EXHIBIT 99.2
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FORM OF
FORBEARANCE, LOCK-UP AND VOTING AGREEMENT
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This Forbearance, Lock-up and Voting Agreement (this "Agreement") is
made and entered into as of November 5, 2002 by and between SpectraSite
Holdings, Inc., a Delaware corporation (the "Company") and [INSERT NAME OF
NOTEHOLDER] (the "Consenting Holder"). The Company and the Consenting Holder are
collectively referred to herein as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, the Company and the Consenting Holder have engaged in good
faith negotiations with the objective of reaching an agreement with regard to
restructuring of the Senior Notes set forth on Exhibit A hereto (the "Notes")
issued by the Company under the applicable Indentures set forth on Exhibit A
hereto (each an "Indenture," and collectively, the "Indentures") and the
recapitalization of the Company;
WHEREAS, the Company and the Consenting Holder now desire to implement
a financial restructuring (the "Financial Restructuring") on the terms set forth
in this Agreement and the term sheet attached hereto as Exhibit B (the "Term
Sheet"); and in order to implement the Financial Restructuring, the Company
intends, subject to the terms and conditions of this Agreement, to prepare and
file a disclosure statement (the "Disclosure Statement") and plan of
reorganization (the "Plan") consistent in all respects with the terms set forth
in this Agreement and the Term Sheet and otherwise acceptable to the Consenting
Holder in a case (the "Chapter 11 Case") filed under chapter 11 of title 11 of
the United States Code (the "Bankruptcy Code") before the United States
Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division
(the "Bankruptcy Court"), and the Company intends to use its reasonable efforts
to have such Disclosure Statement approved and such Plan confirmed by the
Bankruptcy Court, in each case as expeditiously as possible under the Bankruptcy
Code and the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and
in accordance with the timetable set forth in this Agreement;
WHEREAS, the Consenting Holder owns or controls the aggregate principal
amount of Notes as identified on the signature page hereto, and
WHEREAS, in order to expedite the implementation of the Financial
Restructuring, the Consenting Holder is prepared to commit, on the terms and
subject to the conditions of this Agreement, to vote its "Relevant Claims" (as
that term is defined in below) to accept the Plan.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Consenting Holder hereby agree as follows:
1. FORBEARANCE BY CONSENTING HOLDER. So long as this Agreement
shall remain in effect, the Consenting Holder hereby agrees to forbear (and
agrees to seek to cause the forbearance, including by giving all necessary
instructions permitted in accordance with the applicable Indenture to the
trustee under such Indenture) from the exercise of any rights or remedies it may
have under the Notes, the Indentures, applicable law or otherwise, with respect
to any default in existence or arising under the Notes or the Indentures.
2. VOTING. The Consenting Holder represents and warrants that, as
of the date hereof, it is the beneficial owner, and/or the investment adviser or
manager for the beneficial owner (with the power to vote and dispose of such
claims on behalf of such beneficial owner) of the principal amount of Notes set
forth on the schedule attached to its signature page ("Relevant Claims"). The
Consenting Holder agrees that, so long as this Agreement shall remain in effect,
it shall timely vote its Relevant Claims (and not revoke or withdraw such vote)
to accept the Plan and shall restructure the Notes in accordance with the Term
Sheet, subject to the terms herein, including the provisions of Section 8
herein, provided that the terms of the Plan, the Disclosure Statement, and all
other reorganization-related documents or agreements (collectively, the "Plan
Documents") are in a form that is acceptable to the Consenting Holder. So long
as this Agreement shall remain in effect, the Consenting Holder agrees not to
elect on its ballot to preserve any rights, if any, the Consenting Holder may
have that may be affected by the releases provided for under the Plan.
3. RESTRICTION ON TRANSFER. The Consenting Holder hereby agrees
that, so long as this Agreement shall remain in effect, it shall not sell,
transfer or assign any of its Relevant Claims or any option thereon or any right
or interest (voting or otherwise) therein, unless the transferee thereof agrees
in writing to be bound by all the terms of this Agreement by executing a
counterpart signature page of this Agreement and the transferor promptly
provides the Company with a copy thereof, in which event the Company shall be
deemed to have acknowledged that its obligations to the Consenting Holder
hereunder shall be deemed to constitute obligations in favor of such transferee,
and the Company shall confirm that acknowledgement in writing (but the
transferor need not wait for such confirmation prior to consummating such
transfer).
4. COMPANY AGREEMENTS. The Company hereby agrees to use its
commercially reasonable efforts to have the Disclosure Statement approved by the
Bankruptcy Court, and thereafter to use its reasonable efforts to obtain an
order of the Bankruptcy Court confirming the Plan, in each case as expeditiously
as possible under the Bankruptcy Code and the Bankruptcy Rules, consistent with
the terms and conditions set forth in the Term Sheet, and in accordance with the
timetable set forth in this Agreement. The Company shall take all necessary and
appropriate actions to achieve confirmation of the Plan and implementation of
the Financial Restructuring, including, upon approval of the Disclosure
Statement by the Bankruptcy Court, recommending to the holders of claims and
interests impaired under the Plan that they vote to approve the Plan and taking
all reasonable actions necessary and desirable to obtain any and all regulatory
and/or third party approvals for the Financial Restructuring.
