SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (Date of earliest event reported): April 12, 2000
SpectraSite Holdings, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
0-27217 56-2027322
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(Commission File Number) (I.R.S. Employer Identification Number)
100 Regency Forest Drive
Cary, North Carolina 27511
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(Address of principal executive offices) (Zip Code)
(919) 468-0112
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On April 12, 2000, SpectraSite announced execution of a stock purchase
agreement pursuant to which SpectraSite will acquire Lodestar Towers, Inc., a
wholly owned subsidiary of LeBlanc & Royal Enterprises Inc., for approximately
$170 million. Lodestar owns and operates 90 wireless towers and 10 broadcast
towers, and manages an additional 139 wireless towers and 10 broadcast towers.
Lodestar is also in the process of acquiring 27 multi-tenant towers and
developing approximately 200 wireless towers. This acquisition is expected to
close in the second quarter of 2000, subject to customary regulatory approvals.
Copies of the stock purchase agreement and the press release announcing this
transaction are being filed with this report as Exhibit 2.1 and Exhibit 99.1,
respectively.
On April 13, 2000, SpectraSite announced execution of a joint venture
shareholders' agreement, pursuant to which SpectraSite and Transco (BG Group
plc), the arm of BG Group plc which runs Britain's gas network, will jointly
develop a tower business to support Europe's growing mobile communications
industry. SpectraSite and Transco will each own 50% of the joint venture.
Transco will transfer existing operational communications towers and industrial
land suitable for construction of new towers into the joint venture, and
SpectraSite will provide intellectual property and wireless network development
skills. In addition, SpectraSite will contribute funds for future developments
and possible acquisitions. Consummation of the joint venture is subject to
satisfaction of a number of conditions.
On April 13, 2000, SpectraSite also announced its acquisition of Ample
Design Ltd. for approximately $19 million. Ample Design provides wireless
network development services in the United Kingdom. SpectraSite expects to
incorporate Ample Design into the Transco joint venture.
Copies of the joint venture shareholders' agreement with Transco and
the press release announcing both the joint venture and the acquisition of Ample
Design are being filed with this report as Exhibit 2.2. and Exhibit 99.2,
respectively.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
None.
(b) Pro forma financial information.
None.
(c) Exhibits.
2.1 Stock Purchase Agreement, dated as of April
12, 2000, by and between SpectraSite
Communications, Inc. and LeBlanc & Royale
Enterprises Inc.
1
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2.2 Joint Venture Shareholders' Agreement, dated
as of April 13, 2000, by and among
SpectraSite International, Inc., Transco
Telecommunications Asset Development Company
Limited and EVER 1267 Limited.
99.1 Press Release dated April 12, 2000.
99.2 Press Release dated April 13, 2000.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPECTRASITE HOLDINGS, INC.
Dated: April 18, 2000 By: /s/ Daniel I. Hunt
---------------------------
Daniel I. Hunt
Vice President, Finance
and Administration
3
STOCK PURCHASE AGREEMENT
by and between
LeBLANC & ROYLE ENTERPRISES INC.
and
SPECTRASITE COMMUNICATIONS, INC.
-------------------------
for all of the outstanding stock of
LeBLANC PROPERTIES INC.
-------------------------
April 12, 2000
-------------------------
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TABLE OF CONTENTS
1. Sale and Purchase of Shares...........................................1
1.1 Sale and Purchase of Shares..................................1
1.2 Payment of Purchase Price....................................1
1.3 Post-Closing Purchase Price Adjustments......................2
1.4 Delivery of Shares...........................................4
2. Closing; Closing Date.................................................4
3. Representations and Warranties of the Seller..........................4
3.1 Title to the Shares..........................................4
3.2 Due Incorporation and Authority..............................4
3.3 Authority to Execute and Perform Agreement...................4
3.4 Due Incorporation and Authority of Company...................5
3.5 Subsidiaries and Other Affiliates............................5
3.6 Qualification................................................5
3.7 Outstanding Capital Stock ..................................5
3.8 Options or Other Rights......................................6
3.9 Charter Documents and Corporate Records......................6
3.10 Financial Statements.........................................6
3.11 No Material Adverse Change...................................7
3.12 Taxes........................................................7
3.13 Compliance with Laws.........................................8
3.14 Permits......................................................9
3.15 No Breach....................................................9
3.16 Environmental Matters........................................9
3.17 Claims and Proceedings......................................10
3.18 Contracts...................................................10
3.19 Real Estate.................................................11
3.20 Intellectual Property.......................................15
3.21 Title to Properties.........................................15
3.22 Liabilities.................................................15
3.23 Employee Benefits...........................................16
3.24 Employment and Labor Matters................................17
3.25 Insurance...................................................17
3.26 Operations of the Company...................................18
3.27 Banks, Brokers and Proxies..................................19
3.28 Premerger Notification......................................19
3.29 Standard of Disclosure......................................19
4. Representations and Warranties of the Buyer..........................19
4.1 Due Incorporation and Authority.............................19
4.2 Authority to Execute and Perform Agreement..................20
4.3 Purchase for Investment.....................................20
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4.4 Premerger Notification......................................20
5. Covenants and Agreements.............................................20
5.1 Conduct of Business.........................................20
5.2 Corporate Examinations and Investigations...................21
5.3 Publicity...................................................22
5.4 Expenses....................................................22
5.5 Indemnification of Brokerage................................22
5.6 Related Parties.............................................22
5.7 Termination of Debt.........................................22
5.8 Release of Liens............................................23
5.9 Required Consents...........................................23
5.10 Permit Transfers............................................23
5.11 Tax Matters.................................................23
5.12 Allocation of Purchase Price. .............................28
5.13 Seller's Group Insurance Policies. ........................28
5.14 Use of LeBlanc Name. .......................................28
5.15 Tower Construction..........................................28
5.16 Further Assurances..........................................29
6. Conditions Precedent to the Obligation of the Buyer to Close.........29
6.1 Representations and Covenants...............................29
6.2 Consents and Approvals......................................29
6.3 Opinion of Counsel to the Seller............................29
6.4 HSR Act Filing..............................................29
6.5 Resignations; Revocations...................................29
6.6 No Claims...................................................30
6.7 Real Estate.................................................30
6.8 Release of Debt.............................................30
6.9 Release of Liens............................................30
6.10 Termination of Agreements...................................30
6.11 Due Diligence...............................................30
7. Conditions Precedent to the Obligation of the Seller to Close........31
7.1 Representations and Covenants...............................31
7.2 HSR Act Filing..............................................31
7.3 No Claims...................................................31
7.4 Opinion of Counsel to the Buyer.............................31
8. Survival of Representations and Warranties After Closing.............32
9. General Indemnification..............................................32
9.1 Obligation of the Seller to Indemnify.......................32
9.2 Obligation of the Buyer to Indemnify........................32
9.3 Notice and Opportunity to Defend............................33
9.4 Limitations on Indemnification..............................34
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10. Termination of Agreement.............................................34
10.1 Termination.................................................34
10.2 Survival After Termination..................................35
11. Miscellaneous........................................................35
11.1 Certain Definitions.........................................35
11.2 Consent to Jurisdiction and Service of Process..............40
11.3 Notices.....................................................41
11.4 Entire Agreement............................................42
11.5 Waivers and Amendments; Non-Contractual Remedies; Preservation
of Remedies.................................................42
11.6 Governing Law...............................................42
11.7 Binding Effect; No Assignment...............................42
11.8 Variations in Pronouns; Defined Terms; Interpretation.......43
11.9 Counterparts................................................43
11.10 Exhibits and Schedules......................................43
11.11 Headings....................................................43
11.12 Severability of Provisions..................................43
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<PAGE>
EXHIBITS
A: Form of Opinion of Torys, Seller's Counsel
B: Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison, Buyer's
Counsel
THE FOLLOWNING SCHEDULES HAVE BEEN OMITTED, AND WILL BE FURNISHED SUPPLEMENTALLY
TO THE COMMISSION UPON REQUEST.
SCHEDULES
1.2 Capital Expenditures
3.5(i) Subsidiaries
3.5(ii) Interest in Elsinore Peak Facility Corp.
3.7 Outstanding Capital Stock of Subsidiaries
3.12 Taxes
3.14 Transfer of Permits
3.17 Claims and Proceedings
3.18 Contracts
3.19(a) Owned Real Property and Structures
3.19(b)(i) Real Property Leases
3.19(b)(ii) Binding Real Property Leases
3.19(d) Collocation Agreements
3.19(f)(i) Completed Tower Assets
3.19(f)(ii) Uncompleted Tower Assets
3.19(o) Acquisitions
3.23 Company Plans
3.25 Insurance
6.10 Continuing Related Party Agreements
11.1(i) TD Credit Facility Security Documents
11.1(ii) Working Capital
iv
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STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of April 12, 2000, by and between
SpectraSite Communications, Inc., a Delaware corporation (the "Buyer"), and
LeBlanc & Royle Enterprises Inc., a Canadian corporation (the "Seller"), for the
purchase and sale of all of the issued and outstanding shares of capital stock
of LeBlanc Properties Inc., a Delaware corporation (the "Company").
The Seller is the beneficial and record owner of all of the
issued and outstanding shares of common stock, par value $100.00 per share and
all of the issued and outstanding shares of preferred stock, par value $1000.00
per share (collectively, the "Shares"), of the Company. The Seller wishes to
sell all of the Shares and the Buyer wishes to purchase all of the Shares upon
the terms and subject to the conditions of this Agreement.
Certain terms used in this Agreement are defined in Section
11.1.
Accordingly, the parties agree as follows:
1. Sale and Purchase of Shares.
1.1 Sale and Purchase of Shares. At the closing provided for in Article 2 (the
"Closing") and upon the terms and subject to the conditions of this Agreement,
and in reliance upon the representations, warranties and agreements of the
Seller, the Buyer shall purchase all of the Shares for an aggregate purchase
price (subject to adjustment in accordance with this Article 1, the "Purchase
Price") equal to the sum of $170,000,000.00, payable as provided in Section 1.2.
1.2 Payment of Purchase Price.
(a) At the Closing and subject to adjustment in accordance with Section 1.2(c)
and Section 5.7(b), the Buyer shall deliver to the Seller cash by wire transfer
of immediately available funds in an aggregate amount of the Purchase Price, (i)
increased dollar for dollar by (1) the purchase price paid by the Company for
all acquisitions of communications towers made by the Company or any of its
Subsidiaries between January 1, 2000 and May 1, 2000 and (2) the amount of all
capital expenditures incurred by the Company or any of its Subsidiaries between
January 1, 2000 and May 1, 2000; provided, however, that the amounts referred to
in the foregoing clauses (1) and (2) shall not, during the period of time from
the date of this Agreement until May 1, 2000, without the Buyer's written
consent, exceed the amount of capital expenditures for such period calculated by
subtracting the amount of capital expenditures as of December 31, 1999 from the
amount of capital expenditures projected as of May 1, 2000, each as set forth on
Schedule 1.2 and, if such amounts are paid or payable to the Seller or any of
its affiliates, such amounts shall be at market rates (the amounts referred to
in the foregoing clauses (1) and (2), subject to the proviso, being referred to
together as the "Capital Payments"), (ii) decreased dollar for dollar by the
amount of Debt, if any, as of the Closing, and (iii) increased or decreased
dollar for
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2
dollar, as the case may be, by the amount by which Working Capital on the
Closing Date either exceeds or is less than a deficiency in the amount of
$1,792,562.00 (which is the amount of Working Capital as of December 31, 1999
calculated as set forth on Schedule 11.1). The parties agree that if the Closing
does not occur on or before May 1, 2000, the parties will amend Schedule 1.2 to
cover projected capital expenditures from May 1, 2000 to the Closing, and, in
such case, references above in this Section 1.2(a) to "May 1, 2000" will be
deemed to be references to "the Closing."
(b) Three days prior to the Closing, the Seller shall prepare and deliver to the
Buyer an estimated consolidated balance sheet of the Company and the
Subsidiaries as of the Closing Date (the "Preliminary Balance Sheet"). The
Preliminary Balance Sheet (i) shall be prepared by the Seller in good faith and
in accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis, (ii) shall include a schedule setting
forth the amount of Capital Payments, Debt and Working Capital as of the Closing
Date and (iii) shall be accompanied by all information reasonably necessary to
determine the amount of Capital Payments, Debt and Working Capital as of the
Closing Date, to the extent such amounts can be determined or estimated as of
the date of the Preliminary Balance Sheet, and such other information as may be
reasonably requested by the Buyer.
(c) At or prior to the Closing, the Buyer may provide the Seller with any
objections to the amount of Capital Payments, Debt and Working Capital on the
Preliminary Balance Sheet. After considering the Buyer's objections, the Seller
shall make such revisions to the Preliminary Balance Sheet as are mutually
acceptable to the parties, and shall deliver a copy of such revised Preliminary
Balance Sheet (the "Revised Preliminary Balance Sheet") to the Buyer. Subject to
the next sentence, at the Closing, the Buyer shall pay to the Seller the amount
of the Purchase Price as adjusted to take into account the amount of Capital
Payments, Debt and Working Capital agreed upon by the Seller and the Buyer and
included on the Revised Preliminary Balance Sheet. In the case of any amount as
to which the Seller and the Buyer do not agree prior to the Closing, payment of
such amount will be resolved following the Closing in accordance with Section
1.3. In the event that the Buyer fails to deliver any objections to the
Preliminary Balance Sheet by the Closing Date, the Preliminary Balance Sheet
shall be deemed to be the Closing Balance Sheet and shall be deemed to be
delivered to the Seller by the Buyer on the Closing Date.
1.3 Post-Closing Purchase Price Adjustments.
(a) The Seller and the Buyer agree that the Purchase Price shall be adjusted
following the Closing as follows: (i) increased dollar for dollar to the extent
that Capital Payments as set forth on the Closing Balance Sheet exceed Capital
Payments as set forth on the Revised Preliminary Balance Sheet, (ii) decreased
dollar for dollar to the extent that Capital Payments as set forth on the
Closing Balance Sheet are less than Capital Payments as set forth on the Revised
Preliminary Balance Sheet, (iii) increased dollar for dollar to the extent that
Debt as set forth on the Closing Balance Sheet is less than Debt as set forth on
the Revised Preliminary Balance Sheet, (iv) decreased dollar for dollar to the
extent that Debt as set forth on the Closing Balance
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3
Sheet exceeds Debt as set forth on the Revised Preliminary Balance Sheet, (v)
increased dollar for dollar to the extent that Working Capital as set forth on
the Closing Balance Sheet exceeds Working Capital as set forth on the Revised
Preliminary Balance Sheet, and (vi) decreased dollar for dollar to the extent
that Working Capital as set forth on the Closing Balance Sheet is less than
Working Capital as set forth on the Revised Preliminary Balance Sheet.
(b) Within 60 days after the Closing Date, the Buyer shall prepare and deliver
to the Seller an unaudited consolidated balance sheet of the Company and its
Subsidiaries as of the Closing Date (the "Closing Balance Sheet"). The Closing
Balance Sheet shall be prepared by the Buyer in good faith and in accordance
with GAAP applied on a consistent basis and shall be accompanied by all
information reasonably necessary to determine the amount of Capital Payments,
Debt and Working Capital as of the Closing. The Seller shall cooperate with the
Buyer in the preparation of the Closing Balance Sheet.
(c) The Buyer shall allow the Seller and its agents access at all reasonable
times after the Closing Date to the books, records and accounts of the Company
and its Subsidiaries to allow the Seller to examine the accuracy of the Closing
Balance Sheet. Within 30 days after the date that the Closing Balance Sheet is
delivered by the Buyer to the Seller, the Seller shall complete its examination
thereof and may deliver to the Buyer a written report setting forth any proposed
adjustments to the Closing Balance Sheet (the "Seller's Dispute Report"). If the
Seller notifies the Buyer of its acceptance of the amount of Capital Payments,
Debt and Working Capital as of the Closing shown on the Closing Balance Sheet,
or if the Seller fails to deliver a report of proposed adjustments to the
Closing Balance Sheet within the 30 day period specified in the preceding
sentence, the amount of Capital Payments, Debt and Working Capital as of the
Closing shown on the Closing Balance Sheet shall be conclusive and binding on
the parties as of the last day of such 30 day period. The Buyer and the Seller
shall use good faith efforts to resolve any dispute involving the amount of
Capital Payments, Debt and Working Capital as of the Closing (each a "Disputed
Matter"), and any resolution between them as to a Disputed Matter shall be
final, binding and conclusive on the parties hereto. If, after 30 days following
the receipt by the Buyer of the Seller's Dispute Report, the Buyer and the
Seller are unable to resolve any Disputed Matter, such Disputed Matter shall be
referred to a nationally recognized independent accounting firm reasonably
acceptable to both the Buyer and the Seller (the "Arbitrator") for resolution.
The Arbitrator shall be instructed to use every reasonable effort to make its
determination with respect to such Disputed Matter (the "Determination") within
30 days of the submission to the Arbitrator of such Disputed Matter. The Buyer
shall give the Arbitrator access at all reasonable times to the books, records
and accounts of the Company and its Subsidiaries used to prepare the Closing
Balance Sheet. After completing the Determination, the Arbitrator shall deliver
notice of the Determination to the Buyer and the Seller and upon receipt
thereof, the Determination shall be final, binding and conclusive on the parties
hereto with respect to such Disputed Matter. Each of the Buyer and the Seller
shall bear all costs, fees and expenses incurred by it in connection with such
arbitration, and the allocation of the costs, fees and expenses of the
Arbitrator as
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4
between the Buyer and the Seller shall be determined by the
Arbitrator in its sole discretion.
(d) If the Purchase Price as finally determined in accordance with Section
1.3(a) is less than the amount paid by the Buyer to the Seller at the Closing,
then the Seller shall pay over to the Buyer the amount of such difference, plus
interest thereon at the rate of 8.5% per annum from and including the Closing
Date to but excluding the date of payment, by wire transfer of immediately
available funds within three days after the date on which the Purchase Price
adjustments are finally determined in accordance with this Section 1.3. If the
Purchase Price as finally determined in accordance with Section 1.3(a) is
greater than the amount paid by the Buyer to the Seller at the Closing, then the
Buyer shall pay over to the Seller the amount of such difference, plus interest
thereon at the rate of 8.5% per annum from and including the Closing Date to but
excluding the date of payment, by wire transfer of immediately available funds
within three days after the date on which Purchase Price adjustments are finally
determined in accordance with this Section 1.3.
1.4 Delivery of Shares. At the Closing, the Seller shall deliver or cause to be
delivered, as the case may be, to the Buyer stock certificates representing the
Shares, duly endorsed in blank or accompanied by stock powers duly executed in
blank, in proper form for transfer, and with all appropriate stock transfer tax
stamps affixed.
2. Closing; Closing Date. The Closing of the sale and purchase of the Shares
contemplated hereby shall take place at the offices of Paul, Weiss, Rifkind,
Wharton & Garrison, 1285 Avenue of the Americas, New York, New York at 1:00 p.m.
local time, on the later of (i) May 1, 2000 and (ii) four business days after
each of the conditions to the Closing contained in Sections 6 and 7 has been
satisfied or waived by the party entitled to waive such condition; or such other
time or date as the Buyer and the Seller agree in writing. The time and date
upon which the Closing occurs is herein called the "Closing Date."
3. Representations and Warranties of the Seller. The Seller represents and
warrants to the Buyer as follows:
3.1 Title to the Shares. The Seller owns the Shares beneficially and of record,
free and clear of any Lien. Upon delivery of and payment for such Shares at the
Closing as herein provided, the Seller will convey to the Buyer good and valid
title thereto, free and clear of any Lien.
3.2 Due Incorporation and Authority. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of Canada. The Seller has
all requisite corporate power, approvals and authority to own, lease and operate
its properties and to carry on its business as now being and as heretofore
conducted.
3.3 Authority to Execute and Perform Agreement. The Seller has the full legal
right and power and all authority and approvals required to execute and
<PAGE>
5
deliver this Agreement and to perform fully its obligations hereunder. This
Agreement has been duly executed and delivered by the Seller and (assuming the
due authorization, execution and delivery hereof by the Buyer) is a valid and
binding obligation of the Seller enforceable in accordance with its terms.
Except for approval pursuant to the Seller Credit Facility (which has been
obtained or will be obtained prior to Closing), the execution and delivery by
the Seller of this Agreement, the consummation of the transactions contemplated
by this Agreement (the "Contemplated Transactions") and the performance by the
Seller of this Agreement in accordance with its terms will not (a) require the
approval or consent of any Governmental Body (excluding notification and report
forms filed pursuant to the HSR Act) or the approval or consent of any other
person; (b) conflict with or result in any breach or violation of any of the
terms and conditions of, or constitute (or with notice or lapse of time or both
constitute) a default under, the Certificate of Incorporation or By-Laws of the
Seller, any Law or Order of any Governmental Body applicable to the Seller or to
the Shares held by the Seller, or any Contract to which the Seller is a party or
by or to which the Seller is, or the Shares held by the Seller are, bound or
subject; or (c) result in the creation of any Lien on the Shares held by the
Seller.
3.4 Due Incorporation and Authority of Company. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being and
heretofore conducted.
3.5 Subsidiaries and Other Affiliates. Schedule 3.5(i) sets forth the name and
jurisdiction of organization of each corporation or other entity in which the
Company directly or indirectly owns or has the power to vote shares of any
capital stock or other ownership interests having ordinary voting power to elect
a majority of the directors of such corporation, or other persons performing
similar functions for such entity, as the case may be. Except for the entities
set forth on Schedule 3.5(i) and for the interest in Elsinore Peak Facility
Corp. described in Schedule 3.5(ii), the Company does not directly or indirectly
own any interest in any other person. Each of the Subsidiaries is a corporation
duly organized, validly existing and, to the extent applicable, in good standing
under the laws of its jurisdiction of organization and has the corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being and heretofore conducted.
3.6 Qualification. Each of the Company and each of its Subsidiaries is duly
qualified or otherwise authorized as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification or
authorization is required by law and in which the failure so to qualify or be
authorized could have a material adverse effect on the properties, business,
results of operations or financial condition of the Company and the
Subsidiaries, taken as a whole (collectively, the "Condition of the Companies").
3.7 Outstanding Capital Stock. The Company is authorized to issue (a) 30,000
shares of common stock, par value $100.00 per share, of which 24,000
<PAGE>
6
shares are issued and outstanding and (b) 15,000 shares of preferred stock, par
value $1,000.00 per share, of which 13,325 shares are issued and outstanding.
The authorized and issued shares of capital stock of each Subsidiary are set
forth on Schedule 3.7. All issued and outstanding capital stock of each
Subsidiary is owned by the Company, free and clear of all Liens, except for
Liens securing the TD Credit Facility. All of the outstanding shares of capital
stock of the Company and the Subsidiaries are duly authorized and validly
issued, fully paid and non-assessable. No other class of capital stock or other
ownership interests of the Company or any of the Subsidiaries is authorized or
outstanding.
3.8 Options or Other Rights. There is no outstanding right, subscription,
warrant, call, unsatisfied preemptive right, option or other agreement of any
kind to purchase or otherwise to receive from the Company, any of the
Subsidiaries or the Seller any of the outstanding, authorized but unissued,
unauthorized or treasury shares of the capital stock or any other security of
the Company or any of the Subsidiaries, and there is no outstanding security of
any kind of the Company or any Subsidiary convertible into any such capital
stock.
3.9 Charter Documents and Corporate Records. The Seller will make available to
the Buyer after the date hereof true and complete Certificates of Incorporation
and By-Laws, or comparable instruments, of the Company and each of the
Subsidiaries as in effect on the date hereof. The minute books of the Company
and of each of the Subsidiaries which will be made available to the Buyer for
its inspection contain true and complete records in all material respects of all
meetings and consents in lieu of meeting of the Board of Directors (and any
committee thereof) of the Company and of each of the Subsidiaries, and their
respective shareholders, since the time of its organization and accurately
reflect in all material respects all transactions referred to in such minutes
and consents in lieu of meeting. The stock books of the Company and each of the
Subsidiaries, which will be made available to the Buyer for its inspection, are
true and complete in all material respects.
3.10 Financial Statements.
(a) The consolidated balance sheets of Lodestar Towers, Inc. and the
Subsidiaries that are, directly or indirectly, wholly owned by Lodestar Towers,
Inc. as of December 31, 1997, December 31, 1998, and December 31, 1999 and the
related consolidated statements of operations, cash flows and changes in
stockholder's equity for the years then ended, including the footnotes thereto,
opined on by Deloitte & Touche, LLP or McGladrey & Pullen, LLP, as applicable,
independent certified public accountants, which have been delivered to the
Buyer, fairly present the consolidated financial position of Lodestar Towers,
Inc. and such Subsidiaries as at such dates and the consolidated results of
operations for such respective periods, in each case in accordance with GAAP
consistently applied for the periods covered thereby. (The foregoing
consolidated financial statements of Lodestar Towers, Inc. and such
Subsidiaries, together with the financial statements of Spurs referred to in
Section 3.10(b), as of December 31, 1999 and for the year then ended are
sometimes herein called the "Audited Financials," the consolidated balance
sheets included in the Audited
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7
Financials are sometimes herein called the "Audited Balance Sheet" and December
31, 1999 is sometimes herein called the "Audited Balance Sheet Date.")
(b) The balance sheets of Spurs of Missouri, Inc. ("Spurs") as of December 31,
1997, December 31, 1998, and December 31, 1999 and the related statements of
operations, cash flows and changes in stockholder's equity for the years then
ended which have been delivered to the Buyer, fairly present the financial
position of Spurs as at such dates and its results of operations for such
respective periods, in each case in accordance with GAAP consistently applied
for the periods covered thereby.
(c) Each of the Company and L&T Communications, Inc. is a holding company that
has never carried on any active business. The Company owns no assets other than
shares of capital stock of Lodestar Towers, Inc. and L&T Communications, Inc.
and has no Liabilities. L&T Communications, Inc. owns no assets other than the
shares of capital stock of Spurs and has no Liabilities.
3.11 No Material Adverse Change. Since the Audited Balance Sheet Date, there has
been no material adverse change (excluding any change generally affecting the
industry in which the Company and the Subsidiaries operate, and any change in
general economic conditions) in the Condition of the Companies, and to the
knowledge of the Seller, there has been no such change which is threatened in
writing, nor has there been any damage, destruction or loss which would
reasonably be expected to have or has had a material adverse effect on the
Condition of the Companies, whether or not covered by insurance.
3.12 Taxes.
(a) The Company and the Subsidiaries have paid all Material Taxes, and shall
timely pay such Material Taxes required to be paid by or with respect to the
Company and the Subsidiaries (or any of them) after the date hereof and on or
before the Closing Date.
(b) All returns and other reports required to be filed by or with respect to the
Company and the Subsidiaries (or any of them) with respect to Taxes (hereinafter
"Tax Returns") on or before the date hereof have been timely filed. All Tax
Returns required to be filed by or with respect to the Company and the
Subsidiaries (or any of them) after the date hereof and on or before the Closing
Date shall be prepared and timely filed, in a manner consistent with prior years
(except where any inconsistency is required by applicable laws and regulations)
and applicable laws and regulations.
(c) Except as set forth on Schedule 3.12, the Company and the Subsidiaries will
not be required to pay any Taxes attributable to any member of any group of
affiliated corporations that files consolidated or combined returns (other than
a member of the group that consists of the Company and the Subsidiaries) of
which the Company or any of the Subsidiaries was a member before the Closing
Date by reason of
<PAGE>
8
Treas. Reg. ss. 1.1502-6 or any comparable provision of state, local or foreign
law that provides for joint or several liability, in whole or in part.
(d) With respect to all Federal and state income Tax Returns of the Company and
any of the Subsidiaries, (i) no audit is in progress and no extension of time
(other than automatic extensions of time) is in force with respect to any date
on which any Tax Return was or is to be filed and no waiver or agreement is in
force for the extension of time for the assessment or payment of any Tax; and
(ii) there is no unassessed deficiency proposed or threatened in writing against
the Company or any of the Subsidiaries.
(e) With respect to all state, county, local and foreign Tax audits of the Tax
Returns of the Company and the Subsidiaries, no audit is in progress.
(f) Except as set forth on Schedule 3.12, neither the Company nor any of the
Subsidiaries has agreed to or is required to make any adjustments under Section
481(a) of the Internal Revenue Code of 1986, as amended (the "Code") (or in any
similar provision of state, local or foreign tax law) by reason of a change in
accounting method or otherwise for any tax period for which the applicable
Federal statute of limitations has not yet expired.
