Term Note is deemed to have been converted to Common Stock under
this Article 4. Notwithstanding any call for redemption of this Term Note
pursuant to Article 5 and notwithstanding the prior delivery of any Optional
Redemption Notice, the right to convert this Term Note shall terminate at the
close of business on the Business Day immediately preceding the Optional
Redemption Date, unless the Issuers shall default in making payment of the
Optional Redemption Price.
The Issuers may elect to pay any Conversion Interest Payment in (i)
cash, (ii) shares of Common Stock (which will be valued for this purpose at 95%
of the average of the daily Closing Prices per share of Common Stock for the
five consecutive Trading Days immediately prior to the Conversion Date) or (iii)
any combination thereof.
(b) Notwithstanding anything herein to the contrary, the Holder
shall not have the right to convert all or any part of this Term Note into
shares of Common Stock unless the Parent's stockholders have approved the
issuance of the Common Stock upon conversion of this Term Note in accordance
with the rules and regulations of NASDAQ and an amendment to Parent's
certificate of incorporation authorizing a sufficient number of shares of Common
Stock.
Section 4.02. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON
STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to
exercise the conversion privilege with respect to this Term Note, the Holder
shall surrender this Term Note at the address of the Parent set forth in Article
22 and shall give written notice of conversion in the form attached hereto (or
such other notice as is acceptable to the Issuers) to such address that the
Holder elects to convert this Term Note or the portion hereof specified in said
notice. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued, and shall be
accompanied by transfer taxes, if required pursuant to Section 4.04. If this
Term Note is surrendered for conversion, it shall, unless the shares issuable on
conversion are to be issued in the same name as the registration of this Term
Note, be duly endorsed by, or be
26
accompanied by instruments of transfer in form satisfactory to the Issuers duly
executed by, the Holder or its duly authorized attorney.
As promptly as practicable, but no later than five days (such fifth
day, the "SHARE DELIVERY DATE"), after satisfaction of the requirements for
conversion set forth above, the Parent shall issue and shall deliver to the
Holder at the address of the Holder appearing on the Term Notes Register, (i) a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of this Term Note or portion hereof (including any
shares of Common Stock issued in respect of a Conversion Interest Payment) as
determined in accordance with the provisions of this Article 4, (ii) a check or
cash in respect of any fractional interest in respect of a share of Common Stock
arising upon such conversion as provided in Section 4.03 and (iii) a check or
cash in an amount equal to the Conversion Interest Payment (or any portion
thereof) not paid in shares of Common Stock as described above. In case this
Term Note shall be surrendered for partial conversion, the Issuers shall, as
soon as practicable and in no event later than five days following delivery of
this Term Note, execute and deliver to the Holder without charge a new Term Note
or Term Notes in authorized denominations in an aggregate principal amount equal
to the unconverted portion of the surrendered Term Note.
Each conversion shall be deemed to have been effected as to this Term
Note (or portion hereof) on the date (the "CONVERSION DATE") on which the
requirements set forth above in the first paragraph of this Section 4.02 have
been satisfied, and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become on said date the holder of record of the shares represented thereby;
PROVIDED, that any such surrender on any date when the stock transfer books of
the Parent shall be closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
this Term Note shall be surrendered.
No adjustment in respect of interest on any Term Note converted or
dividends on any shares issued upon conversion of such Term Note will be made
upon any conversion except as set forth herein.
Section 4.03. NO ISSUANCE OF FRACTIONAL SHARES. No fractional shares of
Common Stock or scrip representing fractional shares shall be issued upon
conversion of this Term Note (including as part of any Conversion Interest
Payment). If more than one Term Note shall be surrendered for conversion at one
time by the Holder, the number of full shares that shall be issuable upon
conversion shall be computed on the basis of the aggregate Outstanding Principal
Amount of the Term Notes (or specified portions thereof to the extent permitted
hereby and thereby) so surrendered, including any shares of Common Stock to be
issued as part of a Conversion Interest Payment. If any fractional share of
stock
27
would be issuable upon the conversion of any Term Note or Term Notes by the
Holder (including as part of any Conversion Interest Payment), the Parent shall,
at the Parent's option, make an adjustment and payment to the Holder therefor in
cash at the Closing Price per share of Common Stock on the last Business Day
immediately preceding the Conversion Date or the Parent will round up the number
of shares issuable upon such conversion to the next highest whole number of
shares.
Section 4.04. TAXES ON SHARES ISSUED. The issuance of stock
certificates on conversions of this Term Note shall be made without charge to
the Holder for any tax in respect of the issue or transfer thereof. The Issuers
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of stock in any name other
than that of the Holder, and the Issuers shall not be required to issue or
deliver any such stock certificate unless and until the Person or Persons
requesting the issue thereof shall have paid to the Issuers the amount of such
tax or shall have established to the satisfaction of the Issuers that such tax
has been paid.
Section 4.05. ADJUSTMENT OF CONVERSION PRICE. The Conversion Price
shall be adjusted from time to time by the Issuers as follows:
(a) In case the Parent shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect at the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution by a
fraction, the numerator of which shall be the number of shares of the Common
Stock outstanding at the close of business on the date fixed for such
determination, and the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. If any
dividend or distribution of the type described in this Section 4.05(a) is
declared but not so paid or made, the Conversion Price shall again be adjusted
to the Conversion Price that would then be in effect if such dividend or
distribution had not been declared.
(b) In case the Parent shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within 45 days after the date fixed for determination of stockholders
entitled to receive such rights or warrants) to subscribe for or purchase shares
of Common Stock at a price per share less than the Current Market Price on the
date fixed for determination of stockholders entitled to receive such rights or
warrants, the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date fixed for determination of stockholders entitled to receive
such rights or warrants by a fraction, the numerator of which shall be the
number of shares of
28
Common Stock outstanding at the close of business on the date fixed for
determination of stockholders entitled to receive such rights or warrants plus
the number of shares that the aggregate offering price of the total number of
shares so offered would purchase at such Current Market Price, and the
denominator of which shall be the number of shares of Common Stock outstanding
on the date fixed for determination of stockholders entitled to receive such
rights or warrants plus the total number of additional shares of Common Stock
offered for subscription or purchase. Such adjustment shall be successively made
whenever any such rights or warrants are issued, and shall become effective
immediately after the opening of business on the day following the date fixed
for determination of stockholders entitled to receive such rights or warrants.
To the extent that shares of Common Stock are not delivered after the expiration
of such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price that would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Parent for such rights or warrants and any amount
payable on exercise or conversion thereof, the value of such consideration, if
other than cash, to be determined by the Board of Directors (including a
majority of the disinterested directors).
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case the Parent shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Parent (other than any dividends or distributions to which Section 4.05(a)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 4.05(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 4.05(a) (any of the foregoing hereinafter in this Section 4.05(d) called
the "Securities")), then, in each such case (unless the Parent elects to reserve
such Securities for
29
distribution to the Holder upon the conversion of this Term Note so that the
Holder will receive upon such conversion, in addition to the shares of Common
Stock to which the Holder is entitled, the amount and kind of such Securities
which the Holder would have received if the Holder had converted this Term Note
into Common Stock immediately prior to the Record Date for such distribution of
the Securities), the Conversion Price shall be reduced so that the same shall be
equal to the price determined by multiplying the Conversion Price in effect on
the Record Date with respect to such distribution by a fraction, the numerator
of which shall be the Current Market Price per share of the Common Stock on such
Record Date less the fair market value (as determined by the Board of Directors
(including a majority of the disinterested directors) and described in a
resolution of the Board of Directors) on the Record Date of the portion of the
Securities so distributed applicable to one share of Common Stock and the
denominator of which shall be the Current Market Price per share of the Common
Stock on such Record Date, such reduction to become effective immediately prior
to the opening of business on the day following such Record Date; PROVIDED, that
in the event the then fair market value (as so determined) of the portion of the
Securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that the
Holder receives at such time, or shall have the right to receive upon
conversion, the amount of Securities the Holder would have received had the
Holder converted this Term Note on the Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 4.05(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Stock.
Rights or warrants distributed by the Parent to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Parent's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events (each a
"TRIGGER EVENT"): (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not immediately exercisable and (iii) are also issued in respect
of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 4.05 (and no adjustment to the
Conversion Price under this Section 4.05 will be required) until the occurrence
of the earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment (if any is
required) to the Conversion Price shall be made under this Section 4.05(d).
If any such right or warrant, including any such existing right or
warrant distributed prior to the date of this Term Note, is subject to events,
upon the occurrence of which such right or warrant becomes exercisable to
purchase
30
different securities, evidences of indebtedness or other assets, then the date
of the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 4.05
was made, (i) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder or holders of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase and (ii) in the case of such rights or warrants that shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.
No adjustment of the Conversion Price shall be made pursuant to this
Section 4.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Parent for distribution, to the Holder
upon conversion by the Holder of this Term Note to Common Stock. For purposes of
this Section 4.05(d) and Sections 4.05(a) and (b), any dividend or distribution
to which this Section 4.05(d) is applicable that also includes shares of Common
Stock, or rights or warrants to subscribe for or purchase shares of Common Stock
(or both), shall be deemed instead to be (i) a dividend or distribution of the
evidences of indebtedness, assets or shares of capital stock other than such
shares of Common Stock or rights or warrants (and any Conversion Price reduction
required by this Section 4.05(d) with respect to such dividend or distribution
shall then be made) immediately followed by (ii) a dividend or distribution of
such shares of Common Stock or such rights or warrants (and any further
Conversion Price reduction required by Sections 4.05(a) and (b) with respect to
such dividend or distribution shall then be made), except (x) the Record Date of
such dividend or distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution", "the date fixed for the determination of stockholders entitled to
receive such rights or warrants" and "the date fixed for such determination"
within the meaning of Sections 4.05(a) and (b), and (y) any shares of Common
Stock included in such dividend or distribution shall not be deemed "outstanding
at the close of business on the date fixed for such determination" within the
meaning of Section 4.05(a).
(e) In case the Parent shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding (i) any quarterly cash
dividend on
31
the Common Stock to the extent the aggregate cash dividend per share of Common
Stock in any fiscal quarter does not exceed the greater of (x) the amount per
share of Common Stock of the next preceding quarterly cash dividend on the
Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 4.05(e)
(as adjusted to reflect subdivisions, or combinations of the Common Stock), and
(y) 3.75% of the average of the Closing Prices per share of Common Stock for the
ten Trading Days immediately prior to the date of declaration of such dividend,
and (ii) any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Parent, whether voluntary or involuntary),
then, in such case, the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on such record date by a fraction,
the numerator of which shall be the Current Market Price of the Common Stock on
the record date less the amount of cash so distributed (and not excluded as
provided above) applicable to one share of Common Stock, and the denominator of
which shall be such Current Market Price of the Common Stock, such reduction to
be effective immediately prior to the opening of business on the day following
the record date; PROVIDED, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that the Holder shall
have the right to receive upon conversion the amount of cash the Holder would
have received had the Holder converted this Term Note on the record date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price that would then be in
effect if such dividend or distribution had not been declared. If any adjustment
is required to be made as set forth in this Section 4.05(e) as a result of a
distribution that is a quarterly dividend, such adjustment shall be based upon
the amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant hereto. If an adjustment is required
to be made as set forth in this Section 4.05(e) above as a result of a
distribution that is not a quarterly dividend, such adjustment shall be based
upon the full amount of the distribution.
(f) In case a tender or exchange offer made by the Parent or any
Subsidiary of the Parent for all or any portion of the Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to stockholders of consideration per share of Common Stock
having a fair market value (as determined by the Board of Directors (including a
majority of the disinterested directors), whose determination shall be
conclusive and described in a resolution of the Board of Directors) that as of
the last time (the "EXPIRATION TIME") tenders or exchanges may be made pursuant
to such tender or exchange offer (as it may be amended) exceeds the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction the numerator of which
shall be the number of
32
shares of Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the denominator
of which shall be the sum of (i) the fair market value (determined as aforesaid)
of the aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the "PURCHASED SHARES") and (ii) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) at the Expiration Time and
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately prior to the
opening of business on the Trading Day following the Expiration Time. In the
event that the Parent is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Parent is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person other
than the Parent or any Subsidiary of the Parent for an amount that increases the
offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding and shall involve the payment by such Person of consideration per
share of Common Stock having a fair market value (as determined by the Board of
Directors (including a majority of the disinterested directors), whose
determination shall be conclusive, and described in a resolution of the Board of
Directors) that as of the last time (the "OFFER EXPIRATION TIME") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended) that exceeds the Current Market Price of the Common Stock on
the Trading Day next succeeding the Offer Expiration Time, and in which, as of
the Offer Expiration Time the Board of Directors is not recommending rejection
of the offer, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the Offer Expiration Time by a fraction the numerator of which shall be
the number of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Offer Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the Offer
Expiration Time and the denominator of which shall be the sum of (i) the fair
market value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Offer Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "ACCEPTED PURCHASED SHARES") and
(ii) the product of the number of shares of Common Stock outstanding (less any
Accepted Purchased Shares) at the Offer Expiration Time and the Current Market
Price of the Common Stock on the Trading Day
33
next succeeding the Offer Expiration Time, such reduction to become effective
immediately prior to the opening of business on the Trading Day following the
Offer Expiration Time. In the event that such Person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such Person is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Price shall again be adjusted to be
the Conversion Price that would then be in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment described
in this Section 4.05(g) shall not be made if, as of the Offer Expiration Time,
the offering documents with respect to such offer disclose a plan or intention
to cause the Parent to engage in any transaction described in Article 7.