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5. SUPPORT OF THE PLAN. As long as this Agreement remains in
effect, the Consenting Holder will, subject to the provisions of this Agreement,
support and vote for the Plan. As long as this Agreement remains in effect, the
Consenting Holder shall not (a) object to confirmation of the Plan or otherwise
commence any proceeding to oppose or alter the Plan, (b) vote for, consent to,
support or participate in the formulation of any other plan of reorganization or
liquidation proposed or filed or to be proposed or filed in any chapter 11 or
chapter 7 case commenced in respect of the Company, (c) directly or indirectly
seek, solicit, support or encourage any other plan, sale, proposal or offer of
dissolution, winding up, liquidation, reorganization, merger or restructuring of
the Company or any of its subsidiaries that could reasonably be expected to
prevent, delay or impede the successful restructuring of the Company as
contemplated by the Term Sheet, the Plan or the Plan Documents, (d) object to
the Disclosure Statement or the solicitation of consents to the Plan, except to
the extent that it believes, in good faith, that such disclosure statement fails
to contain "adequate information" as defined in section 1125 of the Bankruptcy
Code or contains a material misstatement of omission of a material fact, or (e)
take any other action, directly or indirectly, with respect to the Company, any
of its subsidiaries or otherwise that is inconsistent with, or that would delay
confirmation of, the Plan.
6. ACKNOWLEDGEMENT. This Agreement is not and shall not be deemed
to be a solicitation for consents to the Plan. The acceptance of the Consenting
Holder will not be solicited until the Consenting Holder shall have received the
Disclosure Statement and related ballot, as approved by the Bankruptcy Court.
7. CONDITION PRECEDENT. It is a condition precedent to each of
the Company's and the Consenting Holder's obligations and agreements under this
Agreement that agreements substantially in the form of this Agreement shall have
been executed by the Company and the holders of at least 50% of the aggregate
outstanding principal amount (or principal amount at maturity with respect to
the 12-7/8% Senior Discount Notes due 2010, the 11-1/4% Senior Discount Notes
due 2009, and the 12% Senior Discount Notes Due 2008) of the Notes (each of the
foregoing, other than the Company and the Consenting Holder, a "Designated
Consenting Party").
8. TERMINATION OF AGREEMENT. The Consenting Holder may terminate
its obligations hereunder and rescind its vote on the Plan (which vote shall be
null and void and have no further force and effect), but only if (a) the Company
has not delivered to the Consenting Holder substantially complete drafts of (i)
the Plan upon receiving notice of the satisfaction of the condition precedent
set forth in paragraph 7 and (ii) the Disclosure Statement by November 6, 2002;
(b) the Company files with the Bankruptcy Court a Plan, a Disclosure Statement,
or any Plan Documents that are (or, once filed, the Company amends or modifies
such documents such that they become) inconsistent in any respect with the terms
set forth in the Term Sheet, or provide for a treatment of the Consenting
Holder's Relevant Claims that is materially less favorable than the treatment
provided therefor in the Term Sheet, or provide for a treatment to the holders
of claims (other than the Relevant Claims) or equity interests that is
materially more favorable than the treatment provided therefor in the Term
Sheet, or provide for any greater indebtedness of the reorganized Company or
greater burden on equity of the reorganized
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Company than as contemplated in the Term Sheet, or otherwise are not acceptable
to the Consenting Holder (in each case provided that the Consenting Holder gives
at least two business days' prior written notice of termination to the Company);
(c) the Company has not commenced the Chapter 11 Case and filed the Plan and
Disclosure Statement by November 15, 2002; (d) the effective date of the Plan is
not within 150 days from the date the Company commences the Chapter 11 Case; (e)
the Disclosure Statement is not approved by the Bankruptcy Court within 90 days
from the date the Company commences the Chapter 11 Case; (f) the Chapter 11 Case
is converted to a case under chapter 7 of the Bankruptcy Code; (g) a trustee is
appointed for the Company under any chapter of the Bankruptcy Code; (h) any
written representation or warranty made by the Company or its agents or
representatives to the Consenting Holder in connection with this Agreement or
the Term Sheet (including without limitation representations relating to the
Company's financial performance) is false or misleading in any material respect
when made; (i) the Company breaches any other provision of this Agreement
(including by failing to make the payment described in Section 25, below); or
(j) the Company publicly announces its intention not to pursue the Financial
Restructuring or otherwise proposes a transaction or plan of reorganization that
is not the Plan.
If this Agreement is terminated at a time when permission of the
Bankruptcy Court is required for the Consenting Holder to change or withdraw (or
cause to be changed or withdrawn ) its vote to accept the Plan, the Company
shall not oppose any attempt by the Consenting Lender to change or withdraw (or
cause to be changed or withdrawn) such vote at such time.