(g) Schedule 3.12 sets forth all Federal, state, county, local and foreign tax
elections under the Code and other applicable provisions of tax law that are in
effect with respect to the Company and the Subsidiaries for the fiscal year
ended December 31, 1999 and the fiscal year beginning January 1, 2000.
(h) Except as set forth on Schedule 3.12, no gain or loss from deferred
intercompany transactions or excess loss accounts of the Company or the
Subsidiaries have been or will be triggered by the Contemplated Transactions.
(i) The Company and the Subsidiaries have not at any time consented under
Section 341(f)(1) of the Code to have the provisions of Section 341(f)(2) of the
Code apply to any sale of its capital stock.
(j) Neither the Company nor any of the Subsidiaries will have any liability
after the Closing Date under any tax sharing agreement to which they have been a
party, and all such tax sharing agreements in effect before the Closing Date
shall terminate and be of no further force and effect as of the end of the
Closing Date.
(k) There are no Liens for Taxes on the assets of the Company or the
Subsidiaries except for Liens for current Taxes not yet due.
(l) Schedule 3.12 sets forth all net operating loss carryovers of the Company
and the Subsidiaries for Federal income tax purposes, their respective
expiration dates, and any Code Section 382 limitations to which they may be
subject.
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9
(m) Neither the Company nor any of its Subsidiaries is, or has been, a United
States real property holding corporation (as defined in Section 897(c)(2) of the
Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
3.13 Compliance with Laws. Neither the Company nor any of the Subsidiaries is in
material violation of any applicable order, judgment, injunction, award, decree
or writ (collectively, "Orders"), or any applicable law, statute, code,
ordinance or regulation (including, without limitation, zoning laws and
regulations) (collectively, "Laws"), of any government or political subdivision
thereof, whether Federal (including, without limitation, the Federal
Communications Commission or the Federal Aviation Administration), state, local
or foreign, or any agency or instrumentality of any such government or political
subdivision, or any court or arbitrator (collectively, "Governmental Bodies"),
and, except as set forth in Schedule 3.17, none of the Company, any of the
Subsidiaries or the Seller has received written notice that any such violation
is being or may be alleged. The continued existence, use, occupancy and
operation of each Tower Asset is not dependent on the granting of any special
permit, exception, approval or variance by any Governmental Body.
3.14 Permits. The Company and the Subsidiaries have all licenses, permits,
exemptions, consents, waivers, authorizations, rights, certificates of
occupancy, orders or approvals of, and have made all required registrations
with, any Governmental Body that are material to the conduct of the business of,
or the current use and operation of any properties of, the Company or any of the
Subsidiaries (collectively, "Permits"). All such Permits are in full force and
effect; no material violations are or have been recorded in respect of any such
Permit; and no proceeding is pending or, to the knowledge of the Seller,
threatened in writing to revoke, adversely modify, limit or impair the
renewability of any such Permit. Except as set forth in Schedule 3.14, no action
by the Seller, the Company, any of the Subsidiaries or the Buyer is required in
order that all Permits will remain in full force and effect following the
consummation of the Contemplated Transactions.
3.15 No Breach. The execution, delivery and performance of this Agreement by the
Seller and the consummation of the transactions contemplated hereby will not (a)
violate any provision of the Certificate of Incorporation or By-Laws (or
comparable instruments) of the Company or any of the Subsidiaries; (b) require
the Seller, the Company or any of the Subsidiaries to obtain any consent,
approval or action of, or make any filing with or give any notice to, any
Governmental Body or any other person, except as contemplated by Section 3.28
(collectively, the "Required Consents"); (c) if the Required Consents are
obtained, violate, conflict with or result in the breach of any of the terms of,
in each case in any material respect, result in a material modification of the
effect of, otherwise cause the termination of or give any other contracting
party the right to terminate, or constitute (or with notice or lapse of time or
both constitute) a material default (by way of substitution, novation or
otherwise) under, any material contract, agreement, indenture, note, guaranty,
bond, loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, commitment or other binding arrangement (collectively, the
"Contracts") to which the Company or any of the Subsidiaries is a party
<PAGE>
10
or by or to which any of them or any of their properties may be bound or
subject, or result in the creation of any Lien upon any of the properties of the
Company or any of the Subsidiaries pursuant to the terms of any such Contract;
(d) if the Required Consents are obtained, violate any Order of any Governmental
Body against, or binding upon, the Company or any of the Subsidiaries or upon
their respective securities, properties or business; (e) if the Required
Consents are obtained, violate any Law of any Governmental Body; or (f) if the
Required Consents are obtained, violate or result in the revocation or
suspension of any Permit.
3.16 Environmental Matters. The Company and the Subsidiaries (i) are and have
been in compliance in all material respects with all applicable Safety and
Environmental Laws; (ii) there is no Environmental Claim pending or threatened
in writing against the Company or any of the Subsidiaries and there is no civil,
criminal or administrative judgment or notice of violation against the Company
or any of the Subsidiaries pursuant to Safety and Environmental Laws or
principles of common law relating to pollution, protection of the Environment or
health and safety; and (iii) to the knowledge of the Seller, and except for the
risk of liability related to electromagnetic fields, there are no past or
present events, conditions, circumstances, activities, practices, incidents,
agreements, actions or plans which may prevent compliance with Safety and
Environmental Laws, or which have given rise to or will give rise to an
Environmental Claim or to Environmental Compliance Costs. The Seller will make
available to the Buyer after the date hereof true and complete copies of all of
the documents related to environmental matters with respect to the Company and
the Subsidiaries referenced in Section 5.2(a)(i).
3.17 Claims and Proceedings. There are no outstanding Orders of any Governmental
Body against the Company or any of the Subsidiaries or any of their properties.
Except as set forth on Schedule 3.17, there are no investigations by any
Governmental Body, actions, suits, claims or legal, administrative or arbitral
proceedings (collectively, "Claims") pending, or to the knowledge of the Seller,
threatened in writing, against the Company or any of the Subsidiaries or any of
their properties, owned or leased. All notices required to have been given to
any insurance company listed as insuring against any Claim set forth on Schedule
3.17 have been timely and duly given and, except as set forth on Schedule 3.17,
no insurance company has asserted in writing that such Claim is not covered by
the applicable policy relating to such Claim. There are no Claims pending or, to
the knowledge of the Seller, threatened in writing that would give rise to any
right of indemnification on the part of any director or officer of the Company
or any of the Subsidiaries or the heirs, executors or administrators of such
director or officer, against the Company or any of the Subsidiaries or any
successor to the business of the Company or any of the Subsidiaries.
3.18 Contracts.
(a) Schedule 3.18 sets forth all of the following Contracts to which the Company
or any of the Subsidiaries is a party or by or to which it or any of its
properties may be bound or subject (other than those specifically set forth on
any other Schedule): (i) Contracts with any current or former officer, director,
<PAGE>
11
shareholder, employee, consultant, agent or other representative or with an
entity in which any of the foregoing is a controlling person (except that such
employment contracts do not necessarily reflect current base and/or
bonus/incentive remuneration); (ii) Contracts for the sale of any assets other
than in the ordinary course of business or for the grant to any person of any
option or preferential rights to purchase any properties or assets; (iii)
partnership or joint venture agreements; (iv) Contracts under which the Company
or the Subsidiary agrees to indemnify any party or to share tax liability of any
party; (v) Contracts (excluding Contracts for the construction or purchase of
new communications towers) which cannot be canceled without liability, premium
or penalty and which provide for a current or future obligation of the Company
or the Subsidiary to make payments in excess of $50,000; (vi) Contracts for the
construction or purchase of new communications towers which cannot be cancelled
without liability, premium or penalty and which provide for a current or future
obligation of the Company or a Subsidiary to make payments in excess of
$200,000; (vii) Contracts containing covenants of the Company or the Subsidiary
not to compete in any line of business or with any person in any geographical
area or covenants of any other person not to compete with the Company or the
Subsidiary in any line of business or in any geographical area; (viii) Contracts
relating to the acquisition by the Company or the Subsidiary of any operating
business or the capital stock of any other person; (ix) Contracts containing
obligations or liabilities of any kind to holders of the capital stock of the
Company or the Subsidiary as such (including, without limitation, an obligation
to register any of such securities under any Federal or state securities laws);
(x) Contracts relating to the borrowing of money; (xi) management Contracts and
other similar agreements with any person, excluding those providing for site
management by the Company or a Subsidiary entered into in the ordinary course of
business; and (xii) Contracts with the Seller or any of its affiliates.
(b) The Seller will make available to the Buyer after the date hereof the true
and complete Contracts (including, without limitation, all modifications,
amendments and supplements thereto and copies of all quarterly reports required
to be delivered by the Company under the Florida DoT Contract) set forth on
Schedule 3.18 or on any other Schedule. To the knowledge of the Seller, all of
the Contracts referred to in the preceding sentence are valid and binding and
enforceable upon the Company or one of the Subsidiaries, as the case may be, in
accordance with their terms. Neither the Company nor any of the Subsidiaries is
in breach or default in any material respect under any of such Contracts, nor
does any condition exist that with notice or lapse of time or both would
constitute such a material default thereunder. To the knowledge of the Seller,
no other party to any such Contract is in default thereunder in any material
respect nor does any condition exist that with notice or lapse of time or both
would constitute such a material default thereunder.
(c) Each of the Contracts set forth on Schedule 6.10 to remain in effect after
the Closing relates to matters described in Schedule 6.10 and is at market
rates.
<PAGE>
12
3.19 Real Estate.
(a) Ownership of the Premises. The Company or a Subsidiary is the owner of fee
simple insurable title to the land described on Schedule 3.19(a) and to all of
the buildings, structures and other improvements located thereon (collectively,
the "Owned Real Property and Structures") subject only to (1) taxes not yet due
and payable, (2) easements, rights of way and other similar non-monetary title
defects the existence of which does not interfere in any material respect with
the use, occupancy or operation of the applicable parcel of Real Property and
Structures as currently used, occupied and operated, (3) rights of Collocators,
(4) Liens described on Schedule 3.19(a), and (5) Liens securing the TD Credit
Facility (clauses (1), (2), (3), (4) and (5) defined collectively as the
"Permitted Encumbrances"). The Owned Real Property and Structures includes all
of the real property owned by the Company and the Subsidiaries on the date
hereof.
(b) Leased Properties. Schedule 3.19(b)(i) is a true, correct and complete
schedule as of the date hereof of all leases, easements and other agreements
(collectively, the "Real Property Leases") under which the Company or any of the
Subsidiaries uses or occupies or has the right to use or occupy, now or in the
future, any real property (the land, buildings and other improvements covered by
the Real Property Leases being herein called the "Leased Real Property"), which
Schedule sets forth the start date and end date (excluding renewal terms) of and
parties to each Real Property Lease, the annual base rent payable thereunder and
a brief description of the Leased Real Property covered thereby. The Seller will
cause the Company and the Subsidiaries (i) to make available to the Buyer after
the date hereof the true, correct and complete Real Property Leases (including
all modifications, amendments and supplements thereto) and (ii) to assist the
Buyer in preparing a true, correct and complete index of the Real Property
Leases and all such modifications, amendments and supplements thereto. To the
knowledge of the Seller, there is no underlying mortgage, deed of trust, lease,
grant of term or other estate in or interest affecting any Leased Real Property
which is superior to the interest of the Company or a Subsidiary, whichever is
applicable, as tenant under the applicable Real Property Lease. Except for
Permitted Encumbrances, the Company or a Subsidiary, whichever is applicable,
holds the leasehold estate under and interest in each Real Property Lease free
and clear of all liens, encumbrances and other title defects and survey defects
(collectively, "Title Defects"). Except as set out in Schedule 3.19(b)(ii), each
Real Property Lease is valid, binding and in full force and effect; all rent and
other sums and charges payable by the Company or any of the Subsidiaries as
tenant thereunder are current; no notice of default under any Real Property
Lease has been received by the Company or a Subsidiary which remains uncured;
and to the knowledge of the Seller (except with respect to the Florida DoT
Contract, for which there shall be no knowledge qualification), no uncured
default on the part of the Company or the applicable Subsidiary or, to the
knowledge of the Seller, the landlord, exists under any Real Property Lease.
(c) Entire Premises. All of the land, buildings, structures and other
improvements used by the Company and the Subsidiaries in the conduct of their
business are included in the Owned Real Property and Structures and the Leased
Real Property. The Leased Real Property and the Owned Real Property and
Structures are hereinafter collectively referred to as the "Real Property and
Structures."
<PAGE>
13
(d) Collocation Agreements. Schedule 3.19(d) is a true, correct and complete
schedule as of the Audited Balance Sheet Date of all leases, subleases,
licenses, easements, collocation agreements, master collocation agreements and
other agreements (collectively, the "Collocation Agreements") granting to any
person or entity other than the Company and the Subsidiaries any right to the
possession, use, occupancy or enjoyment of the Real Property and Structures or
Tower Assets or any portion thereof, which schedule sets forth the commencement
date of and parties to each Collocation Agreement, the term thereof, the initial
fees and annual escalator percentage payable thereunder. The Seller will cause
the Company and the Subsidiaries (i) to make available to the Buyer after the
date hereof the true, correct and complete Collocation Agreements in effect as
of the date of this Agreement (including all modifications, amendments and
supplements thereto), (ii) to assist the Buyer in preparing a true, correct and
complete index of such Collocation Agreements and all such modifications,
amendments and supplements, and (iii) to make available to the Buyer after the
date hereof a schedule of commitments to enter into Collocation Agreements. Each
Collocation Agreement is valid, binding and in full force and effect; all rent
and other sums and charges payable by the tenant or occupant thereunder (the
"Collocator") are current subject to ordinary course allowances for overdue or
doubtful accounts; no notice of default or termination under any Collocation
Agreement is outstanding except for such notices in the ordinary course which
are not material; no termination event or condition or, to the knowledge of the
Seller, uncured default on the part of the Company or the applicable Subsidiary
or, to the knowledge of the Seller, the Collocator, exists under any Collocation
Agreement, and, to the knowledge of the Seller in the case of Collocators, no
event has occurred and no condition exists which, with the giving of notice or
the lapse of time or both, would constitute such a default or termination event
or condition.
(e) No Options. Neither the Seller, the Company nor any Subsidiary owns or
holds, or is obligated under or a party to, any option, right of first refusal
or other contractual right to purchase, acquire, sell, dispose of or lease the
Real Property and Structures or any portion thereof or interest therein.
(f) Condition and Operation of Tower Assets. All of the towers, tower grounding
rings, tower foundations, fences, landscaping, tower lighting and tower lighting
control panels, buildings, structures, fixtures and other improvements owned by
the Company or any Subsidiary, whether completed (the "Completed Tower Assets")
or under construction (the "Uncompleted Tower Assets" and, together with the
Completed Tower Assets, the "Tower Assets"), are located in or on the Real
Property and Structures and, in the case of Completed Tower Assets, are serviced
by all utilities believed by the Seller to be reasonably necessary for the
operation of the Tower Assets as currently used and have adequate access to
public streets. Schedule 3.19(f)(i) contains a list and brief description of all
Completed Tower Assets and Schedule 3.19(f)(ii) contains a list and brief
description of all Uncompleted Tower Assets. All completed Tower Assets are in
good operating condition and repair, ordinary wear and tear excepted. During the
past three years there has not been any significant interruption of the
operations of the Company or any of the Subsidiaries due to inadequate
maintenance of the Tower Assets.
<PAGE>
14
(g) Condemnation. There is no pending or threatened in writing condemnation
proceeding and, to the knowledge of the Seller, there is no other threatened
condemnation proceeding affecting the Real Property and Structures or any part
thereof, or any sale or other disposition of the Real Property and Structures or
any part thereof.
(h) Casualty. No portion of the Real Property and Structures or the Tower Assets
suffered any material damage by fire or other casualty which has not heretofore
been completely repaired and restored to its original condition. To the
knowledge of the Seller, no portion of the Real Property and Structures is
located in a special flood hazard area as designated by Federal governmental
authorities.
(i) Real Property Taxes. To the knowledge of the Seller, there has been no
imposition of any special assessments with respect to any Real Property and
Structures.
(j) Zoning. There is no pending or, to the knowledge of the Seller, the Company
or the Subsidiaries, threatened in writing action or proceeding to change the
zoning classification of any Real Property and Structures in a manner that would
interfere with the use and operation of any of the Tower Assets or the ability
to restore the same after a casualty.
(k) Documents Delivered. There will be made available to the Buyer after the
date hereof, to the extent in the possession of the Seller, the Company, the
Subsidiaries or any of their agents or affiliates, the true, correct and
complete:
(i) design drawings and specifications for the Tower Assets, construction,
engineering and architectural drawings, structural analyses, as-built
drawings and related site plans and surveys pertaining to the
construction of the Tower Assets;
(ii) Federal Aviation Administration applications, responses, approvals and
registrations numbers submitted or received by the Company or the
Subsidiaries;
(iii) zoning permits and approvals, variances, building permits and such
other federal, state or local governmental approvals which have been
obtained or for which the Company or the Subsidiaries have made
application;
(iv) geotechnical reports (being reports of soil conditions for the purpose
of tower foundation design) which have been commissioned by the Company
or the Subsidiaries;
(v) title reports, commitments for title insurance, ownership and
encumbrance reports, title opinion letters, copies of
<PAGE>
15
instruments in the chain of title or any other information which may
have been produced regarding title to the Real Property and Structures
or the Tower Assets;
(vi) environmental assessments, including Phase I reports and, if
commissioned, Phase II reports and any environmental reports involving
contemporaneous or subsequent intrusive testing, the "FCC Checklist"
performed pursuant to NEPA requirements and any other information which
may have been produced regarding the environmental condition of the
Real Property and Structures or neighboring real property; and
(vii) all guarantees and warranties related to the Tower Assets.
(l) Construction. To the knowledge of the Seller, the Uncompleted Tower Assets
(to the extent completed) and the Completed Tower Assets have been constructed
substantially in accordance with the design drawings and other items described
in Section 3.19(k)(i). Construction of all Completed Tower Assets has been
completed. With respect to the Uncompleted Tower Assets, Schedule 1.2 sets
forth, with respect to the costs of construction of the Uncompleted Tower
Assets, management's best good faith estimates of (i) the amounts expended as of
December 31, 1999, January 31, 2000, February 29, 2000 and (ii) the projected
completed cost.
(m) Geotechnical Reports. The Company or the Subsidiaries commissioned
geotechnical reports prior to the construction of each of the Tower Assets for
which they arranged the construction, and all such Tower Assets were constructed
in accordance with the recommendations contained in such reports.
(n) Capacity. Each Completed Tower Asset has the used (current) capacity set
forth on Schedule 3.19(f)(i). The Completed Tower Assets have, in the aggregate
(and assuming that all capital expenditures set forth in the column labeled "Eng
cost to achieve" on Schedule 3.19(f)(i) shall be made), the total design
(realistic) capacities set forth on Schedule 3.19(f)(i) as to each of the
following: PCS/MW; Paging; UHF; 800/900; FM; TV; LPFM; and LPTV. Each
Uncompleted Tower Asset will have, if constructed in accordance with the
drawings, plans and specifications therefor, the following capacities: (x) for
Uncompleted Tower Assets constructed on Leased Real Property leased from the
Florida Department of Transportation, a capacity of four broadband tenant
equivalents per Uncompleted Tower Asset; and (y) for Uncompleted Tower Assets
constructed along Interstate 70, a capacity of at least four broadband tenant
equivalents per Uncompleted Tower Asset.
(o) Pending Acquisitions. Schedule 3.19(o) identifies communications towers
either acquired, or expected to be acquired, by the Company since the Audited
Statements Date. The aggregate gross revenues from said towers is not less than
$100,000. Said towers have an average additional capacity of 1.7 broadband
tenant equivalents per tower.
3.20 Intellectual Property. The Company and each of the Subsidiaries own or have
valid rights to use the material trademarks, trade names,
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16
copyrights, patents, logos, logo types, type styles and computer software
programs (excluding the source codes thereto) that are necessary for the conduct
of their respective businesses as now being conducted. To the knowledge of the
Seller, neither the Company nor any of the Subsidiaries has received written
notice that the Company or any of the Subsidiaries is infringing on any
trademark, trade name, copyright, patent or other intangible property right or
any registration thereof or application pending therefor which is necessary for
the conduct of their business on the date hereof.
3.21 Title to Properties. The Company and the Subsidiaries own outright and have
good title to all of the assets reflected for value on the Audited Balance Sheet
(but not including, however, (x) the Real Property and Structures, which is
addressed in Section 3.19, (y) leasehold interests in any property, real or
personal, and (z) licensed interests in any intellectual property), in each case
free and clear of any Lien, except for Permitted Encumbrances.
3.22 Liabilities. As at the Audited Balance Sheet Date, the Company and the
Subsidiaries did not have any Liabilities that were not fully and adequately
reflected or reserved against on the Audited Balance Sheet or described on any
Schedule or in the notes to the Audited Financials, in either case as required
by GAAP. The Company and the Subsidiaries have not, except in the ordinary
course of business, incurred any Liabilities since the Balance Sheet Date.
3.23 Employee Benefits.
(a) Schedule 3.23, which constitutes the Lodestar Towers, Inc. employee
handbook, accurately describes each employee benefit plan, program, arrangement,
policy or commitment (including, without limitation, any executive compensation,
incentive bonus or other bonus, employee pension, profit-sharing, savings,
retirement, stock option, stock purchase, severance pay, life, health,
disability or accident insurance plan, or vacation, or other employee benefit
plan, program, arrangement, agreement or commitment, including, without
limitation, any "employee benefit plan" as defined in Section 3(3) of ERISA)
under which the Company or any of the Subsidiaries has any obligation to
contribute, or has any direct or indirect liability, whether contingent or
otherwise (each, a "Company Plan") other than for performance based incentive
plans in the ordinary course (the details of which shall be made available to
the Buyer after the date hereof).
(b) Neither the Company nor any Subsidiary nor any person who would be
considered a single employer with either the Company or any of the Subsidiaries
pursuant to Section 414(b), (c), (m) or (o) of the Code maintains or contributes
to, or has within the preceding six years maintained or contributed to, or has
had during such period the obligation to maintain or contribute to, or may have
any liability with respect to, any Company Plan subject to Title IV of ERISA or
Section 412 of the Code or any multiple employer plan within the meaning of the
Code or ERISA.
(c) With respect to each Company Plan, (i) all payments due from the Company or
any Subsidiary to date have been made when due and all amounts properly accrued
to date or as of the date of the Closing as liabilities of
<PAGE>
17
the Company which have not been paid have been properly recorded on the books of
the Company; (ii) the Company and each Subsidiary has complied with, and each
such Company Plan conforms in form and operation to, all applicable laws and
regulations, including, but not limited to, ERISA and the Code, in all material
respects; (iii) each such Company Plan which is an "employee pension benefit
plan" (as defined in Section 3(2) of ERISA) and intended to qualify under
Section 401 of the Code is so qualified, and, to the knowledge of the Seller,
nothing has occurred that is likely to adversely affect such qualification; and
(iv) there are no actions, suits or claims pending (other than routine claims
for benefits) or threatened in writing with respect to such Company Plan or
against the assets of such Company Plan.
(d) The consummation of the transactions contemplated by this Agreement will not
(i) accelerate the time of the payment or vesting of, or increase the amount of,
compensation due to any Employee, (ii) reasonably be expected to result in any
excess parachute payment under section 280G of the Code, (iii) result in any
liability to any Employee, including, but not limited to, as a result of the
Worker Adjustment Retraining and Notification Act, or (iv) result in any
liability to any Employee under any change of control, severance, stay bonus,
employment or other similar arrangement.
(e) Neither the Company nor any Subsidiary has an announced plan or legally
binding commitment to create any additional Company Plans or to amend or modify
any existing Company Plan, other than to increase the Company's matching 401(k)
plan contributions as previously approved and announced.
(f) Neither the Company nor any Subsidiary has any liability, whether absolute
or contingent, direct or indirect, including any obligations under any Company
Plan, with respect to any misclassification of a person as an independent
contractor rather than as an Employee.
(g) Neither the Company nor any Subsidiary has any obligation to provide or any
direct or indirect liability, whether contingent or otherwise, with respect to
the provision of health or death benefits following termination of employment to
any Employees, except as may be required pursuant to COBRA and the costs of
which are fully paid by such Employees.
3.24 Employment and Labor Matters.
(a) Neither the Company nor any Subsidiary is a party to any collective
bargaining agreements and there are no labor unions or other organizations
representing or, to the knowledge of the Seller, purporting to represent or
attempting to represent, any Employee.
(b) Neither the Company nor any Subsidiary has violated in any material respect
any provision of federal or state law or any governmental rule or regulation, or
any Order of any Governmental Body regarding the terms and conditions of
employment of Employees or prospective employees or other labor related matters,
including, without limitation, laws, rules, regulations, orders, rulings,
decrees,
<PAGE>
18
judgments and awards relating to discrimination, fair labor standards and
occupational health and safety, wrongful discharge or violation of the personal
rights of Employees or prospective employees.
3.25 Insurance. Schedule 3.25 sets forth a list (specifying the insurer,
describing each pending claim thereunder of more than $50,000 and setting forth
the aggregate amounts paid out under each such policy during the past
twenty-four months and the aggregate limit, if any, of the insurer's liability
thereunder) of all policies or binders of fire, liability, product liability,
worker's compensation, vehicular and other insurance held by or on behalf of the
Company or any of the Subsidiaries, and includes fire and comprehensive coverage
for the full replacement value of all Tower Assets. Such policies and binders
are valid and binding in accordance with their terms, are in full force and
effect, and, to the knowledge of the Seller, insure against risks and
liabilities to an extent and in a manner customary in the industries in which
the Company and the Subsidiaries operate. Neither the Company nor any of the
Subsidiaries is in material default with respect to any provision contained in
any such policy or binder or has failed to give any notice or present any claim
under any such policy or binder in due and timely fashion. There are no
outstanding unpaid claims under any such policy or binder, and neither the
Company nor any of the Subsidiaries has received any notice of cancellation or
non-renewal of any such policy or binder. Since January 1, 1997, there has been
no written notice from any insurer requiring or recommending a change in any
operating procedures, the performance of any work or the taking of any other
action which has not heretofore been fully complied with. Neither the Company
nor any of the Subsidiaries has received any notice from any of its insurance
carriers or any Governmental Body that any insurance premiums will or may be
materially increased in the future or that any insurance coverage listed on
Schedule 3.25 will or may not be available in the future on substantially the
same terms as now in effect.
3.26 Operations of the Company. Except as set forth on any Schedule and for the
Contemplated Transactions, since the Audited Balance Sheet Date, the Company and
each of the Subsidiaries has only engaged in business conducted in the ordinary
course, and neither the Company nor any of the Subsidiaries has:
(a) declared or paid any dividends or declared or made any other distributions
of any kind to its shareholders, or made any direct or indirect redemption,
retirement, purchase or other acquisition of any shares of its capital stock;
(b) except for short-term bank borrowings in the ordinary course of business,
the Seller Capital Loans and borrowings pursuant to the TD Credit Facility,
incurred any indebtedness for borrowed money;
(c) reduced its cash or short-term investments or their equivalent, other than
to meet cash needs arising in the ordinary course of business, consistent with
past practices;
(d) waived any material right under any Contract of the type required to be set
forth on any Schedule;
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19
(e) made any change in its accounting methods or practices or made any change in
depreciation or amortization policies or rates adopted by it;
(f) made any loan or advance to any of its shareholders, officers, directors,
employees, consultants, agents or other representatives (other than travel
advances made in the ordinary course of business), or made any other loan or
advance otherwise than in the ordinary course of business;
(g) except with respect to inventory or equipment in the ordinary course of
business, sold, abandoned or made any other disposition of any of its properties
or assets;
(h) except with respect to acquisitions of communications towers made after the
date of this Agreement with the prior written consent of the Buyer, made any
acquisition of all or any part of the properties, assets, capital stock or
business of any other person;
(i) paid, directly or indirectly, any of its material Liabilities before the
same became due in accordance with its terms, otherwise than in the ordinary
course of business;
(j) terminated or failed to renew, or received any written threat (that was not
subsequently withdrawn) to terminate or fail to renew, any Contract that is or
was material to the Condition of the Companies;
(k) amended its Certificate of Incorporation or By-Laws (or comparable
instruments) or merged with or into or consolidated with any other person,
subdivided or in any way reclassified any shares of its capital stock or changed
or agreed to change in any manner the rights of its outstanding capital stock;
(l) established or increased the benefits under, or promised to establish,
modify or increase the benefits under, any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan or employment, consulting or severance agreement, or
otherwise increased the compensation payable or to become payable to any
directors, officers or Employees of the Company or the Subsidiaries, except in
the ordinary course, or established, adopted or entered into any collective
bargaining agreement; or
(m) engaged in any other material transaction other than in the ordinary course
of business.