(h) To the extent permitted by applicable law, the Parent from
time to time may (but is not obligated to) reduce the Conversion Price by any
amount for any period of time if the period is at least 20 days, the reduction
is irrevocable during the period and the Board of Directors (including a
majority of the disinterested directors) shall have made a determination that
such reduction would be in the best interests of the Parent, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Parent shall mail to the Holder a notice of the
reduction at least 15 days prior to the date the reduced Conversion Price takes
effect, and such notice shall state the reduced Conversion Price and the period
during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; PROVIDED, that any adjustments that by reason of this Section 4.05(i) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article 4 shall be made by
the Board of Directors and shall be made to the nearest cent or to the nearest
one-hundredth (1/100) of a share, as the case may be. No adjustment need be made
for rights to purchase Common Stock pursuant to a Parent plan for reinvestment
of dividends or interest. To the extent this Term Note becomes convertible into
cash, assets, property or securities (other than capital stock of the Parent),
no adjustment need be made thereafter as to the cash, assets, property or such
securities. Interest will not accrue on the cash.
(j) Whenever the Conversion Price is adjusted as herein provided,
the Parent shall promptly prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the date on which each
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to the Holder at its last address appearing on the Term
Notes Register within 10 days after the date of such adjustment. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(k) For purposes of this Section 4.05, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Parent but shall include shares issuable in respect of scrip
certificates issued in
34
lieu of fractions of shares of Common Stock. The Parent will not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Parent.
(l) In any case in which Section 4.05 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to (a), (3) a date fixed for the
determination of stockholders entitled to receive rights or warrants pursuant to
(b), (4) the Expiration Time for any tender or exchange offer pursuant to (f),
or (5) the Offer Expiration Time for a tender or exchange offer pursuant to (g)
(each a "DETERMINATION DATE"), the Parent may elect to defer until the
occurrence of the relevant Adjustment Event (as hereinafter defined) (x) issuing
to the Holder of any Term Note converted after such Determination Date and
before the occurrence of such Adjustment Event, the additional shares of Common
Stock or other securities issuable upon such conversion by reason of the
adjustment required by such Adjustment Event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (y)
paying to such Holder any amount in cash in lieu of any fraction pursuant to
Section 4.03. For purposes of this clause (l), the term "ADJUSTMENT EVENT" shall
mean:
(1) in any case referred to in clause (1) hereof, the
occurrence of such event,
(2) in any case referred to in clause (2) hereof, the
date any such dividend or distribution is paid or made,
(3) in any case referred to in clause (3) hereof, the
date of expiration of such rights or warrants, and
(4) in any case referred to in clause (4) or clause (5)
hereof, the date a sale or exchange of Common Stock pursuant to such
tender or exchange offer is consummated and becomes irrevocable.
Section 4.06. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. Prior to the consummation of (i) any reclassification or change of the
outstanding shares of Common Stock (other than a subdivision or combination to
which Section 4.05(c) applies), (ii) any consolidation, merger or combination of
the Parent with another Person as a result of which holders of Common Stock
shall be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock or (iii)
any sale or conveyance of all or substantially all of the properties and assets
of the Parent to any other Person as a result of which holders of Common Stock
shall be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then (x)
the Parent or the successor or purchasing Person, or, if applicable, the parent
entity of such successor or purchasing Person (in each case, the "ACQUIRING
ENTITY"), as the
35
case may be, and (y) Intermediate Holdco shall deliver to the Holder a written
agreement to deliver, promptly following the consummation of any of the
foregoing events, to the Holder in exchange for this Term Note a security of the
Acquiring Entity and Intermediate Holdco evidenced by a written instrument
substantially similar in form and substance to this Term Note, including,
without limitation, having a principal amount equal to the Outstanding Principal
Amount of this Term Note, being of rank (relative to other Indebtedness of the
Acquiring Equity, its Subsidiaries and any parent entity of the Acquiring Entity
and to other Indebtedness of Intermediate Holdco, its Subsidiaries and any
parent entity of Intermediate Holdco) equal to this Term Note and being
convertible into the kind and amount of shares of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance by the holder of
a number of shares of Common Stock issuable upon conversion of this Term Note
(assuming, for such purposes, a sufficient number of authorized shares of Common
Stock are available to effect such conversion and shareholder approval has been
obtained) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming (i) such holder is not a Person
with which the Parent consolidated or into which the Parent merged or which
merged into the Parent or to which such sale or conveyance was made, as the case
may be, or an Affiliate of such a Person and (ii) such holder of Common Stock
did not exercise its rights of election, if any, as to the kind or amount of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance (PROVIDED that, if the kind or amount of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised ("NON-ELECTING SHARE"), then for the purposes of this
Section 4.06 the kind and amount of stock, other securities or other property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such security shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 4 and shall be in form and substance
reasonably satisfactory to the Required Noteholders.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 4.06 applies to any event or occurrence, Section 4.05
shall not apply.
36
Section 4.07. NOTICE TO HOLDER PRIOR TO CERTAIN ACTIONS. In case:
(a) the Parent shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Price pursuant to Section 4.05; or
(b) the Parent shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights or warrants to subscribe for
or purchase any share of any class or any other rights or warrants at a price
per share less than the Current Market Price; or
(c) of any reclassification or reorganization of the Common Stock
of the Parent (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Parent
is a party and for which approval of any stockholders of the Parent is required,
or of the sale or transfer of all or substantially all of the assets of the
Parent or any Significant Subsidiary; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Parent or any Significant Subsidiary;
the Parent shall cause to be mailed to the Holder at its address appearing on
the Term Notes Register, as promptly as possible but in any event at least ten
Business Days prior to the applicable date hereinafter specified, a notice
stating (i) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined or (ii) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
Section 4.08. RESERVATION OF SHARES; SHARES TO BE FULLY PAID;
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. Following
receipt of Parent Stockholder Approval (as defined in the Funding Agreement),
the Parent shall reserve, free from preemptive rights, out of its authorized but
unissued shares or shares held in treasury, sufficient shares of Common Stock to
provide for the conversion of this Term Note from time to time as this Term Note
is presented for conversion.
37
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of this Term Note (including shares that may be issued
as part of a Conversion Interest Payment), the Issuers will take all corporate
action which may, in the opinion of their counsel, be necessary in order that
the Parent may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Issuers covenant that all shares of Common Stock which may be
issued upon conversion of this Term Note (including shares that may be Issued as
part of a Conversion Interest Payment) will upon issue be fully paid and
non-assessable by the Parent and free from all taxes, liens and charges with
respect to the issue thereof.
The Issuers further covenant that, if at any time the Common Stock
shall be listed on NASDAQ or any other national securities exchange or automated
quotation system, the Parent will, if permitted by the rules of such exchange or
automated quotation system, list and keep listed, so long as the Common Stock
shall be so listed on such exchange or automated quotation system and subject to
any required shareholder approval, all Common Stock issuable upon conversion of
this Term Note (including shares that may be Issued as part of a Conversion
Interest Payment).
ARTICLE 5
REDEMPTION AT THE OPTION OF THE ISSUERS
Section 5.01. REDEMPTION AT OPTION OF THE ISSUERS. This Term Note may
not be redeemed by the Issuers, in whole or in part, on or prior to the third
anniversary of the Issue Date. At any time after the third anniversary of the
Issue Date, provided that the average of the daily Closing Prices per share of
Common Stock for the Trading Days in the three-month period (and for the five
consecutive Trading Days) immediately preceding the date on which the Optional
Redemption Notice is delivered by the Issuers exceeds $1.50 per share (as
adjusted to reflect any stock dividend, subdivision or combination subsequent to
the Issue Date), and subject to the Holder's conversion rights pursuant to
Article 4, the Issuers may deliver a written notice to the Holder (the "OPTIONAL
REDEMPTION NOTICE"), indicating that the Issuers have elected to redeem, and are
requiring the Holder to submit for redemption, subject to Section 5.01(c), this
Term Note for an amount in cash as set forth below (the "OPTIONAL REDEMPTION
PRICE"); PROVIDED, that the Issuers may not redeem all or any portion of the
Outstanding Principal Amount of this Term Note pursuant to this Section 5.01(a)
if (i) a Conversion Failure shall have occurred at any time prior to the
Optional Redemption Date which has not been cured by the Optional Redemption
Date by the delivery to the Holder of all shares of Common Stock and all other
amounts payable to the Holder in connection with any Conversion Failure or (ii)
an Event
38
of Default described in Section 16.01(b) or 16.01(c) shall have occurred and is
continuing. The Optional Redemption Price shall be equal to:
(i) if the Optional Redemption Date is prior to the fifth
anniversary of the Issue Date, 110% of the sum of the Outstanding
Principal Amount of this Term Note plus accrued and unpaid interest to
the Optional Redemption Date;
(ii) if the Optional Redemption Date is on or after the
fifth anniversary of the Issue Date, but on or prior to [ ]2, 105% of
the sum of the Outstanding Principal Amount of this Term Note plus
accrued and unpaid interest to the Optional Redemption Date; and
(iii) if the Optional Redemption Date is after [ ]2, 100%
of the sum of the Outstanding Principal Amount of this Term Note plus
accrued and unpaid interest to the Optional Redemption Date.
The Optional Redemption Notice shall be sent by facsimile and overnight
courier to the Holder and shall indicate (W) the date fixed for redemption,
which shall be not less than 30 days nor more than 60 days after the Holder's
receipt of the Optional Redemption Notice (the "OPTIONAL REDEMPTION DATE"), (X)
if less than the Outstanding Principal Amount of this Term Note is to be
redeemed in accordance with Section 5.01(c), the amount of this Term Note to be
redeemed, (Y) the place or places where this Term Note is to be surrendered for
payment of the Optional Redemption Price and (Z) that interest accrued on the
portion of this Term Note to be redeemed will cease to accrue on such Optional
Redemption Date. Once an Optional Redemption Notice is mailed in accordance with
this Section 5.01(a), this Term Note (or portion hereof called for redemption)
shall become irrevocably due and payable on the Optional Redemption Date at the
Optional Redemption Price. An Optional Redemption Notice may not be conditional.
(b) If the Issuers have elected to exercise their redemption right
pursuant to this Section 5.01, the Issuers shall pay to the Holder, in cash, on
the Optional Redemption Date, by wire transfer of immediately available funds to
an account designated in writing by the Holder, an amount equal to the Optional
Redemption Price. In the event that less than the Outstanding Principal Amount
of this Term Note is being redeemed in accordance with Section 5.01(c), then the
Issuers shall, at their own expense, issue and deliver within five days after
delivery to the Issuers of this Term Note, to the Holder a Term Note for the
Outstanding Principal Amount of this Term Note not redeemed by the Issuers.
An Optional Redemption Notice having been given as aforesaid, this Term
Note (or portion hereof to be redeemed) shall, on the Optional Redemption Date,
- ------------------------
2 Date that is 5 1/2 years after the Issue Date
39
become due and payable at the Optional Redemption Price therein specified and
from and after such date (unless the Issuers shall default in the payment of the
Optional Redemption Price and accrued interest) this Term Note (or portion
hereof that was redeemed) shall cease to bear interest. Upon surrender of this
Term Note for redemption in accordance with said notice, this Term Note (or
portion hereof to be redeemed) shall be paid by the Issuers at the Optional
Redemption Price. If this Term Note (or portion hereof called for redemption)
shall not be so paid upon surrender hereof for redemption, the Outstanding
Principal Amount hereof shall, until paid, bear interest from the Optional
Redemption Date at the rate borne by this Term Note.
If the applicable Optional Redemption Date is an Interest Payment Date,
the Interest Payment becoming due on such date shall be payable to the Holder
registered as such on the relevant record date.
(c) Notwithstanding anything herein to the contrary, the Issuers
(i) may not initially exercise their rights pursuant to Section 5.01(a) to
redeem less than two-thirds of the then Outstanding Principal Amount of this
Term Note, (ii) may only exercise their rights pursuant to Section 5.01(a)
hereof and Section 5.01(a) of the other Term Notes so as to redeem Term Notes
from all Noteholders in proportion to the Outstanding Principal Amount of all
Term Notes held by each such Noteholder on the applicable Optional Redemption
Date, (iii) may only redeem Term Notes pursuant to Section 5.01(a) if,
concurrently with such redemption, Parent and Intermediate Holdco redeem
Exchange Notes from all Exchange Note holders in a principal amount that bears
the same proportion to the total principal amount of outstanding Exchange Notes
immediately prior to such redemption as the proportion of Term Notes being
redeemed bears to the total principal amount of outstanding Term Notes
immediately prior to such redemption and (iv) may only redeem Term Notes
pursuant to Section 5.01(a) on or prior to the fourth anniversary of the Issue
Date if the following conditions are satisfied: (w) all, but not less than all,
of such Term Notes are redeemed at such time, (x) immediately after such
redemption (and the related redemption of Exchange Notes as required above) or
conversion of any Term Notes or Exchange Notes converted in connection therewith
(and giving effect to such redemption or conversion), the Indebtedness to
Adjusted EBITDA Ratio of the Parent shall not be greater than 4.0 to 1 or less
than zero and the business plan referred to in clause (y)(1) below projects that
the Indebtedness to Adjusted EBITDA Ratio of the Parent shall not be greater
than 4.0 to 1 or less than zero at any time prior to the fourth anniversary of
the Issue Date, (y) the New Credit Facility shall have been refinanced at or
prior to such time by a fully syndicated credit facility provided by a group of
commercial banks and other financial institutions that customarily participate
in commercial banking credit facilities, and such refinancing (1) provides
sufficient liquidity to fully fund the Parent's business plan most recently
approved by Parent's Board of Directors immediately prior to such time covering
the five years after the date of such optional redemption and (2) does not
require aggregate payments of principal thereunder in excess of $50.0 million
prior to the second anniversary of such redemption date and (z) no event of
default or event
40
that, with the lapse of time or giving of notice, would constitute an event of
default shall have occurred and be continuing under the New Credit Facility
after giving effect to such redemption. If the Issuers have previously exercised
their rights pursuant to Section 5.01(a), any subsequent exercise of redemption
rights pursuant to Section 5.01(a) must be made with respect to all, but not
less than all, of the Term Notes then outstanding.