9. GOOD FAITH NEGOTIATION OF DOCUMENTS. Each Party hereby further
covenants and agrees to negotiate the definitive documents relating to the
Financial Restructuring, including the Plan, the Disclosure Statement, and the
Plan Documents, in good faith and, in any event, in all respects consistent with
this Agreement and the Term Sheet. The Company shall coordinate with the
Consenting Holder and its representatives in preparing such documents and shall
afford the Consenting Holder and its representatives a reasonable opportunity to
review and comment upon all such documents prior to their release and filing.
10. REPRESENTATIONS AND WARRANTIES. The Company and the Consenting
Holder represent and warrant to each other the following statements are true,
correct and complete as of the date hereof:
(a) CORPORATE POWER AND AUTHORITY. It has all requisite
corporate, partnership or LLC power and authority to enter into this Agreement
and to carry out the transactions contemplated by, and perform its respective
obligations under, this Agreement.
(b) AUTHORIZATION. The execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary corporate, partnership or LLC action on its part.
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(c) NO CONFLICTS. The execution, delivery and performance
by it of this Agreement do not and shall not (i) violate any provision of law,
rule or regulation applicable to it or any of its subsidiaries or its
certificate of incorporation or bylaws or other organizational documents or
those of any of its subsidiaries or (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation to which it or any of its subsidiaries is a
party.
(d) GOVERNMENTAL CONSENTS. The execution, delivery and
performance by it of this Agreement do not and shall not require any
registration or filing with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body, other than the approval of the Bankruptcy Court, in the case of
the Company.
(e) BINDING OBLIGATION. Subject to the provisions of
sections 1125 and 1126 of the Bankruptcy Code, this Agreement is the legally
valid and binding obligation of it, enforceable against it in accordance with
its terms, except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws relating to the
rights of a creditor against a debtor, or by equitable principles relating to
enforceability.
11. FURTHER ACQUISITION OF CLAIMS. This Agreement shall in no way
be construed to preclude the Consenting Holder from acquiring additional claims
against the Company. However, any such additional claims so acquired shall
automatically be deemed to be Relevant Claims and to be subject to the terms of
this Agreement.
12. AMENDMENTS. This Agreement may not be modified, amended or
supplemented without the prior written consent of the Company and the Consenting
Holder.
13. IMPACT OF APPOINTMENT TO CREDITORS COMMITTEE. If any official
creditors committee is appointed by the United States Trustee in the Chapter 11
Case and the United States Trustee appoints the Consenting Holder to be a member
of such official committee pursuant to section 1102 of the Bankruptcy Code, then
the fact of such service on such committee shall not otherwise affect the
continuing obligations of the Consenting Holder under this Agreement or the
validity or enforceability of this Agreement; provided, however, that nothing
contained herein shall prevent such Consenting Holder, in its capacity as a
member of such official committee, from acting in a manner consistent with its
duties as a member of such official committee (as determined by the Consenting
Holder in its sole discretion).
14. DISCLOSURE OF CONSENTING HOLDER. Unless required by applicable
law or regulation, the Company shall not disclose the Consenting Holder's
holdings of Relevant Claims without the prior written consent of the Consenting
Holder; and if such announcement or disclosure is so required by law or
regulation, the Company shall afford the Consenting Holder a reasonable
opportunity to review and comment upon any such announcement or disclosure prior
to the Company's making such announcement or
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disclosure. The foregoing shall not prohibit the Company from disclosing the
approximate aggregate holdings of Relevant Claims by the Designated Consenting
Parties (including the Consenting Holder) as a group.
15. GOVERNING LAW; JURISDICTION. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York,
without regard to any conflicts of law provision which would require the
application of the law of any other jurisdiction. By its execution and delivery
of this Agreement, each of the Parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, may be brought in the United States
District Court for the Southern District of New York. By execution and delivery
of this Agreement, each of the Parties hereto hereby irrevocably accepts and
submits itself to the nonexclusive jurisdiction of each such court, generally
and unconditionally, with respect to any such action, suit or proceeding.
Notwithstanding the foregoing consent to New York jurisdiction, upon the
commencement of the Chapter 11 Case, each of the Parties hereto hereby agrees
that the Bankruptcy Court shall have exclusive jurisdiction of all matters
arising out of or in connection with this Agreement.
16. SPECIFIC PERFORMANCE. It is understood and agreed by each of
the Parties hereto that money damages would not be sufficient remedy for any
breach of this Agreement by any Party and each non-breaching Party shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy of any such breach.
17. HEADINGS. The headings of the sections, paragraphs and
subsections of this Agreement are inserted for convenience only and shall not
affect the interpretation hereof.
18. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of the Parties and their respective successors, assigns,
heirs, executors, administrators and representatives.
19. PRIOR NEGOTIATIONS. This Agreement, the Term Sheet, the Plan
and the Plan Documents supersede all prior negotiations with respect to the
subject matter hereof.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement. This Agreement may be executed by
facsimile signatures.
21. NO THIRD-PARTY BENEFICIARIES. Unless expressly stated herein,
this Agreement shall be solely for the benefit of the Parties hereto and no
other person or entity shall be a third-party beneficiary hereof.