3.27 Banks, Brokers and Proxies. The Seller will make available to the Buyer
after the date hereof a schedule which sets forth (a) the name of each bank,
trust company, securities or other broker or other financial institution with
which the Company or any of the Subsidiaries has an account, credit line or safe
deposit box or vault; (b) the name of each person authorized by the Company or
any of the Subsidiaries to draw thereon or to have access to any safe deposit
box or vault; (c) the purpose of each such account, safe deposit box or
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20
vault; and (d) the names of all persons authorized by proxies, powers of
attorney or other instruments to act on behalf of the Company or any of the
Subsidiaries in matters concerning its business or affairs.
3.28 Premerger Notification. As soon as practical after the date hereof, the
Company (or its ultimate parent entity) will file notification and report forms
with respect to the Contemplated Transactions in compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the rules and
regulations promulgated thereunder (the "HSR Act").
3.29 Standard of Disclosure. References to specific dollar amounts in Section 3
are for convenience of disclosure only and do not establish or imply a standard
of materiality, a standard for what is or is not in the ordinary course, or any
other standard for disclosure set forth in this Agreement. No implication shall
be drawn that any condition, set of facts or other disclosure set forth in a
Schedule is necessarily material or is otherwise required to be disclosed or
that the inclusion of such disclosure establishes or implies a standard of
materiality, a standard for what is or is not in the ordinary course, or any
other standard for disclosure set forth in this Agreement.
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller as follows:
4.1 Due Incorporation and Authority. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being and as heretofore
conducted.
4.2 Authority to Execute and Perform Agreement. The Buyer has the full legal
right and power and all authority and approvals required to execute and deliver
this Agreement and to perform fully its obligations hereunder. This Agreement
has been duly executed and delivered by the Buyer and (assuming the due
authorization, execution and delivery hereof by the Seller) is a valid and
binding obligation of the Buyer enforceable in accordance with its terms. The
execution and delivery by the Buyer of this Agreement, the consummation of the
Contemplated Transactions and the performance by the Buyer of this Agreement in
accordance with its terms will not (a) require the consent of any Governmental
Body (excluding notification and report forms filed pursuant to the HSR Act) or
any other person; (b) conflict with or result in any breach or violation of any
of the terms and conditions of, or constitute (or with notice or lapse of time
or both constitute) a default under, the Certificate of Incorporation or By-Laws
of the Buyer, any Law or Order of any Governmental Body applicable to the Buyer,
or any Contract to which the Buyer is a party or by or to which the Buyer or any
of its properties is bound or subject; or (c) result in the creation of any Lien
on any of the properties of the Buyer.
4.3 Purchase for Investment. The Buyer is purchasing the Shares for its own
account for investment and not with a view toward or for resale in
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21
connection with any distribution thereof. The Buyer acknowledges that the sale
of the Shares has not been registered under the Securities Act of 1933, as
amended, or any applicable state securities laws and that such Shares may only
be sold or otherwise disposed of under an effective registration statement under
the Securities Act of 1933, as amended, or under an exemption therefrom. The
Buyer is an accredited investor, as defined in Rule 501(a) of the Securities Act
of 1933, as amended.
4.4 Premerger Notification. As soon as practical after the date hereof, the
Buyer (or its ultimate parent entity) will file notification and report forms
with respect to the Contemplated Transactions in compliance with the HSR Act.
5. Covenants and Agreements.
5.1 Conduct of Business. From the date hereof through the Closing Date, the
Seller agrees that it (a) shall cause the Company and the Subsidiaries to
conduct their businesses in the ordinary course and, without the prior written
consent of the Buyer which may not be unreasonably withheld or delayed, not to
undertake any of the actions specified in Section 3.26 and (b) shall cause the
Company and the Subsidiaries to use commercially reasonable efforts to conduct
their businesses in such a manner so that the representations and warranties
contained in Article 3 shall continue to be true and correct in all material
respects on and as of the Closing Date as if made on and as of the Closing Date.
Without limiting the foregoing, between the date hereof and the Closing Date,
the Company and the Subsidiaries shall: (A) not, without the prior written
consent of the Buyer, which consent may not, with respect to amendments to Real
Property Leases or Collocation Agreements, be unreasonably withheld or delayed,
(i) amend in any material respect or terminate any Real Property Lease, (ii)
amend in any material respect or terminate any Collocation Agreement, (iii)
enter into any new Collocation Agreement (other than Collocation Agreements
pursuant to commitments therefor entered into prior to the date of this
Agreement); provided, however, that the Seller shall cooperate with the Buyer to
market collocation; (B) not assign, sell, encumber or otherwise transfer or
dispose of any of the Real Property and Structures or the Tower Assets; (C) use
commercially reasonable efforts to (i) maintain all of the Real Property and
Structures and the Tower Assets in their present condition, reasonable wear and
tear and ordinary usage excepted, and (ii) promptly repair any damage to any
Real Property and Structures or Tower Assets; and (D) use commercially
reasonable efforts to maintain all Permits in full force and effect. The Seller,
on the one hand, and the Buyer, on the other hand, shall give each other prompt
notice of any event, condition or circumstance occurring from the date hereof
through the Closing Date that would constitute a violation or breach of any
representation or warranty, whether made as of the date hereof or as of the
Closing Date, of such parties or that would constitute a violation or breach of
any covenant of any of such parties contained in this Agreement.
5.2 Corporate Examinations and Investigations. Prior to the Closing Date, the
Seller agrees that the Buyer shall be entitled, through its employees and
representatives, to make such investigation of the properties, businesses and
operations of the Company and the Subsidiaries, and such examination of the
books, records and financial condition of the Company and the Subsidiaries, as
it wishes. Any such
<PAGE>
22
investigation and examination shall be conducted at reasonable times and under
reasonable circumstances, and the Seller shall, and shall cause the Company and
the Subsidiaries to, cooperate fully therein. No investigation by the Buyer
shall diminish or obviate any of the representations, warranties, covenants or
agreements of the Seller contained in this Agreement. In order that the Buyer
may have full opportunity to make such physical, business, accounting and legal
review, examination or investigation as it may wish of the affairs of the
Company and the Subsidiaries, (a) the Seller shall make available and shall
cause the Company and the Subsidiaries to make available to the representatives
of the Buyer during such period (i) all reports, assessments, audits, reviews,
plans, analyses and other documents or correspondence in the possession or
control of the Seller, the Company or any of the Subsidiaries relating to the
condition of the Environment, the effect of the operations of the Company or any
of the Subsidiaries on the Environment, or the compliance of the Company or any
of the Subsidiaries with Safety and Environmental Laws and (ii) all information
and copies of such documents concerning the affairs of the Company and the
Subsidiaries as such representatives may reasonably request, (b) the Seller
shall permit the representatives of the Buyer access to the Real Property and
Structures and the Tower Assets, subject to any restrictions on access in the
Real Property Leases, and (c) the Seller shall use commercially reasonable
efforts to cause its officers, employees, consultants, agents, accountants and
attorneys to cooperate fully with such representatives in connection with such
review and examination. If this Agreement terminates, (a) the Buyer shall, and
shall cause its employees and representatives to, keep confidential, and shall,
and shall cause its employees and representatives to, not use in any manner any
information or documents obtained from the Company or the Subsidiaries
concerning their properties, businesses and operations, unless (i) disclosure of
such information or documents shall be required by applicable Law or Order, or
(ii) disclosure of such information or documents is reasonably required in
connection with any litigation against or involving the Buyer with respect to
the Contemplated Transactions, or (iii) such information is or such documents
are readily ascertainable from public or published information, or trade
sources, or, without violation of this Agreement by the Buyer or its employees
or representatives, already known or subsequently developed by the Buyer
independently of any investigation of the Company or the Subsidiaries, and (b)
any documents obtained from the Company or the Subsidiaries and all copies
thereof shall be returned to the Company.
5.3 Publicity. The parties agree that no publicity release or announcement
concerning this Agreement or the Contemplated Transactions shall be made without
advance approval thereof by the Seller and the Buyer, except as shall be
required by applicable Law or Order (and in which case the announcing party
shall make reasonable efforts to obtain the input and approval of the other
party in advance of such publicity release or announcement).
5.4 Expenses. The parties to this Agreement shall, except as otherwise
specifically provided herein, bear their respective expenses incurred in
connection with the preparation, execution and performance of this Agreement and
the Contemplated Transactions, including, without limitation, all fees and
expenses of agents, representatives, counsel and accountants. With respect to
any real property transfer taxes incurred in connection with the Contemplated
Transactions, the Buyer, on the one hand,
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23
shall bear one half of the amount of such real property transfer taxes and the
Seller, on the other hand, shall bear one half of the amount of such real
property transfer taxes.
5.5 Indemnification of Brokerage. Each party hereto agrees to indemnify and save
the other harmless from any claim or demand for commission or other compensation
by any broker, finder, agent or similar intermediary claiming to have been
employed by or on behalf of such party or any of its affiliates, and to bear the
cost of legal expenses incurred in defending any such Claim or demand. Claims
for indemnification under this Section 5.5 will be made in accordance with the
provisions set forth in Section 9.3 but will not be subject to any of the
limitations set forth in Section 9.4.
5.6 Related Parties.
(a) The Seller shall, prior to or at the Closing, pay or cause to be paid to the
Company or each of the Subsidiaries, as the case may be, all amounts owed to the
Company or such Subsidiary by the Seller or any of its affiliates (other than
the Company or any Subsidiary).
(b) At and as of the Closing, any debts of the Company or any of the
Subsidiaries owed to the Seller or to any of its affiliates (other than the
Company or any Subsidiary), including intercompany advances, demand notes and
debentures (but excluding Seller Capital Loans, which are addressed in Section
5.7, and trade accounts payable in the ordinary course and at market rates),
shall be contributed to the capital of the Company. The Buyer will cause such
trade accounts payable to be paid in the ordinary course.
(c) Within 30 days after the Closing, the Buyer will cause the $50,000 letter of
credit posted by the Seller with the Florida Department of Transportation
pursuant to the Florida DoT Contract to be returned, undrawn, to the Seller.
5.7 Termination of Debt.
(a) The Seller shall cause the Company and the Subsidiaries to, prior to or at
the Closing, pay or repay and terminate all Debt of the Company and each
Subsidiary, including, without limitation, (i) the Credit Agreement, dated
December 13, 1999, among Lodestar Towers, Inc. and the lenders named therein
(the "TD Credit Facility"), and (ii) the Seller Capital Loans, but excluding the
Promissory Notes which are addressed in paragraph (b) below. At the Seller's
option, by written notice delivered to the Buyer prior to Closing, the Seller
may direct the Buyer to wire transfer a portion of the Purchase Price otherwise
payable by the Buyer to the Seller at Closing under Section 1 to satisfy the TD
Credit Facility and/or the Seller Capital Loans, in which event such payment
shall reduce the amount otherwise payable by the Buyer to the Seller at Closing
under Section 1 on a dollar for dollar basis.
(b) The Seller agrees to use commercially reasonable efforts to restructure the
financial and legal arrangements related to the Promissory Notes,
<PAGE>
24
in consultation with the Buyer, so as to be able to cause the Company to repay
and terminate the Promissory Notes prior to or at Closing. If the Promissory
Notes are repaid prior to or at Closing, then the Buyer will increase the amount
otherwise payable to the Seller at Closing on a dollar for dollar basis. If the
Seller is unable to cause the Promissory Notes to be repaid prior to or at
Closing, the Buyer and the Seller agree to restructure the Contemplated
Transactions so as to enable the Buyer to acquire the Company and the
Subsidiaries without any Debt outstanding on the closing date of such
acquisition in a way that maintains the economics negotiated in this Agreement.
5.8 Release of Liens. The Seller shall cause the Company and the Subsidiaries to
terminate and release all Liens on the capital stock and the assets of the
Company and each of the Subsidiaries, other than Liens referred to in clauses
(1), (2), (3) and (4) of the definition of Permitted Encumbrances, prior to or
at the Closing.
5.9 Required Consents. The Seller shall, prior to the Closing, use commercially
reasonable efforts to obtain or make, at its sole expense, all Required Consents
and undertake all commercially reasonable actions and incur all commercially
reasonable expenses, costs and obligations required pursuant to the Required
Consents.
5.10 Permit Transfers. At and as of the Closing, the Seller, at its sole
expense, shall use commercially reasonable efforts to cause the transfer,
reissuance or modification of any Permits to the extent that such is required to
cause the Permits to remain in full force and effect in the possession of the
Company or any Subsidiary after the Closing.
5.11 Tax Matters.
(a) Tax Indemnity. Subject to the limitations set forth in Section 5.11(f), the
Seller shall indemnify and hold harmless the Buyer against the following amounts
(including any Loss reasonably incurred in contesting or otherwise in connection
with any such amounts) (collectively, "Indemnified Taxes"): (i) Taxes imposed on
or required to be withheld by the Company or any of the Subsidiaries (including,
without limitation, Taxes imposed as a result of the Company or any of the
Subsidiaries being included in an affiliated group that files consolidated or
combined returns by reason of U.S. Treasury Regulation ss.1.1502-6 or any
comparable provision of state, local or foreign law that provides for joint or
several liability) with respect to any taxable year or period ending on or
before the Closing Date, except for (A) Taxes, other than deferred taxes, that
have been reserved or otherwise accrued or reflected on the Audited Balance
Sheet, and (B) Taxes in an amount equal to the accrued and unpaid Taxes of the
Company and its Subsidiaries reflected on the books and records of the Company
and its Subsidiaries since December 31, 1999 in the ordinary course of business
consistent with past practice and relating to operations since December 31,
1999; (ii) with respect to any taxable year or period beginning before the
Closing Date and ending after the Closing Date, Taxes imposed on or required to
be withheld by the Company or any of its Subsidiaries which are allocable,
pursuant to Section 5.11(b) below, to the portion of such taxable year or period
ending at the end of the day on the Closing Date (an "Interim Period") (Interim
Periods and any taxable years or periods that
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25
end on or prior to the Closing Date being referred to collectively hereinafter
as "Pre-Closing Periods"), except for (A) Taxes, other than deferred taxes, that
have been reserved or otherwise accrued or reflected on the Audited Balance
Sheet, and (B) Taxes in an amount equal to the accrued and unpaid Taxes of the
Company and its Subsidiaries reflected on the books and records of the Company
and the Subsidiaries since December 31, 1999 in the ordinary course of business
consistent with past practice and relating to operations since December 31,
1999; and (iii) Taxes arising from the Company or any of the Subsidiaries
ceasing to be members of an affiliated group that files consolidated or combined
income tax returns by reason of any of the Contemplated Transactions; and (iv)
without duplication of any Indemnified Taxes referred to in clauses (i) or (ii)
hereof, Taxes imposed on the Buyer, the Company or any affiliate of the Buyer or
the Company as a result of a breach or inaccuracy of any representation or
warranty set forth in Section 3.12, or as a result of a breach of any covenant
contained in this Section 5.11 without duplication. The Seller shall pay to the
Buyer any Tax indemnity required to be paid pursuant to the preceding sentence
within 15 days of the Seller's receipt of a written request therefor from the
Buyer describing in reasonable detail the Indemnified Taxes which are the
subject of and basis for such Tax indemnity and the computation of the amount so
payable; provided, that if Indemnified Taxes are being contested in accordance
with Section 5.11(e), the Seller shall pay any required Tax indemnity to the
Buyer within 15 days of final resolution of such contest. The failure of the
Buyer to submit to the Seller a written request for indemnification under this
Section 5.11 shall not relieve the Seller of its indemnity obligation under this
Section 5.11. Subject to the limitations set forth in Section 5.11(f), the Buyer
shall indemnify and hold harmless the Seller against the following amounts
(including any Loss reasonably incurred in contesting or otherwise in connection
with any such amounts) (also, collectively, "Indemnified Taxes"): Taxes imposed
on or required to be withheld by the Company or any of the Subsidiaries
(including, without limitation, Taxes imposed as a result of the Company or any
of the Subsidiaries being included in an affiliated group that files
consolidated or combined returns by reason of U.S. Treasury Regulation
ss.1.1502-6 or any comparable provision of state, local or foreign law that
provides for joint or several liability) with respect to any taxable year or
period beginning after the Closing Date (including the portion of any Interim
Period beginning after the Closing Date). The Buyer shall pay to the Seller any
Tax indemnity required to be paid pursuant to the preceding sentence within 15
days of the Buyer's receipt of a written request therefor from the Seller
describing in reasonable detail the Indemnified Taxes which are the subject of
and basis for such Tax indemnity and the computation of the amount so payable;
provided, that if indemnified taxes are being contested in accordance with
Section 5.11(e), the Buyer shall pay any required Tax indemnity to the Seller
within 15 days of final resolution of such contest. The failure of the Seller to
submit to the Buyer a written request for indemnification under this Section
5.11 shall not relieve the Buyer of its indemnity obligation under this Section
5.11.
(b) Allocation of Taxes. In the case of Taxes that are payable with respect to
an Interim Period, the portion of any such Tax that is allocable to the portion
of the Interim Period ending on the Closing Date shall be deemed equal to:
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26
(i) in the case of Taxes that are either (x) based upon or related to
income or receipts, or (y) imposed in connection with any sale or other
transfer or assignment of property (real or personal, tangible or
intangible), the amount of such Taxes which would be payable if the
taxable year ended on the Closing Date determined, to the extent
permissible under applicable Laws, in a manner which is consistent with
the relevant company's accounting practices and business operations as
in effect prior to the Closing Date (except that, solely for purposes
of determining the marginal tax rate applicable to income or receipts
during such period in a jurisdiction in which such tax rate depends
upon the level of income or receipts, annualized income or receipts may
be taken into account, if appropriate, for an equitable sharing of such
Taxes); and
(ii) in the case of Taxes not described in subparagraph (i) that are imposed
on a period basis and measured by the level of any item, the amount of
such Taxes for the entire period (or, in the case of such Taxes
determined on an arrears basis, the amount of such Taxes for the
immediately preceding period) multiplied by a fraction the numerator of
which is the number of calendar days in the period ending at the end of
the day on the Closing Date and the denominator of which is the number
of calendar days in the entire period and determined, to the extent
permissible under applicable Laws, in a manner which is consistent with
the relevant company's accounting practices and business operations as
in effect prior to the Closing Date.
(c) Filing of Tax Returns and Payment of Taxes. The Seller shall prepare and
timely file, or shall cause the Company to prepare and timely file, all Tax
Returns with respect to the Company and the Subsidiaries for the taxable years
or periods that end on or prior to the Closing Date, including, for those
jurisdictions and tax authorities that permit or require a short period Tax
Return, for the period ending on and including the Closing Date (the "Indemnitor
Returns"). All such Indemnitor Returns shall be prepared and filed in a manner
that is consistent with past practice, except as required by applicable Law. The
Seller shall deliver such Indemnitor Returns to the Buyer at its address
specified in Section 11.3 at least 20 days prior to the respective due dates of
such Indemnitor Returns (as the same may have been validly extended) for the
approval of the Buyer, such approval not to be unreasonably withheld or delayed.
If any Indemnitor Returns have not been filed as of the Closing Date, the
Company shall timely file such Indemnitor Returns as prepared by the Seller in
accordance with the foregoing sentences of this Section 5.11(c). The Buyer shall
prepare and timely file all Tax Returns with respect to the Company and its
Subsidiaries for Interim Periods (the "Straddle Returns") and for all periods
that do not end on or prior to the Closing Date. The Buyer shall deliver the
Straddle Returns, and a statement setting forth any amounts on such Straddle
Returns allocable to an Interim Period pursuant to Section 5.11(b) of this
Agreement (a "Straddle Statement"), to the Seller at its address specified in
Section 11.3 at least 20 days prior to the respective due dates of such Straddle
Returns as the same may have been validly extended for the approval of the
Seller, such approval not to be unreasonably withheld or delayed. If the Seller
does not approve the Straddle Statement, and the Seller and the Buyer cannot
otherwise agree, such Straddle Statement shall be submitted to the Independent
Accountant for binding resolution in accordance with this
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27
Section 5.11(c). The fees of the Independent Accountant incurred in connection
with the resolution of any dispute under this Section 5.11(c) shall be shared
equally by the Buyer, on the one hand, and the Seller, on the other hand.
(d) Tax Refunds. Any Tax refund (including any interest with respect thereto)
relating to a Pre-Closing Period of the Company and its Subsidiaries shall be
the property of the Seller and, if received by the Buyer, shall be payable to
the Seller within 15 business days of the Buyer's receipt, except for (x) any
such Tax refunds attributable to the carry back of losses incurred in or with
respect to any taxable year or period beginning after the Closing Date and (y)
any such Tax refunds reflected or accrued as a receivable or other asset on the
Audited Balance Sheet or on the books and records of the Company and its
Subsidiaries since December 31, 1999 in the ordinary course of business
consistent with past practice relating to operations since December 31, 1999. In
the event the Seller receives any amount relating to a refund under this Section
5.11(d) and subsequent thereto adjustments are made to any item that gave rise
to such refund and as a result thereof either the Company or any of its
Subsidiaries is required to pay any additional Taxes for which either the
Company or any of its Subsidiaries is not otherwise indemnified for by the
Seller under this Agreement, then the Seller shall pay all or any portion of
such refund relating to such adjustment back to either the Company or its
Subsidiaries, as the case may be, within 15 days of receipt of such refund.
(e) Contests.
(i) After the Closing Date, the Buyer shall promptly notify the Seller, or
the Seller shall promptly notify the Buyer, in each case in writing, of
any written notice of a proposed assessment or claim in an audit or
administrative or judicial proceeding involving the Company or its
Subsidiaries which, if determined adversely to the taxpayer, would be
grounds for indemnification under this Section 5.11; provided, however,
that failure to give prompt written notice of any such claim shall bar
indemnification hereunder only to the extent such failure materially
prejudices the Indemnifying Party.
(ii) Except as provided in Section 5.11(e)(iii) below, in the case of an
audit or administrative or judicial proceeding that relates to any
Pre-Closing Period, the Seller shall have the right, at its own
expense, to control the conduct of such audit or proceeding, provided
that within 30 days after the Seller has received notice directly, or
the written notice from the Buyer that is required under Section
5.11(e)(i) above, and prior to taking any action with respect to such
audit or administrative or judicial proceeding, the Seller acknowledges
in writing its liability under Sections 5.11(a) above, subject to the
limitations set forth in Section 5.11(f) of this Agreement, to hold the
Buyer harmless against the full amount of any adjustment which may be
made as a result of such audit or proceeding that relates to the
Pre-Closing Period and provided further, that the Seller shall not
settle or agree to settle any such audit or proceeding without the
written consent of the Buyer (which consent shall not be unreasonably
withheld or delayed). The Buyer also may participate in any such
<PAGE>
28
audit or proceeding at its own expense and, if the Seller does not
assume the defense of any such audit or proceeding, the Buyer may
defend the same at its own expense in such manner as it may deem
appropriate, including, but not limited to, settling such audit or
proceeding, without any effect on the Buyer's right to indemnification
under this Section 5.11.
(iii) With respect to a proposed adjustment for an Interim Period or for
which both the Seller (as evidenced by its acknowledgment under this
Section 5.11(e)) and the Buyer could be liable (x) the Seller and the
Buyer may each participate in the audit or proceeding, and (y) the
audit or proceeding shall be controlled by the Seller or the Buyer,
whichever would bear the burden of the greatest portion of the
adjustment. The principle set forth in the preceding sentence shall
govern also for purposes of deciding any issue that must be decided
jointly (in particular, choice of judicial forum) in situations in
which separate issues are otherwise controlled hereunder by the
Seller and the Buyer.
(f) Additional Provisions Affecting Tax Indemnification. If an audit adjustment
for a Pre-Closing Period (A) gives rise to an indemnity obligation pursuant to
which payment is made under Section 5.11(a), and (B) results in a reduction of
the taxable income of the Company, any Subsidiary or the Buyer for a taxable
year or period beginning after the Closing Date (such reduction in taxable
income is referred to herein as a "Post-Closing Tax Benefit"), then the Buyer
shall repay to the Seller the portion of such indemnity payment corresponding to
the "realized value" of such Post-Closing Tax Benefit. The "realized value" of a
Post-Closing Tax Benefit shall be equal to the excess of (x) the liability of
the Buyer for Taxes for the taxable year or period in respect of which the
Post-Closing Tax Benefit is realized, computed without regard to any deductions
or credits directly attributable to the Post-Closing Tax Benefit over (y) the
actual liability of the Buyer for Taxes for such taxable year or period. Any
repayment required to be made by the Buyer pursuant to this Section 5.11(f)
shall be made within 15 days following the Buyer's actual utilization of the
Post-Closing Tax Benefit to reduce its Taxes payable.
(g) Cooperation and Exchange of Information. The Buyer and the Seller shall
provide each other with such cooperation and information as any of them
reasonably may request in filing any Tax Return, amended Tax Return or claim for
refund, determining a liability for Taxes or a right to a refund of Taxes, or
participating in or conducting any audit or other proceeding in respect of Taxes
of the Company or any Subsidiary. Such cooperation and information shall include
providing copies of relevant Tax Returns of the Company or any Subsidiary or
portions thereof, together with accompanying schedules, related work papers and
documents relating to rulings or other determinations by Tax authorities. The
Seller and the Buyer shall make their respective employees available on a basis
mutually convenient to both parties to provide explanations of any documents or
information provided hereunder. The Seller and the Buyer shall retain all Tax
Returns, schedules, work papers, records and other documents in their respective
possession relating to Tax matters of the Company and its Subsidiaries for each
taxable year or period until the later of (i) the expiration of the statute of
limitations of the taxable periods to which such Tax Returns and other
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29
documents relate, without regard to extensions except to the extent notified by
the other party in writing of such extensions for the respective Tax periods, or
(ii) five years following the due date (without extension) for such Tax Returns.
Any information obtained under this Section 5.11(g) shall be kept confidential
except as may be otherwise necessary in connection with the filing of Tax
Returns or claims for refund or in conducting an audit or other proceeding.
(h) Survival of Obligations. Notwithstanding any other provisions in this
Agreement, the obligations of the parties set forth in this Section 5.11 shall
not be subject to any limitations other than those set forth in this Agreement
and shall remain in effect until 30 days after the expiration of all applicable
statutes of limitations.
5.12 Allocation of Purchase Price. The Buyer and the Seller shall use
commercially reasonable efforts to agree, on or before the Closing, on a joint
determination of the fair market value of the assets of the Company and the
Subsidiaries.
5.13 Seller's Group Insurance Policies. The Buyer acknowledges that, at the
Seller's election, the Company and the Subsidiaries may cease to be covered
under the Seller's group insurance policies following the Closing.
5.14 Use of LeBlanc Name. The Buyer and the Seller agree that the Buyer shall be
permitted to use the "LeBlanc" name, design and logo (and any trade or service
names or marks related thereto) for a period of 60 days following the Closing.
The Buyer agrees that after such 60-day period, the Buyer shall cease to use the
"LeBlanc" name, design and logo (and any trade or service names or marks related
thereto) and that the Buyer shall have no right and no interest in and to the
use of the "LeBlanc" name design and logo (and any trade or service names or
marks related thereto).
5.15 Tower Construction.
(a) The Seller agrees that for a period of two years following the Closing,
neither the Seller nor any of its affiliates shall, directly or indirectly,
perform any fabrication, modification or erection of broadcast towers for
American Tower Corporation, a Delaware corporation, or any of its affiliates in
any broadcast market in which the Company or any Subsidiary owns a broadcast
tower or has a broadcast tower under construction as of the date of Closing.
(b) If any court of competent jurisdiction determines that the covenant
contained in Section 5.15(a), or any part thereof, is unenforceable because of
duration or geographic scope, such court shall have the power to reduce the
duration or scope of such covenant, as the case may be, and, in its reduced
form, such covenant shall then be enforceable.
(c) If the Seller or any of its affiliates breaches, or threatens to breach, the
covenant contained in Section 5.16(a), the Buyer shall have the right and remedy
to have such covenant specifically enforced by a court of competent
<PAGE>
30
jurisdiction, it being agreed that any such breach or threatened breach would
cause irreparable injury to the Buyer, the Company and the Subsidiaries and that
money damages would not provide an adequate remedy to the Buyer, the Company and
the Subsidiaries.
5.16 Further Assurances. Each of the parties shall use its commercially
reasonable efforts to fulfill or obtain the fulfillment of the conditions to the
Closing set forth in Articles 6 and 7.