In connection with any redemption, the Issues shall deliver to the
Holders an Officer's Certificate certifying that all conditions to such
redemption set forth in the Term Notes have been satisfied and providing
reasonable detail as to such satisfaction.
(d) If the Issuers elects to redeem this Term Note on or prior to
the fourth anniversary of the Issue Date, then the Parent agrees that,
thereafter (whether this Term Note is redeemed or converted prior to
redemption), it will not, and will not permit any Restricted Subsidiary, to
Incur, directly or indirectly, any Indebtedness or Preferred Stock unless, on
the date of such Incurrence and after giving effect to such Incurrence and the
application of the net proceeds therefrom, the Indebtedness to Adjusted EBITDA
Ratio of the Parent would be equal to or less than 4.00:1 but not less than
zero. This clause (d) shall remain in effect until and including the fourth
anniversary of the Issue Date notwithstanding the prior repayment in full of all
amounts outstanding under, or conversion of, this Term Note and may only be
waived after the Optional Redemption Date by Persons that constituted the
Required Noteholders immediately prior to such Optional Redemption Date and any
related conversions of Term Notes.
(e) For purposes of this Section 5.01, but not for any other
purpose, "Adjusted EBITDA", as of any date of determination, means the sum of
(i) the EBITDA of the Parent for the four most recent full fiscal quarters
ending prior to such date, less the Parent's Tower EBITDA for such four-quarter
period, plus (ii) the product of four times the Parent's Tower EBITDA for the
most recent quarterly period, without any further pro forma adjustment.
ARTICLE 6
OFFER TO REPURCHASE UPON CHANGE OF CONTROL
Section 6.01. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. In addition
to the rights of the Holder under this Term Note and the Related Agreements,
upon a Change of Control the Holder shall have the right, at such Holder's
option, to require the Issuers to redeem all or a portion of this Term Note at a
price equal to (i) 105% of the Outstanding Principal Amount hereof (excluding
accrued and unpaid interest) plus (ii) the accrued and unpaid interest hereon to
the date of repurchase (such amount, the "CHANGE OF CONTROL REDEMPTION PRICE").
Within 30 days following any Change of Control, the Issuers shall deliver
written notice thereof via facsimile and overnight courier (a
41
"NOTICE OF CHANGE OF CONTROL") to the Holder. The Notice of Change of Control
shall state:
(i) that a Change of Control has occurred and that the
Holder has the right to require the Issuers to purchase this Term Note
in denominations of $1,000 in Outstanding Principal Amount or any
integral multiple thereof (except that the Holder may elect to have the
entire Outstanding Principal Amount of this Term Note repurchased, even
if such amount is not an integral multiple of $1,000) at the Change of
Control Redemption Price;
(ii) the circumstances and relevant facts regarding such
Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization after giving effect to
such Change of Control);
(iii) the repurchase date (which shall be no earlier than
30 days nor later than 60 days from the date such notice is mailed);
and
(iv) the instructions determined by the Issuers,
consistent with this Section 6.01, that the Holder must follow in order
to have this Term Note purchased by the Issuers.
(b) The Holder may require the Issuers to redeem all or a portion
of this Term Note by surrendering this Term Note, together with all necessary
endorsements and other appropriate materials duly completed, to the Issuers at
the address specified in the notice at least three Business Days prior to the
purchase date. The Holder will be entitled to withdraw its election if the
Issuers receive not later than one Business Day prior to the purchase date, a
facsimile transmission or letter setting forth the name of the Holder, the
Outstanding Principal Amount of this Term Note which was delivered for purchase
by the Holder as to which such notice of withdrawal is being submitted and a
statement that the Holder is withdrawing its election to have this Term Note (or
portion hereof) purchased. Notwithstanding anything herein to the contrary, the
Holder shall continue to have the right to convert this Term Note into shares of
Common Stock pursuant to Article 4 hereof until such Holder has received payment
of the Change of Control Redemption Price.
(c) On the purchase date, the Issuers shall pay to the Holder, in
cash, the Change of Control Redemption Price by wire transfer of immediately
available funds to an account designated in writing by the Holder. In the event
that less than the Outstanding Principal Amount of this Term Note is being
repurchased in accordance with this Section 6.01, then the Issuers shall, at
their own expense, issue and deliver within five days after delivery to the
Issuers of this Term Note, to the Holder a Term Note for the Outstanding
Principal Amount of this Term Note not repurchased by the Issuers.
42
(d) The Issuers will comply, to the extent applicable, with the
requirements of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of this Term Note pursuant to this Section 6.01.
To the extent that the provisions of any securities laws or regulations conflict
with provisions of this Section 6.01, the Issuers will comply with the
applicable securities laws and regulations and will not be deemed to have
breached their obligations under this Section 6.01 by virtue thereof.
(e) The Issuers will not be required to make an offer pursuant to
this Section 6.01 upon a Change of Control if a third party, in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Term Note applicable to a Change of Control made by the Issuers, makes an offer
to purchase and purchases all Term Notes validly tendered and not withdrawn
under such offer.
(f) If the applicable repurchase date is an Interest Payment Date,
the Interest Payment becoming due on such date shall be payable to the Holder
registered as such on the relevant record date.
(g) Notwithstanding the occurrence of a Change of Control, the
Issuers shall not be obligated to repurchase this Term Note or otherwise comply
with this Section 6.01 if the Issuers have irrevocably elected to redeem all the
Term Notes in accordance with Article 5; PROVIDED that the Issuers do not
default in their redemption obligations pursuant to such election.
ARTICLE 7
SUCCESSOR ISSUERS; MERGER
Section 7.01. WHEN THE ISSUERS MAY MERGE OR TRANSFER ASSETS. Neither
Issuer will consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, all or substantially all
its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"SUCCESSOR ISSUER") will be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Issuer (if not such Issuer) will
expressly assume, by a written agreement, executed and delivered to the
Holder, in form reasonably satisfactory to the Required Noteholders,
all the obligations of such Issuer under the Term Notes (and the
Indenture, if it has previously been executed and delivered) and the
Registration Rights Agreement;
(ii) immediately after giving effect to such transaction
on a pro forma basis (and treating any Indebtedness which becomes an
obligation of any Successor Issuer or any Restricted Subsidiary as a
result of such
43
transaction as having been Incurred by such Successor Issuer or such
Restricted Subsidiary at the time of such transaction), no Default or
Event of Default will have occurred and be continuing;
(iii) except (A) in the case of a merger of such Issuer
into a Wholly Owned Subsidiary, (B) a merger entered into solely for
the purpose of reincorporating such Issuer in another jurisdiction or
(C) a merger the Parent enters into solely for the purpose of forming a
holding company to hold all of the outstanding capital stock of the
Parent, immediately after giving effect to such transaction on a pro
forma basis as if such transaction had occurred at the beginning of the
applicable four quarter period, such Issuer or the Person formed by or
surviving any such consolidation or merger (if other than such Issuer),
or to which such conveyance, transfer, lease or other disposition shall
have been made, (a) would have been permitted to incur at least $1.00
of additional Indebtedness under paragraph (a) of Section 11.02 or
11.03, as the case may be or (b) Parent would have an Indebtedness to
Adjusted EBITDA Ratio and Intermediate Holdo would have an Intermediate
Holdco Indebtedness to Adjusted EBITDA Ratio no worse than such ratio
immediately prior to such transaction;
(iv) immediately after giving effect to such transaction,
the Parent (or a Successor Issuer in respect of the Parent) will be the
direct holder of 100% of the issued and outstanding Capital Stock of
Intermediate Holdco (or a Successor Issuer in respect of Intermediate
Holdco); and
(v) such Issuer will have delivered to the Holder an
Officer's Certificate and an opinion of counsel, each stating that such
consolidation, merger or transfer complies with this Term Note.
A Successor Issuer will succeed to, and be substituted for, and may
exercise every right and power of, the applicable Issuer under this Term Note,
but the predecessor Issuer in the case of a conveyance, transfer or lease of all
its assets or substantially all its assets will be released from its obligations
under this Term Note, including without limitation the obligation to pay the
principal of and interest on this Term Note.
ARTICLE 8
NO REISSUANCE OF TERM NOTE
No Term Notes acquired by the Issuers by reason of redemption,
purchase, conversion or otherwise shall be reissued, and all such Term Notes
shall be retired. No additional Term Notes (other than the Term Notes issued
pursuant to the Funding Agreement or the terms of the Term Notes) shall be
authorized or issued without the consent of the Required Noteholders.
44
ARTICLE 9
NO IMPAIRMENT
The Issuers shall not intentionally take any action which would impair
the rights and privileges of this Term Note set forth herein or the Holder
hereof.
ARTICLE 10
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 10.01. TERM NOTES SOLELY OBLIGATIONS OF THE ISSUERS. No
recourse for the payment of the principal of or premium, if any, or interest on
any Term Note, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Issuers, or because of the creation of any indebtedness represented hereby,
shall be had against any incorporator, stockholder, member, employee, agent,
officer, director or subsidiary, in their capacity as such, past, present or
future, of the Issuers or of any of their respective successors, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of the Term Note.
ARTICLE 11
COVENANTS
Section 11.01. SEC REPORTS. Notwithstanding that the Parent may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Parent will provide the Holder with the annual reports
and such information, documents and other reports which are specified in
Sections 13 and 15(d) of the Exchange Act.
Section 11.02. LIMITATION ON INDEBTEDNESS. The Parent will not Incur,
directly or indirectly, any Indebtedness unless, on the date of such Incurrence
and after giving effect to such Incurrence and the application of the net
proceeds therefrom, the Indebtedness to Adjusted EBITDA Ratio of the Parent
would be equal to or less than 7.00:1 but not less than zero. Accrual of
interest, accretion or amortization of original issue discount and the payment
of interest in the form of additional Indebtedness will not be deemed to be an
Incurrence of Indebtedness for purposes of this covenant.
(b) Notwithstanding Section 11.02(a) and regardless of the amount
of outstanding Indebtedness of the Parent, the Parent may Incur any or all of
the following Indebtedness: (i) Indebtedness of the Parent owing to and held by
any Restricted Subsidiary; PROVIDED, that any event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
45
transfer of any such Indebtedness (except to another Restricted Subsidiary) will
be deemed, in each case, to constitute the Incurrence of such Indebtedness by
the Parent, (ii) Indebtedness represented by the Term Notes and the Exchange
Notes, (iii) Indebtedness of the Parent outstanding on the Issue Date (other
than indebtedness or Preferred Stock referred to in clauses (i), (vi), (vii),
(xi), (xii) and (xiii)), (iv) Indebtedness (including Capitalized Lease
Obligations) of the Parent Incurred to finance the acquisition, construction or
improvement of fixed or capital assets in an aggregate principal amount
(together with the amount of any Indebtedness then outstanding and Incurred
pursuant to clause (b)(vi) of Section 11.03) at any one time outstanding not to
exceed $25.0 million; PROVIDED that such Indebtedness is Incurred within 180
days after the date of such acquisition, construction or improvement and does
not exceed the fair market value of such acquired, constructed or improved
assets, as determined in good faith by the Board of Directors of the Parent, (v)
Refinancing Indebtedness Incurred in respect of any Indebtedness Incurred
pursuant to paragraph (a) or pursuant to clause (ii), (iii) or this clause (v)
or paragraph (a) or pursuant to clauses (b) (iii), (iv) or (v) of Section 11.03,
(vi) Indebtedness (A) in respect of performance bonds, bankers' acceptances,
letters of credit and surety or appeal bonds provided by the Parent in the
ordinary course of its business and which do not secure other Indebtedness and
(B) under Currency Agreements and Interest Rate Agreements Incurred which, at
the time of Incurrence, is in the ordinary course of business; PROVIDED that, in
the case of Currency Agreements and Interest Rate Agreements, such Currency
Agreements and Interest Rate Agreements are directly related to Indebtedness
permitted to be Incurred by the Parent pursuant to this Term Note, (vii)
Indebtedness represented by Guarantees by the Parent of Indebtedness otherwise
permitted to be Incurred by a Restricted Subsidiary pursuant to this Term Note,
(viii) Indebtedness of any other Person existing at the time such other Person
is merged with or into the Parent outstanding on or prior to the date on which
such Person was merged with or into the Parent (other than Indebtedness Incurred
in connection with, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Person was merged with or into the Parent);
PROVIDED that on the date of such merger and after giving effect thereto, (1)
the Parent would have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to paragraph (a) of this Section 11.02, or (2) (x) the
Parent would have an Indebtedness to Adjusted EBITDA Ratio no worse than the
Indebtedness to Adjusted EBITDA Ratio immediately prior to such merger and (y)
Intermediate Holdco would have an Intermediate Holdco Indebtedness to Adjusted
EBITDA Ratio no worse than the Intermediate Holdco Indebtedness to Adjusted
EBITDA Ratio immediately prior to such merger, (ix) the Incurrence by the Parent
of Indebtedness not to exceed, at any one time outstanding, 2.0 times the sum of
100% of the aggregate Net Cash Proceeds and 50% of the non-cash proceeds
received by the Parent from the issue or sale of Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an issuance or sale
to a Subsidiary of the Parent and other than an issuance or sale to an employee
stock ownership plan or to a trust established by the Parent or any of its
Restricted
46
Subsidiaries), less the aggregate amount of such Net Cash Proceeds used to make
Restricted Payments pursuant to clause (3)(B) of paragraph (a) of Section 11.04
or applied pursuant to clause (i)(B) of paragraph (b) of Section 11.04, (x)
other Indebtedness in an aggregate principal amount outstanding at any time not
to exceed $200.0 million (together with the amount of any Indebtedness and
Preferred Stock then outstanding and Incurred pursuant to clause (b)(ix) of
Section 11.03), (xi) Indebtedness Incurred by the Issuer's Subsidiaries in
compliance with Section 11.03, Indebtedness incurred under Credit Facilities, in
an aggregate principal amount outstanding at any time, together with the amount
of any Indebtedness then outstanding and incurred under clause (b)(i) of Section
11.03, not to exceed (A) the lesser of (x) $1.05 billion and (y) the sum of (1)
the product of $200,000 times the number of Completed Towers on the date of
incurrence and (2) the product of $1,000,000 times the number of Completed
Broadcast Towers on the date of such incurrence; PROVIDED that the amount of
such Indebtedness incurred pursuant to this clause (2) does not exceed 25% of
the cost of acquiring or constructing such Completed Broadcast Towers, less (B)
the aggregate amount of all proceeds from all Asset Dispositions of Tower Assets
of the Parent and the Restricted Subsidiaries that have been applied to
permanently reduce the outstanding amount of such Indebtedness pursuant to
Section 11.06, Indebtedness representing the deferred payment of the purchase
price for any entity that is engaged in a Permitted Business and that becomes a
Restricted Subsidiary or the acquisition of any assets constituting a business
or line of business, as determined in good faith by the Board of Directors, that
is a Permitted Business, not to exceed at any one time outstanding, together
with any Indebtedness then outstanding and incurred pursuant to clause (b)(xi)
of Section 11.03, 50% of the purchase price for the related entity or business
so acquired; PROVIDED that after giving effect to such acquisition and all
Indebtedness incurred in connection therewith, (1) the Parent would have been
able to incur at least $1.00 of additional Indebtedness under paragraph (a) of
this Section 11.02, or (2) (x) the Parent would have an Indebtedness to Adjusted
EBITDA Ratio no worse than the Indebtedness to Adjusted EBITDA Ratio immediately
prior to such acquisition and the incurrence of such related Indebtedness and
(y) Intermediate Holdco would have an Intermediate Holdco Indebtedness to
Adjusted EBITDA Ratio no worse than the Intermediate Holdco Indebtedness to
Adjusted EBITDA Ratio immediately prior to such acquisition and the incurrence
of such related Indebtedness, and (xiv) Permitted Acquisition Indebtedness.