22. CONSIDERATION. It is hereby acknowledged by the Parties hereto
that no consideration shall be due or paid to the Consenting Holder for its
agreement to vote to accept the Plan in accordance with the terms and conditions
of this Agreement
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other than the Company's agreement to use its reasonable efforts to obtain
approval of the Disclosure Statement and reasonable efforts to confirm the Plan
in accordance with the terms and conditions of this Agreement.
23. SIMILAR AGREEMENTS. In the event that the Company shall enter
into a lock-up, standstill or substantially similar agreement with any other
party, the terms of which are not substantially similar to this Agreement
(including, without limitation, the duration and scope thereof), then this
Agreement shall be deemed amended to incorporate herein any such terms, so long
as such terms are not less favorable to the Consenting Holder than the current
terms hereof (as determined by the Consenting Holder in its sole discretion).
24. NO WAIVER OF PARTICIPATION AND RESERVATION OF RIGHTS. This
Agreement and the Plan and Plan Documents are part of a proposed settlement of a
dispute among the Parties. Except as expressly provided in this Agreement,
nothing contained herein is intended to, or does, in any manner waive, limit,
impair or restrict the ability of the Consenting Holder to protect or preserve
its rights, remedies and interests, including, without limitation, its claims
against the Company or its full participation in any case filed by or against
the Company or any affiliates thereof under the Bankruptcy Code. If the
transactions contemplated by this Agreement, including, without limitation, the
Plan, are not consummated, or if this Agreement is terminated for any reason,
then the Consenting Holder, as well as the other Parties, fully reserve any and
all of their rights, remedies, interests and claims against the other Parties.
Pursuant to Federal Rule of Evidence 408 and any applicable state rules of
evidence, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any proceeding other than a proceeding to enforce
its terms.
25. PAYMENT OF LEGAL FEES/EXPENSES. Immediately upon execution of
this Agreement, the Company will pay the legal fees and expenses incurred to
date with respect to litigation concerning the Notes by each of Noteholders who
are Designated Consenting Parties, in an amount not to exceed $450,000.
[REMAINDER OF THIS PAGE IS BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
SPECTRASITE HOLDINGS, INC.
By:
---------------------------
Name:
Title:
[INSERT NAME OF NOTEHOLDER]
By:
---------------------------
Name:
Title:
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF
12-1/2% SENIOR NOTES DUE 2010
BENEFICIALLY OWNED BY CONSENTING HOLDER:
$________
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF
6-3/4% SENIOR CONVERTIBLE NOTES DUE 2010
BENEFICIALLY OWNED BY CONSENTING HOLDER:
$________
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF
10-3/4% SENIOR NOTES DUE 2010
BENEFICIALLY OWNED BY CONSENTING HOLDER:
$________
AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF
12-7/8% SENIOR DISCOUNT NOTES DUE 2010
BENEFICIALLY OWNED BY CONSENTING HOLDER:
$________
AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF
11-1/4% SENIOR DISCOUNT NOTES DUE 2009
BENEFICIALLY OWNED BY CONSENTING HOLDER:
$________
AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF
12% SENIOR DISCOUNT NOTES DUE 2008
BENEFICIALLY OWNED BY CONSENTING HOLDER:
$________
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EXHIBIT A TO LOCK-UP AGREEMENT
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SUMMARY OF NOTES
SPECTRASITE HOLDINGS, INC. SENIOR NOTES INDENTURE
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12-1/2% Senior Notes due 2010 Indenture, dated as of December 20, 0000, xxxxxxx
XxxxxxxXxxx Xxxxxxxx, Xxx. xxx Xxxxxx Xxxxxx Trust
Company of New York, as Trustee
6-3/4% Senior Convertible Notes due 2010 Indenture, dated as of November 20, 0000, xxxxxxx
XxxxxxxXxxx Xxxxxxxx, Xxx. xxx Xxxxxx Xxxxxx Trust
Company of New York, as Trustee
10-3/4% Senior Notes due 2010 Indenture, dated as of March 15, 0000, xxxxxxx
XxxxxxxXxxx Xxxxxxxx, Xxx. xxx Xxxxxx Xxxxxx Trust
Company of New York, as Trustee
12-7/8% Senior Discount Notes due 2010 Indenture, dated as of March 15, 0000, xxxxxxx
XxxxxxxXxxx Xxxxxxxx, Xxx. xxx Xxxxxx Xxxxxx Trust
Company of New York, as Trustee
11-1/4% Senior Discount Notes due 2009 Indenture, dated as of April 20, 0000, xxxxxxx
XxxxxxxXxxx Xxxxxxxx, Xxx. xxx Xxxxxx Xxxxxx Trust
Company of New York, as Trustee
12% Senior Discount Notes due 2008 Indenture, dated as of June 26, 0000, xxxxxxx
XxxxxxxXxxx Xxxxxxxx Xxx. xxx Xxxxxx Xxxxxx Trust
Company of New York, as Trustee, as amended
March 25, 1999 and June 6, 2000
EXHIBIT B TO LOCK-UP AGREEMENT
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THIS OUTLINE IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES
OR SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN.