6. Conditions Precedent to the Obligation of the Buyer to Close. The obligation
of the Buyer to enter into and complete the Closing is subject, at the option of
the Buyer acting in accordance with the provisions of Article 10 with respect to
termination of this Agreement, to the fulfillment on or prior to the Closing
Date of the following conditions, any one or more of which may be waived by it:
6.1 Representations and Covenants. The representations and warranties of the
Seller contained in this Agreement shall be true in all material respects on and
as of the Closing Date with the same force and effect as though made on and as
of the Closing Date or, in the case of representations and warranties made as of
a specified date earlier than the Closing Date, as of such date. The Seller
shall have performed and complied in all material respects with all covenants
and agreements required by this Agreement to be performed or complied with by
the Seller on or prior to the Closing Date. The Seller shall have delivered to
the Buyer a certificate, dated the date of the Closing and signed by an officer
of the Seller, to the foregoing effect.
6.2 Consents and Approvals. All Required Consents shall have been obtained and
be in full force and effect, and the Buyer shall have been furnished with
evidence reasonably satisfactory to it that such Required Consents have been
obtained.
6.3 Opinion of Counsel to the Seller. The Buyer shall have received the opinion
of Torys, counsel to the Seller, dated the date of the Closing, addressed to the
Buyer, substantially in the form of Exhibit A.
6.4 HSR Act Filing. Any person required in connection with the Contemplated
Transactions to file a notification and report form in compliance with the HSR
Act shall have filed such form and the applicable waiting period with respect to
each such form (including any extension thereof by reason of a request for
additional information) shall have expired or been terminated.
6.5 Resignations; Revocations. The resignation of each director and officer of
the Company and each director and officer of each of the Subsidiaries shall, if
so requested by the Buyer, have been delivered to the Buyer. The Buyer shall
have received evidence satisfactory to it that effective as of the Closing Date,
any proxies, powers of attorney or other instruments authorizing persons to act
on behalf of the Company or any of the Subsidiaries in matters concerning their
respective businesses or affairs have been revoked and are of no further force
and effect, if so requested by the Buyer.
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31
6.6 No Claims. There shall not be on the Closing Date any Orders of any
Governmental Body or Law which would prohibit the purchase of the Shares or the
consummation of the Contemplated Transactions.
6.7 Real Estate.
(a) Tax Returns. The Buyer shall have received any and all real property
transfer tax returns and other similar filings required by law in connection
with the Contemplated Transactions and relating to the Real Property and
Structures, any part thereof or ownership interest therein, all duly and
properly executed and acknowledged by the Seller, the Company and/or the
Subsidiary, whichever is required. If required in connection with any of the
foregoing filings, the Buyer shall have received the written agreement of the
Seller and the Buyer allocating to certain parcels of Real Property and
Structures a portion of the Purchase Price. The Seller shall also have executed
such affidavits in connection with such filings as shall have been required by
law or reasonably requested by the Buyer. The Buyer agrees to cooperate with the
Seller in connection with the filings required under this Section 6.7 and to
execute any and all required affidavits, questionnaires, returns or similar
documents.
(b) FIRPTA Affidavit. The Buyer shall have received an affidavit of an officer
of the Company sworn to under penalty of perjury pursuant to U.S. Treasury
Regulation ss.1.1445-2(c)(3), containing a statement that the Shares are not
"U.S. real property interests" within the meaning of Section 897(c)(1) of the
Code.
6.8 Release of Debt. The Buyer shall have received evidence satisfactory to it
that effective as of the Closing Date, the Company and each Subsidiary are
released from any and all liability with respect to the Debt, including, without
limitation, releases from the Security Documents related thereto, and the
Company and each Subsidiary are no longer obligated with respect to the Debt.
6.9 Release of Liens. The Buyer shall have received evidence satisfactory to it
that effective as of the Closing Date, the capital stock and the assets of the
Company and each Subsidiary are released from any and all Liens, other than
Liens referred to in clauses (1), (2), (3) and (4) of the definition of
Permitted Encumbrances.
6.10 Termination of Agreements. Except for the Contracts identified on Schedule
6.10, at and as of the Closing, the Seller, the Company and/or the Subsidiaries
shall have terminated all Contracts between the Company or a Subsidiary, on the
one hand, and the Seller or any of its affiliates (other than the Company or any
Subsidiary), on the other hand, and the Company or such Subsidiary, as the case
may be, shall retain no obligations under such Contracts. The Buyer shall have
received evidence satisfactory to it of the termination of all Contracts
required to be terminated pursuant to the preceding sentence and of the release
of any obligations under such Contracts of the Company and all relevant
Subsidiaries. As to the Contracts identified on Schedule 6.10, the Seller will
cause the Company and the Subsidiaries to perform their obligations thereunder.
<PAGE>
32
6.11 Due Diligence. As a result of the Buyer's due diligence review of (a) each
of the documents and materials required to be made available pursuant to
Sections 3.9, 3.16, 3.18 and 3.19 and (b) any document or material referenced in
any Schedule (other than the Florida DoT Contract and the Lodestar Towers, Inc.
employee handbook, each of which has previously been delivered to the Buyer),
the Buyer shall not have learned any information which is (i) inconsistent with
any written material or written information delivered to the Buyer prior to
April 11, 2000 and (ii) individually or in the aggregate materially adverse to
the Condition of the Companies; provided, however, that to the extent that this
condition is not satisfied, the Buyer agrees to seek to renegotiate the terms
and conditions of this Agreement with the Seller in good faith for a reasonable
period of time. The Seller agrees to make available to the Buyer each of the
documents and materials referred to in the previous sentence as soon as
practicable but in no event later than April 17, 2000. The condition to Closing
set forth in the first sentence of this Section 6.11 shall be deemed satisfied
unless, prior to 5:00 p.m. on April 24, 2000, the Buyer provides written notice
to the Seller that it has not been satisfied, including reasonable justification
therefor. The Buyer confirms that it has completed its business due diligence of
the Company and the Subsidiaries and that this due diligence condition is
intended to cover only the specific matters referred to in this Section 6.11.
7. Conditions Precedent to the Obligation of the Seller to Close. The obligation
of the Seller to enter into and complete the Closing is subject, at the option
of the Seller acting in accordance with the provisions of Article 10 with
respect to termination of this Agreement, to the fulfillment on or prior to the
Closing Date of the following conditions, any one or more of which may be waived
by the Seller:
7.1 Representations and Covenants. The representations and warranties of the
Buyer contained in this Agreement shall be true in all material respects on and
as of the Closing Date with the same force and effect as though made on and as
of the Closing Date or, in the case of representations and warranties made as of
a specified date earlier than the Closing Date, as of such date. The Buyer shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Closing Date. The Buyer shall have delivered to the Seller a
certificate, dated the date of the Closing and signed by an officer of the
Buyer, to the foregoing effect.
7.2 HSR Act Filing. Any person required in connection with the Contemplated
Transactions to file a notification and report form in compliance with the HSR
Act shall have filed such form and the applicable waiting period with respect to
each such form (including any extension thereof by reason of a request for
additional information) shall have expired or been terminated.
7.3 No Claims. There shall not be on the Closing Date any Orders of any
Governmental Body or Law which would prohibit the purchase of the Shares or the
consummation of the Contemplated Transactions.
7.4 Opinion of Counsel to the Buyer. The Seller shall have received an opinion
of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the Buyer,
<PAGE>
33
dated the date of the Closing, addressed to the Seller, substantially in
the form of Exhibit B.
8. Survival of Representations and Warranties After Closing. Notwithstanding any
right of the Buyer fully to investigate the affairs of the Company and the
Subsidiaries and notwithstanding any knowledge of facts determined or
determinable by the Buyer pursuant to such investigation or right of
investigation, the Buyer has the right to rely fully upon the representations,
warranties, covenants and agreements of the Seller contained in this Agreement
or the certificate delivered pursuant to Section 6.1. All such representations,
warranties, covenants and agreements shall survive the execution and delivery of
this Agreement and the Closing hereunder. Except for those representations and
warranties in Sections 3.1, 3.7 and 3.8 (all of which representations and
warranties shall survive without limitation), all representations and warranties
of the Seller contained in this Agreement shall terminate and expire (a) two
years after the Closing Date, with respect to any General Claim based upon,
arising out of or otherwise in respect of any fact, circumstance or Claim of
which the Buyer prior to that date shall not have given notice to the Seller;
and (b) with respect to any Tax Claim, on the later of (i) the date upon which
the liability to which any such Tax Claim may relate is barred by all applicable
statutes of limitations and (ii) the date upon which any claim for refund or
credit related to such Tax Claim is barred by all applicable statutes of
limitations.
9. General Indemnification.
9.1 Obligation of the Seller to Indemnify.
(a) Subject to the limitations contained in Article 8 and Section 9.4, the
Seller agrees to indemnify, defend and hold harmless the Buyer (and its
directors, officers, employees, affiliates, successors and permitted assigns)
from and against all losses, liabilities, damages, deficiencies, demands,
Claims, actions, judgments or causes of action, assessments, costs or expenses
(including, without limitation, claims by mechanics, materialmen, architects,
contractors and subcontractors for labor or materials performed, rendered or
supplied to or in connection with any Real Property and Structures, interest,
penalties and reasonable fees, expenses and disbursements of attorneys, experts,
personnel and consultants reasonably incurred by the indemnified party in any
action or proceeding between the indemnifying party and the indemnified party or
between the indemnified party and any third party, or otherwise) after applying
applicable insurance proceeds ("Losses") based upon, arising out of or otherwise
in respect of any inaccuracy in or any breach of any representation, warranty,
covenant or agreement of the Seller contained in this Agreement, except to the
extent otherwise covered by Sections 9.1(b).
(b) The Seller's indemnification obligation for any inaccuracy in or any breach
of any representation, warranty, covenant or agreement of the Seller set forth
in Sections 3.12 or 5.11 of this Agreement shall be governed exclusively by
Section 5.11 of this Agreement.
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34
9.2 Obligation of the Buyer to Indemnify. The Buyer agrees to indemnify, defend
and hold harmless the Seller from and against all Losses based upon, arising out
of or otherwise in respect of any inaccuracy in or any breach of any
representation, warranty, covenant or agreement of the Buyer contained in this
Agreement.
9.3 Notice and Opportunity to Defend.
(a) Notice of Asserted Liability. With respect to third party claims, all claims
for indemnification by any party making a claim under this Article 9 (referred
to herein as the "Indemnitee") shall be asserted and resolved as follows:
Promptly after receipt by an Indemnitee of notice of any demand, claim or
circumstances, which, with the lapse of time, would or might give rise to a
claim or the commencement (or the threatened commencement of) any action,
proceeding or investigation (an "Asserted Liability") that may result in Losses
which are subject to indemnification under Sections 9.1 or 9.2, the Indemnitee
shall give notice thereof (the "Claims Notice") to the party against whom such
claims are asserted (referred to herein as the "Indemnifying Party"). The Claims
Notice shall describe the Asserted Liability in reasonable detail, and shall
indicate the amount (estimated, if necessary, and to the extent feasible) of the
Losses that have been or may be suffered by the Indemnitee. The failure of an
Indemnitee to provide a Claims Notice with reasonable promptness shall not
adversely affect any indemnification obligations hereunder except to the extent
that the Indemnifying Party is actually prejudiced thereby.
(b) Opportunity to Defend. The Indemnifying Party may elect to compromise or
defend, at its own expense and by its own counsel, any Asserted Liability. If
the Indemnifying Party elects to compromise or defend such Asserted Liability,
it shall, within 30 days (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the compromise of, or
defense against, such Asserted Liability. If the Indemnifying Party elects not
to compromise or defend the Asserted Liability, fails to notify the Indemnitee
of its election as herein provided or contests its obligations to defend under
this Agreement, the Indemnitee may pay, compromise or defend such Asserted
Liability (at the Indemnifying Party's sole cost and expense). Notwithstanding
the foregoing, neither the Indemnifying Party nor the Indemnitee may settle or
compromise any claim over the objection of the other; provided, however, that if
the settlement or compromise does not result in any liability to the
Indemnifying Party, consent to such settlement or compromise shall not be
unreasonably withheld. In any event, the Indemnitee and the Indemnifying Party
may participate, at their own expense, in the defense of such Asserted
Liability. If the Indemnifying Party chooses to defend any claim, the Indemnitee
shall make available to the Indemnifying Party any books, records or other
documents within its control that are necessary or appropriate for such defense
(in the judgment of counsel engaged by the Indemnifying Party).
The Indemnitee has the right to employ its own
counsel in any compromise of, or defense against, any Asserted Liability, or in
connection with the
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35
Indemnitee's provision of reasonable cooperation and assistance to the
Indemnifying Party or the Indemnifying Party's counsel as provided above, but
the fees, expenses and other charges of such counsel employed by the Indemnitee
will be at the expense of the Indemnitee unless (i) the employment of counsel by
the Indemnitee has been authorized in writing by the Indemnifying Party or (ii)
the Indemnifying Party has not in fact employed counsel to compromise or defend
against the Asserted Liability within a reasonable time, in each of which cases
the reasonable fees, disbursements and other charges of counsel retained by the
Indemnitee will be at the expense of the Indemnifying Party. It is understood
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time retained by the Indemnitee unless
the employment of more than one counsel has been authorized in writing by the
Indemnifying Party.
(c) Notice of Direct Claim. In the event that an Indemnitee has a claim for
indemnification that does not involve a third party (a "Direct Claim"), the
Indemnitee shall notify the Indemnifying Party of such Direct Claim with
reasonable promptness, specifying, to the extent known, the nature,
circumstances and amount of such Direct Claim (a "Direct Claim Notice"),
however, the failure of an Indemnitee to provide such Direct Claim Notice with
reasonable promptness shall not adversely affect any indemnification obligations
hereunder except to the extent that the Indemnifying Party is actually
prejudiced thereby. If the Indemnifying Party notifies the Indemnitee that it
disputes the Indemnitee's right of indemnification with respect to a Direct
Claim, the Indemnitee and the Indemnifying Party shall use reasonable efforts to
resolve such dispute. In the absence of such an agreement, the Indemnitee shall
be entitled to proceed to enforce its rights hereunder.
9.4 Limitations on Indemnification. The indemnification provided for in Section
9.1 shall be subject to the following limitations:
(a) The Seller shall not be obligated to pay any amounts for indemnification for
breach of representation or warranty under Section 9.1(a), except those based
upon, arising out of or otherwise in respect of Sections 3.1, 3.3, 3.7, 3.8 and
3.23 (the "Basket Exclusions"), until the aggregate amounts for indemnification
under Section 9.1(a), exclusive of those based on the Basket Exclusions, equals
1.0% of the Purchase Price (the "Basket Amount"), whereupon the Seller shall be
obligated to pay in full all such amounts for such indemnification above, but
excluding, the Basket Amount.
(b) The Seller shall be obligated to pay any amounts for indemnification based
on the Basket Exclusions (in accordance with its liability as set forth in
Section 9.1(a)) without regard to the individual or aggregate amounts thereof
and without regard to whether all other indemnification payments shall have
exceeded, in the aggregate, the Basket Amount.
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36
10. Termination of Agreement.
10.1 Termination. This Agreement may be terminated prior to the Closing as
follows:
(a) at the election of the Seller in writing, if any one or more of the
conditions to its obligation to close has not been fulfilled by July 31, 2000;
(b) at the election of the Buyer in writing, if any one or more of the
conditions to its obligation to close has not been fulfilled by July 31, 2000;
(c) at the election of the Seller or the Buyer in writing, if any legal
proceeding is commenced or threatened by any Governmental Body seeking to
prevent the consummation of the Contemplated Transaction and the Seller or the
Buyer, as the case may be, reasonably and in good faith deems it impracticable
or inadvisable to proceed in view of such legal proceeding;
(d) at the election of the Seller in writing, if the Buyer has breached any
material representation, warranty, covenant or agreement contained in this
Agreement, which breach cannot be or is not cured within thirty (30) days after
notification of such intent to terminate is sent;
(e) at the election of the Buyer in writing, if the Seller has breached any
material representation, warranty, covenant or agreement contained in this
Agreement, which breach cannot be or is not cured within thirty (30) days after
notification of such intent to terminate is sent; or
(f) at any time on or prior to the Closing Date, by mutual written consent of
the Seller and the Buyer.
If this Agreement so terminates, it shall become null and void
and have no further force or effect, except as provided in Section 10.2.
10.2 Survival After Termination. If this Agreement terminates pursuant to
Section 10.1, it shall become null and void and have no further force or effect,
except that any such termination shall be without prejudice to the rights of any
party on account of the non-satisfaction of the conditions set forth in Articles
6 and 7 resulting from the intentional or willful breach or violation of the
representations, warranties, covenants or agreements of another party under this
Agreement. Notwithstanding anything in this Agreement to the contrary, Sections
5.2 (relating to the Buyer's confidentiality obligations), 5.3, 5.4, 5.5, this
Section 10.2 and Article 11 shall survive any termination of this Agreement.
11. Miscellaneous.
11.1 Certain Definitions. (a) As used in this Agreement, the following
terms have the following meanings:
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37
"affiliate" means, with respect to any person, any other
person controlling, controlled by or under common control with, such person.
"COBRA" means the provisions of Section 4980B of the Code and
Part 6 of Subtitle B of Title I of ERISA.
"Debt" of the Company or any Subsidiary means, without
duplication, all obligations or liabilities of such person (i) for borrowed
money, whether current, short term or long term, or secured or unsecured, (ii)
evidenced by notes, bonds, debentures or similar instruments, other than
operating leases, (iii) for the deferred purchase price for purchases of assets
or property (other than trade payables), (iv) created or arising under any
conditional sale or other title retention with respect to assets or property
acquired directly or indirectly by such person, (v) under leases which are
capital leases in accordance with GAAP, (vi) in respect of banker's acceptance
or letters of credit (other than documentary and stand-by letters of credit in
support of ordinary course trade payables or self-insured workers' compensation
obligations), (vii) with respect to interest trade swaps, collars, caps and
similar obligations, (viii) for accrued and unpaid interest or other charges
(including any contractual prepayment premiums, penalties or similar charges
resulting from the Contemplated Transactions or the discharge of such
obligations) with respect to any of the foregoing, (ix) for any costs or
expenses incurred by such person in connection with the Contemplated
Transactions and to be borne by the Company or any Subsidiary (on behalf of the
Seller) and not the Buyer, including legal fees and disbursements, fees and
other payments to any broker, finders, agents or similar intermediaries, (x) for
all bonuses or other compensation payable to employees of the Company or any
Subsidiary which are conditioned upon the consummation of the transactions
contemplated by this Agreement, and (xi) in the nature of guarantees of
obligations of the type described in clauses (i) through (x) above of any other
person.
"Employee" means any individual employed at any time by the
Company or any of the Subsidiaries.
"Environment" means navigable waters, waters of the contiguous
zone, ocean waters, natural resources, surface waters, ground water, drinking
water supply, land surface, subsurface strata, ambient air, both inside and
outside of buildings and structures, man-made buildings and structures, and
plant and animal life on earth.
"Environmental Claims" means any written notification, whether
direct or indirect, formal or informal, pursuant to Safety and Environmental
Laws or principles of common law relating to pollution, protection of the
Environment or health and safety, that any of the current or past operations of
the Company or any of the Subsidiaries, or any by-product thereof, or any of the
property currently or formerly owned, leased or operated by the Company or any
of the Subsidiaries, or the operations or property of any predecessor or
affiliates of the Company or any of the Subsidiaries is or may be implicated in
or subject to any proceeding, action, investigation, claim, lawsuit, order,
agreement or evaluation by any Governmental Body or any other person.
"Environmental Compliance Costs" means any expenditures,
costs, assessments or expenses (including, without limitation, any payments,
costs, assessments or expenses in connection with the conduct of any Remedial
Action, as well as reasonable
<PAGE>
38
fees, disbursements and expenses of attorneys, experts, personnel and
consultants), whether direct or indirect, necessary to cause the operations,
real property, assets, equipment or facilities owned, leased, operated or used
by the Company or by any of the Subsidiaries to be in compliance with any and
all requirements, as in effect at the Closing Date, of Safety and Environmental
Laws, principles of common law concerning pollution, protection of the
Environment or health and safety, or Permits issued pursuant to Safety and
Environmental Laws; provided, however, that Environmental Compliance Costs do
not include payments, costs, assessments or expenses necessary in connection
with normal maintenance of such real property, assets, equipment or facilities
or the replacement of equipment in the normal course of events due to ordinary
wear and tear.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Florida DoT Contract" means the Lease and Operating Agreement
for Commercial Wireless Telecommunications, dated March 25, 1999, between the
State of Florida, Department of Transportation, as Lessor, and the Company, as
Lessee.
"General Claim" means any claim (other than a Tax Claim) based
upon, arising out of or otherwise in respect of any inaccuracy in or any breach
of any representation or warranty of the Seller (other than a representation or
warranty set forth in Sections 3.1, 3.7 and 3.8) contained in this Agreement.
"Hazardous Substance" means any toxic waste, pollutant,
hazardous substance, toxic substance, hazardous waste, special waste, industrial
substance or waste, petroleum or petroleum-derived substance or waste,
radioactive substance or waste, or any constituent of any such substance or
waste, or any other substance regulated under or defined by any Safety and
Environmental Law.
"IRS" means the Internal Revenue Service.
"knowledge" or "belief" with respect to the Seller means the
knowledge or belief, as applicable, of Thomas F. Byrne, John C. Charles, Paul A.
Dickie, Michael J. Hussey, Nancy E. McGee and Paul Scott; and "knows" or
"believes" have correlative meanings.
"Liabilities" means any direct or indirect indebtedness,
liability, Claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated,
secured or unsecured, accrued, absolute, contingent or otherwise, whether or not
of a kind required by GAAP to be set forth on a financial statement or in the
notes thereto.
"Lien" means any lien, pledge, mortgage, security interest,
claim, lease, license, charge, option, right of first refusal, easement,
servitude, transfer restriction, encumbrance or any other restriction or
limitation whatsoever.
"material" means, where the context permits, material to the
Company and the Subsidiaries, taken as a whole.
<PAGE>
39
"Material Taxes" means any Taxes the liability for which when
aggregated with the liabilities for all other Taxes equals or exceeds $50,000.
"NEPA" means the National Environmental Protection Agency.
"person" means any individual, corporation, partnership,
limited liability company, limited liability partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.
"Promissory Notes" means (a) the Promissory Note, dated August
19, 1987, made by Lodestar New Orleans, Inc. in favor of Stoner Broadcasting
System Group, Inc., (b) the Replacement Promissory Note, dated February 11,
1999, made by Lodestar New Orleans, Inc. in favor of Sinclair Radio of New
Orleans, Inc., and (c) the related Loan Agreement between Lodestar New Orleans,
Inc., as borrower, and Stoner Broadcasting Group, Inc. and EZ Communications,
Inc., as lenders.
"property" or "properties" means real, personal or mixed
property, tangible or intangible.
"Remedial Action" means all actions, whether voluntary or
involuntary, reasonably necessary to comply with, or discharge any obligation
under, Safety and Environmental Laws to (A) clean up, remove, treat, cover or in
any other way adjust Hazardous Substances in the indoor or outdoor Environment;
(B) prevent or control the release of Hazardous Substances so that they do not
migrate or endanger or threaten to endanger public health or welfare or the
Environment; or (C) perform remedial studies, investigations, restoration and
post-remedial studies, investigations and monitoring on, about or in any real
property.
"Safety and Environmental Laws" means all Laws and Orders
relating to pollution, protection of the Environment, public or worker health
and safety, or the emission, discharge, release or threatened release of
pollutants, contaminants or industrial, toxic or hazardous substances or wastes
into the Environment or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants or industrial, toxic or hazardous substances or wastes,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq., the Toxic Substances
Control Act, 15 U.S.C. ss. 2601 et seq., the Federal Water Pollution Control
Act, 33 U.S.C. ss. 1251 et seq., the Clean Air Act, 42 U.S.C. ss. 7401 et seq.,
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss. 121 et
seq., the Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., the
Asbestos Hazard Emergency Response Act, 15 U.S.C. ss.2601 et seq., the Safe
Drinking Water Act, 42 U.S.C.
ss. 300f et seq., the Oil Pollution Act of 1990 and analogous state acts.
"Security Documents" means the security documents securing the
TD Credit Facility as listed on Schedule 11.1(i)
"Seller Capital Loans" means any and all loans by the Seller
or any of its affiliates (other than the Company and the Subsidiaries) to the
Company or any
<PAGE>
40
of the Subsidiaries made from the date hereof until immediately prior to the
Closing to fund Capital Payments.
"Seller Credit Facility" means the Credit Agreement, dated
November 26, 1999, among the Seller and the other borrowers and lenders named
therein.
"Subsidiaries" means those entities listed on Schedule 3.5(i).
"Tax Claim" means any claim based upon, arising out of or
otherwise in respect of any inaccuracy in or any breach of any representation or
warranty of the Seller contained in this Agreement related to Taxes.
"Taxes" means all Federal, state, county, local and foreign
taxes (including, without limitation, income, profits, premium, estimated,
excise, sales, use, occupancy, gross receipts, franchise, ad valorem, severance,
capital levy, production, transfer, withholding, employment, unemployment
compensation, payroll related and property taxes and import duties), whether or
not measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto,
required to be paid by or with respect to the Company and the Subsidiaries (or
any of them) on or before the date hereof.
"Working Capital" means the working capital of the Company and
the Subsidiaries, taken as a whole, as determined as of December 31, 1999 based
on the Audited Balance Sheet and as of the Closing Date based on the Closing
Balance Sheet, in each case calculated on the same basis as set forth on
Schedule 11.1(i).
(b) The following capitalized terms are defined
in the following Sections of this Agreement:
Term Section
---- -------
Arbitrator.......................................................... 1.3(c)
Asserted Liability.................................................. 9.3(a)
Audited Balance Sheet............................................... 3.10(a)
Audited Balance Sheet Date.......................................... 3.10(a)
Audited Financials.................................................. 3.10(a)
Basket Amount....................................................... 9.4(a)
Basket Exclusions................................................... 9.4(a)
Buyer............................................................... Preamble
Capital Payments.................................................... 1.2(a)
Claims.............................................................. 3.17
Claims Notice....................................................... 9.3(a)
Closing............................................................. 1.1
Closing Balance Sheet............................................... 1.3(b)
Closing Date........................................................ 2
Code................................................................ 3.12(f)
Collocation Agreements.............................................. 3.19(d)
Collocator.......................................................... 3.19(d)
Company............................................................. Preamble
<PAGE>
41
Company Plan........................................................ 3.23(a)
Completed Tower Assets.............................................. 3.19(f)
Condition of the Companies.......................................... 3.6
Contemplated Transactions........................................... 3.3
Contracts........................................................... 3.15
Determination....................................................... 1.3(c)
Direct Claim........................................................ 9.3(c)
Direct Claim Notice................................................. 9.3(c)
Disputed Matter..................................................... 1.3(c)
FCC Checklist....................................................... 3.19(k)
GAAP................................................................ 1.2(b)
Governmental Body(ies).............................................. 3.13
HSR Act............................................................. 3.27
Indemnified Taxes................................................... 5.11(a)
Indemnifying Party.................................................. 9.3(a)
Indemnitee.......................................................... 9.3(a)
Indemnitor Returns.................................................. 5.11(c)
Independent Accountant.............................................. 5.11(c)
Interim Period...................................................... 5.11(a)
Laws................................................................ 3.13
Leased Real Property................................................ 3.19(b)
Liabilities......................................................... 3.22
Losses.............................................................. 9.1(a)
Orders.............................................................. 3.13
Owned Real Property and Structures.................................. 3.19(a)
Permits............................................................. 3.14
Permitted Encumbrances.............................................. 3.19(a)
Post-Closing Tax Benefit............................................ 5.11(f)
Pre-Closing Period.................................................. 5.11(a)
Preliminary Balance Sheet........................................... 1.2(b)
Purchase Price...................................................... 1.1
Real Property and Structures........................................ 3.19(c)
Real Property Leases................................................ 3.19(b)
Required Consents................................................... 3.15
Revised Preliminary Balance Sheet................................... 1.2(c)
Seller.............................................................. Preamble
Seller's Dispute Report............................................. 1.3(c)
Shares.............................................................. Preamble
Spurs............................................................... 3.10(b)
Straddle Returns.................................................... 5.11(c)
Straddle Statement.................................................. 5.11(c)
TD Credit Facility.................................................. 5.7
Tax Returns......................................................... 3.12(b)
Title Defects....................................................... 3.19(b)
Tower Assets........................................................ 3.19(f)
<PAGE>
42
Uncompleted Tower Assets............................................ 3.19(f)
11.2 Consent to Jurisdiction and Service of Process. Any Claim arising out of or
relating to this Agreement or the Contemplated Transactions may be instituted in
any Federal court of the Southern District of New York or any state court
located in New York County, State of New York, and each party agrees not to
assert, by way of motion, as a defense or otherwise, in any such action, suit or
proceeding, any claim that it is not subject personally to the jurisdiction of
such court, that the action, suit or proceeding is brought in an inconvenient
forum, that the venue of the action, suit or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced in or by such court.