(c) Notwithstanding the foregoing, the Parent shall not Incur any
Indebtedness pursuant to the foregoing paragraph (b) of this Section 11.02 if
the proceeds thereof are used, directly or indirectly, to Refinance any
Indebtedness of the Parent or Subordinated Obligations unless such new
Indebtedness shall (i) in the case of any Indebtedness whose proceeds are used
to Refinance Subordinated Obligations, be subordinated to the Term Notes to at
least the same extent as such Subordinated Obligations being Refinanced and (ii)
have a Stated Maturity that is no earlier than the Stated Maturity of the
Indebtedness of the Parent or Subordinated Obligations being Refinanced.
47
(d) For purposes of determining compliance with this Section
11.02, (i) in the event that an item of Indebtedness meets the criteria of more
than one of the types of Indebtedness described above, the Parent, in its sole
discretion, will classify (and may from time to time reclassify) such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of the above clauses of this Section 11.02 and (ii) an item
of Indebtedness may be divided and classified in more than one of the types of
Indebtedness described in this Section 11.02.
Section 11.03. LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK OF
RESTRICTED SUBSIDIARIES. The Parent shall not permit any Restricted Subsidiary
to Incur, directly or indirectly, any Indebtedness or Preferred Stock unless, on
the date of such Incurrence and after giving effect to such Incurrence and the
application of the net proceeds therefrom, the Indebtedness to Adjusted EBITDA
Ratio of the Parent would be equal to or less than 7.00:1 but not less than
zero. Accrual of interest, accretion or amortization of original issue discount
and the payment of interest in the form of additional Indebtedness will not be
deemed to be an incurrence of Indebtedness for purposes of this covenant.
(b) Notwithstanding Section 11.03(a) and regardless of the amount
of outstanding Indebtedness of the Restricted Subsidiaries, but subject to the
other limitations contained in this Term Note, any Restricted Subsidiary may
Incur any or all of the following Indebtedness: Indebtedness Incurred under
Credit Facilities in an aggregate principal amount outstanding at any time,
together with the amount of any Indebtedness then outstanding and incurred under
clause (b)(xii) of Section 11.02, not to exceed (A) the lesser of (x) $1.05
billion and (y) the sum of (1) the product of $200,000 times the number of
Completed Towers on the date of such Incurrence; and (2) the product of
$1,000,000 times the number of Completed Broadcast Towers on the date of such
Incurrence; PROVIDED that the amount of such Indebtedness incurred pursuant to
this clause (2) does not exceed 25% of the cost of acquiring or constructing
such Completed Broadcast Towers less (B) the aggregate amount of all proceeds
from all Asset Dispositions of Tower Assets of the Parent and the Restricted
Subsidiaries that have been applied to permanently reduce the outstanding amount
of such Indebtedness pursuant to Section 11.06, and Guarantees of such
Indebtedness incurred under Credit Facilities; (ii) Indebtedness or Preferred
Stock of a Restricted Subsidiary issued to and held by the Parent or a
Restricted Subsidiary; PROVIDED that any subsequent issuance or transfer of any
Capital Stock which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of such Indebtedness or
Preferred Stock (other than to the Parent or a Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness or
Preferred Stock by the issuer thereof, (iii) Indebtedness or Preferred Stock of
a Restricted Subsidiary Incurred and outstanding on or prior to the date on
which such Restricted Subsidiary was acquired by the Parent or a Restricted
Subsidiary and Indebtedness or Preferred Stock of an entity merged into a
Restricted Subsidiary (other than, in either case, Indebtedness or Preferred
Stock Incurred in connection with, or to provide all or
48
any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Parent or a
Restricted Subsidiary or such entity was merged into such Restricted
Subsidiary); PROVIDED that on the date of such acquisition or merger and after
giving effect thereto, (1) the Restricted Subsidiaries would have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of
Section 11.03, or (2) (x) the Parent would have an Indebtedness to Adjusted
EBITDA Ratio no worse than the Indebtedness to Adjusted EBITDA Ratio immediately
prior to such acquisition or merger and (y) Intermediate Holdco would have an
Intermediate Holdco Indebtedness to Adjusted EBITDA Ratio no worse than the
Intermediate Holdco Indebtedness to Adjusted EBITDA Ratio immediately prior to
such acquisition or merger, (iv) Indebtedness (including the Term Notes) or
Preferred Stock outstanding on the Issue Date (other than Indebtedness or
Preferred Stock referred to in clauses (i), (ii), (vii), (viii) and (x)) and the
Exchange Notes Incurred by Intermediate Holdco in the Transactions, (v)
Refinancing Indebtedness Incurred in respect of Indebtedness or Preferred Stock
referred to in paragraph (a) above or in clauses (iii) or (iv) of this paragraph
or this clause (v); PROVIDED that to the extent such Refinancing Indebtedness
directly or indirectly Refinances Indebtedness or Preferred Stock of a
Subsidiary described in clause (iii), such Refinancing Indebtedness shall be
Incurred only by such Subsidiary, (vi) Indebtedness (including Capitalized Lease
Obligations) Incurred by a Restricted Subsidiary to finance the acquisition,
construction or improvement of fixed or capital assets in an aggregate principal
amount at any one time outstanding (together with the amount of any Indebtedness
then outstanding and Incurred pursuant to clause (b)(iv) of Section 11.02) not
to exceed $25.0 million; PROVIDED that such Indebtedness is Incurred within 180
days after the date of such acquisition, construction or improvement and does
not exceed the fair market value of such acquired, constructed or improved
assets, as determined in good faith by the Board of Directors of the Parent,
(vii) Indebtedness (A) in respect of performance bonds, bankers' acceptances,
letters of credit and surety or appeal bonds provided in the ordinary course of
its business and which do not secure other Indebtedness and (B) under Currency
Agreements and Interest Rate Agreements Incurred which, at the time of
Incurrence, is in the ordinary course of business; PROVIDED that, in the case of
Currency Agreements and Interest Rate Agreements, such Currency Agreements and
Interest Rate Agreements are directly related to Indebtedness permitted to be
Incurred pursuant to this Term Note, (viii) Indebtedness represented by
Guarantees by a Restricted Subsidiary of Indebtedness otherwise permitted to be
Incurred by a Restricted Subsidiary (other than Intermediate Holdco) pursuant to
this Term Note, other Indebtedness and Preferred Stock in an aggregate principal
and/or liquidation amount outstanding at any time not to exceed $25.0 million
(less the amount of any Indebtedness then outstanding and Incurred pursuant to
clause (b)(x) of Section 11.02), (x) Indebtedness representing the deferred
payment of the purchase price for any entity that is engaged in a Permitted
Business and that becomes a Restricted Subsidiary or the acquisition of any
assets constituting a business or line of
49
business, as determined in good faith by the Board of Directors, that is a
Permitted Business, not to exceed at any one time outstanding, together with any
Indebtedness then outstanding and incurred pursuant to clause (b)(xiii) of
Section 11.02, 50% of the purchase price for the related entity or business so
acquired; PROVIDED that after giving effect to such acquisition and all
Indebtedness incurred in connection therewith, (1) the Parent and Intermediate
Holdco would have been able to incur at least $1.00 of additional Indebtedness
under paragraph (a) of Section 11.02 and 11.03, respectively, or (2) (x) the
Parent would have an Indebtedness to Adjusted EBITDA Ratio no worse than the
Indebtedness to Adjusted EBITDA Ratio immediately prior to such acquisition and
the incurrence of such related Indebtedness and (y) Intermediate Holdco would
have an Intermediate Holdco Indebtedness to Adjusted EBITDA Ratio no worse than
the Intermediate Holdco Indebtedness to Adjusted EBITDA Ratio immediately prior
to such acquisition and the incurrence of such related Indebtedness and
Permitted Acquisition Indebtedness.
(c) For purposes of determining compliance with this Section
11.03, (i) in the event that an item of Indebtedness meets the criteria of more
than one of the types of Indebtedness described above, the Parent, in its sole
discretion, will classify (and may from time to time reclassify) such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of the above clauses of this Section 11.03 and (ii) an item
of Indebtedness may be divided and classified in more than one of the types of
Indebtedness described in this Section 11.03.
(d) The Parent will not permit any Unrestricted Subsidiary to
Incur any Indebtedness other than Non-Recourse Debt.
Section 11.04. LIMITATION ON RESTRICTED PAYMENTS. (a) The Parent will
not, and will not permit any Restricted Subsidiary, directly or indirectly, to
make any Restricted Payment if at the time the Parent or such Restricted
Subsidiary makes such Restricted Payment (1) a Default or Event of Default will
have occurred and be continuing (or would result therefrom), (2) except with
respect to making an Investment, the Parent could not Incur at least $1.00 of
additional Indebtedness under paragraph (a) of Section 11.02 or (3) the
aggregate amount of such Restricted Payment and all other Restricted Payments
(the amount so expended, if other than in cash, to be determined in good faith
by the Board of Directors of the Parent, whose determination will be evidenced
by a resolution of such Board of Directors) declared or made on or subsequent to
the Issue Date would exceed the sum of: (A) (x) the aggregate EBITDA (or, in the
event such EBITDA shall be a deficit, minus such deficit) accrued subsequent to
the Issue Date to the most recent date for which financial information is
available to the Parent, taken as one accounting period, less (y) 1.4 times
Consolidated Interest Expense for the same period, (B) (x) 100% of the aggregate
Net Cash Proceeds (less the aggregate amount of such Net Cash Proceeds used to
Incur Indebtedness pursuant to clause (b)(x) of Section 11.02 or to fund a
Permitted Investment pursuant to clause (xv) of the definition thereof) and (y)
70% of the GAAP
50
purchase accounting valuation of Qualified Proceeds (with each such valuation
calculated as of the sale date of the Capital Stock received as consideration
therefor), in each case received by the Parent from the issue or sale of Capital
Stock (other than Disqualified Stock) subsequent to the Issue Date (other than
an issuance or sale to a Subsidiary of the Parent and other than an issuance or
sale to an employee stock ownership plan or to a trust established by the Parent
or any of its Restricted Subsidiaries), (C) the amount by which Indebtedness of
the Parent is reduced on the Parent's balance sheet upon the conversion or
exchange (other than by a Restricted Subsidiary) subsequent to the Issue Date of
any Indebtedness of the Parent convertible or exchangeable for Capital Stock
(other than Disqualified Stock) of the Parent (less the amount of any cash, or
the fair value of any other property, distributed by the Parent upon such
conversion or exchange), (D) an amount equal to the sum of (i) the net reduction
in Investments in Unrestricted Subsidiaries resulting from dividends, repayments
of loans or advances or other transfers of assets to the Parent or any
Restricted Subsidiary from Unrestricted Subsidiaries after the Issue Date and
(ii) the portion (proportionate to the Parent's equity interest in such
Subsidiary) of the fair market value of the net assets of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; PROVIDED that the foregoing sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made by the Parent
or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was
included in the calculation of the amount of Restricted Payments, (E) dividends
and distributions received by the Parent subsequent to the Issue Date from
Unrestricted Subsidiaries, to the extent such dividends and distributions are
not otherwise included in calculating EBITDA, and (F) Net Cash Proceeds received
by the Parent subsequent to the Issue Date from Investments that are not
Permitted Investments, to the extent not otherwise included in calculating
EBITDA.