SUCH OFFER OR SOLICITATION WILL BE MADE IN COMPLIANCE WITH
ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE
SPECTRASITE HOLDINGS, INC.
PRELIMINARY OUTLINE OF PRINCIPAL TERMS OF
CHAPTER 11 PLAN OF REORGANIZATION
---------------------------------
This Outline describes certain of the principal terms of a proposed
reorganization of the outstanding indebtedness and liabilities of, and equity
interests in, SpectraSite Holdings, Inc., a Delaware corporation (the "PROPOSED
TRANSACTION" and the "COMPANY"). It is contemplated that the Proposed
Transaction will be implemented through confirmation of a "pre-arranged" or
"pre-negotiated" reorganization plan for the Company (the "PLAN"), described
below, under chapter 11 of title 11 of the United States Code, 11 U.S.C.
ss.ss.101 ET SEQ. (the "BANKRUPTCY CODE"), which Plan has the support of certain
holders of the Company's Senior Notes, the series of which are set forth on
Exhibit A to the lock-up agreement, issued by the Company under the applicable
indentures (collectively, the "NOTES", and all holders thereof, the
"NOTEHOLDERS"). The Company's principal operating company, SpectraSite
Communications, Inc. ("OPCO"), and the Company's other direct and indirect
subsidiaries will not file a bankruptcy case; all claims and obligations of OpCo
and the Company's other direct and indirect subsidiaries will be unaffected by
the Proposed Transaction. The Proposed Transaction is subject in all respects
to, among other things, definitive documentation, including the Plan,
appropriate disclosure materials and related documents.
I. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS
A. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE)
Administrative Claims: Each holder will receive payment in
full (in cash) of the unpaid portion
of an allowed administrative claim
on the Plan effective date (the
"EFFECTIVE DATE") or as soon
thereafter as practicable.
Priority Tax Claims: At the Company's option, each holder
will receive either (i) payment in
full (in cash) of an allowed
Priority Tax Claim on the
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Effective Date or as soon thereafter
as practicable, or (ii) payment in
six equal annual installments with
interest as may be required by the
Bankruptcy Code. The Company
anticipates that the allowed amount
of Priority Tax Claims will be $0.
B. UNIMPAIRED CLAIMS (DEEMED TO ACCEPT)
Class 1 - Other Priority Claims: Unless agreed otherwise, each holder
will receive payment in full (in
cash) of an allowed Other Priority
Claim on the Effective Date or as
soon thereafter as practicable. The
Company anticipates that the allowed
amount of Other Priority Claims will
be $0.
Class 2 - Senior Secured Class 2 consists of the lenders'
secured Guaranty Claims: claims
under the Company's guarantee of the
Amended and Restated Credit
Agreement, dated February 22, 2001,
as amended on October 31, 2001, and
August 14, 2002 (the "AMENDED CREDIT
AGREEMENT"). The lenders' Class 2
claims shall be reinstated and
rendered unimpaired in accordance
with section 1124(1) of the
Bankruptcy Code.
Class 3 - Other Secured Claims: Class 3 consists of secured claims
not otherwise classified. Unless
agreed otherwise, at the Company's
option, (i) each allowed Other
Secured Claim shall be reinstated
and rendered unimpaired in
accordance with section 1124(2) of
the Bankruptcy Code, (ii) each
holder of an allowed Other Secured
Claim shall receive Cash in an
amount equal to such allowed Other
Secured Claim, including any
interest on such
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allowed Other Secured Claim required
to be paid pursuant to section
506(b) of the Bankruptcy Code, on
the Effective Date or as soon
thereafter as is practicable, or
(iii) each holder of an allowed
Other Secured Claim shall receive
the Collateral securing its allowed
Other Secured Claim and any interest
on such allowed Other Secured Claim
required to be paid pursuant to
section 506(b) of the Bankruptcy
Code, on the Effective Date or as
soon thereafter as is practicable.
The Company anticipates that the
allowed amount of Other Secured
Claims will be $0. It will be a
condition to the Effective Date that
Allowed Other Secured Claims will
not exceed $1 million.
Class 4 - Other Guaranty Class 4 consists of any claims under
the Claims: Company's guarantees of
certain OpCo contractual obligations
(set forth on SCHEDULE I hereto),
which OpCo contracts will be
otherwise unaffected by the Proposed
Transaction. Class 4 claims shall be
reinstated and rendered unimpaired
in accordance with section 1124(1)
of the Bankruptcy Code. [This
treatment is subject to review by
the Ad Hoc Committee of the Schedule
I agreements in order to confirm the
nature of liabilities thereunder.]
Class 5 - Convenience Claims: Convenience Claims consist of any
Claim which would otherwise be a
Class 6 General Unsecured Claim that
(i) is Allowed in an amount of
$25,000 or less, or (ii) is Allowed
in the amount of greater than
$25,000 but which is reduced to
$25,000 by the election of the
holder thereof pursuant to the
holder's ballot. Each holder will
receive payment in full (in cash) of
an allowed Convenience Claim on the
Effective Date or as soon thereafter
as practicable. No Noteholder claim
may be a Convenience Claim (whether
by election or otherwise).