Each party further irrevocably submits to the jurisdiction of such court in any
such action, suit or proceeding. Any and all service of process and any other
notice in any such action, suit or proceeding shall be effective against any
party if given personally or by registered or certified mail, return receipt
requested, or by any other means of mail that requires a signed receipt, postage
prepaid, mailed to such party as herein provided. Nothing herein contained shall
be deemed to affect the right of any party to serve process in any manner
permitted by law or to commence legal proceedings or otherwise proceed against
any other party in any other jurisdiction.
11.3 Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally or sent by a nationally
recognized overnight courier service. Any such notice shall be deemed given when
so delivered personally or by such courier service as follows:
(i) if to the Buyer, to:
SpectraSite Communications, Inc.
100 Regency Forest Drive, Suite 400
Cary, NC 27511
Attention: General Counsel
Telephone: (919) 468-0112
Facsimile: (919) 468-8522
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Bruce A. Gutenplan
Telephone: (212) 373-3117
Facsimile: (212) 757-3990
<PAGE>
43
(ii) if to the Seller:
LeBlanc & Royle Enterprises Inc.
461 Cornwall Road
Oakville, Ontario, Canada L6J 4A5
Attention: Nancy E. McGee
Telephone: 905-844-1242, Ext. 219
Facsimile: 905-844-2787
with a copy to:
Torys
Suite 3000, Maritime Life Tower
P.O. Box 270
Toronto-Dominion Centre
Toronto, Ontario, Canada M5K 1N2
Attention: Brian M. Flood and
Richard G. Willoughby
Telephone: 416-865-0040
Facsimile: 416-865-7380
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
11.4 Entire Agreement. This Agreement (including the Exhibits and Schedules) and
any collateral agreements executed in connection with the consummation of the
Contemplated Transactions contain the entire agreement among the parties with
respect to the purchase of the Shares and supersede all prior agreements,
written or oral, with respect thereto.
11.5 Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies.
This Agreement may be amended, superseded, canceled, renewed or extended, and
the terms hereof may be waived, only by a written instrument signed by the Buyer
and the Seller or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. The rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies that any party may otherwise have at law or in equity. The rights
and remedies of any party based upon, arising out of or otherwise in respect of
any inaccuracy in or breach of any representation, warranty, covenant or
agreement contained in this Agreement or the certificates delivered pursuant to
Section 6.1 or 7.1 shall in no way be limited by the fact that the act,
omission, occurrence or other state of facts upon which any claim of any such
inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or
<PAGE>
44
agreement contained in this Agreement or the certificates delivered pursuant to
Section 6.1 or 7.1 (or in any other agreement between the parties) as to which
there is no inaccuracy or breach.
11.6 Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely within such State.
11.7 Binding Effect; No Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement is not assignable except by operation of law,
and any purported assignment in violation hereof shall be null and void;
provided, however, that the Buyer may assign this Agreement to (i) any direct or
indirect wholly-owned subsidiary of the Buyer if the Buyer guarantees the
performance by such assignee of its obligations hereunder, (ii) to any successor
to all or substantially all of its business or assets, and (iii) to the Buyer's
lenders as collateral security; provided, further, that the Seller may assign
this Agreement to any direct or indirect wholly-owned subsidiary of the Seller
if the Seller transfers all of the Shares to such assignee, the Seller
guarantees the performance by such assignee of its obligations hereunder and
such assignment would have no adverse effect on the Buyer, as determined in the
Buyer's sole discretion.
11.8 Variations in Pronouns; Defined Terms; Interpretation. All pronouns and any
variations thereof refer to the masculine, feminine or neuter, singular or
plural, as the context may require. All terms defined in this Agreement in their
singular or plural forms have correlative meanings when used herein in their
plural or singular forms, respectively. Unless otherwise expressly provided, the
words "include," "includes" and "including" do not limit the preceding words or
terms and shall be deemed to be followed by the words "without limitations." All
references herein to dollar amounts shall mean United States Dollars.
11.9 Counterparts. This Agreement may be executed by the parties hereto by
facsimile signature and in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
11.10 Exhibits and Schedules. The Exhibits and Schedules are a part of this
Agreement as if fully set forth herein. All references herein to Sections,
Exhibits and Schedules shall be deemed references to such parts of this
Agreement, unless the context shall otherwise require.
11.11 Headings. The headings in this Agreement are for reference only, and shall
not affect the interpretation of this Agreement.
11.12 Severability of Provisions. If any provision or any portion of any
provision of this Agreement shall be held invalid or unenforceable, the
remaining portion of such provision and the remaining provisions of this
Agreement shall not be affected thereby. If the application of any provision or
any portion of any provision of
<PAGE>
45
this Agreement to any person or circumstance
shall be held invalid or unenforceable, the application of such provision or
portion of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
BUYER:
SPECTRASITE COMMUNICATIONS, INC.
By /s/ Stephen H. Clark
----------------------------------
Name: Stephen H. Clark
Title: Chief Executive Officer
SELLER:
LeBLANC & ROYLE ENTERPRISES INC.
By /s/ Paul A. Dickie
----------------------------------
Name: Paul A. Dickie
Title: President
By /s/ Nancy E. McGee
----------------------------------
Name: Nancy E. McGee
Title: Senior Vice President
SpectraSite International, Inc.
and
Transco Telecommunications Asset Development Company Limited
and
EVER 1267 Limited
(to be renamed by the parties at Completion)
JOINT VENTURE
SHAREHOLDERS' AGREEMENT
<PAGE>
Table of Contents
Clause
1 Interpretation..........................................................1
2 Warranties..............................................................8
3 Conditions..............................................................9
4 Prior to Completion....................................................10
5 Completion.............................................................11
6 The Business of the Company............................................14
7 Property transfer matters..............................................15
8 Ample and Telink Acquisitions..........................................17
9 Installation of fibre optics...........................................17
10 Provision of services by Shareholders..................................17
11 Know-how...............................................................17
12 The Board and management...............................................18
13 Reserved matters.......................................................20
14 Budgets and financial information......................................21
15 Liability for Employees................................................22
16 Distribution policy....................................................22
17 Finance for the Company................................................23
18 Acquisitions...........................................................24
19 Transfers of Shares....................................................25
20 Deadlock...............................................................28
21 Put and Call Options...................................................30
22 Failure to transfer....................................................32
23 General................................................................32
<PAGE>
24 Default................................................................33
25 Determination of Fair Value............................................36
26 Terms and consequences of transfers of Shares..........................37
27 Enforcement of rights..................................................39
28 Competition with the Business..........................................40
29 Public announcements...................................................42
30 Information, insurance, records, licences..............................42
31 Intellectual property rights...........................................43
32 Tax Matters............................................................43
33 Duration and termination...............................................44
34 Confidentiality........................................................45
35 Arbitration............................................................46
36 Notices................................................................47
37 Whole agreement and remedies...........................................48
38 General................................................................49
39 Governing law and submission to jurisdiction...........................51
THE FOLLOWNING SCHEDULES HAVE BEEN OMITTED, AND WILL BE FURNISHED SUPPLEMENTALLY
TO THE COMMISSION UPON REQUEST.
SCHEDULE 1 List of Agreements and Documents...........................53
SCHEDULE 2 Description of Know-how....................................54
SCHEDULE 3 SpectraSite Warranties.....................................55
SCHEDULE 4 List of Shareholder Reserved Matters.......................56
SCHEDULE 5 Share Options Term Sheet...................................58
SCHEDULE 6 Apportionment of Consideration provided by TadCo...........60
<PAGE>
This Deed is made on 13 April 2000 between:
(1) SpectraSite International, Inc., corporation formed under the laws of the
state of Delaware whose principal place of business is at 100 Regency
Forest, Suite 400, Cary, North Carolina 27511, United States of America
("SpectraSite");
(2) Transco Telecommunications Asset Development Company Limited, a company
incorporated in England and Wales with registered number 3956595 whose
registered offices is at 100 Thames Valley Park Drive, Reading, Berkshire
RG6 1PT ("TadCo");
(3) EVER 1267 Limited (to be renamed by the parties at Completion), a company
incorporated in England and Wales with registered number 3922958 whose
registered offices is at Cloth Hall Court, Infirmary Street, Leeds LS1
2JB, United Kingdom (the "Company").
Recitals:
(A) SpectraSite is a wholly owned subsidiary of SpectraSite Holdings, Inc., a
Delaware corporation, which is in the business of providing outsourced
antenna sites and network services to the wireless communications and
broadcast industries in the United States and Canada.
(B) TadCo is a wholly owned subsidiary of BG Transco Holdings plc which in
turn is a wholly owned subsidiary of BG Group plc. The principal business
of BG Transco Holdings plc is the transportation of gas. The BG group
operates a considerable number of properties in the United Kingdom many
of which are thought to be potentially attractive locations for the
deployment of wireless communications antennae.
(C) SpectraSite and TadCo have agreed to establish a joint venture
company to carry on the business as more particularly described in
Clause 6 which will provide antenna sites and network infrastructure
services to operators of mobile and wireless communication networks in
the United Kingdom and, through subsidiary companies, in Europe
building upon the expertise of SpectraSite Holdings, Inc., and
utilising the Properties and Apparatus to be contributed to the venture
by TadCo and SpectraSite in accordance with the Site Transfer
Agreement together with other properties and assets to be acquired in
the future by the joint venture from third parties or contributed
through related joint ventures.
(D) The Company was incorporated in England and Wales on 10 February 2000. As
at the date of this Deed it has an authorised share capital of
(pound)1,000 divided into 1,000 ordinary shares of (pound)1 each one of
which has been issued at par to and is held by SpectraSite.
(E) This Deed inter alia sets out the terms on which SpectraSite and TadCo
have agreed to subscribe for new shares in the Company which when issued
will result in each holding 50 per cent of the issued share capital of
the Company. This Deed also sets out the terms governing their
relationship as shareholders in the Company.
It is agreed as follows:
1 Interpretation
In this Deed (including the Recitals):
1.1 Definitions
"Acceptance Committee" shall have the meaning ascribed to it
in the Site Transfer Agreement;
"Acceptance Notice" shall have the meaning ascribed thereto in
Clause 19.5.1;
<PAGE>
"Acceptance Period" shall have the meaning ascribed to it in
Clause 19.4.1 ;
"Acquirer" shall have the meaning ascribed to it in Clause
21.6.1 of this Deed;
"Act" means the Companies Act 1985 as amended by the Companies
Act 1989;
"A Director" means a director appointed by the A Shareholder in
accordance with the Articles and "A Directors" shall be
construed accordingly;
"agreed terms" means a document in the terms agreed between, and
signed for identification by or on behalf of, SpectraSite and
TadCo, respectively, as the same may be amended, added to or
replaced from time to time by written agreement between the
parties thereto or as otherwise set out in this Deed, a list of
such documents in agreed terms is set out in Schedule 1;
"Ample" means Ample Design Limited, a company incorporated in
England and Wales with registered number 3055844 and having its
registered office at 98 Lind Road, Sutton, Surrey SM1 4PL;
"Apparatus" means any tower, mast, pole, equipment, housing or
other structure used or adapted for use for the installation
support and housing of any antennae, dishes, transceivers or
other plant and equipment used for the purpose of conveying
radio telecommunications signals by media including but not
limited to radio and microwave;
"Articles" mean the proposed new articles of association of the
Company to be adopted by the Company in accordance with Clause
5.3.4 and which shall give effect to the Shareholders' rights
set out in this Deed;
"A Shareholder" means the registered holders of A Shares;
"A Shares" mean the ordinary shares of (pound)1 each
designated as A Shares in the capital of the Company;
"Associated Company" means a holding company, subsidiary,
subsidiary undertaking or fellow subsidiary or subsidiary
undertaking or any other subsidiaries or subsidiary undertakings
of any such holding company;
"Audited Accounts" mean the report and audited accounts of the
Company and, if applicable, the audited consolidated accounts of
the Group for the financial period ending on the relevant
balance sheet date;
"B Director" means a director appointed by the B Shareholder in
accordance with the Articles and "B Directors" shall be
construed accordingly;
"B Shareholder" means the registered holder of B Shares;
"B Shares" mean the ordinary shares of (pound)1 each
designated as B Shares in the capital
of the Company;
"BG Group" means BG Group plc (or any successor to BG Group plc
as the ultimate parent company of Transco) and each of its
subsidiary undertakings from time to time;
"BGPH" shall have the meaning ascribed to it in Clause 7.3;
"Bid Notice" shall have the meaning ascribed to it in Clause
20.4.1 of this Deed;
"Bid Price" shall have the meaning ascribed to it in Clause
20.4.1(i) of this Deed;
<PAGE>
"Board" means the board of directors of the Company or an
authorised committee of the Board;
"Business" means the business of the Company as defined in
Clause 6.1.1;
"Business Day" means a day (except a Saturday or Sunday) on
which clearing banks in London are open for business;
"Business Plan" means the Initial Business Plan and any
subsequent business plan for the Group comprising an annual
budget and five year rolling business plan prepared annually by
the Company and approved by the Shareholders;
"CEO" shall have the meaning ascribed to it in Clause 12.1.1 of
this Deed;
"CFO" shall have the meaning ascribed to it in Clause 12.2.1 of
this Deed;
"CGT Group" means a group of companies as defined in Section 170
of TCGA 1992;
"Chairman" means the Chairman of the Board from time to time;
"Change of Control Call Option" shall have the meaning ascribed
to it in Clause 21.2 of this Deed;
"Change of Control Put Option" shall have the meaning
ascribed to it in Clause 21.2 of this Deed;
"Code" means the Telecommunications Code set out in
Schedule 2 to the Telecommunications Act 1984;
"Completion" means the transactions and matters provided for
under Clause 5;
"Completion Date" means the date on which Completion takes place
pursuant to Clause 5.1.1 being no later than the date being 90
days after the date of this Deed;
"Confidential Information" shall have the meaning ascribed
to it in Clause 34.1 of this Deed;
"Consortium Claim" means a consortium claim as defined in
Section 402(3) ICTA;
"Contracts" has the meaning given to it in the Site Transfer
Agreement;
"Control" means, in relation to a Shareholder, where a person
(or persons acting in concert) acquires or agrees to acquire
direct or indirect control (1) of the day to day affairs of the
board of directors of that Shareholder, or (2) over more than 50
per cent of the total voting rights conferred by all the issued
shares in the capital of that Shareholder which are ordinarily
exercisable in general meeting or (3) control of the composition
of the board of directors of that Shareholder. For these
purposes "persons acting in concert", in relation to a
Shareholder, are persons which actively co-operate, pursuant to
an agreement or understanding (whether formal or informal) with
a view to obtaining or consolidating Control of that
Shareholder;
"Deadlock Matter" shall have the meaning ascribed to it in
Clause 20.1.2 of this Deed;
"Deadlock Notice" shall have the meaning ascribed to it in
Clause 20.2 of this Deed;
"Defaulting Shareholder" shall have the meaning ascribed to it
in Clause 24.1 of this Deed;
"Default Notice" shall have the meaning ascribed to it in Clause
24.4 of this Deed;
<PAGE>
"De Minimis Business" means any business carried on by a person
in any jurisdiction involving the ownership of
telecommunications infrastructure assets, unless such ownership
is for a wholly ancillary purpose;
"Designated Representatives" shall have the meaning ascribed
to it in Clause 20.1.2 of this Deed;
"Directors" means the A Directors and the B Directors, and
"Director" means any one of them;
"Employing Shareholder" means the Shareholder who at the date
of Notification is the employer of the Undisclosed Employee;
"Employment Losses" means all losses, claims and reasonable
legal costs;
"Event of Default" shall have the meaning ascribed to it in
Clause 24.1 of this Deed;
"Excluded Territories" shall have the meaning ascribed to it in
Clause 28.3.1 of this Deed;
"Facility" shall have the meaning ascribed to it in Clause 17.2;
"Fair Value" means the value of the Shares calculated in
accordance with Clause 25;
"Green Lining" means the identification by TadCo of the Phase 1
Properties in accordance with Clause 9 of the Site Transfer
Agreement;
"Group" means the Company and its subsidiaries and its
subsidiary undertakings and "Group Company" means any one of
them;
"Holder Licence" has the meaning given to it in the Site
Transfer Agreement;
"ICL Contract" means the contractual arrangements between
Transco and any of its Associated Companies in force at the date
of this Deed in respect of provision by ICL plc or any of its
Associated Companies of PMR, maintenance and associated
services;
"ICL Property" shall have the meaning ascribed to it in Clause
5.7;
"ICTA" means The Income and Corporation Taxes Act 1988;
"Improvement" means any improvement in modification to or
development of the Know-how and any new know-how or invention
(whether patented, patentable or the subject of patent
application or otherwise) relating to the Know-how;
"Initial Business Plan" means the initial business plan for the
Company to be agreed between SpectraSite and TadCo no later than
two weeks prior to Completion;
"Initiator" shall have the meaning ascribed to it in Clause 20.2
of this Deed;
"Know-how" means the intellectual property relating to the
know-how described in Schedule 2;
"LCIA" means London Court of International Arbitration;
"Licence of Know-how" means a perpetual, non-exclusive,
royalty free licence of the Know-how;
"Majority Call Option" shall have the meaning ascribed to it
in Clause 21.1 of this Deed;
<PAGE>
"Majority Shareholding" shall have the meaning ascribed to it
in Clause 21.1 of this Deed;
"Minority Put Option" shall have the meaning ascribed to it
in Clause 21.1 of this Deed;
"Minority Shareholding" shall have the meaning ascribed to it
in Clause 21.1 of this Deed;
"Minority Shares" shall have the meaning ascribed to it in
Clause 21.1 of this Deed;
"Non-approved Acquisition" shall have the meaning ascribed
to it in Clause 18.2 of this Deed;
"Notice" shall have the meaning ascribed to it in Clause 36.1 of
this Deed;
"Notification" shall have the meaning ascribed to it in Clause
15.1(i) of this Deed;
"Occupation Lease" shall have the meaning ascribed thereto
in the Site Transfer Agreement;
"Offer" shall have the meaning ascribed to it in Clause 19.3 of
this Deed;
"Ofgem" shall have the meaning ascribed thereto in Clause 7.7.4;
"Option Date" shall have the meaning ascribed to in Clause
21.4.1 of this Deed;
"Option Notice" shall have the meaning ascribed to it in Clause
21.3 of this Deed;
"Option Price" shall have the meaning ascribed to it in Clause
21 of this Deed;
"Options" shall have the meaning ascribed to it in Clause 21.3
of this Deed;
"PGT Licence" means the public gas transporter licence treated
as granted under Section 7 of the Gas Act 1986 (as amended) to
Transco by which Transco is authorised to transport gas;
"PMR" means private mobile radio;
"Participation Right" shall have the meaning ascribed to it in
Clause 5.4.2(iii) of this Deed;
"Permitted Condition" means a bona fide material consent,
clearance, approval or permission necessary to enable the
relevant person to be able to complete a transfer of Shares
under (1) its constitutional documents (2) the rules or
regulations of any stock exchange or automated quotation system
on which it or its parent company is quoted or (3) any
governmental, statutory or regulatory body in those
jurisdictions where that person carries on business and not
being a condition which is within the power of that person to
fulfil;
"Phase 1 Property" shall have the meaning ascribed thereto
in the Site Transfer Agreement;
"Phase 2 Property" shall have the meaning ascribed thereto
in the Site Transfer Agreement;
"Potential Phase 1 Property" shall have the meaning
ascribed thereto in the Site Transfer Agreement;
"Potential Phase 2 Property" shall have the meaning
ascribed thereto in the Site Transfer Agreement;
<PAGE>
"Potential Property" shall have the meaning ascribed thereto in
the Site Transfer Agreement and "Potential Properties" shall be
construed accordingly;
"Property" means any Phase 1 Property or Phase 2 Property and
"Properties" shall be construed accordingly;
"Purchaser" shall have the meaning ascribed to it in Clause
20.5.1 of this Deed;
"Relevant Obligations" shall have the meaning ascribed thereto
in Clause 24.2;
"Remaining Shareholder" shall have the meaning ascribed to it
in Clause 19.4 of this Deed;
"Review" shall have the meaning ascribed thereto in Clause
7.7.1;
"Right" shall have the meaning ascribed to it in Clause 38.6 of
this Deed;
"Sale Notice" shall have the meaning ascribed to it in Clause
19.5.3 of this Deed;
"Sale Shares" shall have the meaning ascribed to it in Clause
24.4.1 of this Deed;
"SDRT" means stamp duty reserve tax;
"Seller" shall have the meaning ascribed to it in Clause 21.6.1
of this Deed;
"Senior Management" shall have the meaning ascribed to it in
Clause 12.8.1;
"Shareholders" means the A Shareholder and the B Shareholder;
"Shareholder Reserved Matter" shall have the meaning ascribed
to it in Clause 13.1 of this Deed;
"Shares" mean the A Shares and the B Shares and (1) any shares
issued in exchange for those shares or by way of conversion or
reclassification and (2) any shares representing or deriving
from those shares as a result of an increase in, reorganisation
or variation of the capital of the Company registered in the
name of the A Shareholder or the B Shareholder;
"Site Licence" has the meaning given to it in the Site Transfer
Agreement;
"Site Transfer Agreement" means the agreement by that name
between the Company (1) and TadCo (2) of even date herewith
which governs the process for the identification and delivery of
Properties in the Company in accordance with its terms;
"STA" shall have the meaning ascribed thereto in Clause 7.3;
"Target Shares" shall have the meaning ascribed thereto in
Clause 28.1.2;
"TCGA 1992" means the Taxation of Chargeable Gains Act 1992;
"Telink" means Telink Limited, a company incorporated in England
and Wales with registered number 3598122 and having its
registered office at 98 Lind Road, Sutton, Surrey SM1 4PL;
"Territory" shall have the meaning ascribed to it in Clause
6.1.3 of this Deed;
"Transco" means BG Transco plc, a company incorporated in
England and Wales with registered number 2006000 and having its
registered office at 100 Thames Valley Park Drive, Reading,
Berkshire RG6 1PT or any successor to some or all of its
business;
<PAGE>
"Transco Licence" shall have the meaning ascribed thereto
in the Site Transfer Agreement;
"Transfer Date" shall have the meaning ascribed to it in
Clauses 19.7.1, 20.7.1 and 24.5.1 of this Deed;
"Transfer Notice" shall have the meaning ascribed to it in
Clause 19.4 of this Deed;
"Transfer Provisions" means the Transfer Regulations and Council
Directive 77/187 EEC;
"Transfer Regulations" means the Transfer of Undertakings
(Protection of Employment) Regulations 1981 (as amended);
"Undisclosed Employee" shall have the meaning ascribed to it
in Clause 15.1 of this Deed;
"VAT" means value added tax;
"Viability Date" shall have the meaning ascribed thereto in
Clause 7.7.1; and
"Wireless Communication Sites" shall have the meaning ascribed
thereto in Clause 6.1.1(i).
1.2 Interpretation Act 1978
The Interpretation Act 1978 shall apply to this Deed in the same
way as it applies to an enactment.
1.3 Subordinate legislation
References to a statutory provision include any subordinate
legislation made from time to time under that provision.
1.4 Modification etc. of statutes
References to a statute or statutory provision include that
statute or provision as from time to time modified or re-enacted
or consolidated so far as such modification or re-enactment or
consolidation applies or is capable of applying to any
transactions entered into in accordance with this Deed.
1.5 Companies Act 1985
The expressions "holding company", "subsidiary" and "subsidiary
undertaking" shall have the same meanings in this Deed as their
respective definitions in the Act.
1.6 Clauses, Schedules etc.
References to this Deed include the Schedules and Appendices to
it and this Deed as from time to time amended and unless
otherwise stated references to Clauses, Schedules and Appendices
are to Clauses of, and Schedules and Appendices to, this Deed.
1.7 Headings
Headings shall be ignored in construing this Deed.
<PAGE>
2 Warranties
2.1 Initial warranties be given by each of the Shareholders Each of
the Shareholders warrants to the other (but in the case of TadCo
subject to Clause 2.2.1 and in the case of SpectraSite to Clause
2.2.2) that;
2.1.1 it has full power and authority to enter into and to
perform its obligations under this Deed which when
executed will constitute valid and binding obligations
on it in accordance with its terms;
2.1.2 the entry into, delivery of, and the performance by it
of this Deed will not result in any breach of any
provision of its memorandum and articles of association
or other constitutional documents or result in any
claim by a third party against the other Shareholders
or the Company; and
2.1.3 the entry into, delivery of, and the performance by it
of this Deed or any of the obligations contemplated
herein will not result in any breach of any arrangement
between it and a third party.
2.2 Disclosures
2.2.1 TadCo as a member of the BG Group is affected by the
undertaking given by the ultimate parent company of
Transco to procure that members of the BG Group will
refrain from taking any action which may put Transco in
breach of its PGT Licence or its statutory obligations.
This disclosure qualifies the warranties given by TadCo
in Clause 2.1 but does not prevent any liabilities or
act to limit or reduce any liability arising under any
of TadCo's other obligations under this Deed.
2.2.2 SpectraSite Holdings, Inc. which will be the primary source of
funds to SpectraSite in order to raise the necessary
finance for subscription of A Shares pursuant
to Clause 5.4.1 shall require the consent of
certain of its third party financiers, including
pursuant to its indentures and (if appropriate) bank
credit agreements. This disclosure qualifies the
warranties given by SpectraSite in Clause 2.1 but
does not prevent any liability or act to
limit or reduce any liability arising under any of
SpectraSite's other obligations under this Deed.
2.3 Additional warranties given by SpectraSite
SpectraSite further represents and warrants to TadCo and to the
Company in the terms set out in Schedule 3.
2.4 Knowledge and awareness
2.4.1 Any warranty which is quantified as being made "so far
as TadCo is aware" or "to the best of the knowledge,
information and belief of TadCo after making due and
careful enquiries" or any similar expression, has been
so qualified after reasonable enquiries by TadCo
including enquiries of persons employed by Transco who
in the recent past have had responsibility for
management or operation of the relevant Site.
2.4.2 Any warranty which is qualified as being made "so far
as SpectraSite is aware" or "to the best of the
knowledge, information and belief of SpectraSite after
making due and careful enquiries" or any similar
expression has been so
<PAGE>
qualified after reasonable enquiries of the officers of
SpectraSite Holdings, Inc., its attorneys at law and
Messrs Alex Gellman and Christopher Jackman.
2.5 Updating to Completion
Each of the warranties given by TadCo and SpectraSite will be
fulfilled down to and will be true and accurate in all material
respects and not misleading in any material respects as if they
had been given again at Completion.
3 Conditions
3.1 Conditions Precedent
Completion of this Deed is conditional upon satisfaction of the
following conditions subject only to Completion of this Deed:
3.1.1 SpectraSite and TadCo agreeing in writing the Initial Business Plan;
3.1.2 Transco having received consent pursuant to Special
Condition 2(5) of the PGT Licence from the Director
General of Gas and Electricity Markets for the creation
of any cross default obligations created in or pursuant
to the Participation Agreement entered into on even
date with this Deed between Transco (1) and TadCo (2)
and in any agreed form documents thereunder;
3.1.3 The form of the documents in Part 2 of Schedule 1
having been agreed between the parties hereto; and
3.1.4 the relevant Associated Company of SpectraSite
receiving the requisite consents pursuant to the terms
of its indentures or, if applicable, third party credit
facilities as required by that Associated Company in
order to finance the subscription of the B Shares by
SpectraSite in accordance with Clause 5.4.1.
3.2 Responsibility for Satisfaction
SpectraSite and TadCo each hereby undertake to use all
reasonable endeavours to ensure the satisfaction of the
conditions set out in Clause 3.1 as soon as possible.
3.3 Non-Satisfaction
3.3.1 If any of the conditions in Clause 3.1 are not
satisfied by the Completion Date either SpectraSite or
TadCo may in its sole discretion terminate this Deed
and no party shall have any claim against any other
party under this Deed save for any claim arising from
breach of any undertaking contained in Clause 3.2, and,
in the case of TadCo, as provided in Clause 3.3.2.