(b) The provisions of the foregoing paragraph (a) of this Section
11.04 will not prohibit: (i) any purchase, redemption, defeasance or other
acquisition of Capital Stock or Indebtedness of the Parent, Exchange Notes or
Subordinated Obligations made by exchange for, or out of the net proceeds of the
substantially concurrent sale of, Capital Stock of the Parent (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
of the Parent or an employee stock ownership plan or to a trust established by
the Parent or any of its Subsidiaries); PROVIDED that (A) such purchase,
redemption, defeasance or other acquisition will be excluded in the calculation
of the amount of Restricted Payments and (B) to the extent applied toward any
such purchase, redemption, defeasance or other acquisition, the Net Cash
Proceeds from such sale will be excluded from clause (3)(B) of paragraph (a) of
this Section 11.04 and clause (b)(x) of Section 11.02, (ii) any purchase,
redemption, defeasance or other acquisition of Subordinated Obligations made by
exchange for, or out of the net proceeds of the substantially concurrent sale
of, Subordinated Obligations; PROVIDED that (A) the principal amount of such new
Indebtedness does not exceed the principal amount of the Subordinated
Obligations being so redeemed, repurchased, acquired or retired for value (plus
the amount of any premium
51
required to be paid under the terms of the instrument governing the Subordinated
Obligations being so redeemed, repurchased, acquired or retired), (B) such new
Indebtedness is subordinated to the Term Notes at least to the same extent as
such Subordinated Obligations so purchased, exchanged, redeemed, repurchased,
acquired or retired for value, (C) such new Indebtedness has a final scheduled
maturity date later than the final scheduled maturity date of the Subordinated
Obligations being so redeemed, repurchased, acquired or retired and the final
scheduled maturity date of the Term Notes, (D) such new Indebtedness has an
Average Life equal to or greater than the Average Life of the Indebtedness being
so redeemed, repurchased, acquired or retired and (E) such new Indebtedness is
issued by the Parent or the same issuer (if not the Parent) as the Subordinated
Obligations being so redeemed, repurchased, acquired or retired; PROVIDED
FURTHER that such purchase, redemption, defeasance or other acquisition will be
excluded in the calculation of the amount of Restricted Payments, (iii) any
purchase, redemption, defeasance or other acquisition of Indebtedness of the
Parent (that is not a Subordinated Obligation) or Exchange Notes made by
exchange for, or out of the net proceeds of the substantially concurrent sale of
Indebtedness of the Parent (or, in the case of the Exchange Notes, Indebtedness
of Intermediate Holdco); PROVIDED that (x) the principal amount of such new
Indebtedness does not exceed the principal amount of the Indebtedness being so
redeemed, repurchased, acquired or retired for value (plus the amount of any
premium required to be paid under the terms of the instrument governing the
Indebtedness being so redeemed, repurchased, acquired or retired), (y) such new
Indebtedness has a final scheduled maturity date later than the final scheduled
maturity date of the Indebtedness being so redeemed, repurchased, acquired or
retired and (z) such new Indebtedness has an Average Life equal to or greater
than the Average Life of the Indebtedness being so redeemed; PROVIDED FURTHER
that any such purchase, redemption, defeasance or other acquisition subject to
this clause (iii) will be excluded in the calculation of the amount of
Restricted Payments, (iv) any purchase, redemption or other acquisition of
Indebtedness of the Parent out of the net proceeds of the Term Notes or the
Exchange Notes, PROVIDED FURTHER that such purchase, redemption, defeasance or
other acquisition will be excluded in the calculation of the amount of
Restricted Payments, (v) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would have
complied with this covenant; PROVIDED that the amount of such dividend will be
included in the calculation of the amount of Restricted Payments, (vi) purchases
of outstanding shares of the Parent's capital stock from former employees in an
amount not to exceed $5.0 million in the aggregate; PROVIDED that such purchases
will be included in the calculation of the amount of Restricted Payments, (vii)
other Restricted Payments not to exceed $25.0 million in the aggregate; PROVIDED
that such payments will be included in the calculation of the amount of
Restricted Payments, (viii) any payment to Parent to enable Parent to make the
following payments: (1) interest payments on the Term Notes, the Exchange Notes
and the Parent Notes and Refinancing Indebtedness in respect thereof; (2)
dividend or interest payments, as applicable, on Permitted High-Yield
Securities, in each case following expiration of any required payment-in-kind
52
period applicable thereto; PROVIDED that (x) after giving effect to any such
payment, Intermediate Holdco would be have an Intermediate Holdco Indebtedness
to Adjusted EBITDA Ratio of no greater than 7.0 to 1 or less than zero or (y)
the Net Cash Proceeds from the sale of such securities are concurrently applied
to repay Indebtedness under the New Credit Facility and (I) such Permitted
High-Yield Securities are Incurred pursuant to Section 11.02(b)(xii) and (II)
the commitments under the New Credit Facility in respect of such refinanced
amount are permanently terminated, (3) to the extent that such payments are
required in the ordinary course of business and relate directly to a Subsidiary,
or to services provided for or on behalf of a Subsidiary, payments, in each case
that are required to be paid in cash, when due of (A) corporate franchise fees
and taxes actually owed by Parent, (B) legal and accounting fees and expenses
actually incurred by Parent, (C) costs incurred to comply with Parent's
reporting obligations under federal or state laws, including, without
limitation, reports filed with respect to the Securities Act, the Exchange Act
or the respective rules and regulations promulgated thereunder and (D) other
customary corporate overhead expenses; (4) payments of "additional interest" in
connection with the Term Notes and the Parent Notes (and Refinancing
Indebtedness in respect thereof) and any other comparable payments in respect of
other Permitted High-Yield Securities; and (5) any Restricted Payment or
Permitted Investment not otherwise prohibited by this Term Note; PROVIDED that
such payments (except clauses (3) and (5)) shall be included in the calculation
of the amount of Restricted Payments; and (ix) any redemption of Exchange Notes
that is required pursuant to Section 5.01(c)(iii) hereof; PROVIDED that such
redemption shall be excluded in the calculation of the amount of Restricted
Payments;
PROVIDED that, at the time of, and after giving effect to, any Restricted
Payment permitted by clauses (i), (ii), (iii), (vi), (vii) and (viii), no
Default or Event of Default shall have occurred and be continuing.
(c) The amount of any Investment shall be measured at the date
made and shall not give effect to subsequent changes in value.
(d) The Parent will not make or hold any Investment other than (i)
Investments in Intermediate Holdco, (ii) Temporary Cash Investments, (iii)
Guarantees by the Parent of Indebtedness and other obligations of the Restricted
Subsidiaries and (iv) Permitted Investments of the types described in clauses
(v), (vi), (ix) (provided that the Capital Stock referred to therein is limited
to Capital Stock of the Parent), (xi) and (xiii) of the definition of Permitted
Investments.
(e) Notwithstanding anything to the contrary contained herein, the
Issuers shall not make any cash interest payment to the holders of the Exchange
Notes on any semi-annual interest payment date unless, concurrently therewith,
the Issuers pay cash interest to the Term Note Holders for the same period in
the manner forth in the second paragraph of this Term Note.
53
Section 11.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Parent will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock to the Parent or a Restricted Subsidiary or pay any Indebtedness or other
obligation owed to the Parent, (ii) make any loans or advances to the Parent or
Intermediate Holdco or (iii) transfer any of its property or assets to the
Parent or any Restricted Subsidiary, except: (1) any encumbrance or restriction
pursuant to any Credit Facility, the Term Notes, any other agreement in effect
at or entered into on the Issue Date or the Exchange Notes, (2) any encumbrance
or restriction with respect to a Restricted Subsidiary pursuant to an agreement
relating to any Indebtedness or Capital Stock Incurred or issued by such
Restricted Subsidiary on or prior to the date on which such Restricted
Subsidiary was acquired by the Parent or a Restricted Subsidiary (other than
Indebtedness or Capital Stock Incurred or issued as consideration for, or to
provide all or any portion of the funds or credit support utilized to consummate
the transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Subsidiary or was acquired by the Parent or a
Restricted Subsidiary) and outstanding on such date, (3) any encumbrance or
restriction pursuant to an agreement effecting a Refinancing of Indebtedness
Incurred pursuant to an agreement referred to in clause (1) or (2) of this
Section 11.05 or contained in any amendment to an agreement referred to in
clause (1) or (2) of this Section 11.05; PROVIDED that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in any such
refinancing agreement or amendment taken as a whole are no less favorable to the
Holder than the encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such predecessor agreements as determined in good faith
by the Board of Directors of the Parent, (4) in the case of clause (iii), any
encumbrance or restriction that restricts in a customary manner the subletting,
assignment or transfer of any property or asset that is subject to a lease,
license or other contract or such lease, license or other contract, (5) in the
case of clause (iii), contained in security agreements or mortgages securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance or
restrictions restrict the transfer of the property subject to such security
agreements or mortgages, (6) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition, (7)
customary provisions with respect to the disposition or distribution of assets
or property in joint venture and other similar agreements, and (8) restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business; PROVIDED that the Board of
Directors of the Parent in good faith determines that such restrictions will not
have a material adverse impact on the Issuers' ability to make payments on the
Term Notes.
Section 11.06. LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK. The
Parent will not, and will not permit any Restricted Subsidiary to, directly or
54
indirectly, consummate any Asset Disposition unless (i) the Parent or such
Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value (including as to the value
of all non cash consideration), as determined in good faith by the Board of
Directors of the Parent of the shares and assets subject to such Asset
Disposition and (ii) except in the case of a Tower Asset Exchange, at least 75%
of the consideration thereof received by the Parent or such Restricted
Subsidiary is in the form of cash or cash equivalents.
Within 330 days after the receipt of any Net Available Cash from an
Asset Disposition, the Parent or the applicable Restricted Subsidiary may apply
such Net Available Cash to: (A) prepay, repay, redeem or purchase Indebtedness
(other than Disqualified Stock) of a Restricted Subsidiary (provided, that the
applicable Restricted Subsidiary also may prepay, repay, redeem or purchase its
own outstanding Indebtedness) (in each case other than Indebtedness owed to the
Parent or an Affiliate of the Parent), (B) acquire all or substantially all of
the assets of an entity engaged in a Permitted Business, (C) acquire Voting
Stock of an entity engaged in a Permitted Business from a Person that is not a
Subsidiary of the Parent; PROVIDED, that (x) after giving effect thereto, the
Parent or its Restricted Subsidiary owns a majority of such Voting Stock and (y)
such acquisition is otherwise made in accordance with this Term Note, including,
without limitation, Section 11.04, or (D) make a capital expenditure or acquire
other long-term assets that are used or useful in a Permitted Business; PROVIDED
that any assets, Voting Stock, capital expenditures or long-term assets acquired
pursuant to clause (B), (C) or (D) above shall be held by a Restricted
Subsidiary and not by the Parent. To the extent of the balance of such Net
Available Cash after application in accordance with clauses (A), (B), (C) or
(D), the Issuers shall make an Offer (as defined in Section 11.06(b)) to the
Noteholders to purchase Term Notes pursuant to and subject to the conditions set
forth in paragraph (b) of this Section 11.06.
Notwithstanding the foregoing provisions, the Parent and its Restricted
Subsidiaries shall not be required to apply any Net Available Cash in accordance
herewith except to the extent that the aggregate Net Available Cash from all
Asset Dispositions which are not applied in accordance with this covenant
exceeds $10.0 million. Pending application of Net Available Cash pursuant to
this covenant, such Net Available Cash shall be invested in Temporary Cash
Investments.
For the purposes of this Section 11.06(a), the following are deemed to
be cash: (x) the assumption by the transferee of Indebtedness of the Parent
(other than Disqualified Stock of the Parent and other than Indebtedness that is
subordinated to the obligations of the Parent with respect to the Term Notes) or
Indebtedness of any Restricted Subsidiary and the release of the Parent or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Asset Disposition, (y) securities received by the Parent or any Restricted
Subsidiary from the transferee that are converted by the Parent or such
Restricted
55
Subsidiary into cash within 20 days of the applicable Asset Disposition (to the
extent of the cash received), and (z) any liabilities (as shown on the Parent's
or such Restricted Subsidiary's most recent balance sheet) of the Parent or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the obligations of the Parent with respect to
the Term Notes) that are assumed by the transferee of any such assets pursuant
to a customary novation agreement that releases the Parent or any such
Restricted Subsidiary from further liability.