C. IMPAIRED CLAIMS (ENTITLED TO VOTE)
Class 6 - General Unsecured General Unsecured Claims consist of
Claims: the Noteholders' claims and other
general unsecured claims. The
Company will establish a bar date
and treat other general unsecured
claims pari passu with the
Noteholders' claims. It will be a
condition to the Effective Date that
Allowed General
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Unsecured Claims (other than the
Noteholders' claims) will not exceed
$21 million. General Unsecured
Claims will receive 100% of the
reorganized Company's new common
stock (the "NEW COMMON STOCK"),
subject to dilution for options to
purchase New Common Stock reserved
under the Equity Incentive Plan
(defined below) and exercise of the
New Warrants (defined below).
Class 7 - Old Common Stock: Class 7 consists of the Company's
existing common stock (the "OLD
COMMON Stock"), which will receive 7
-year warrants (the "NEW WARRANTS")
to purchase 5% of the Company's New
Common Stock on a fully diluted
basis, struck at a total enterprise
value of $1.5 billion. The principal
terms of the New Warrants are
described on Exhibit A hereto. The
method of calculating enterprise
value must be acceptable to the Ad
Hoc Committee of Noteholders with
whom this Term Sheet was negotiated
(the "AD HOC COMMITTEE") and the
Company.
D. IMPAIRED CLAIMS (TO RECEIVE NO DISTRIBUTIONS; DEEMED TO REJECT)
Class 8 - Subordinated Security Class 8 consists of all claims based
Claims on Old Common Stock, including
security class action claims, that
are subordinated under section
510(b) of the Bankruptcy Code. Class
8 shall receive no distributions.
The Company anticipates that the
allowed amount of the Subordinated
Security Claims will be $0.
Class 9 - Other Equity Interests: Class 9 consists of old warrants,
options to purchase Old Common
Stock, or other similar interests in
the Company (other than Old Common
Stock). Class 9 shall receive no
distributions.
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II. OTHER PLAN PROVISIONS
A. RELEASES
The Plan will provide customary releases by the Company for
all current directors, officers, and Noteholders who execute lockup agreements
(the "LOCK-UP NOTEHOLDERS") and their and the Company's respective advisors and
such other releases that may be agreed upon with the Company and the Ad Hoc
Committee.
B. REGISTRATION RIGHTS
The Noteholders who would own greater than 10% of the
Company's New Common Stock on a pro forma basis will have customary demand
registration rights.
C. SBC
Effectiveness of the Plan shall be contingent on the Company
consummating either (x) an amendment to the Agreement to Sublease, dated as of
August 25, 2000, by and among SBC Wireless, Inc., for itself and on behalf of
the other Sublessor Entities, and SpectraSite Holdings, Inc. and Southern
Towers, Inc., as amended on such terms as may be agreed with the Company and the
Ad Hoc Committee, and/or (y) an amendment to the SpectraSite Newco Purchase
Agreement, dated as of May 15, 2002, by and among Cingular Wireless LLC,
SpectraSite Holdings, Inc., Southern Towers, Inc., SpectraSite Communications,
Inc. and CA/NV Tower Holdings, LLC on such terms as may be agreed with the
Company and the Ad Hoc Committee (either or both of (x) and (y), the "SBC
TRANSACTION").
D. ADDITIONAL PROVISIONS
In addition, the Plan shall contain provisions appropriate
under the circumstances concerning, among other things, the following: (i)
disputed claims, allowance thereof and reserves therefor; (ii) the assumption or
rejection, as the case may be, of executory contracts and unexpired leases
(including the assumption of all executory contracts, whether or not amended,
with respect to the SBC and Cingular Transaction); (iii) voting of claims; (iv)
effect of Plan confirmation; (v) retention of jurisdiction by the Bankruptcy
Court for certain purposes; and (vi) inability to amend or modify the Plan's
provisions without the consent of the Ad Hoc Committee and any official
creditors committee appointed in the Company's chapter 11 case.
E. AMENDED CREDIT AGREEMENT
Effectiveness of the Plan shall be contingent on (a) there
being no outstanding "Default" or "Event of Default" under the Amended Credit
Agreement and (b) the Plan constituting an "Acceptable Restructuring Plan" under
such agreement.
6
F. NOTEHOLDERS' ATTORNEYS FEES
The Company will pay the legal and financial advisory fees and
expenses incurred through the Effective Date by the Ad Hoc Committee.
III. MANAGEMENT OF THE REORGANIZED COMPANY
A. BOARD OF DIRECTORS AND MANAGEMENT
The initial board of directors of the Reorganized Company (the
"NEW BOARD") shall consist of five (5) members, including the
Chief Executive Officer serving as of the Effective Date and
four (4) members to be selected by the Ad Hoc Committee. The
composition of the New Board shall satisfy all requirements
for director independence.