3.3.2 If the Condition in Clause 3.1.4 is not satisfied by
the Completion Date, SpectraSite shall pay the sum of
(pound)2 million plus a sum to TadCo equal to the
reasonable legal and third party professional costs and
expenses incurred by TadCo in connection with the
preparation of this Deed and the documents referred to
herein and the preparation and negotiation of the
transaction contemplated by this Deed such amount not
to exceed, in any circumstances, the sum of (pound)1
million.
<PAGE>
4 Prior to Completion
4.1 Actions between the date of this Deed and Completion:
4.1.1 SpectraSite may perform such due diligence in relation
to the Potential Properties, Apparatus and Contracts as
it may reasonably require and TadCo shall provide, or
use reasonable endeavours to procure the provision of,
such reasonable assistance as SpectraSite may
reasonably require to achieve the same;
4.1.2 TadCo shall complete the process of Green Lining;
4.1.3 TadCo shall use reasonable endeavours to procure a
report on title in relation to each Phase 1 Property is
completed and provided to the Company;
4.1.4 the Shareholders will agree a name for the Company
comprising elements of the SpectraSite and Transco
names;
4.1.5 TadCo shall conduct such due diligence as it may
reasonably require in relation to the Know-how; and
4.1.6 TadCo shall have reasonable access to and a reasonable
opportunity to consider and conduct reasonable due
diligence in respect of the acquisition of Ample and
Telink by SpectraSite or any of its Associated
Companies.
4.2 Restrictions
4.2.1 Pending Completion and subject to Clause 4.2.2, TadCo
shall not, and shall procure so far as it is reasonably
able to do so that Transco shall not without the prior
written consent of SpectraSite (not to be unreasonably
withheld or delayed):
(i) assign, amend or terminate any of the Contracts;
(ii) take steps to procure payment by any Contract
debtor generally in advance of the date on
which such debt is payable in accordance with
the relevant Contract;
(iii) sell, convey, lease, transfer or otherwise
dispose of, or mortgage, charge or otherwise
encumber any Potential Property or any
Apparatus installed at a Potential Property
save as permitted by the Site Transfer
Agreement;
4.2.2 Clause 4.2.1 shall not prevent TadCo, provided that it
has previously consulted with SpectraSite, from:
(i) entering into new contracts for the leasing of
antenna space at any of the Potential
Properties on the expiry of a Contract, such
new contract to be on substantially the same
terms as the Contract so expired save for
price which may be adjusted (if appropriate)
in line with current market rates;
(ii) entering into additional contracts with third
parties for the leasing of antenna space on
any of the Potential Properties;
(iii) negotiating and settling rent reviews in
accordance with the terms of the Contracts;
<PAGE>
(iv) taking such action as is deemed reasonably
appropriate in the event of any material
breach of any of the Contracts.
5 Completion
5.1 Timing of Completion
5.1.1 Completion shall take place at One Silk Street, London
on 31 May 2000 or, if later, two Business Days after
receipt of the last of the consents referred to in
Clauses 3.1.2 and 3.1.4 or at such other place or on
such other date as may be agreed between SpectraSite
and TadCo provided that Completion shall not take place
more than 90 days after the date of this Deed.
5.1.2 TadCo, SpectraSite and the Company shall procure that
SpectraSite becomes beneficially entitled to the A
Shares to be allotted pursuant to this Clause 5 before
TadCo becomes beneficially entitled to the B Shares to
be allotted pursuant to this Clause 5.
5.2 Meeting of the Board of Directors
On the Completion Date, SpectraSite shall procure the holding of
a Board meeting to pass a resolution immediately convening an
extraordinary general meeting of the Company on short notice for
the purposes set out in Clause 5.3.
5.3 Extraordinary general meeting
SpectraSite shall consent to short notice in respect of the
extraordinary general meeting referred to in Clause 5.2 and
shall attend and vote in favour of resolutions (in a form
approved by SpectraSite):
5.3.1 redesignating the existing issued and authorised but
unissued ordinary shares in the capital of the Company
as A Shares;
5.3.2 increasing the share capital of the Company from
(pound)1,000 by the creation of 129,999,000 A Shares of
(pound)1 each and 130,000,000 B Shares of (pound)1
each;
5.3.3 authorising the Directors to issue and allot
129,999,000 A Shares and 130,000,000 B Shares to the A
and B Shareholders respectively in accordance with this
Deed and the Articles; and
5.3.4 adopting the Articles in substitution for the existing
articles of association of the Company.
5.4 Agreement to Subscribe for Shares Once the resolutions
in Clause 5.3 have been passed:
5.4.1 SpectraSite shall subscribe for 129,999,999 A Shares to
be allotted to it at par in consideration of:
(i) the payment to the Company of (pound)107,499,999
million;
(ii) the provision of the Know-how to the Company in
accordance with the terms of this Deed; and
(iii) the transfer to the Company of the entire issued share
capital of Ample and Telink together with the
assignment of all rights and benefits which
<PAGE>
any member of the SpectraSite group has contracted to
acquire in connection with the acquisition of such
companies (including the rights and benefits (if any)
granted pursuant to the Ample share acquisition
agreement dated 7 April 2000 in relation to a retention
fund of (pound)2 million) and SpectraSite undertakes to
pay all costs of transfer and to pay to the Company an
amount equal to any stamp duty or SDRT payable by the
Company in connection with those transfers in each case
on demand.
5.4.2 Conditional on SpectraSite's subscription for A Shares,
the Company shall, at Completion, pay to TadCo the sum
of (pound)130 million to be satisfied solely by the
allotment and issue of 130,000,000 B Shares credited as
fully paid at the time of issue in consideration of :
(i) the agreement to deliver to the Company Phase 1 Properties together
with the Apparatus installed thereon in accordance with the
provisions and procedures set out in the Site Transfer Agreement
which Properties are
subject (if relevant) to:
(I) substitution in accordance with the Site Transfer Agreement;
(II) the Contracts;
(III) the Transco Licences; and
(IV) the Occupation Leases, Site Licences and Holder Licences;
(ii) on completion of the Occupation Lease, Site Licence or Holder Licence
of the relevant Property, as appropriate, the transfer to the Company
of the benefit and burden of the Contracts and the assignment to the
Company of any Transco Licences which relate to that Property;
(iii) the subjection of the Phase 2 Properties to be processed in
accordance with the procedures set out in the Site Transfer
Agreement with a view to an interest in such Phase 2 Properties
being granted to the Company together with the benefit of the
restriction on the disposal of Potential Phase 2 Properties by
TadCo as set out in Clause 5 of the Site Transfer Agreement
subject to variation in accordance with Clause 7.7 of this Deed and
the right of the Company to be informed of potential disposals of
such Potential Properties in accordance with Clause 6 of the Site
Transfer Agreement (the "Participation Right");
(iv) the grant to the Company by TadCo of an interest in the first 1500
Phase 2 Properties nominated, identified and accepted in accordance
with the procedures set out in the Site Transfer Agreement.
5.4.3 The Company shall pay TadCo such VAT, if any, as is due
by reason of the above subscription by TadCo, and the
Company shall pay to HM Custom and Excise such VAT, if
any, as is due by reason of the provision of the
Know-how and the operation of the VAT reverse charge.
<PAGE>
5.4.4 The Shareholders shall procure that the Board meeting
referred to in Clause 5.2 is reconvened and resolutions
are passed:
(i) approving the Shareholders' respective
applications for the numbers of A Shares and B
Shares set out above and allotting those
Shares;
(ii) adopting 31 December as the Company's
accounting reference date (the Company's first
accounting reference period to end on 31
December 2000);
(iii) appointing the Company's auditors and bankers;
(iv) accepting the resignation of Christopher
Jackman as a director and Secretary and
appointing such person as is nominated by
TadCo pursuant to clause 12.4 of this Deed as
Secretary of the Company and changing the
registered office of the Company to 98 Lind
Road, Sutton, Surrey SM1 4PL or such other
address as the Board may agree prior to
Completion;
(v) approving, the Licence of Know-how; and
(vi) adopting a share options plan substantially in
accordance with the term sheet set out in
Schedule 5.
5.4.5 the Company shall issue to SpectraSite 129,999,999 A
Shares and the Company shall issue to TadCo 130,000,000
B Shares;
5.4.6 SpectraSite shall appoint its first A Directors
pursuant to the Articles and this Deed;
5.4.7 TadCo shall appoint its first B Directors pursuant to
the Articles and this Deed;
5.4.8 the Company shall adopt the Initial Business Plan; and
5.4.9 the Company shall enter into the Licence of Know-how.
5.5 The consideration received by the Company for the issue of the B
Shares at Completion as aforesaid shall be apportioned in
accordance with Schedule 6. As soon as reasonably practicable
following Completion, SpectraSite and TadCo shall further
apportion the amounts set opposite items 1 and 4 in Schedule 6
to arrive at a price per Property.
5.6 Share Option Plan
The Company shall as soon as reasonably practicable following
Completion establish a share options plan substantially in
accordance with the terms set out in Schedule 5.
5.7 ICL Contract
The Company shall have no liability in respect of the ICL
Contract with regard to the maintenance of Apparatus and
Properties until such time and subject to and then only to the
extent that the Company acquires an Occupation Lease, Site
Licence or Holder Licence of a Property which is subject to the
ICL Contract (an "ICL Property"). On and from acquisition of an
ICL Property as mentioned above the Company shall pay to TadCo
or such person as TadCo may nominate with regard to the
maintenance of the Property and Apparatus situate at the ICL
Property, a sum equal to:
<PAGE>
(i) the actual costs attributable to such maintenance under the ICL
Contract; or if lower
(ii) the amount which would be payable if such maintenance charge
had been negotiated on arms length commercial terms.
6 The Business of the Company
6.1 Scope and Purpose
6.1.1 The Company will offer a range of antenna site and
network infrastructure services for operators of mobile
and wireless communication networks of all descriptions
including GSM, UMTS, PMR, GPRS, wireless local loop,
telemetry and microwave point to point networks and
analogue and digital radio and television broadcasters
and the provision of connections to fixed and wireless
telecommunications networks belonging to third parties.
The business will comprise:
(i) the provision and management of mobile,
wireless and broadcast communication sites of
all descriptions, including without
limitation, towers, masts and roof top sites
hereinafter referred to as ("Wireless
Communication Sites") together with associated
infrastructure and civil works;
(ii) the acquisition, construction and development
of Wireless Communication Sites;
(iii) network design, consultancy and
implementation services;
(iv) equipment and systems specification,
procurement, installation and commissioning;
(v) the provision of facilities (with associated
services) at Wireless Communication Sites for
network operators and other third parties;
(vi) the operation and maintenance of Wireless
Communication Sites, and third party network
equipment;
(vii) leasing of Wireless Communication Sites and
associated infrastructure;
(viii) project management; and
(ix) associated services,
together the "Business" provided that the
Company shall not, save as provided above,
build, own or operate all or part of a fixed
telecommunications network and/or business
other than as is strictly ancillary to the
operation of Wireless Communications Sites on
sites owned and/or managed and/or operated by
the Company (ie "backhaul")
6.1.2 In addition, the joint venture may examine other
business opportunities and related services.
6.1.3 The Company will operate across the whole of Europe
excluding those countries which comprised the former
USSR (the "Territory") and will focus
<PAGE>
initially on the United Kingdom, Spain, Italy, France,
Germany, Holland, Sweden, Norway, Finland and Denmark.
6.2 Licences
The Company shall apply for appropriate licences as required to
operate the Business, and in particular shall apply for a
licence pursuant to Section 7 of the Telecommunications Act 1984
(which shall include Code powers) and the parties shall use all
reasonable endeavours to assist the Company to obtain such a
licence as soon as reasonably practicable.
6.3 Conduct and promotion of the Business
The Shareholders agree that their respective rights in the
Company shall be regulated by this Deed and the Articles. The
Shareholders and the Company agree to be bound by and comply
with the provisions of this Deed which relate to them and all
provisions of the Articles will be enforceable by the parties
between themselves in whatever capacity. The Shareholders shall:
(i) promote the best interests of the Company;
(ii) (so far as they lawfully can) ensure that the Company
performs and complies with all of its obligations under
this Deed, the Articles and all other agreements it
enters into; and
(iii) ensure that the Business is conducted in accordance
with good business practice and the highest ethical
standards and in accordance with the Business Plan.
6.4 Head office
The head office of the Company shall be situated in the United
Kingdom.
7 Property transfer matters
7.1 No warranty as to transferability
Some of the Potential Properties are subject to operational
clearance by Transco, the obtaining of third party consents or
removal of restrictive covenants and accordingly TadCo makes no
representation or warranty that an Occupation Lease, Site
Licence or Holder Licence will be capable of grant in relation
to any specific Property.
7.2 Use of Sites
The Properties delivered to the Company are for the express
purpose of their use in connection with the Business and for no
other purpose, save that the Company may assign, transfer, swap
or share any of the Properties subject to all third party rights
(including the rights of TadCo under the Site Transfer
Agreement), if it is reasonably believed to be in the normal
course of developing the Business and so long as such
assignment, transfer, swap or sharing is not and does not become
a material part of the Business and that any such assignment,
transfer, swap or sharing of a Property shall not be for cash or
equity consideration save for any balancing payment.
<PAGE>
7.3 Properties owned by BG Property Holdings Limited
TadCo and the Company agree to use all reasonable endeavours to
enter into an agreement ("STA") in terms substantially similar
to the Site Transfer Agreement in relation to at least 550
properties currently owned by BG Property Holdings Limited
("BGPH") (such properties to be included in a list to be
provided to the Company on the date of this Deed). It is
acknowledged by the parties that such STA will amongst other
differences:
7.3.1 provide for such properties to be delivered to the
Company in each case calculated as at the date of
delivery, by way of Site Licence and in each case at
open market value;
7.3.2 will enable TadCo to refuse to identify any such
property in response to a nomination notice under such
STA where it has been notified by BGPH that BGPH
reasonably considers that identifying and proceeding to
deliver that property would have a material adverse
effect on the open market value of or BGPH's ability to
dispose of and/or exploit land retained by BGPH which
adjoins or contains the relevant property.
7.3.3 the early occupation regime set out in Clause 16 of the
Site Transfer Agreement shall not apply to such
properties;
7.3.4 such properties may be the subject of one nomination
notice only and automatically withdrawn from the scope
of the STA if not accepted by the Company;
7.3.5 any such nomination notice must be served within a
period of three years from the date of this Deed;
7.3.6 no more than 125 such nomination notices per quarter
nor more than 500 in any year may be served by the
Company in respect of such properties;
7.3.7 such STA will provide that the Company will not
implement any planning consent which contains
conditions affecting any part of BGPH's retained land
if in the reasonable opinion of BGPH such conditions
would materially diminish the open market value of any
of BGPH's retained land or would materially adversely
affect BGPH's ability to dispose of and/or exploit any
of its retained land;
7.3.8 the responsibility for maintaining fences between parts
of such properties vested in the Company and BGPH's
retained land shall remain with the Company;
7.3.9 the planning co-operation provisions set out in Clause
28 of the Site Transfer Agreement shall not apply to
such properties.
Any STA entered into pursuant to this Clause will terminate if BGPH
ceases to be a subsidiary of BG Transco Holdings plc or if TadCo or
SpectraSite ceases to be a Shareholder and the proposed STA will
terminate in any event in accordance with its terms 3 years from the date
of completion of this Deed.
7.4 Staff Training
7.4.1 For a period of one year following the Completion Date
TadCo shall provide staff of the Company with
supervision during access to Potential Properties and
<PAGE>
shall provide such training of Company staff as the
Company shall reasonably request in order that those
staff may be properly equipped to access Potential
Properties unsupervised, in each case free of charge.
7.4.2 At any time after one year following the Completion
Date, TadCo shall continue to provide supervision
and/or staff training as described in Clause 7.7.1
above, but shall be entitled to charge for these
services as an arms length, commercial basis.
8 Ample and Telink Acquisitions
To the extent that limitations of liability (other than de minimis
provisions in relation to warranty and indemnity claims) are contained in
any of the documentation relating to the acquisition of Ample and Telink
and to the extent that the Company incurs a liability by reason of its
ownership of Ample or Telink which it would (by virtue of the assignment
of SpectraSite's rights to the Company under Clause 5.4.1(iii)) be
entitled to claim from the vendors of Ample and Telink but for the fact
that such liability is in excess of those limitations, SpectraSite shall
fully indemnify the Company for an amount equal to the difference between
the amount of the consideration paid to the vendors of Ample and Telink
and the amount of such liability together with the Company's actual costs
in connection with the claim.
9 Installation of fibre optics
The Company agrees to give TadCo and its Associated Companies the
opportunity to provide fibre optic connections to any and all of the
Properties in priority to any other person provided that TadCo or its
Associated Companies are reasonably able to do so on terms that are at
least as favourable to the Company as those which the Company is able to
obtain in the market.
10 Provision of services by Shareholders
10.1 Any services to be provided by any of the Shareholders or
members of their respective groups to the Company shall be
agreed by the parties in advance and such services shall be
(save where provided by Transco in which event TadCo will
reimburse the Company) provided free of cost to the Company for
the first 12 months following the Completion Date. The terms of
any such services shall be set out in a written agreement.
11 Know-how
11.1 SpectraSite shall use all reasonable endeavours to procure that
the Company will have access to and use of the Know-how for the
duration of this Deed at no cost to the Company together with
all available documentation and customer support as may be
reasonably required to operate the Know-how also at no cost to
the Company.
11.2 SpectraSite shall procure that all upgrades, improvements and
developments in relation to the Know-how are provided free of
cost to the Company for the first 12 months following the
Completion Date.
11.3 SpectraSite shall indemnify the Company and hold the Company
harmless against (in each case on an after tax basis) all
losses, liabilities, costs (including without limitation,
reasonable legal costs), charges and reasonable expenses
exclusive of VAT where
<PAGE>
recoverable by the Company which may be suffered or incurred by
the Company arising out of any and all claims, actions,
proceedings and demands which may be instituted, made or alleged
against the Company in the event of any claim for infringement
made by third party in respect of the Know-how.
12 The Board and management
12.1 A Directors
12.1.1 The A Shareholder may appoint three persons as A
Directors one of whom shall be the Chief Executive
Officer of the Company (the "CEO") and at least one of
whom shall be a non-executive Director. The appointment
of A Directors, subject to Clause 12.1.2, shall be
subject to consultation and approval in accordance with
Clause12.5.
12.1.2 Alex Gellman shall be the first CEO.
12.1.3 Any A Director may be removed by the A Shareholder in
accordance with the Articles and in such event the
Shareholders shall procure that the Company promptly
removes the A Director from his position. The A
Shareholder may, from time to time, appoint a
replacement A Director in his or her place subject to
compliance with Clause 12.1.1.
12.2 B Directors
12.2.1 The B Shareholder may appoint three persons as B
Directors one of whom shall be the Chief Financial
Officer of the Company (the "CFO"), and at least one of
whom shall be a non-executive Director. The appointment
of B Directors, subject to Clause 12.2.2, shall be
subject to consideration and approval in accordance
with Clause 12.5.
12.2.2 The first CFO will be identified by the B Shareholder
and notified to the A Shareholder prior to Completion.
12.2.3 Any B Director may be removed by the B Shareholder in
accordance with the Articles and in such event the
Shareholders shall procure that the Company promptly
removes the B Director from his position. The B
Shareholder may appoint a replacement B Director in his
or her place subject to compliance with Clause 12.2.1.
12.3 Chairman
12.3.1 The chairmanship of the Board shall rotate between the
non-executive Directors to the extent that there are
non executive Directors appointed by the relevant
Shareholder on the Board, failing which, the
chairmanship shall rotate between executive directors
appointed by the relevant Shareholder, with each
Shareholder in turn being able to nominate a Director
for the post in the following order or rotation:
Shareholder B then Shareholder A. The first Chairman
shall be decided prior to Completion.
12.3.2 Until the second anniversary of the Completion Date
each Chairman shall hold office for a period of six
months and thereafter each Chairman shall hold office
for a period of twelve months.
<PAGE>
12.4 Company secretary
The Company secretary shall be appointed by the B Shareholder
and may be the CFO or any other member of Senior Management.
12.5 Shareholder consultation and approval for appointments
12.5.1 Neither Shareholder shall appoint a Director or a
Chairman without the approval of the other Shareholder,
such approval not to be unreasonably withheld or
delayed.
12.5.2 The Shareholder who wishes to make an appointment shall
take reasonable steps to ensure that its nominee is
able to perform his duties competently.
12.5.3 Each appointing Shareholder shall give notice to the
other Shareholder of the name, qualifications and
experience of its nominee and intended date of
appointment at least 5 Business Days prior to the
intended date of appointment.
12.5.4 The other Shareholder may give notice to the proposing
Shareholder that it does not approve of its nominee,
stating its reasons. If it does not do so before the
intended date of appointment, it shall be deemed to
approve the appointment.
12.6 Board Meetings
12.6.1 Board meetings shall be held at least six times a year
and at not more than two monthly intervals. At least
five clear days' written notice shall be given to each
of the Directors of all Board meetings (except if there
are exceptional circumstances or the majority of A and
B Directors agree to shorter notice). Any Director may
ask the Company secretary to call a meeting of the
board by giving notice in accordance with this Clause
12.6.1 and Clause 12.6.2.
12.6.2 Each notice of a Board meeting shall:
(i) specify a reasonably detailed agenda;
(ii) be accompanied by any relevant papers; and
(iii) be sent by courier or facsimile transmission
if sent to an address outside the United
Kingdom.
12.6.3 The quorum at a Board meeting shall be one A Director
and one B Director present in person or by audio or
video conferencing at the time when the relevant
business is transacted. If a quorum is not present
within half an hour of the time appointed for the
meeting or ceases to be present, the Director(s)
present shall adjourn the meeting to a specified place
and time three Business Days after the original date.
Notice of the adjourned meeting shall be given by the
secretary of the Company.
12.6.4 Board meetings shall be chaired by the Chairman. If the
Chairman is not present within ten minutes of the time
specified in a notice calling a meeting, the Directors
present may appoint any one of their number to act as
Chairman for the meeting.
12.6.5 At any Board meeting every A Director and every B
Director shall have one vote. If the number of A
Directors or B Directors present is not equal, the
<PAGE>
number of votes exercisable by the A Directors or B
Directors shall be increased so that each class of
Directors can cast the same number of votes
irrespective of the number of Shares held by the
appointing Shareholder.
12.6.6 All business arising at any Board meeting shall be
determined by resolution passed by a majority of votes
cast by the Directors present. The Chairman shall not
be entitled to a second or casting vote.
12.6.7 Any Director may vote on a matter and be taken into
account for the purposes of a quorum even if he is
interested in that matter.
12.6.8 The Shareholders shall use their reasonable endeavours
to ensure that at least one Director appointed by them
attends Board meetings.
12.6.9 If three consecutive Board meetings are inquorate,
either Shareholder shall be entitled to serve a notice
to exercise the Deadlock procedure in accordance with
Clause 20.
12.7 Committees of Directors
12.7.1 The Board may constitute committees of Directors.
12.7.2 The voting and quorum for Board committee meetings shall be the same as
for Board meetings.
12.8 Management
12.8.1 The day to day affairs of the Company shall be managed by the senior
management, under the supervision of the Board, comprising:
(i) the CEO;
(ii) the CFO;
(iii) a marketing director;
(iv) an operations director; and
(v) a business development director
(together hereinafter referred to as the "Senior Management").
12.8.2 The initial appointments to the position of marketing director and
operations director shall be by the Board after consultation with the
Shareholders, using the services of recruitment consultants. Christopher
Jackman shall be appointed as the initial business development director.
13 Reserved matters
13.1 Shareholder Reserved Matters
The Shareholders shall procure, as far as they can, that no
action is taken or resolution passed by the Company or any Group
Company (whether acting through the Board or otherwise) in
respect of any of the matters or their nearest equivalent in the
case of a Group Company ("Shareholder Reserved Matters") set out
in Schedule 4 without the written approval of both Shareholders.
<PAGE>
13.2 Timing of Shareholder approvals
Any Shareholder Reserved Matter submitted to the Shareholders by
the Board or the other Shareholder for their approval:
13.2.1 where there is no monetary amount involved, or where
the value of the transaction does not exceed (pound)20
million, shall receive a decision as to whether it has
been approved or not within 5 Business Days after all
papers containing reasonable details to make a proper
evaluation of the proposal have been received by them;
13.2.2 where the value of the transaction exceeds (pound)20
million, shall receive a decision as to whether it has
been approved or not as soon as reasonably possible
taking into account the possible need to call a board
meeting of a Shareholder, but shall in any even receive
a decision within 10 Business Days after all papers
containing reasonable details to make a proper
evaluation of the proposal have been received by them.
14 Budgets and financial information
14.1 Information to be prepared
The Company shall prepare and submit to the Board and to the
Shareholders for their approval the following information as
soon as possible and no later than the dates/times set out
below:
14.1.1 the unaudited results of the Company and all Group
Companies for the previous financial year within 25
Business Days of the end of each financial year
together with a reconciliation against management
accounts;
14.1.2 audited accounts for the previous financial year within
three months of the end of each financial year. The
audited accounts of the Company shall be prepared in
accordance with UK GAAP and with a US GAAP
reconciliation.
14.1.3 a detailed draft Business Plan (including a budget
setting out major items of revenue and capital
expenditure) for the Company and the Group for
the following financial year and a draft business
plan for the Company and the Group on a rolling five
year basis to be prepared two months before the end
of each financial year. The Business Plan shall be
broken down on a monthly basis, shall contain a
cash flow forecast and a balance sheet showing
the projected position of the Company and the
Group as at the end of the following financial year;
14.1.4 monthly unaudited management accounts including:
(i) a detailed account, balance sheet and cash flow stateme
(ii) an analysis of income and other revenue;
(iii) a review of the budget contained within the Business
Plan including a reconciliation of results with revenue
and capital budgets;
within 20 Business Days after the end of each month;
14.1.5 monthly key performance indicators in a form to be
agreed in respect of the previous month within 20
Business Days after the end of each month; and
<PAGE>
14.1.6 such further information as any Shareholder may
reasonably require relating to the Business or
financial condition of the Company or of any Group
Company.
14.2 Access to accounting records
The Shareholders shall have unrestricted access to the
accounting records, minutes and other information relevant to
the Company, subject only to legally binding duties of
confidentiality.
15 Liability for Employees
15.1 Transfer Provisions and Undisclosed Employees
If any contract of employment shall have effect as if originally
made between the Company and any employee ("Undisclosed
Employee") as a result of the provisions of the Transfer
Provisions and this Deed (without prejudice to any other rights
or remedies which may be available to the Company):
(i) the Company shall as soon as reasonably practicable
notify the Employing Shareholder upon becoming aware of
the application of the Transfer Provisions and this
Deed to any such contract of employment
("Notification") in order that the Employing
Shareholder can look into the possibilities of
redeploying such Undisclosed Employee to a suitable
alternative position within its organisation;
(ii) if the Employing Shareholder does not identify or wish
to offer the Undisclosed Employee a suitable
alternative position or any such offer is not accepted
by the Undisclosed Employee within 28 days of
Notification, the Company may terminate the contract of
employment of the Undisclosed Employee within a further
28 days; and
(iii) the Employing Shareholder shall indemnify the Company
and keep the Company indemnified against all Employment
Losses relating to or arising out of such termination,
provided that such termination occurs within six months
of the date on which the Company became aware of the
application of the Transfer Provisions to the
Undisclosed Employee in question.
15.2 Definitions
For the purposes of this Clause 15 the terms "contract of
employment" and "collective agreement" shall have the same
meanings respectively as in the Transfer Regulations.
16 Distribution policy
16.1 Audited Accounts
The annual general meeting of the Company at which Audited
Accounts are laid before the Shareholders must be held not later
than four months after the end of the relevant financial year.
16.2 Distributions
The Company shall not make any distributions to the Shareholders
within the first three years commencing on the Completion Date.
Thereafter the Company shall distribute such percentage of the
Company's profits lawfully available for distribution as the
Board
<PAGE>
determines in each financial year to its Shareholders subject to
the Board making reasonable provisions and transfers to reserves
and to the conditions in Clause 16.3 being met.
16.3 Conditions for distribution of net profit
Distribution of profits in accordance with this Clause may not
be made if:
16.3.1 the distribution would result in the debt/equity ratio
of the Company or the Group exceeding 50:50 at the time
of the payment or (based on the Board's estimates,
having regard to the relevant budget) within the
following 12 months;
16.3.2 the distribution would result in a breach of any
covenant or undertaking given by the Company to any
lender or would, in the opinion of the Board, be likely
to do so within the following 12 months; or
16.3.3 the Board resolves that the distribution is materially
prejudicial to the interests of the Company having
regard to:
(i) implementation of the investment programme approved in the Business
Plan or otherwise;
(ii) the trading prospects of the Company and the Group; and (iii) the
need to maintain the sound financial standing of the Company and the
Group.