(b) In the event of an Asset Disposition that requires the
purchase of Term Notes pursuant to paragraph (a) of this Section 11.06, the
Issuers will be required to purchase Term Notes (or portions thereof) tendered
pursuant to an offer by the Issuers for the Term Notes (the "OFFER") at a
purchase price of 100% of the Outstanding Principal Amount of the Term Notes as
of the Purchase Date (as defined below) plus accrued and unpaid interest to the
Purchase Date in accordance with the procedures (including prorating in the
event of oversubscription) set forth in this Term Note. If the aggregate
purchase price of all Term Notes (or portions thereof) tendered pursuant to the
Offer is less than the Net Available Cash allotted to the purchase of the Term
Notes, the Parent may use any remaining Net Available Cash for general corporate
purposes not otherwise prohibited by this Term Note. If the aggregate purchase
price of Term Notes tendered pursuant to the Offer is greater than the Net
Available Cash allotted to the purchase of the Term Notes, the Parent will
select the Term Notes to be purchased on the basis set forth in paragraph (c) of
this Section 11.06. Upon completion of any required Offer, the amount of Net
Available Cash will be reset at zero. The Parent shall not be required to make
an Offer pursuant to this Section 11.06 if the Net Available Cash available
therefore (after application of the proceeds as provided in the second paragraph
of Section 11.06(a)) is less than $10.0 million for all Asset Dispositions
(which lesser amounts shall be carried forward for purposes of determining
whether an Offer is required with respect to the Net Available Cash from any
subsequent Asset Disposition).
(c) (i) Promptly, and in any event within 10 days after the
Issuers become obligated to make an Offer, the Issuers shall be obligated to
deliver written notice thereof via facsimile and overnight courier (the "OFFER
NOTICE") to the Holder and the other Noteholders, which Offer Notice shall set
forth a purchase date not less than 10 days nor more than 20 days (or, if
longer, the minimum period required under applicable law) after the date of such
notice (the "PURCHASE DATE") and shall contain (A) all instructions and
materials necessary to tender this Term Note (or any portion hereof) pursuant to
the Offer, (B) the amount of the Offer (the "OFFER AMOUNT") and (C) the
allocation of the Net Available Cash from the Asset Dispositions pursuant to
which such Offer is being made.
(ii) Noteholders electing to have a Term Note purchased
will be required to surrender the Term Note, together with all
necessary endorsements and other appropriate materials duly completed,
to
56
the Issuers at the address specified in the notice at least three
Business Days prior to the Purchase Date. Noteholders will be entitled
to withdraw their election in whole or in part if the Issuers receive
not later than one Business Day prior to the Purchase Date, a facsimile
transmission or letter setting forth the name of the Noteholder, the
Outstanding Principal Amount of the Term Note (which shall be $1,000 in
principal amount or an integral multiple thereof) which was delivered
for purchase by such Noteholder, the aggregate Outstanding Principal
Amount of such Term Note (if any) that remains subject to the original
notice of the Offer and that has been or will be delivered for purchase
by the Issuers and a statement that such Noteholder is withdrawing his
election to have such Term Note (or relevant portion) purchased. If on
the Purchase Date the aggregate principal amount of Term Notes
surrendered by Noteholders exceeds the Offer Amount, the Issuers shall
select the Term Notes to be purchased on a pro rata basis in accordance
with the Outstanding Principal Amount of Term Notes tendered by each
tendering Noteholder (with such adjustments as may be deemed
appropriate by the Issuers so that only Term Notes in denominations of
$1,000 Outstanding Principal Amount, or integral multiples thereof,
shall be purchased).
(iii) On the Purchase Date, the Issuers shall pay to each
tendering Noteholder, in cash, the purchase price of its Term Note, to
the extent tendered and accepted pursuant to the Offer, by wire
transfer of immediately available funds to an account designated in
writing by such Noteholder. Noteholders whose Term Notes are purchased
only in part will be issued new Term Notes by the Issuers equal in
principal amount to the unpurchased portion of the Term Notes
surrendered.
(iv) A Term Note shall be deemed to have been accepted for
purchase at the time the Issuers deliver payment therefor to the
surrendering Noteholder.
(d) The Issuers will comply, to the extent applicable, with the
requirements of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Term Notes pursuant to this Section 11.06. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this covenant, the Issuers will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this covenant by virtue thereof.
(e) The provisions of this Section 11.06 shall not apply to any
transaction that is subject to, and permitted under, the provisions of Section
7.01.
Section 11.07. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Parent
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of transactions
(including the purchase, sale, lease or exchange of any property, employee
compensation
57
arrangements or the rendering of any service) with any Affiliate of the Parent
(an "AFFILIATE TRANSACTION") unless (i) the terms of such transaction, taken as
a whole, are no less favorable to the Parent or such Restricted Subsidiary, as
the case may be, than those that could be obtained at the time of such
transaction in arm's-length dealings with a Person who is not such an Affiliate,
(ii) in the event such Affiliate Transaction involves an aggregate amount in
excess of $5.0 million, the terms of such transaction are set forth in writing
and shall have been approved by a majority of the members of the Board of
Directors having no personal stake in such Affiliate Transaction (and such
majority determines that such Affiliate Transaction satisfies the criteria in
clause (i) above) and (iii) in the event such Affiliate Transaction involves an
aggregate amount in excess of $10.0 million, the Parent has received a written
opinion from a nationally recognized independent investment banking firm that
such Affiliate Transaction is fair to the Parent and its Restricted Subsidiaries
from a financial point of view.
(b) The provisions of paragraph (a) of this Section 11.07 shall
not prohibit (i) any Restricted Payment permitted to be made pursuant to Section
11.04, (ii) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors, or any arrangements relating thereto, (iii) the grant of stock
options or similar rights to employees and directors of the Parent pursuant to
plans approved by the Board of Directors, (iv) loans or advances to employees in
the ordinary course of business in accordance with the past practices of the
Parent or its Restricted Subsidiaries, (v) the payment of reasonable fees to
directors of the Parent and its Restricted Subsidiaries who are not employees of
the Parent or its Restricted Subsidiaries, (vi) any transaction between
Restricted Subsidiaries, (vii) the issuance or sale of any Capital Stock (other
than Disqualified Stock) of the Parent, (viii) any transaction consummated
pursuant to the terms of any agreement described in Parent's Form 10-K for the
year ended December 31, 2001 or Forms 10-Q or Forms 8-K filed thereafter and
prior to the Issue Date, including the exhibits and documents included by
reference therein, giving effect to any subsequent supplements, amendments,
modifications or alterations thereof that are approved by the disinterested
members of the Board of Directors, (ix) any transaction in the ordinary course
of business between Parent or any Restricted Subsidiary and any Affiliate of
Parent relating to the acquisition, management, construction, leasing or
licensing of Tower Assets, PROVIDED that such transaction is on terms that are
no less favorable, taken as a whole, to Parent or the relevant Restricted
Subsidiary than those that could have been obtained in a comparable transaction
by Parent or such Restricted Subsidiary with an unrelated Person or is otherwise
on terms that, taken as a whole, Parent has determined to be fair to Parent or
the relevant Restricted Subsidiary), (x) the consummation of any transaction
pursuant to any Related Agreement, and (xi) any transaction between the Parent
or any Restricted Subsidiary and any Affiliate of the Parent involving ordinary
course investment banking, commercial banking or related activities.
58
Section 11.08. LIMITATION ON SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Parent (i) will not, and will not permit any
Restricted Subsidiary to, transfer, convey, sell, lease or otherwise dispose of
any Capital Stock of any Restricted Subsidiary to any Person (other than to the
Parent or a Wholly Owned Subsidiary), unless (a) such transfer, conveyance,
sale, lease or other disposition is of (x) all of the Capital Stock of such
Restricted Subsidiary or (y) a majority of the issued and outstanding Capital
Stock of such Restricted Subsidiary; PROVIDED, that the Parent's minority equity
interest in such Person after giving effect to any such disposition shall be
deemed to constitute an Investment by the Parent in such Person; and (b) the net
cash proceeds from such transfer, conveyance, sale, lease or other disposition
are applied in accordance with Section 11.06, (ii) will not permit any
Restricted Subsidiary to issue any of its Capital Stock (other than, to the
extent necessary or mandated by applicable law, shares of its Capital Stock
constituting directors' qualifying shares or the ownership by foreign nationals
of Capital Stock of any Restricted Subsidiary) to any Person other than to the
Parent or a Wholly Owned Subsidiary, and (iii) will not, and will not permit any
Restricted Subsidiary to, transfer, convey, sell, lease or dispose of any
Capital Stock of Intermediate Holdco to any Person (other than to Parent or a
Successor Issuer to Parent permitted under Article 7 that shall, upon the
consummation of such transaction, hold 100% of the issued and outstanding
Capital Stock of Intermediate Holdco).
Section 11.09. LIMITATION ON LIENS. The Parent will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create or permit to
exist any Lien on any of its property or assets (including Capital Stock),
whether owned on the Issue Date or thereafter acquired, securing any obligation,
other than Permitted Liens.
Section 11.10. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The Parent
will not, and will not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless (i) the Parent or
such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an
amount equal to the Attributable Indebtedness with respect to such
Sale/Leaseback Transaction pursuant to Section 11.02 or Section 11.03, as the
case may be, and (B) create a Lien on such property securing such Attributable
Indebtedness pursuant to Section 11.09, (ii) the net cash proceeds received by
the Parent or any Restricted Subsidiary in connection with such Sale/Leaseback
Transaction are at least equal to the fair value (as determined in good faith by
the Board of Directors) of such property and (iii) the transfer of such property
is permitted by, and the Parent or such Restricted Subsidiary applies the
proceeds of such transaction in compliance with, Section 11.06.
Section 11.11. COMPLIANCE WITH LAWS. The Parent shall comply, and shall
cause each of its Restricted Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the United States of
America, all states and municipalities thereof and any governmental department,
commission, board, regulatory authority, bureau, agency and instrumentality of
the foregoing,
59
in respect of the conduct of their respective businesses and the ownership of
their respective properties, except for such noncompliances as are not in the
aggregate reasonably likely to have a material adverse effect on the financial
condition or results of operations of the Parent and its Subsidiaries, taken as
a whole.
Section 11.12. COMPLIANCE CERTIFICATE. The Parent shall deliver to the
Holder within 120 days after the end of each fiscal year of the Parent an
Officer's Certificate signed by the chief executive officer, the chief financial
officer or the chief accounting officer stating that in the course of the
performance by the signer of his duties as an Officer of the Parent he would
normally have knowledge of any Default or Event of Default and whether or not
the signer knows of any Default or Event of Default that occurred during such
period. If he does, the certificate shall describe the Default or Event of
Default, its status and what action the Parent is taking or proposes to take
with respect thereto.
Section 11.13. FURTHER INSTRUMENTS AND ACTS. Upon reasonable request of
the Holder, the Parent will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Term Note.
Section 11.14. CORPORATE EXISTENCE. Except as otherwise permitted by
this Term Note, each Issuer shall do or cause to be done, at its own cost and
expense, all things necessary to preserve and keep in full force and effect its
existence (corporate or otherwise) and the corporate, partnership or limited
liability company existence of each of the Parent's Significant Subsidiaries in
accordance with the respective organizational documents of each such Subsidiary
and the material rights (charter and statutory) and franchises of such Issuer
and each such Subsidiary; PROVIDED, that neither Issuer shall be required to
preserve, with respect to itself, any material right or franchise and, with
respect to any of the Parent's other Significant Subsidiaries, any such
existence, material right or franchise, if the Board of Directors shall
determine in good faith (such determination to be evidenced by a board
resolution), that the preservation thereof is no longer desirable in the conduct
of the business of the Parent and its Subsidiaries, taken as a whole.
Section 11.15. PAYMENT OF TAXES AND OTHER CLAIMS. The Parent shall pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Restricted Subsidiaries or properties of
it or any of its Restricted Subsidiaries and (ii) all lawful claims for labor,
materials and supplies that, if unpaid, might by law become a Lien upon the
property of it or any of its Restricted Subsidiaries; PROVIDED, that the Parent
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings properly instituted and
60
diligently conducted for which adequate reserves, to the extent required under
GAAP, have been taken.
Section 11.16. MAINTENANCE OF PROPERTIES AND INSURANCE. (a) Each Issuer
shall, and shall cause each of the Significant Subsidiaries to, maintain its
material properties in good working order and condition (subject to ordinary
wear and tear) and make or cause to be made all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto and actively
conduct and carry on its business, all as in the reasonable judgment of the
Issuers is necessary so that the business carried on by the Issuers and the
Parent's Significant Subsidiaries may be actively conducted; PROVIDED, that
nothing in this Section 11.16 shall prevent the Parent or any of its
Subsidiaries from discontinuing the operation and maintenance of any of its
properties, if such discontinuance is, in the good faith judgment of the Parent
or the Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect to the
Noteholders.
(b) Each Issuer shall provide or cause to be provided, for itself
and each of the Significant Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Issuers, are adequate and appropriate for the conduct of the
business of the Issuers and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States of America, any
state thereof or any agency or instrumentality of such governments, in such
amounts, with such deductibles, and by such methods as shall be customary, in
the good faith judgment of the Issuers, for companies similarly situated in the
industry.
Section 11.17. LIMITATIONS ON ACTIVITIES BY INTERMEDIATE HOLDCO. (a)
Notwithstanding any provision of this Term Note to the contrary, Intermediate
Holdco shall not engage in any business or conduct any activity or own any
assets, other than (i) the holding of the capital stock of its Wholly Owned
Subsidiaries, (ii) the performance of its obligations under the Term Notes, the
Exchange Notes and the New Credit Facility in accordance with the terms thereof,
and (iii) the performance of activities incidental thereto.
(b) Notwithstanding any provision of this Term Note to the
contrary, Intermediate Holdco shall not Incur any Indebtedness other than the
Term Notes or the Exchange Notes or create or suffer to exist any Lien on any of
its assets; PROVIDED, that Intermediate Holdco shall be permitted to Guarantee
indebtedness under any Credit Agreement and pledge any of its assets, including
any Capital Stock of its Subsidiaries, to secure indebtedness under the Term
Notes and the New Credit Facility.