B. MANAGEMENT INCENTIVE PLAN
The Plan shall provide for an equity incentive plan (the
"EQUITY INCENTIVE PLAN") for certain of the Reorganized
Company's employees to purchase up to 10% of the Company's New
Common Stock on a fully diluted basis (the "OPTIONS"). The
Equity Incentive Plan will be available to approximately 72
employees, including senior management. All Options will be
awarded on the Effective Date, of which 20% will vest
immediately and 50% will vest evenly on a monthly basis over a
3-year period. The remaining 30% of the Options will vest
evenly on each of the first three anniversaries of the
Effective Date, subject to meeting appropriate performance
targets set by the New Board. The exercise price of the
Options will be set based on the average of the closing prices
of the New Common Stock on the first 20 days of trading after
the Effective Date. The Options will have ten year terms,
subject to (i) in the case of those individuals entering into
the Management Employment Contracts (as defined below),
Exhibit B hereto, and (ii) in the case of all other employees,
customary option termination provisions of the Company.
C. MANAGEMENT EMPLOYMENT CONTRACTS
The Reorganized Company will enter into amended employment
contracts with Xxxxxxx X. Xxxxx, President and Chief Executive
Officer, Xxxxx X. Xxxxxx, Executive Vice President and Chief
Financial Officer, and Xxxxxxx X. Xxxxx, Chief Operating
Officer, on the terms described on Exhibit B hereto (the
"MANAGEMENT EMPLOYMENT
7
CONTRACTS"). The Company will assume all other existing
employment contracts.
D. EMPLOYMENT COMPENSATION AND BENEFIT PLANS
Except as otherwise set forth in the Management Employment
Contracts, the Reorganized Company and its subsidiaries will
retain all existing employee benefit, severance, and
performance bonus plans in their present forms. The Company's
Bonus Plan is set forth in more detail on Exhibit C hereto.
E. EMERGENCE BONUSES
On the Effective Date, the Company will pay to Xx. Xxxxx an
emergence bonus in the amount required to allow Xx. Xxxxx to
retain $1.45 million after tax. On the Effective Date, the
Company will pay to Xx. Xxxxxx an emergence bonus in the
amount required to allow Xx. Xxxxxx to retain $600,000 after
tax. All such bonus terms will be included in the Management
Employment Contracts.
SCHEDULE I
SPECTRASITE HOLDINGS, INC.
AGREEMENTS GIVING RISE TO OTHER GUARANTY CLAIMS (1)
1. Agreement to Sublease, dated as of February 16, 2000, by and among
AirTouch Communications, Inc., the Sublessors (as defined therein),
California Tower, Inc. and SpectraSite Holdings, Inc.
2. Site Marketing Agreement, dated as of February 16, 2000, by and among
AirTouch Communications, Inc., the Owners (as defined therein),
California Tower, Inc. and SpectraSite Holdings, Inc.
3. Sublease, dated as of August 15, 2000, by and among Verizon Wireless
(VAW) LLC, the Sublessors (as defined therein), California Tower, Inc.
and SpectraSite Holdings, Inc.
4. Master Tower Site Lease Agreement, dated as of February 16, 2000, by
and among AirTouch Communications, Inc., California Towers, Inc. and
SpectraSite Holdings, Inc.
5. Strategic Relationship Agreement, dated as of December 31, 2001, by and
among Simon Business Network, LLC, Simon Property Group, L.P. and
SpectraSite Communications, Inc.
6. Guaranty of Park Ave. lease, dated February 21, 2001 by SpectraSite
Holdings, Inc. (formal name of lease to be inserted).
7. Agreement of Indemnity, dated as of April 20, 2001, by and among
SpectraSite Holdings, Inc., SpectraSite Communications, Inc., XL
Specialty Insurance Company and Greenwich Insurance Company.
8. Agreement to Sublease, dated as of August 25, 2000, by and among SBC
Wireless, Inc., for itself and on behalf of the other Sublessor
Entities, and SpectraSite Holdings, Inc. and Southern Towers, Inc., and
all amendments thereto and side letters or other guarantees with
respect thereof, as modified by the SBC Transaction and as agreed with
the Company and the Ad Hoc Committee.
9. Lease and Sublease, dated as of December 14, 2000, by and among SBC
Tower Holdings LLC, for itself and as Agent for the SBC Group, and SBC
Wireless, LLC, as Guarantor, and Southern Towers, Inc., and SpectraSite
Holdings, Inc., as
-------------
(1) The Company does not anticipate that any amounts will be owed in
respect of Other Guaranty Claims on the Effective Date.
Guarantor, and all amendments thereto and side letters or other
guarantees with respect thereof, as modified by the parties.
10. BTS Lease Agreement, dated as of December 14, 2000, by and among
SpectraSite Communications, Inc., SpectraSite Holdings, Inc., each
TowerCo (as defined therein), SBC Wireless, LLC and each User (as
defined therein), as amended by Amendment No. 1 to the BTS Lease
Agreement, dated as of August 31, 2001, and all amendments thereto and
side letters or other guarantees with respect thereof, as modified by
the parties.
EXHIBIT A
SPECTRASITE HOLDINGS, INC.