17 Finance for the Company
17.1 Additional finance
17.1.1 Finance for the Company shall be provided in accordance
with the budget contained within the Business Plan and
the Company will at all times be subject to the maximum
debt/equity ratio of 50:50 or such other debt/equity
ratio as may be agreed by the Shareholders from time to
time.
17.1.2 If the Board determines that the Company requires
additional finance, subject to the approval of
Shareholders as a Shareholder Reserved Matter where
required, the Company may receive further finance
either:
(i) by borrowing from third party lenders; or
(ii) from Shareholders.
17.2 External finance
Finance from third party lenders shall be on the best terms
reasonably available in the open market (the "Facility"). The
Facility shall not confer any right on the lender to participate
in the share capital of the Company or in the Business. The
Shareholders shall not be obliged to provide any capital to the
Company either by way of subscription for shares or loan notes
or by advancing loans.
17.3 Recourse
There shall be no recourse to the Shareholders in respect of the
Facility and the Shareholders shall not be required to provide
guarantees or security in respect of the Facility.
<PAGE>
17.4 Shareholder Finance
17.4.1 Any additional finance shall be provided by the
Shareholders subscribing for loan notes or by the
Shareholders subscribing for additional shares in the
Company in each case in proportion to their share
holdings in the Company.
17.4.2 Each Shareholder shall contribute the required
additional finance within 30 Business Days (or longer
if agreed by the Shareholders) of receipt by it of a
notice in writing specifying the amount of additional
finance to be provided.
17.4.3 Subscription monies for the loan notes and
consideration for the subscription of shares shall be
paid by wire or telegraphic transfer to the Company's
bank account.
17.4.4 The terms of any loan notes shall be subject to the
approval of Shareholders save that the terms of loan
notes to be issued to each Shareholder must be
identical.
18 Acquisitions
18.1 Subject to the approval of Shareholders as a Shareholder
Reserved Matter where required by paragraph 4 of Schedule 4 the
Shareholders intend that the Company should seize upon
appropriate opportunities to make business acquisitions within
the scope of the Business in accordance with the agreed
acquisition strategy comprised within the Business Plan.
18.2 Any proposed acquisition which requires Shareholders' approval
as set out in paragraph 4 of Schedule 4 and fails to receive
such approval may, provided that the Company is not already
operating in the country or countries concerned or in countries
where Ample or Telink is the only Group company carrying on
business there or where the business conducted does not involve
the ownership of telecommunications assets in that jurisdiction
, be completed by the Shareholder which was willing to approve
the transaction (but not by means of or involving the Company or
any Group Company), (a "Non-approved Acquisition"). Once a
Shareholder has completed a Non-approved Acquisition in
accordance with this Clause the country or countries covered by
the acquisition (not, save as referred to above, being countries
where the Company was already operating) will from that point
onwards be excluded from the definition of Territory and
henceforth the Company will not conduct business within that
jurisdiction save that any activities of Ample or Telink or any
business of the Group not involving the ownership of
telecommunications assets in the relevant jurisdiction may
continue.
18.3 Without prejudice to the provisions of Clause 18.2 the
Shareholders acknowledge that it is necessary to adopt a
flexible approach in relation to possible future transactions to
develop the Business, that where possible such transactions
should, if they involve third parties as on-going participants,
be structured through separate joint venture arrangements or a
subsidiary of the Company, but that where this is not possible
and could involve the third party investors as shareholders in
the company the Shareholders will at the relevant time
co-operate with one another in good faith to seek if possible to
agree any changes acceptable to them to this Deed to accommodate
new shareholders in the Company.
<PAGE>
19 Transfers of Shares
19.1 General prohibition against share transfers
No Shareholder can do, or agree to do, any of the following
unless it is permitted by this Clause:
19.1.1 pledge, mortgage, charge or otherwise part with or
encumber any of its Shares or any interest in any of
its Shares without the consent of the other
Shareholder(s);
19.1.2 sell, transfer or otherwise dispose of, or grant any
option over, any of its Shares or any interest in its
Shares;
19.1.3 enter into any agreement in respect of the votes
attached to any of its Shares;
19.1.4 take any action which causes such Shareholder to cease
to have some or all of the benefit of the economic
rights or the power to exercise or control the exercise
of the voting rights.
19.2 Transfers to Associated Companies
19.2.1 Subject to Clause 19.2.2, any Shareholder may transfer
all but not some of its Shares to an Associated Company
on giving prior written notice to the other
Shareholder. An Associated Company must be under an
obligation to retransfer its Shares to the Shareholder
or another Associated Company of that Shareholder
immediately if it ceases to be an Associated Company.
19.2.2 Following a transfer of Shares to an Associated
Company, the original transferring Shareholder
(but not a subsequent transferor in a series of
transfers to Associated Companies) shall remain
party to this Deed and shall be jointly and severally
liable with the transferee under this Deed as a
Shareholder in respect of the transferred Shares.
The transferee shall become a party to this Deed
and shall assume all the rights and liabilities
of the transferor under this Deed as a Shareholder
in respect of the transferred shares .
19.3 Third party offers
A Shareholder may transfer its shares to a party not being a
party to this Deed or an Associated Company of any such party
only if it receives an offer (the "Offer"):
19.3.1 which is a bona fide Offer in writing;
19.3.2 from a third party which has its own financial
resources to meet its obligations under the Offer or
has an unconditional and legally binding commitment
from a lender(s) for that finance;
19.3.3 which is irrevocable and unconditional except for any Permitted Conditi
19.3.4 which is governed by English law;
19.3.5 which is for cash in Sterling and which is for (all but
not some of) the Shares of the selling Shareholder and
the Shares of the other Shareholder if they also elect
to accept the Offer; and
19.3.6 which contains all material terms and conditions
(including the price and the intended completion date
of the Offer).
<PAGE>
19.4 Notice of Offers
If a Shareholder receives an Offer which it wishes to accept, it
must immediately give written notice (the "Transfer Notice") to
the other Shareholder (the "Remaining Shareholder") offering to
sell those Shares which are the subject of the Offer to the
other Shareholder at the same price per Share as set out in the
Offer and on terms which are no less favourable than those
contained in the Offer. The Transfer Notice must also state:
19.4.1 the period within which the offer to sell the Shares to
the Remaining Shareholder shall remain open to be
accepted. This period must be at least 30 Business Days
from the date of the Transfer Notice (the "Acceptance
Period"); and
19.4.2 full details of all other terms and conditions of the Offer.
19.5 Options of Remaining Shareholder
Once the Remaining Shareholder has received a Transfer Notice it
may either:
19.5.1 send a written notice to the selling Shareholder (an
"Acceptance Notice") within the Acceptance Period
accepting the offer of the Shares set out in the
Transfer Notice; or
19.5.2 send a written notice to the selling Shareholder within
the Acceptance Period declining the offer set out in
the Transfer Notice; or
19.5.3 send a written notice to the selling Shareholder (a
"Sale Notice") within the Acceptance Period offering to
sell all of its Shares to the third party on the same
terms and conditions as those contained in the Offer;
or
19.5.4 not reply to the Transfer Notice within the Acceptance
Period. In this case, the Remaining Shareholder shall
be deemed not to have accepted the offer set out in the
Transfer Notice and not to have issued a Sale Notice.
19.6 Consequences of Transfer Notice
19.6.1 If the offer set out in the Transfer Notice is
accepted, the selling Shareholder must sell the Shares
covered by the Acceptance Notice to the Remaining
Shareholder.
19.6.2 If the offer set out in the Transfer Notice is not
accepted or deemed not to have been accepted and a Sale
Notice is not issued or not deemed to have been issued,
the selling Shareholder may, subject to the provisions
of Clause 19.3 as to the terms of any such Offer,
accept the Offer and sell its Shares to the third party
making the Offer on the terms and conditions of the
Offer.
19.6.3 If a Sale Notice is issued, the selling Shareholder and
the Remaining Shareholder must sell all their Shares to
the third party making the Offer on the terms and
conditions of the Offer.
<PAGE>
19.7 Completion of transfer
The sale of the Shares in accordance with this Clause shall be
made on the following terms:
19.7.1 if any of the Permitted Conditions to the Acceptance
Notice or the Offer or the Sale Notice is not
satisfied or waived 90 Business Days after service of
the Acceptance Notice or the Offer or the Sale Notice,
then that Notice or that Offer, as appropriate, shall
lapse. Otherwise, completion of the transfer of the
Shares shall be completed seven Business Days after
the date of expiry of the Acceptance Period or the
date of satisfaction or waiver of all Permitted
Conditions (whichever is the later) (the "Transfer
Date") and at such reasonable time and place as the
Shareholders agree or, failing which, at the
registered office of the Company during normal business
hours;
19.7.2 the selling Shareholder(s) must deliver to the buyer in
respect of the Shares which it is selling on or before
the Transfer Date:
(i) duly executed share transfer forms;
(ii) the relevant share certificates; and
(iii) a power of attorney in such form and in favour of such
person as the buyer may nominate to enable the buyer to
exercise all rights of ownership in respect of the
Shares to be sold including voting rights.
19.7.3 the buyer must pay the total consideration due for the
Shares to the selling Shareholder(s) by bankers draft
or by telegraphic transfer to the bank account of the
selling Shareholder(s) notified to it for the purpose
on the Transfer Date;
19.7.4 completion of the sale of the Shares of all selling
Shareholders must take place simultaneously; and
19.7.5 in accordance with Clause 26.
19.8 Failure to complete sale
19.8.1 If after a Remaining Shareholder has issued an
Acceptance Notice or a Sale Notice, as the
case may be, and the selling Shareholder(s) in
question fail(s) or refuse(s) to comply with its/their
obligations in this Clause, the Company shall
authorise a person to execute and deliver the
necessary transfer on its/their behalf. The Company
shall receive the purchase money in trust for such
selling Shareholder(s) and cause the buyer to be
registered as the holder of the Shares being sold.
The receipt of the Company for the purchase money
shall be a good discharge to the buyer (who shall
not be bound to see to the application of those
moneys). After the buyer has been registered as
holder of the Shares being sold in purported
exercise of these powers the validity of the
proceedings shall not be questioned by any person.
19.9 General
19.9.1 The Shareholders shall keep the Company informed, at
all times, of the issue and contents of any notice
served pursuant to this Clause and any election or
acceptance relating to those notices.
<PAGE>
19.9.2 The Shareholders waive their pre-emption rights to the
transfer of Shares contained in this Deed and the
Articles to the extent necessary to give effect to this
Clause.
19.9.3 For the purposes of this Clause all Shareholders in the
same group of companies of which it is a member will be
treated as one.
19.9.4 Each of the Shareholders undertake that they have and
will have at all times unrestricted powers to transfer
their respective Shares other than in relation to any
restrictions in this Deed or the Articles.
20 Deadlock
20.1 Escalation procedure
20.1.1 If the Board cannot reach agreement on any resolution
before it within 10 Business Days of such resolution
first being tabled at the Board meeting or three or
more consecutive Board meetings have been dissolved
because a quorum is not present, the subject of any
such resolution before them shall be referred
immediately to the Shareholders.
20.1.2 If the Shareholders cannot reach agreement on any
matter referred to them under Clause 20.1.1 or which is
a Shareholder Reserved Matter within 5 Business Days of
that matter being referred to them (a "Deadlock
Matter"), the Shareholders shall refer the Deadlock
Matter to the designated representatives of their
respective chief executive officers ("Designated
Representatives") for resolution.
20.1.3 If the Designated Representatives cannot reach
agreement on the Deadlock Matter referred to them
within 5 Business Days of that matter being referred to
them under Clause 20.1.2, the Designated
Representatives shall refer the Deadlock Matter to the
their respective chief executive officers for
resolution.
20.1.4 If the Acceptance Committee cannot reach agreement on
any resolution before it within 10 Business Days of
such resolution first being tabled to it or three or
more consecutive meetings of the Acceptance Committee
have been dissolved because a quorum is not present,
the subject of any such resolution before them shall be
referred immediately to the Board.
20.2 Auction
If the Deadlock Matter cannot be resolved by the chief executive
officers within 5 Business Days of the matter being referred to
them and any Shareholder considers that the matter may
materially adversely effect its interests or the interests of
the Company, then any Shareholder (the "Initiator") may serve a
notice (a "Deadlock Notice") on the other Shareholder(s).
20.3 Appointment of Auctioneer
The Shareholders shall appoint an independent investment bank
within 10 Business Days of the date of the Deadlock Notice to
act as auctioneer for the purposes of this Clause. If the
Shareholders cannot agree on an auctioneer within such period,
any Shareholder may request the President of the London
Investment Bankers Association to make the appointment. The
Auctioneer shall act as an expert and not as an arbitrator
<PAGE>
and its determination shall be final and binding on the parties
(in the absence of fraud or manifest error). The fees of the
Auctioneer shall be borne equally by each of the Shareholders.
20.4 Bids
20.4.1 Within 10 Business Days after the appointment of an
Auctioneer each Shareholder shall give a written notice
containing a sealed bid (a "Bid Notice") to the
Auctioneer. The Bid Notice shall:
(i) set out the price per Share at which it is
willing to purchase for cash in Sterling all
(but not some only) of the Shares held by the
other Shareholder(s) (a "Bid Price") but must
not contain any other condition other than a
Permitted Condition;
(ii) constitute an offer by that Shareholder to buy
for cash in Sterling all (but not some only)
of the Shares held by the other Shareholder(s)
at the Bid Price;
(iii) constitute an offer by that Shareholder to
sell for cash in Sterling all (but not some
only) of its own Shares at the highest Bid
Price specified by the other Shareholder(s) in
their Bid Notice(s) if that Bid Price exceeds
its own Bid Price; and
(iv) be irrevocable without the consent of all the
Shareholders.
20.4.2 The Initiator shall specify a Bid Price per Share which
is an even number of pence and the other Shareholder(s)
shall specify a Bid Price per Share which is an odd
number of pence.
20.5 Auctioneer's Notice
20.5.1 The Auctioneer shall give a written notice to all the
Shareholders specifying which Shareholder (the
"Purchaser") has offered the highest Bid Price within 2
Business Days of receipt of the last Bid Notice. The
Auctioneer's notice shall be final and binding on each
of the parties (in the absence of fraud or manifest
error).
20.5.2 The Purchaser must buy the Shares of the other
Shareholder(s) at the Bid Price specified in the
Purchaser's Bid Notice and the other Shareholder(s)
must sell their Shares to the Purchaser (upon payment
of the Bid Price).
20.6 Failure to submit Bid Notice
If a Shareholder fails to serve a Bid Notice, it shall be deemed
to have accepted the offer to buy its Shares set out in the
other Shareholder(s) Bid Notice(s) and shall be bound to sell
its Shares to the Purchaser who shall be bound to buy them.
20.7 Completion of transfer
The sale of the Shares in accordance with this Clause shall be
made under the following terms:
20.7.1 if any of the Permitted Conditions to which the Bid Notice is
subject is not satisfied or waived 90 Business Days after the
service of that notice then the Bid Notice shall lapse.
Otherwise, completion of the transfer of the Shares to be
<PAGE>
sold shall be completed seven Business Days after the
Auctioneer's notice has been served or the date of satisfaction
or waiver of all Permitted Conditions (whichever is the later)
(the "Transfer Date") and at such reasonable time and place as
the Shareholders agree or, failing which, at the registered
office of the Company during normal business hours.
20.7.2 the selling Shareholder(s) must deliver to the
Purchaser in respect of the Shares it is selling on or
before the Transfer Date:
(i) duly executed share transfer forms; and
(ii) the relevant share certificates; and
(iii) a power of attorney in such form and in favour
of such person as the Purchaser may nominate
to enable the Purchaser to exercise all rights
of ownership in respect of the Shares to be
sold including voting rights; and
20.7.3 the Purchaser shall pay the Bid Price to the selling
Shareholder(s) by banker's draft or by telegraphic
transfer to the bank account(s) of the selling
Shareholder(s) notified to it for the purpose on the
Transfer Date; and
20.7.4 in accordance with Clause 26.
21 Put and Call Options
21.1 Options in the event of dilution
In the event that either Shareholder's shareholding in the
Company is reduced to less than 25 per cent of the issued share
capital of the Company (a "Minority Shareholding"), the other
Shareholder, provided that it holds not less than 50 per cent of
the issued share capital of the Company (the "Majority
Shareholding"), shall have an option (the "Majority Call
Option") of purchasing all (but not some) of the Shares held by
the Minority Shareholder ("Minority Shares") from the Minority
Shareholder and the Minority Shareholder shall have an option
(the "Minority Put Option") of requiring the Majority
Shareholder to purchase all (but not some) of the Minority
Shares in each case for an amount equal to the Fair Value of the
Minority Shares (the "Option Price") on the terms of this
Clause.
21.2 Options on change of control
In the event that any Shareholder undergoes a change of control
(other than a solvent reorganisation or reconstruction within
its group such that its ultimate holding company is the same
after the event as it was before, or a spin-off or distribution
of the shares or assets or a tax-exempt de-merger of an
intermediate holding company to all or substantially all of the
shareholders of the ultimate holding company), the non-acquired
Shareholder shall have an option (a "Change of Control Put
Option") entitling it to sell all (but not some) of its Shares
to the Shareholder which has undergone a change of control, or
an option (a "Change of Control Call Option") entitling it to
purchase all the Shares of the Shareholder which has undergone a
change of control which in either case shall be exercisable by
it at any time within 24 months following the change of control
if during that period the acquired party (or its controlling
shareholder) proposes formally to the Board on more than one
occasion changes to the fundamental strategy or operations of
the Company which are not acceptable to the non-acquired
Shareholder.
<PAGE>
The price at which the non-acquired Shareholder may purchase the
Shares of the acquired Shareholder will be an amount equal to
the Fair Value of the Shares (also the "Option Price") and
otherwise on the terms of this Clause. The flotation of an
intermediate holding company of a Shareholder shall not be
considered to be a change of control for the purposes of this
Clause.
21.3 Exercise
The Majority Call Option and, the Minority Put Option set out in
Clause 21.1 above and the Change of Control Put Option and
Change of Control Call Option set out in Clause 21.2 above (the
"Options") are exercisable in whole but not in part by written
notice (an "Option Notice"). An Option Notice shall be
irrevocable and unconditional except for any Permitted
Condition. Any notices to be issued in connection with this
Clause shall comply with Clause 36.
21.4 Completion of transfer
The sale and purchase of Shares in accordance with this Clause
shall be made on the following terms:
21.4.1 if any of the Permitted Conditions to an Option
Notice is not satisfied or waived 90 Business Days
after service of the Option Notice, then the Option
Notice shall lapse. Otherwise, completion of the
transfer of the Shares in respect of the Option Notice
shall be completed 7 Business Days after the date of
exercise of the Option determination of the Fair
Value of the Option Shares or the date of the
satisfaction or waiver of all Permitted Conditions,
whichever is the later (the "Option Date") at such
reasonable time and place that the Shareholders
agree or, failing which, at the registered
office of the Company during normal business hours;
21.4.2 the selling Shareholder must deliver to the buyer in
respect of the Option Shares on or before the Option
Date:
(i) duly executed share transfers forms; and
(ii) the relevant share certificates; and
(iii) a power of attorney in such form and in favour
of such person as the buyer may nominate to
enable the buyer to exercise all rights of
ownership in respect of the Shares covered by
the Option Notice including voting rights; and
21.4.3 the buyer shall pay the Option Price to the selling
Shareholder by banker's draft by telegraphic transfer
to the bank account of the selling Shareholder notified
to it for the purpose on the Option; and
21.4.4 in accordance with Clause 26.
21.5 Non-application in the case of a listing
This Clause shall not apply while the share capital of the
Company is listed on a recognised stock exchange or traded on an
automated quotation system, or when a sponsor has been formally
engaged and a resolution of the Board has been passed in
contemplation of the intention to list.
<PAGE>
21.6 Exercise of options and subsequent listing
21.6.1 In the event that one party (the "Acquirer") acquires the Shares
of another party (the "Seller") pursuant to the
exercise of the Majority Call Option or Change of
Control Call Option and the Acquirer subsequently
disposes (or agrees to dispose) of the whole of the
issued share capital of the Company within 90
days after the acquisition of the Shares from the
Seller the Acquirer shall pay to the Seller 50 per
cent. of any increase in the price per Share
between the price per Share paid by the Acquirer
and the net proceeds (after deduction of any
applicable commissions, stamp duty, SDRT,
applicable taxes and reasonable expenses) received
by the Acquirer for the sale of the Shares to the third
party.
21.6.2 For the purposes of this Clause, a disposal includes a
sale of all or substantially all of the assets or
undertakings, an introduction or initial public
offering or the commencement of trading on any
automated quotation system of the issued share capital
of the Company.
21.6.3 Any payments pursuant to Clause 21.6.1 shall be an
adjustment to the consideration paid, and received for
the relevant shares.
22 Failure to transfer
22.1 If the selling Shareholder(s) fail(s) or refuse(s) to comply with
its/their obligations to sell in Clauses 20 and 21, the
Company shall authorise a person to execute and deliver the
necessary transfer on its/their behalf. The Company shall
receive the purchase money in trust for the selling
Shareholder(s) and cause the buyer to be registered as the
holder of the Shares being sold. The receipt of the Company for
the purchase money shall be a good discharge to the buyer (who
shall not be bound to see to the application of those moneys).
After the buyer has been registered as the holder of the
shares being sold in purported exercise of these powers the
validity of the proceedings shall not be questioned by any
person.
22.2 If any selling Shareholder fails or refuses to transfer any
Shares in accordance with Clauses 20 and 21 the other
Shareholder buyer may serve a default notice. Following
the service of a default notice (unless such non-compliance
has previously been remedied to the reasonable satisfaction
of the buyer), the defaulting selling Shareholder shall not
exercise any of its powers or rights in relation to management
of, and participation in the profits of, the Company under this
Deed, the Articles or otherwise. The Directors appointed by
the defaulting seller (or its predecessor in title) shall not:
(iv) be entitled to vote at any Board meeting;
(v) be required to attend any meeting of Directors in order to constitute a
quorum; or
(vi) be entitled to receive or request any information from the Company.
23 General
23.6.1 The Shareholders shall keep the Company informed, at all times,
of the issue and contents of any notice served pursuant to
Clauses 19, 20 and 21 and any election or acceptance relating
to those notices.
<PAGE>
23.6.2 The Shareholders waive their pre-emption rights to the transfer
of Shares contained in this Deed and the Articles to the extent
necessary to give effect to Clauses 19, 20and 21.
23.6.3 The arbitration provisions in Clause 33 do not apply to any
Deadlock Matter except to the extent that it relates to the
interpretation of this Deed or the respective rights and
obligations of any party pursuant to this Deed.
24 Default
24.1 Events of Default
Subject to Clause 24.2, a Shareholder (the "Defaulting
Shareholder") suffers an "Event of Default" where:
24.1.1 it commits a material breach of this Deed (excluding
for the avoidance of doubt, a failure to transfer its
shares in accordance with Clauses 19, 20 and 21) and
either (1) the breach is not capable of being remedied
or (2) the Defaulting Shareholder does not remedy that
breach within 10 Business Days of the other Shareholder
sending it written notice requiring it to remedy that
breach; or
24.1.2 an order is made, petition presented, resolution passed
or meeting convened for its winding-up (or other
process whereby its business is terminated and its
assets are distributed amongst its creditors and/or
shareholders or other contributors) or there are cases
or proceedings under any applicable insolvency,
reorganisation, or similar laws in any relevant
jurisdiction or events have occurred which, under
applicable laws, would justify any such cases or
proceedings;
24.1.3 a petition is presented or other proceedings are
commenced for an administration order to be made (or
any other order to be made by which during the period
it is in force, its affairs, business and assets are
managed by a person appointed for the purpose by a
Court, governmental agency or similar body) in relation
to it, or any such order been made;
24.1.4 a receiver (including an administrative receiver),
liquidator, trustee, administrator, custodian or
similar official is appointed in any jurisdiction in
respect of the whole or any part of its business or
assets or any step has been taken for or with a view to
the appointment of such a person;
24.1.5 it is insolvent or unable to pay its debts as they fall due;
24.1.6 any of the events above occurs in relation to its holding company; or
24.1.7 it fails to take up its entitlement to shares offered
to it following Shareholder approval as a Shareholder
Reserved Matter.
24.2 PGT Licence Default
Where TadCo commits an Event of Default which is a material
breach of this Deed by virtue of TadCo refraining from
undertaking any of its obligations under this Deed ("Relevant
Obligations") on the grounds that TadCo or Transco believes that
TadCo undertaking its obligations under this Deed would put
Transco in breach of Transco's PGT Licence or its statutory
obligations, TadCo shall have a period of 3 months from
receiving Notice from SpectraSite or the Company to remedy such
breach, provided that
<PAGE>
SpectraSite, the Company and TadCo shall during such 3 month
period use their respective reasonable endeavours:
24.2.1 to obtain Transco's agreement that TadCo undertaking
its Relevant Obligations will not cause Transco to
breach Transco's PGT Licence or its statutory
obligations; or
24.2.2 to agree an alternative to the Relevant Obligations
which would achieve substantially the same commercial
objectives and economic effect as contained in this
Deed (at no additional cost to the Company or
SpectraSite) and which do not result in Transco being
in breach of its PGT Licence or its statutory
obligations.
If the parties fail to reach agreement as contemplated by clause
24.2.1 or 24.2.2 within the 3 month period referred to above,
then TadCo shall have suffered an Event of Default not capable
of remedy provided that the parties agree that for the purposes
of Clause 24.4 any resulting sale or purchase shall be at Fair
Value. Any Investment Bank appointed pursuant to Clause 25.1
shall be directed to take account when calculating Fair Value of
any dimituation in value of Shares owned by TadCo caused by the
Event of Default suffered by TadCo contemplated by this Clause
24.2.
24.3 Notice of Default
If an Event of Default occurs, the Defaulting Shareholder shall
notify the other Shareholder as soon as reasonably practicable.
24.4 Default Notice
Following an Event of Default, the non-defaulting Shareholder
may give written notice (a "Default Notice") to the Defaulting
Shareholder within 10 Business Days of receiving notification of
the Event of Default from the Defaulting Shareholder or of its
becoming aware of the Event of Default, whichever is the later
requiring the Defaulting Shareholder either:
24.4.1 to sell all of the Shares held by the Defaulting
Shareholder (the "Sale Shares") to the non-defaulting
Shareholder at a price per Share equal to 80 per cent
of the Fair Value of the Sale Shares: or
24.4.2 to purchase all of the Shares held by the
non-defaulting Shareholder (also "Sale Shares") at a
price equal to 120 per cent. of the Fair Value of the
Sale Shares.
24.5 Completion of transfer
The sale and purchase of the Sale Shares in accordance with this
Clause shall be made on the following terms:
24.5.1 if any of the Permitted Conditions to the Default
Notice is not satisfied or waived 90 Business Days
after service of that Default Notice then that Default
Notice shall lapse. Otherwise, completion of the
transfer of the Sale Shares shall be completed 7
Business Days after written notice of the
determination of the Fair Value of the Sale Shares or
the date of satisfaction or waiver of all Permitted
Conditions (whichever is the later) (the "Transfer
Date") at such reasonable time and place that the
shareholders agree or, failing which, at the
registered office of the Company during normal business
hours;
<PAGE>
24.5.2 the selling Shareholder shall deliver to the buyer in
respect of the Sale Shares on or before the Transfer
Date:
(i) duly executed share transfer forms; and
(ii) the relevant share certificates; and
(iii) a power of attorney in such form and in favour
of such person as the buyer may nominate to
enable the buyer to exercise all rights of
ownership in respect of the Sale Shares
including, without limitation, the voting
rights; and
24.5.3 the buyer shall pay the consideration for the Sale
Shares to the selling Shareholder by banker's draft or
by telegraphic transfer to the bank account of the
selling Shareholder notified to it for the purpose on
the Transfer Date; and
24.5.4 in accordance with Clause 26.
24.6 Failure to transfer
24.6.1 If the Defaulting Shareholder does not comply with
its obligations in this Clause, the Company shall
authorise a person to execute and deliver the
necessary transfer on its behalf. The Company shall
receive the purchase money in trust for the selling
Shareholder and cause the buyer to be registered as
the holder of the Shares. The receipt of the Company
for the purchase money shall be a good discharge to
the selling Shareholder (who shall not be bound to
see to the application of those moneys. After the
buyer has been registered as holder of the Sale
Shares in purported exercise of these powers the
validity of the proceedings shall not be questioned
by any person.