(c) Intermediate Holdco will not merge or consolidate with or into
the Parent or any Successor Issuer in respect of the Parent.
Section 11.18. ADDITIONAL INTEREST UPON CERTAIN EVENTS. (a) If
61
(i) any registration statement required by the
Registration Rights Agreement is not filed or declared effective by the
SEC on or prior to the date required for filing or effectiveness, as
the case may be, pursuant to the Registration Rights Agreement (or, if
no date is specified therein for the filing or effectiveness of such
registration statement, if the registration statement is not filed
within 90 days of the request for filing or declared effective within
180 days of such request; or
(ii) while any registration statement is required to be
maintained effective pursuant to the terms of the Registration Rights
Agreement, the effectiveness of such registration statement lapses for
any reason (including, without limitation, the issuance of a stop
order) or is unavailable to the Holder for sale of all of the
Restricted Securities (as defined in the Registration Rights Agreement)
in accordance with the terms of the Registration Rights Agreement, and
such lapse or unavailability continues for a period of five consecutive
Trading Days (excluding days during a Blackout Period (as defined in
the Registration Rights Agreement)); or
(iii) the Common Stock is suspended from trading or fails
to be listed on NASDAQ or the NYSE for more than an aggregate of five
Trading Days in any 365-day period or
(iv) the Common Stock issuable upon conversion of this
Term Note (including as payment of a Conversion Interest Payment) is
not approved for listing on NASDAQ or the NYSE at any time after Parent
Stockholder Approval is obtained;
then (each such event referred to in clauses (i) through (iv), a "CONVERTIBILITY
IMPAIRMENT"):
(x) The Issuers will be jointly and severally obligated to pay
additional interest ("ADDITIONAL INTEREST") to the Holder of this Term Note,
from and beginning on the date of any Convertibility Impairment of a type
described in clauses (i), (ii) or (iv)(except to the extent such failure under
clause (iv) is the result of a Convertibility Impairment under clause (iii)),
until but excluding the date on which (i) the Registration Statement is filed or
declared effective, (ii) the Registration Statement is again declared effective
or available, or (iii) the Common Stock issuable upon conversion is accepted for
listing on NASDAQ or the NYSE, in an amount equal to 0.75% per annum on the
Outstanding Principal Amount hereof for the first 30-day period. The amount of
Additional Interest shall increase by an additional 0.75% per annum with respect
to each subsequent 30-day period until all Convertibility Impairments referred
to in this clause (x) have been cured, up to a maximum amount of Additional
Interest of 5-1/8%; or
(y) The Issuers will be jointly and severally obligated to pay
Additional Interest to the Holder of this Term Note, from and beginning on the
date of any
62
Convertibility Impairment of a type described in clause (iii) until but
excluding the date on which the Common Stock ceases to be suspended from trading
and is listed on NASDAQ or the NYSE, in an amount equal to 0.4% per annum on the
Outstanding Principal Amount hereof for the first 90-day period. The amount of
Additional Interest shall increase by an additional 0.4% per annum with respect
to each subsequent 90- day period until all Convertibility Impairments referred
to in this clause (y) have been cured, up to a maximum amount of Additional
Interest of 2.0%.
(b) The Issuers shall notify the Holder of this Term Note
immediately upon the happening of each and every Convertibility Impairment. The
Additional Interest due shall be payable at the same times and in the same
manner as regular interest on this Term Note is payable, as stated in the second
paragraph of this Term Note. In the event of multiple Convertibility
Impairments, Additional Interest shall accrue each day only in respect of the
one Convertibility Impairment that would result in the highest Additional
Interest for such day.
Section 11.19. COLLATERAL. (a) In order to secure the Term Notes and
all obligations thereunder, Parent will execute and deliver the Pledge Agreement
on the Issue Date and create the Liens intended to be created thereunder on the
"Collateral" referred to therein.
(b) Parent shall comply with all covenants and agreements
contained in the Pledge Agreement.
(c) Each Holder, by accepting a Term Note, agrees to all of the
terms and provisions of the Pledge Agreement, as the same may be amended from
time to time.
(d) As among the Holders, the Collateral as now or hereafter
constituted shall be held for the equal and ratable benefit of the Holders
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale or otherwise, as security for the
obligations under the Term Notes.
Section 11.20. COVENANTS IN EFFECT AFTER PERMITTED EARLY TRANSFER.
Immediately upon any transfer of this Term Note prior to _________, 2007 to
anyone other than a Permitted Transferee (a "PERMITTED EARLY TRANSFER"), Section
11.02 through Section 11.04, Section 11.09 and Article 17 shall cease to be of
further effect with respect to this Term Note, and subsection (b) below shall
apply; PROVIDED that the foregoing shall not apply if, prior to such transfer,
any Default under Section 16.01(g) or Section 16.01(h) shall have occurred and
be continuing or such transfer is in connection with an out-of-court
restructuring of either Issuer.
(b) From and after the date of any Permitted Early Transfer, the
Issuers and their Subsidiaries shall comply with the covenants set forth in
Sections 4.3 to
63
4.5 and Section 4.11 of the Indenture dated as of December 20, 2000 with respect
to the Parent's 12-1/2% Senior Notes due 2010 (as such covenants are in effect
on the date hereof or may be amended subsequent to the date hereof if the
amendment is approved by the Required Noteholders), which covenants shall be
deemed to be incorporated by reference herein, together with all related
definitions. For purposes of determining compliance with such covenants, (x) all
Incurrences of Debt or Preferred Stock and all payments that would be
"Restricted Payments" or "Permitted Investments" that occurred and (y) all Liens
on any property that attached, on or after the Issue Date (as defined in such
Indenture) but prior to the date of any Permitted Early Transfer shall be deemed
to have been Incurrences of Debt or Preferred Stock, Restricted Payments or
Permitted Investments or attachment of a Lien and shall accordingly reduce
availability under the baskets under such covenants and, to the extent not
permitted thereunder, shall constitute a Default.
ARTICLE 12
OBLIGATIONS ABSOLUTE
No provision of this Term Note shall alter or impair the obligation of
the Issuers, which is absolute and unconditional, to pay the principal of, and
interest on, this Term Note at the time, place and rate, and in the manner,
herein prescribed. The obligations of the Issuers set forth in this Term Note
shall be joint and several as between them.
ARTICLE 13
WAIVERS OF DEMAND, ETC.
The Issuers hereby expressly waive (to the extent permitted by
applicable law) demand and presentment for payment, notice of nonpayment,
protest, notice of protest, notice of dishonor, notice of acceleration or intent
to accelerate, bringing of suit and diligence in taking any action to collect
amounts called for hereunder and will be directly and primarily liable for the
payment of all sums owing and to be owing hereon, regardless of and without any
notice, diligence, act or omission as or with respect to the collection of any
amount called for hereunder.
ARTICLE 14
REPLACEMENT TERM NOTES
In the event that the Holder notifies the Issuers that this Term Note
has been lost, stolen or destroyed, a replacement Term Note identical in all
respects to the original Term Note (except for registration number and
Outstanding Principal Amount, if different than that shown on the original Term
Note) shall be issued
64
by the Issuers to the Holder; PROVIDED that the Holder executes and delivers to
the Issuers an agreement reasonably satisfactory to the Issuers to indemnify the
Issuers from any loss incurred by them in connection with such Term Note.
ARTICLE 15
PAYMENT OF EXPENSES
The Issuers agree to pay all reasonable expenses, including reasonable
attorneys' fees, which may be incurred by the Holder in successfully enforcing
the provisions of this Term Note and/or successfully collecting any amount due
under this Term Note or any Related Agreement.
ARTICLE 16
DEFAULTS AND REMEDIES
Section 16.01. EVENTS OF DEFAULT. The following shall constitute
"EVENTS OF DEFAULT":
(a) any Event of Default under any other Term Note; or
(b) any default by the Issuers in any payment of interest
or Additional Interest on this Term Note when the same becomes due and
payable, and such default continuing for a period of 30 days; or
(c) any default by the Issuers in the payment of any
principal on this Term Note when the same becomes due and payable at
the Maturity Date, upon optional redemption, upon required repurchase,
upon acceleration or otherwise; or
(d) the Issuers fail to comply with Article 6 or 7; or
(e) the Issuers fail to comply with Section 11.01, 11.02,
11.03, 11.04, 11.05, 11.06, 11.07, 11.08, 11.09, 11.10 or 11.17, or
replacements therefor pursuant to Section 11.20 (other than a failure
to purchase Notes when required pursuant to 11.06, which failure shall
constitute an Event of Default under Section 16.01(c)) and such failure
continues for 30 days after receipt of notice described below; or
(f) either Issuer or any Significant Subsidiary fails to
pay any Indebtedness within any applicable grace period provided in
such Indebtedness after final maturity or the acceleration of any such
Indebtedness by the holders thereof because of a default if the total
amount of such Indebtedness unpaid or accelerated exceeds $10.0 million
or its foreign currency equivalent at the time; or
65
(g) either Issuer or a Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case in which it is the debtor;
(C) consents to the appointment of a Custodian
of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit
of its creditors;
or, in each case, takes any comparable action under any foreign laws
relating to insolvency; or
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against either Issuer or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of either Issuer or any
Significant Subsidiary or for any substantial part of the
property of either Issuer or any Significant Subsidiary; or
(C) orders the winding up or liquidation of
either Issuer or any Significant Subsidiary,
(or, in each case, any similar relief is granted under any foreign
laws) and the order, decree or relief remains unstayed and in effect
for 90 days; or
(i) any final judgment or decree for the payment of money
in excess of $10.0 million (net of any amounts with respect to which a
creditworthy insurance company has acknowledged full liability (subject
to any deductible amounts of less than $10.0 million required to be
paid by either Issuer or any Significant Subsidiary in accordance with
the applicable insurance policy)) is rendered against either Issuer or
any Significant Subsidiary and either (A) an enforcement proceeding has
been commenced by any creditor upon such judgment or decree or (B) such
judgment or decree remains unpaid and outstanding for a period of 60
days following such judgment and is not discharged, waived or stayed
within 10 days after receipt of notice described below; or
(j) Any of the representations or warranties made by
either Issuer herein or in any Related Agreement shall be false or
misleading in any material respect at the time made; or
66
(k) a Conversion Failure; or
(l) the Liens purportedly created by the Pledge Agreement
shall cease to be, or shall be asserted by either Issuer or any
Restricted Subsidiary not to be, second priority perfected Liens on all
of the Collateral (as defined in the Pledge Agreement), subject to no
Liens other than Liens securing obligations under the New Credit
Facility in an amount not to exceed $1.05 billion or
(m) the Issuers fail to comply with any of their
agreements in this Term Note, the other Term Notes or the Related
Documents (other than those referred to in (b), (c), (d), (e), (k) or
(l) above) and such failure continues for 60 days after receipt of
notice described below.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "BANKRUPTCY LAW" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "CUSTODIAN"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
The Issuers shall deliver to the Holder, within 15 days after their
knowledge of the occurrence thereof, written notice in the form of an Officers'
Certificate of any Event of Default and any event which with the giving of
notice or the lapse of time would become an Event of Default and what action the
Issuers are taking or propose to take with respect thereto.
A Default under clauses (e), (i) or (m) of this Section 16.01 is not an
Event of Default until the Holders of at least 25% in aggregate Outstanding
Principal Amount of the outstanding Term Notes by notice to the Issuers give
notice of the Default and the Issuers do not cure such Default within the time
specified in said clause (e), (i) or (m) after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default."
Section 16.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 16.01(g) or 16.01(h)) occurs and is
continuing, the holders of at least 50% in aggregate Outstanding Principal
Amount of the Term Notes, by notice to the Issuers, may declare the Outstanding
Principal Amount of and accrued but unpaid interest on the Term Notes to be due
and payable. Upon such a declaration, such Outstanding Principal Amount and
interest shall be due and payable immediately. If an Event of Default specified
in Section 16.01(g) or 16.01(h) occurs and is continuing, the Outstanding
Principal Amount of and accrued interest on all the Term Notes shall ipso facto
become and be
67
immediately due and payable without any declaration or other act on the part of
any Noteholder.
The Required Noteholders may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
A delay or omission by the Holder or any other Noteholder in exercising
any right or remedy accruing upon an Event of Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are, to the
extent permitted by law, cumulative.
Section 16.03. WAIVER OF PAST DEFAULTS. The Required Noteholders may
waive any past or existing Default and its consequences except that (i) a
Default in the payment of the Outstanding Principal Amount of or interest on the
Term Notes or (ii) a Default in respect of a provision that under Section 16.04,
Article 19 or under the Funding Agreement cannot be amended without the consent
of each Noteholder affected. When a Default is waived, it is deemed cured, and
any Event of Default arising therefrom shall be deemed to have been cured, but
no such waiver shall extend to any subsequent or other Default or impair any
consequent right.
Section 16.04. RIGHTS OF HOLDER TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Term Note, the right of the Holder to receive payment of
the Outstanding Principal Amount of and interest on this Term Note on or after
the respective due dates expressed in this Term Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
Section 16.05. WAIVER OF STAY OR EXTENSION LAWS. The Issuers (to the
extent they may lawfully do so) shall not at any time insist upon, or plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Term Note and the Issuers (to
the extent that they may lawfully do so) hereby expressly waive all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Holder, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
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ARTICLE 17
VOTING RIGHTS
Section 17.01. VOTING RIGHTS. (a) On and after the date of Parent
Stockholder Approval (as defined in the Funding Agreement), to the maximum
extent permitted by law but subject to the Stockholders Agreement, the Holder of
this Term Note, in its capacity as Holder of this Term Note, shall be entitled
to vote on all matters voted on by holders of Common Stock, and shall vote
together with the shares of Common Stock as a single class, except as otherwise
required by law or as specified herein.