NEW WARRANTS
TERM SHEET
--------------------------------------------------------------------------------
ISSUER: SpectraSite Holdings, Inc.
--------------------------------------------------------------------------------
ISSUE: Warrants to purchase New Equity.
--------------------------------------------------------------------------------
DENOMINATIONS: Par [$0.01].
--------------------------------------------------------------------------------
EXPIRATION: 7 years (2010).
--------------------------------------------------------------------------------
LIMITATION OF WARRANTS May be exercised for an amount not to exceed 5% of
New Equity on a fully diluted basis.
--------------------------------------------------------------------------------
STRIKE PRICE: The exercise price of the New Warrants will be set
based on a total enterprise value of $1.5 billion.
--------------------------------------------------------------------------------
EXHIBIT B
SPECTRASITE HOLDINGS, INC.
MANAGEMENT EMPLOYMENT CONTRACTS -
XXXXX, XXXXXX AND XXXXX
TERM SHEET
Salary Same as current.
Bonus The existing bonus plan will be continued,
and the targets for 2002 will remain as
currently set. The bonus targets for 2003
and thereafter will be determined by the
Reorganized Company's Board of Directors.
Term 3 years with automatic 1-year renewals,
unless notice is given by either party at
least 6 months prior to expiration.
Severance 24 months of severance (base salary plus
annualized bonus) and benefits will be
granted if a covered employee is fired
without Cause other than during the 2-year
period following a Change of Control. 36
months of severance (base salary plus
annualized bonuses) and benefits will be
granted if a covered employee is fired
without Cause or resigns with Good Reason
during the 2-year period following a Change
of Control. (Same terms as existing
Severance Plan A. Defined terms "Cause",
"Good Reason" and "Change of Control" as
defined in Severance Plan A, except that the
Proposed Transaction will not constitute a
Change of Control.)
Right to Resign Following a In addition to the severance provision
Change of Control described above, a covered employee can
resign without Good Reason during the 30-day
period beginning on the first anniversary of
a Change of Control and receive 24 months of
severance (base salary plus annualized
bonuses) and benefits. The definition of
"Change of Control" will be modified to
exclude share purchases by or transfers of
shares among members of the Ad Hoc
Committee.
Option Vesting Following For service-based options, full acceleration
Termination (New Options) upon termination without Cause, resignation
with Good Reason, death or disability; the
New Board to
determine the terms relating to the
acceleration of performance-based options;
provided that there will be no acceleration
for Options with performance-based vesting
for which the performance period has passed
and the target has not been hit.
Exercise Period of Vested Continuing exercisability for:
Options Following o the applicable severance period upon
Termination (New Options) termination without Cause or resignation
with Good Reason;
o 2 years following death or disability;
and
o 90 days following a resignation without
Good Reason.
All Options immediately terminate upon a
termination by the Company for Cause.
Option Vesting Upon a Change If the Change of Control is a cash for stock
of Control (New Options) transaction, full acceleration of service-
based options will occur upon the Change of
Control; the New Board to determine the
terms relating to the acceleration of
performance-based options; provided that
there will be no acceleration for Options
with performance-based vesting for which the
performance period has passed and the target
has not been hit.
If the Change of Control is a stock for
stock transaction, there will be no
acceleration and options will be converted
into options on the new stock.
Golden Parachute Modified No severance or other payment or portion
Cut-Back thereof will be paid if, after payment of
any "golden parachute" excise tax, the
employee would be in a better position
economically if such payment or portion
thereof is not made.
Other Terms: Same as existing employment agreements and
compensation and benefit arrangements.
EXHIBIT C
SPECTRASITE PERFORMANCE BONUS PLAN
SUMMARY
STRUCTURE
The performance bonus program provides a percentage of annual salary
for employees of the Company and its subsidiaries based on the
Company's achievement of EBITDA and functional goals, such as
collocation rate. Five levels of employees are eligible. Tier I bonuses
are based solely on actual vs. budget EBITDA. Bonuses for employees in
Tiers II through V are based 60% on EBITDA and 40% on one or more
functional goals. The actual numbers of employees and division of those
employees into Tiers may vary.
TARGET TARGET TARGET MAX
TIER QUARTERLY BONUS ANNUAL BONUS TOTAL TOTAL
---- --------------- ------------ ----- -----
I(a) None 100% 100% 135%
II 7.5% 20% 50% 67.5%
III 6.0% 16% 40% 54%
IV 4.5% 12% 30% 40.5%
V 3.0% 8% 20% 27%
BONUS DETERMINATION
Bonus increments paid per increment of performance are as follows:
ACTUAL VS. BUDGET PERFORMANCE
----------------------------- PERFORMANCE BONUS BONUS
HALF MINIMUM MAXIMUM INCREMENTS RANGE INCREMENTS
---- ------- ------- ---------- ----- ----------
1st (2002) 80% 120% 1% 80-120% 1%
2nd (2002) 80% 120% 1% 50-150% 2.5%
(a) Represents Messrs. Xxxxx, Xxxxxx and Xxxxx