(b) The Holder hereof shall have a number of votes in respect
hereof equal to the number of shares of Common Stock that would be issued upon
the conversion hereof as of the record date of any vote or, if no such record
date is established, on the date such vote is taken or any written consent of
stockholders is solicited (assuming for these purposes interest would be paid on
such conversion in the form of Common Stock); PROVIDED that the number of votes
to which any Holder of Term Notes is entitled, in its capacity as such, shall at
no time exceed the aggregate Outstanding Principal Amount of such Holder's Term
Note divided by the Voting Price, or such greater number of votes that are then
permitted by the rules of NASDAQ (or, if Parent's common stock is quoted or
listed on a different exchange, such greater number of votes that are then
permitted by the rules of such exchange).
(c) Without the consent or affirmative vote of the Required
Noteholders, voting separately as a class, Parent shall not (i) amend, alter or
repeal any provision of its Certificate of Incorporation or its By-laws, if the
amendment, alteration or repeal (including by way of merger, consolidation or
otherwise) alters or changes the rights of the Holders of the Term Notes so as
to affect them materially and adversely or (ii) authorize or take any other
action (including by way of merger, consolidation or otherwise) if (x) such
action alters or changes any of the rights of Holders of the Term Notes under
this Article 17 in any respect or otherwise would be inconsistent with the
provisions of this Article 17 so as to affect the Holders materially and
adversely and (y) the holders of any class or series of the capital stock of
Parent are entitled to vote on such action.
(d) Neither Issuer shall enter into any agreement or issue any
security that prohibits, conflicts or is inconsistent with, or would be breached
by, the Issuers' performance of their obligations under this Article.
ARTICLE 18
SAVINGS CLAUSE
In case any provision of this Term Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable
69
to the maximum extent possible, and the validity and enforceability of the
remaining provisions of this Term Note will not in any way be affected or
impaired thereby.
ARTICLE 19
ENTIRE AGREEMENT; AMENDMENTS
This Term Note, the Related Agreements and the other agreements
referred to in this Term Note constitute the full and entire understanding and
agreement among the Issuers and the Holder with respect to the subject hereof.
Except as otherwise provided in Section 16.04 or Section 6 of the Stockholders
Agreement, neither this Term Note nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the
Issuers and the Required Noteholders.
ARTICLE 20
ASSIGNMENT, ETC.
The Holder may, subject to compliance with the provisions of the
Stockholders Agreement (to the extent a party thereto) and the Funding Agreement
and applicable federal and state securities laws, transfer or assign this Term
Note or any portion thereof and may pledge, encumber or transfer its rights or
interest in and to this Term Note or any part hereof; PROVIDED that,
concurrently with any such transfer or assignment, the Holder shall assign to
such transferee or assignee its rights under Section 6 of the Stockholders
Agreement to the extent of the portion of this Term Note so transferred or
assigned, and such transferee or assignee shall assume, to the extent of such
portion of this Term Note so transferred or assigned, the obligations of the
Holder under Section 6 of the Stockholders Agreement and agree to be bound by
all of the provisions thereof. Each such assignee, transferee and pledgee shall
have all of the rights of the Holder under this Term Note. The Issuers agree
that, subject to compliance with the provisions of the Stockholders Agreement
(to the extent applicable) and the Funding Agreement, after receipt by the
Issuers of written notice of assignment from the Holder the Issuers shall cause
such assignment to be reflected in the Term Notes Register, and all principal,
interest and other amounts which are then, and thereafter become, due under this
Term Note shall be paid to such assignee, transferee or pledgee at the place of
payment designated in such notice. The Issuers may not assign this Term Note or
any of their rights or obligations hereunder except as permitted hereunder. This
Term Note shall be binding upon the Issuers and their respective successors and
shall inure to the benefit of the Holder and its successors and permitted
assigns.
70
ARTICLE 21
NO WAIVER
No failure on the part of the Holder to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Holder of any right,
remedy or power hereunder preclude any other or future exercise of any other
right, remedy or power. Each and every right, remedy or power hereby granted to
the Holder or allowed it by law or other agreement shall be cumulative and not
exclusive of any other, and may be exercised by the Holder from time to time.
ARTICLE 22
NOTICES
Unless otherwise provided herein, any notices, consents, waivers or
other communications required or permitted to be given under the terms of this
Term Note must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally, (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party) or (iii) one Business Day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Parent:
SpectraSite Holdings, Inc.
100 Regency Forest Drive, Suite 570
Cary, North Carolina 27511
Attention: Mr. Stephen H. Clark
Telecopy: (919) 388-9475
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Bruce Gutenplan, Esq.
Telecopy: (212) 757-3990
If to the Intermediate Holdco:
71
SpectraSite Intermediate Holdings, LLC
100 Regency Forest Drive, Suite 570
Cary, North Carolina 27511
Attention: Mr. Stephen H. Clark
Telecopy: (919) 388-9475
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Bruce Gutenplan, Esq.
Telecopy: (212) 757-3990
If to the Holder, to its address and facsimile number appearing in the
Term Notes Register which, in the case of the initial Holder, shall be as set
forth on Schedule I, or II attached to the Funding Agreement, with copies to
such Holder's representatives as set forth in Section 8.04 of the Funding
Agreement, or to such other address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.
ARTICLE 23
MISCELLANEOUS
Whenever the sense of this Term Note requires, words in the singular
shall be deemed to include the plural and words in the plural shall be deemed to
include the singular. Paragraph headings are for convenience only and shall not
affect the meaning of this document.
ARTICLE 24
CHOICE OF LAW AND VENUE; WAIVER OF JURY TRIAL
This Term Note shall be governed by and construed in accordance with
the law of the State of New York. Except as otherwise expressly provided in this
Term Note, the Issuers and the Noteholders agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Term Note or the transactions contemplated
hereby
72
shall be brought in the United States District Court for the Southern District
of New York or any New York State court sitting in New York City, so long as one
of such courts shall have subject matter jurisdiction over such suit, action or
proceeding, and that any cause of action arising out of this Term Note shall be
deemed to have arisen from a transaction of business in the State of New York,
and each of the parties hereby irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Article 22 shall be deemed
effective service of process on such party. EACH OF THE ISSUERS AND THE
NOTEHOLDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS TERM NOTE.
ARTICLE 25
RULE 144
With a view to making available to the Holder the benefits of Rule 144
promulgated under the Securities Act ("RULE 144") and any other rule or
regulation of the SEC that may at any time permit the Holder to sell the
underlying stock of the Parent issuable upon conversion or exercise of this Term
Note to the public without registration, the Parent agrees to use its reasonable
best efforts to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and
other documents required of the Parent under the Securities Act and the
Exchange Act;
(c) furnish to the Holder, promptly upon request, a
written statement by the Parent (provided true at the time) that it has
complied with the applicable reporting and filing requirements of the
Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Parent, and copies of such other reports and
documents (if any) so filed by the Parent as may be reasonably
requested to permit the Holder to take advantage of any rule or
regulation of the SEC permitting the selling of any such securities
without registration.
73
ARTICLE 26
ISSUANCE UNDER AN INDENTURE
Section 26.01. ISSUANCE OF TERM NOTES UNDER AN INDENTURE. (a) In the
event that an indenture is required to be qualified under the Trust Indenture
Act of 1939, as amended ("TIA"), with respect to the Term Notes, or at any time
upon request of Holders of in excess of 25% in aggregate principal amount of the
outstanding Term Notes, the Issuers shall appoint a trustee (the "TRUSTEE") who
satisfies the eligibility requirements set forth in Section 8.9 of the Indenture
dated as of November 20, 2000 between Parent and United States Trust Company of
New York, as trustee (the "CONVERTIBLE INDENTURE") and shall take whatever
actions are necessary to cause an indenture (the "INDENTURE"), substantially in
the form of the Convertible Indenture (subject to the next succeeding
paragraph), to be executed and delivered by the Issuers and the Trustee and to
be qualified under the TIA. In such event, (i) this Term Note shall be deemed to
be one of an issue of Term Notes of the Issuers issued under the Indenture; (ii)
the terms of the Term Notes shall be deemed to include those stated in the
Indenture and those made part of the Indenture by reference to the TIA; and
(iii) the Term Notes shall be subject to all such terms. In such event, the
Issuers may require Holders of the Term Notes, and each Holder by acceptance
hereof agrees upon the Issuers' request, to surrender to the Trustee all Term
Notes in the form hereof in exchange for replacement Term Notes substantially in
the form provided for in the Indenture in an identical principal amount.
(b) Notwithstanding the foregoing, the terms of the Indenture
shall include the following terms included in this Term Note, whether or not
consistent with the terms in the Convertible Indenture (in each case together
with the related definitions):
(i) the Indenture and the Term Notes shall constitute the
joint and several obligations of the Issuers;
(ii) the interest rate and interest payment dates and the
form of consideration to be used to pay interest set forth in the Term
Notes shall be provided for in the Indenture;
(iii) the Term Notes shall be limited in aggregate
principal amount to the principal amount thereof outstanding on the
date of such Indenture;
(iv) the conversion provisions set forth in Article 4 and
the conversion price contained in the Term Notes shall be used in lieu
of Article 15 of the Convertible Indenture (to the extent the
provisions thereof are inconsistent with such provisions of the Term
Notes);
(v) the maturity date of the Term Notes and the
provisions for optional redemption set forth in Article 5 shall be
included in the
74
Indenture; PROVIDED that Sections 3.2 through 3.4 of the Convertible
Indenture shall be included even if inconsistent with the terms of the
Term Notes;
(vi) the repurchase provisions upon a "Change of Control"
set forth in Article 6 shall be included;
(vii) the provisions of Article 7 with respect to mergers,
consolidations and transfers of assets (other than the last paragraph
thereof) shall be included in lieu of Section 12.1 of the Convertible
Indenture;
(viii) the covenants contained in Article 11 shall be
included in addition to those contained in Article Five of the
Convertible Indenture (except Sections 5.5 through 5.7, which shall be
omitted); and
(ix) the events of default listed in Section 16.01, to the
extent not included in the Convertible Indenture, shall be included in
the Indenture.
(c) The provisions of Article 20 shall not be included in the
Indenture. The second paragraph of the legend of the front page hereof shall be
omitted unless, on the date of the Indenture, any original Holder of a Term Note
or Permitted Transferee is still a Holder thereof (in which case the second
paragraph of such legend shall be retained and shall apply only to such original
Holder or Permitted Transferee). In addition to the foregoing, the transfer
provisions in the Convertible Indenture shall also be included.
(d) Without limiting the foregoing, in the event of any
inconsistency between the terms of the Term Notes and the Convertible Indenture
(other than terms that are required in an Indenture to comply with the TIA or
other applicable law), the Indenture shall contain terms consistent in all
material respects with those set forth in the Term Notes (except as expressly
set forth herein) unless agreed otherwise by the Required Noteholders.
75
IN WITNESS WHEREOF, the Issuers have caused this instrument to be duly
executed by their respective officers thereunto duly authorized.
Dated: [ ], 2002
SPECTRASITE HOLDINGS, INC
By:
-------------------------------------------
Name:
Title:
Print Address:
Telephone:
Facsimile:
ATTEST
- ------------------------------
Name:
Title:
SPECTRASITE INTERMEDIATE HOLDINGS, LLC
By:
-------------------------------------------
Name:
Title:
Print Address:
Telephone:
Facsimile:
ATTEST
- ------------------------------
Name:
Title:
76
DEFINED TERMS
SECTION
-------
Accepted Purchased Shares................................................4.05(g)
Acquiring Entity............................................................4.06
Additional Interest........................................................11.18
Adjustment Event ................................................Section 4.05(l)
Affiliate Transaction...................................................11.07(a)
Approval Date...........................................................17.01(c)
Change of Control Redemption Price.......................................6.01(a)
Conversion Date.............................................................4.02
Conversion Interest Payment.................................................4.01
Convertible Indenture......................................................26.01
Convertibility Impairment..........................................Section 11.18
Determination Date...............................................Section 4.05(l)
Events of Default..........................................................16.01
Expiration Time..........................................................4.05(f)
Holder...................................................First Page of this Note
Indenture..................................................................26.01
Interest Payment Date....................................First Page of this Note
Interest Payments........................................First Page of this Note
Notice of Change of Control..............................................6.01(a)
Offer Amount............................................................11.06(c)
Offer Expiration Time....................................................4.05(g)
Offer Notice............................................................11.06(c)
Optional Redemption Date.................................................5.01(a)
Optional Redemption Notice...............................................5.01(a)
Optional Redemption Price................................................5.01(a)
Outstanding Principal Amount.............................First Page of this Note
Parent Stockholder Approval ................................................4.01
Permitted Early Transfer........................................Section 11.20(a)
Purchase Date...........................................................11.06(c)
Purchased Shares.........................................................4.05(f)
Rule 144..............................................................Article 25
Securities...............................................................4.05(d)
Share Delivery Date.........................................................4.02
Successor Issuer............................................................7.01
Term Note................................................First Page of this Note
Term Notes Register......................................First Page of this Note
Term Notes...............................................First Page of this Note
TIA........................................................................26.01
Trigger Event............................................................4.05(d)
Trustee....................................................................26.01
Defined Terms - 1