24.6.2 Following the of service of the Default Notice (unless
such non-compliance has previously been remedied to the
reasonable satisfaction of the buyer), the Defaulting
Shareholder shall not exercise any of its powers or
rights in relation to management of, and participation
in the profits of, the Company under this Deed, the
Articles or otherwise. The Directors appointed by the
Defaulting Shareholder (or its predecessor in title)
shall not:
(i) be entitled to vote at any Board meeting;
(ii) be required to attend any meeting of Directors in order to constitute a
quorum; or
(iii) be entitled to receive or request any information from the Company.
24.7 General
24.7.1 The Shareholders shall keep the Company informed at all
times of the issue and contents of any notice served
pursuant to this Clause and any election or acceptance
relating to those notices.
24.7.2 The Shareholders waive their pre-emption rights on the
transfer of Shares contained in this Deed and the
Articles to the extent necessary to give effect to this
Clause.
24.7.3 The Shareholders shall do all things within their power
to ensure that the Business is continued to be run as a
going concern during the period between
<PAGE>
the service of the Default Notice and the completion
of the transfer of the Sale Shares.
25 Determination of Fair Value
25.1 Appointment of expert
The "Fair Value" of the Shares for the purposes of this Deed and
the Articles shall be determined by an independent investment
bank appointed by the Shareholders within 15 Business Days of
the date of the Transfer Notice or Default Notice, or Option
Notice as the case may be. If the Shareholders do not agree on
an independent investment bank, any Shareholder may request the
President of the London Investment Bankers Association to make
the appointment.
25.2 Method and adjustments
25.2.1 The independent investment bank shall determine the
Fair Value of the Shares to be sold as at the date of
the relevant Transfer Notice or Default Notice or
Option Notice, as appropriate and on the following
assumptions and bases:
(i) valuing the Shares to be sold as on an arm's length
sale between a willing seller and a willing buyer;
(ii) if the Company is then carrying on business as
a going concern, on the assumption that it
will continue to do so;
(iii) that the Shares to be sold are capable of being transferred without
restriction;
(iv) valuing the Shares to be sold as a rateable
proportion of the total value of all the
issued shares of the Company without any
premium or discount being attributable to the
class of the Shares to be sold or the
percentage of the issued share capital of the
Company which they represent; and
(v) the value of the Shares shall be calculated on
an enterprise value basis and shall take into
account all indebtedness of the Company.
25.2.2 The independent investment bank shall determine the
Fair Value to reflect any other factors which the
independent investment bank reasonably believes should
be taken into account.
25.2.3 If any difficulty arises in applying any of these
assumptions or bases then the independent investment
bank shall resolve that difficulty in such manner as it
shall in its absolute discretion think fit.
25.3 Determination, etc.
25.3.1 The independent investment bank must determine the Fair
Value within 15 Business Days of its appointment and
shall notify the Shareholders of its determination. The
fees of the independent investment bank shall be borne
by the Shareholders equally.
25.3.2 The independent investment bank shall act as an expert
and not as an arbitrator and its determination shall be
final and binding on the parties (in the absence of
fraud or manifest error).
<PAGE>
25.3.3 The independent investment bank shall have access to
all accounting records or other relevant documents of
the Company, subject to any confidentiality provisions.
26 Terms and consequences of transfers of Shares
26.1 Transfer terms
Any sale and/or transfer of Shares pursuant to this Deed shall
be on terms that those Shares:
26.1.1 are transferred free from all claims, pledges,
equities, liens, charges and encumbrances; and
26.1.2 are transferred with the benefit of all rights
attaching to them as at the date of the relevant
Deadlock Notice or Transfer Notice or Default Notice or
Option Notice as appropriate.
26.2 Registration
The parties shall procure that a transfer of Shares is not
approved for registration unless this Deed and Articles have
been complied with. The Company shall procure that each share
certificate issued by it shall carry the following statement:
"Any disposition, transfer, charge of or dealing in any other
manner in the Shares represented by this certificate is
restricted by a Shareholders' Agreement dated [ ] April 2000 and
made between SpectraSite International, Inc., Transco
Telecommunications Asset Development Company Limited and the
Company".
26.3 Further assurance
Each party shall do all things and carry out all acts which are
reasonably necessary to effect the transfer of the shares in
accordance with the terms of this Deed in a timely fashion.
26.4 Return of documents, etc.
On ceasing to be a Shareholder, a Shareholder must hand over to
the Company material correspondence, Business Plans, schedules,
documents and records relating to the Business held by it or an
Associated Company or any third party which has acquired such
matter through that Shareholder and shall not keep any copies.
26.5 Loans, borrowings, guarantees and indemnities 26.5.1 Upon a transfer of
all the Shares held by a Shareholder:
(i) the continuing Shareholder shall procure that
all loans, borrowings and indebtedness in the
nature of borrowings outstanding owed by the
Company to a transferring Shareholder
(together with any accrued interest) are
either assigned to the continuing Shareholder
for such value as may be agreed between the
transferring Shareholder and the continuing
Shareholder, or failing agreement with the
continuing Shareholder, are repaid by the
Company;
<PAGE>
(ii) all loans, borrowings and indebtedness in the
nature of borrowings outstanding owed by that
transferring Shareholder to the Company shall
be repaid; and
(iii) the continuing Shareholder shall use all
reasonable endeavours (but without involving
any financial obligation on its part) to
procure the release of any guarantees,
indemnities, security or other comfort given
by the transferring Shareholder to or in
respect of the Company or its Business and,
pending such release, shall indemnify the
transferring Shareholder in respect of them.
26.5.2 Any assumption of the obligations of a transferring
Shareholder by the continuing Shareholder is without
prejudice to the right of the continuing Shareholder
and/or the Company to claim from the transferring
Shareholder in respect of liabilities arising prior to
the completion date of the transfer of Shares.
26.6 Assumption of obligations
The parties shall procure that no person other than an existing
Shareholder acquires any Shares unless it enters into a Deed of
Adherence in a form reasonably acceptable to the other
Shareholder agreeing to be bound by this Deed as a Shareholder
and any other agreements in connection with the Business as a
Shareholder.
26.7 Removal of appointees
26.7.1 If a Shareholder ceases to be a Shareholder it shall
immediately upon transfer of its Shares procure the
resignation of all its appointees to the Board, as
Director, Chairman CEO or CFO as appropriate and to the
board of directors of each Group Company. If the
continuing Shareholders request, it shall do all such
things and sign all such documents as may otherwise be
necessary to procure the resignation or dismissal of
such persons from such appointments in a timely manner.
26.7.2 Those resignations shall take effect without any
liabilities on the Company for compensation for loss of
office or otherwise except to the extent that the
liability arises in relation to a service contract with
a Director who was acting in an executive capacity.
26.8 Power of Attorney
26.8.1 Each of the Shareholders irrevocably appoints the other
Shareholder by way of security for the performance of
their respective obligations under Clauses19, (Transfer
of Shares), 20(Deadlock), 21 (Put and Call Options) and
24 (Default), its attorney to execute any necessary
document required to be executed by it under the
provisions of Clauses 19, 20, 21 and 24 including any
transfer of shares or other documents which may be
necessary:
(i) to transfer title to the Shares required by 19, 20, 21
and 24; and
(ii) give any notice to be given under Clauses 19, 20, 21
and 24.
26.8.2 The purchase monies shall, to the extent that they are
not delivered to the selling party on or before the
appropriate completion date, bear interest against the
purchasing party at the rate of 3 per cent. over the
base lending rate from
<PAGE>
time to time of Barclays Bank plc calculated on a
daily basis from such date until the selling party is
reimbursed by the other party.
26.9 Change of Name
If a Shareholder ceases to be a Shareholder and the corporate
name of the Company or any Group Company contains any word the
same or similar to the corporate name or any distinctive part of
the corporate name of that Shareholder, the remaining parties
shall procure the corporate name of the Company or any Group
Company shall be changed to exclude that word within 30 days of
the Shareholder ceasing to be a Shareholder.
27 Enforcement of rights
27.1 Rights of the Company
If at any time the Company (1) wishes to enforce or exercise any
right under or (2) has any claim against or is the subject of a
claim by any Shareholder or any member of a Shareholder's group
in respect of:
27.1.1 this Deed;
27.1.2 any other agreement or deed to which that Shareholder
or a member of that Shareholder's group is also a
party; or
27.1.3 any obligation owed to the Company or another Group
Company by any Shareholder or a member of that
Shareholder's group,
that matter shall be dealt with on behalf of the Company by a
committee of the Directors appointed by the other Shareholder
not involved in the claim. The provisions of this Clause do not
prejudice to the right of any party to dispute any claim to
which it relates.
27.2 Authority of committee
The committee of Directors appointed under this Clause has full
authority to exercise rights on behalf of the Company.
27.3 Rights of Shareholders
27.3.1 The Shareholder involved in the claim shall be entitled
to attend and speak at any general meeting of the
Company in relation to such claim but shall not vote at
such meeting.
27.3.2 The Directors appointed by the Shareholder involved in
the claim shall be entitled to attend and speak at any
Board meeting or any Board committee meeting in
relation to such claim but shall not vote at such
meeting.
27.3.3 No general meeting of the Company or Board meeting at
which a resolution in relation to such a claim proposed
shall be inquorate by virtue of the absence of the
Shareholder involved in the claim or of the Director(s)
appointed by it.
<PAGE>
28 Competition with the Business
28.1 Restrictions
28.1.1 Unless it has obtained the prior written consent of the
other Shareholder, a Shareholder must not, and shall
procure, that all Associated Companies of the
Shareholder shall not, either alone or jointly, with,
through or on behalf of any person, directly or
indirectly:
(i) carry on or be engaged, concerned, involved or in any
way interested in any activities in any country
where the Company is carrying on business (but
excluding any countries where Ample or Telink is
the only Group company carrying on business there or
where the business conducted does not involve the
ownership of telecommunication assets in that
jurisdiction) which are in competition with the
Business otherwise than in connection with a
Non-approved Acquisition in accordance with Clause
18; or
(ii) solicit or contact with a view to the engagement or
employment by any person, any key employee, officer
or manager of the Company including for the
avoidance of doubt any member of Senior Management
within the previous two-year period, except for an
employee who has been seconded to the Company. The
placing of an advertisement of a post available to a
member of the public generally and the recruitment
of a person through an employment agency shall not
constitute a breach of this clause.
28.1.2 Where the ultimate holding company of a Shareholder has
its shares or other securities traded on any regulated
investment exchange (including without limitation, the
London Stock Exchange Limited) or an automated
quotations system ("Target Shares") and where such
ultimate holding company undergoes a change of control
in circumstances where some or all of the business of
any acquirer of the Target Shares competes with that of
the Business, then:
(i) the acquirer of the Target Shares may continue
to operate any business which is at that time
competing with the Business and to develop any
such business which is not a De Minimis
Business in each case, in any country, and
without breaching the provisions of Clause
28.1.1(i) of this Deed; provided
(ii) if the acquirer of Target Shares wishes to
commence operating a business in competition
with the Business (provided that such Business
is not De Minimis Business) such new business
of the acquirer must be commenced in
accordance with the provisions of this Deed.
28.2 Duration
The covenants set out in this Clause shall continue to apply to
a Shareholder for so long as it continues to be a Shareholder
and for a period of two years from the date on which that
Shareholder ceases to be a Shareholder.
<PAGE>
28.3 Business outside the Territory
28.3.1 The Shareholders agree to consider other opportunities
within the scope of the Business in countries outside
of the Territory save for the United States and Canada
(the "Excluded Territories") without obligation on
either party;
28.3.2 Where the Shareholders fail to reach agreement on an
opportunity within the scope of the Business in a
country outside of the Territory either Shareholder may
pursue such opportunity alone or with others provided
it is not within the Excluded Territories or is a
country in which a Non-Approved Acquisition has taken
place.
28.3.3 For the avoidance of doubt, the Company and TadCo
respectively, shall not, and shall procure that their
respective Associated Companies do not, seek to pursue
any opportunities in the Excluded Territories, but
there shall be no such restriction in relation to
SpectraSite.
28.4 Exclusions
28.4.1 Nothing contained in this Clause precludes or restricts
any Shareholder or any of its Associated Companies:
(i) acquiring any business or company, as an
integral part of a larger transaction or
acquisition of a business, company or group of
companies, not predominantly engaged in a
competing business;
(ii) carrying on any activity carried on by it at
the Completion Date;
(iii) using any Potential Properties which are
not able to be delivered to the Company in
accordance with the Site Transfer Agreement
or which are rejected by the Company, for any
purpose provided that if the circumstances
relating to any Potential Property have
changed since the time when it was previously
considered for delivery to the Company, or
the time when it was returned by the Company
to TadCo, and the Company has been notified
of the change in circumstances and TadCo
has offered the site to the Company which
offer has not been taken up; or
(iv) carrying on a telecommunications business of
any description outside of the scope of the
Business, including for the avoidance of
doubt, a business offering PMR services or a
fixed line telecommunications business and
installing antennae on any structure provided
it is an incidental part of any fixed
telecommunications business.
28.4.2 To the extent that any fixed or wireless
telecommunication business forming part of the
business of any Shareholder or any Associated
Company of any Shareholder has a requirement for
the deployment of antennae structures or
build-to-suit the Shareholders agree that subject to
relevant competition and public procurement laws and
regulations, the Company shall be given an opportunity
to carry out such works in priority to any other
person provided it is willing to do so on terms
which are at least as favourable as those which the
Company is able to obtain generally in the market.
<PAGE>
28.5 Invalidity
28.5.1 Each of these restrictions is an entirely separate and
independent restriction on each Shareholder and the
validity of one restriction shall not be affected by
the validity or unenforceability of another.
28.5.2 Each Shareholder considers the restrictions in this
Clause to be reasonable and necessary for the
protection of the interests of the Company. If any such
restriction shall be held to be void but would be valid
if deleted in part or reduced in application, such
restriction shall apply with such deletion or
modification as may be necessary to make it valid and
enforceable.
29 Public announcements
29.1 Shareholder approval
A Shareholder or any Associated Company shall not make any
public announcement or issue any circular relating to the
Company or this Deed without the prior written approval of the
other Shareholder (such consent not to be unreasonably
withheld). This does not affect any announcement or circular
reasonably believed to be required by law or any regulatory body
or the rules of any recognised stock exchange or any automated
quotation system.
29.2 Clause 29.1 shall not prevent the Company providing factual
information (but not projections or forecasts) to any analysts
or brokers nor prevent the Shareholders providing information
about the Company (provided by the Company for that purpose) and
that it projects a co-ordinated message about the Company.
29.3 Oral statements
Any oral statements made or replies to questions given by either
Shareholder relating to the Company shall be consistent with any
such public announcements or circulars.
30 Information, insurance, records, licences
30.1 Rights to information
A Shareholder may at all reasonable times and at its own
expense:
30.1.1 discuss the affairs, finances and accounts of the
Company and the Group with its officers and principal
executives; and
30.1.2 inspect and make copies of all books, records,
accounts, documents and vouchers relating to the
Business and the affairs of the Company and the Group.
30.2 Insurance, records and licences
The Shareholders undertake that they shall use their reasonable
endeavours to procure that:
30.2.1 the Company maintains with a well established and
reputable insurer prudent insurance in accordance with
current industry practice from time to time against all
risks usually insured against by companies carrying on
the same or similar business to the Business and which
is prudent as agreed by the Shareholders;
<PAGE>
30.2.2 the Group keeps proper books of account and makes true
and complete entries of all its dealings and
transactions of and in relation to the Business; and
30.2.3 the Group shall use its best endeavours to obtain and
maintain in full force and effect all approvals,
consents or licences necessary for the conduct of the
Business.
31 Intellectual property rights
31.1 Any intellectual property rights including, without limitation,
patents, trade marks, service marks, registered designs,
copyright, rights in designs, inventions, confidential
information which are developed by the Company and which are not
Improvements to the Know-how shall belong to the Company.
31.2 In respect of any Improvement to the Know-how which is
undertaken by or on behalf of the Company, the Company
undertakes to assign for nil or nominal consideration such
intellectual property rights to SpectraSite or as it may direct
in consideration for the grant to the Company by SpectraSite or
the owner of the intellectual property rights in the Know-how of
a perpetual, non-exclusive royalty free licence and the Company
shall be at liberty to exploit these as it sees fit.
32 Tax Matters
32.1 Consortium tax relief
Each Shareholder which is a member of the consortium which owns
the Company for the purpose of Section 413(6) of ICTA shall be
entitled to require the Company to surrender to it (or any of
its Associated Companies) and shall (to the extent that it or
any such Associated Company is permitted by applicable tax
legislation to do so) use all reasonable commercial endeavours
to accept the surrender to it (or procure that any such
Associated Company uses all reasonable commercial endeavours to
accept the surrender to it) of a proportionate share of any
consortium relief which may be available to it and which arises
from the trading activities of the Company, for consideration
(payable on 1October following the accounting period ending
31December to which the losses relate), in the case of each
recipient, equal to the amount of the losses and/or other
amounts surrendered to it by way of consortium relief multiplied
by the rate of corporation tax on income profits for the account
period of the company to which the losses or other amounts
relate. No Shareholder shall knowingly enter into arrangements
(for the purposes of Section 410 of ICTA but excluding any such
arrangements as exist by virtue only of the execution of this
Deed or the adoption of the Articles) which shall affect the
right of any Shareholder to obtain consortium relief at any time
when the Company has losses or other amounts available for
surrender by way of consortium relief, provided that subject to
the Articles, this shall not prevent any Shareholder from
transferring Shares in accordance with the provisions relating
thereto set out in this Deed and the Articles. In the event that
payments are made for consortium relief which is subsequently
found not to be available or not required, the Company shall
repay the amount overpaid within 14 Business Days of the issue
of a written claim by the payer.
<PAGE>
32.2 Capital Allowances
The Company acknowledges that it will not be entitled to any
capital allowances in relation to Apparatus installed on the
Properties and the Company will not seek to claim any such
capital allowances.
32.3 U.S. Tax clearance
Should SpectraSite wish to make an affirmative entity
classification election solely for U.S. tax purposes for the
Company and such election requires the consent of TadCo, TadCo
agrees that such consent will be given.
33 Duration and termination
33.1 Duration
Subject to the other provisions of this Deed, this Deed shall
continue in full force and effect without limit in point of time
until the earlier of:
33.1.1 the Shareholders agree in writing to terminate this Deed;
33.1.2 the Shares are listed on a recognised Stock Exchange or
traded on an automated quotation system; and
33.1.3 either SpectraSite or TadCo ceases to hold Shares in
the Company save as a result of any transfer to an
Associated Company; or
33.1.4 in the event that a liquidator, receiver or receiver
and manager, administrator or administrative receiver
is appointed in respect of the whole or any material
part of the assets and/or undertaking of the Company or
the Company enters into an arrangement or composition
with its creditors.
33.2 Termination
33.2.1 Termination of this Deed shall:
(i) not affect any of the provisions of this
Deed which are expressed to continue in
force after termination;
(ii) be without prejudice to any liability or
obligation in respect of any matters,
undertakings or conditions which shall not
have been observed or performed by the
relevant Shareholder prior to such
termination;
(iii) not affect any wireless telecommunication
assets installed at any of the Sites at the
date of Termination;
(iv) be without prejudice to the Company's right
to a Know-how licence under Clause 31; and
(v) will not affect the validity and/or
continuance on and subject to its terms of the
Site Transfer Agreement.
<PAGE>
34 Confidentiality
34.1 Confidential Information
The parties shall keep confidential and use all reasonable
endeavours to ensure that their respective Associated Companies
and their respective officers, employees, agents and
professional and other advisers keep confidential any
information (the "Confidential Information"):
34.1.1 relating to the customers, Business, assets or affairs
of the Company which they may have or acquire through
ownership of an interest in the Company;
34.1.2 relating to the customers, business, assets or affairs
of the other parties or any member of their group which
they may have or acquire through being a Shareholder or
making appointments to the Board or through the
exercise of its rights or performance of its
obligations under this Deed; or
34.1.3 which relates to the contents of the any agreement or
arrangement entered into pursuant to that Agreement).
34.2 Restrictions
34.2.1 No party may use for its own business purposes or
disclose to any third party any Confidential
Information without the consent of the other parties.
34.2.2 This Clause does not apply to:
(i) information which is or becomes publicly
available (otherwise than as a result of a
breach of this Clause); or
(ii) information which is independently developed
by the relevant party or acquired from a third
party, to the extent that it is acquired with
the right to disclose it;
(iii) information which was lawfully in the
possession of the relevant party free of any
restriction on disclosure as can be shown by
that party's written records or other
reasonable evidence;
(iv) following disclosure under this Clause,
becomes available to the relevant party (as
can be demonstrated by that party's written
records or other reasonable evidence) from a
source other than another party which is not
bound by any obligation of confidentiality in
relation to such information;
(v) the disclosure by a party of Confidential
Information to its directors or employees or
to those of its Associated Companies who need
to know that confidential information in its
reasonable opinion for purposes relating to
this Deed but those directors and employees
shall not use that Confidential Information
for any other purpose;
(vi) the disclosure of information to the extent
required to be disclosed by law or any court
of competent jurisdiction, any governmental
official or regulatory authority (including
the London Stock Exchange and the Panel on
Takeovers and Mergers) or any binding
judgment, order or requirement of any other
competent authority;
<PAGE>
(vii) the disclosure of information to any tax
authority to the extent reasonably required
for the purposes of the tax affairs of the
party concerned or any member of its group;
(viii) the disclosure to a party's professional
advisers of information reasonably required to
be disclosed for purposes relating to this
Deed or the Business;
(ix) any announcement, or circular made, or
information provided in accordance with the
terms of Clause 29.
34.2.3 Each party shall inform any officer, employee or agent
or any professional or other adviser advising it in
relation to matters relating to this Deed, or to whom
it provides Confidential Information, that such
information is confidential and shall instruct them:
(i) to keep it confidential; and
(ii) not to disclose it to any third party (other
than those persons to whom it has already been
or may be disclosed in accordance with the
terms of this Clause).
34.3 Damages not an adequate remedy
Without prejudice to any other rights or remedies which a party
may have, the parties acknowledge and agree that damages would
not be an adequate remedy for any breach of this Clause 34 and
the remedies of injunction, specific performance and other
equitable relief may not be appropriate for any threatened or
actual breach of any such provision and no proof of special
damages shall be necessary for the enforcement of the rights
under this Clause 34.
34.4 Survival
34.4.1 The disclosing party shall remain responsible for any
breach of this Clause by the person to whom that
Confidential Information is disclosed.
34.4.2 The provisions of this Clause 34.4 shall survive the
termination of this Deed for whatever cause for a
period of 2 years.
35 Arbitration
35.1 Subject to Clause 20 (Deadlock), and except as otherwise
provided in this Deed, in the case of any dispute arising
between the parties out of or in connection with this Deed, the
parties shall first attempt to settle the dispute between
themselves within 20 Business Days of any party submitting a
notice of dispute to the other parties. If such dispute cannot
be resolved among themselves within such time period the parties
shall resort to the arbitration procedure set out in this Clause
35.
35.2 The arbitration shall be held in London by a single arbitrator
jointly nominated by the parties within 20 Business Days of the
parties failing to settle the dispute in accordance with Clause
35.1 above.
<PAGE>
35.3 Should the parties fail to agree on the appointment of an
arbitrator within the period specified in Clause 35.2, the
arbitrator shall be appointed at the request of either party by
the President of the London Chamber of Commerce.
35.4 The arbitration shall be conducted under the rules of the LCIA
save that, unless the parties agree or the arbitrator rules
otherwise:
35.4.1 the claimant shall serve his written claim document
within 14 days of the arbitrator's appointment. The
defence shall be served 14 days after that and the
reply 14 days thereafter. Each party shall attach any
documents relied upon;
35.4.2 no statement of case, witness statement, expert report
or submission shall exceed 10 pages plus attachments;
35.4.3 factual witnesses shall give evidence in chief by
witness statement. Cross-examination of any factual or
expert witness shall not exceed half a day;
35.4.4 there shall be no general disclosure of documents;
35.4.5 there shall be no oral submissions, though the
arbitrator may ask questions of the parties orally or
in writing;
35.4.6 the arbitrator shall make his award, with reasons,
within four months of his appointment.
PROVIDED THAT if:
(i) at the time the claimant commences an arbitration under
this sub-clause an expert determination has been, or is
about to be, commenced under Clause 20 (Deadlock) , and
(ii) all or some of the claims in the arbitration are so
linked to the issues in the expert determination as to
render it expedient that the same person should decide
both, and
(iii) the expert appointed under Clause 20 (Deadlock)
consents,
the said expert shall also be appointed as arbitrator under this
Clause. In that event the parties shall assist in co-ordinating
the procedures in the expert determination and the arbitration.
If the parties cannot agree whether the conditions listed at (i)
to (iii) above are satisfied, the LCIA shall decide and its
decision shall be final.
36 Notices
36.1 Any notice, claim or demand in connection with this Deed or with
any arbitration under this Deed (each a "Notice") shall be
marked "IMPORTANT LEGAL NOTICE" and sufficiently given or served
if delivered or sent: In the case of SpectraSite to:
Address: 100 Regency Forest
Suite 400
Cary,
North Carolina 27511
United States of America
<PAGE>
Fax: 001 919 468 8522
Attention: General Counsel
In the case of TadCo to:
Address: 100 Thames Valley Park Drive
Reading
Berkshire
RG6 1PT
United Kingdom
Fax: 0118 929 2670
Attention: The Company Secretary
In the case of the Company to:
Address: 98 Lind Road
Sutton
Surrey SM1 4PL
United Kingdom
Fax: 01707 266 677
Attention: The Company Secretary
or (in each case) to such other address or fax number in the
United Kingdom as the relevant party may have notified to the
others in accordance with this Clause.
36.2 Form
Any Notice shall be in writing in English and may be sent by
courier, fax or prepaid post (first class in the case of service
in the United Kingdom and airmail in the case of international
service). Any Notice shall be deemed to have been received on
the next working day in the place to which it is sent, if sent
by courier or fax, or three days from the date of the postmark,
if sent by post.
37 Whole agreement and remedies
37.1 Whole agreement
This Deed and the documents referred to in Schedule 1 contains
the whole agreement between the parties relating to the subject
matter of this Deed at the date hereof to the exclusion of any
terms implied by law which may be excluded by contract and
supersedes any previous written or oral agreement between the
parties in relation to the matters dealt with in this Deed. In
this Clause "this Deed" includes all documents entered into
pursuant to this Deed.
<PAGE>
37.2 No inducement
Each of the Shareholders acknowledges that it has not been
induced to enter into this Deed by any representation, warranty
or undertaking not expressly incorporated into it.
37.3 Remedies
So far as permitted by law and except in the case of fraud, each
party agrees and acknowledges that its only right and remedy in
relation to any representation, warranty or undertaking made or
given in connection with this Deed shall be for breach of the
terms of this Deed to the exclusion of all other rights and
remedies (including those in tort or arising under statute).
37.4 Legal advice
Each party to this Deed confirms it has received independent
legal advice relating to all the matters provided for in this
Deed, including the provisions of this Clause, and agrees,
having considered the terms of this Clause and the Agreement as
a whole, that the provisions of this Deed are fair and
reasonable.
38 General
38.1 Exclusion of Contracts (Rights of Third Parties) Act 1999 A
person who is not a party to this Deed has no right under the
Contracts (Rights to Third Parties) Act 1999 to enforce any term
of this Deed.
38.2 Survival of rights, duties and obligations
Termination of this Deed for any cause shall not release a party
from any liability which at the time of termination has already
accrued to another party or which thereafter may accrue in
respect of any act or omission prior to such termination.
38.3 Conflict with the Articles
In the event of any ambiguity or discrepancy between the
provisions of this Deed and the Articles, it is intended that
the provisions of this Deed shall prevail and accordingly the
Shareholders shall exercise all voting and other rights and
powers available to them so as to give effect to the provisions
of this Deed and shall further if necessary procure any required
amendment to the Articles.
38.4 No partnership
Nothing in this Deed shall be deemed to constitute a partnership
between the parties nor constitute any party the agent of any
other party for any purpose.
38.5 Release etc.
Any liability to any party under this Deed may in whole or in
part be released, compounded or compromised or time or
indulgence given by that party in its absolute discretion as
regards any party under such liability without in any way
prejudicing or affecting its rights against any other party
under the same or a like liability, whether joint and several or
otherwise.
<PAGE>
38.6 Waiver
No failure of any party to exercise, and no delay by it in
exercising, any right, power or remedy in connection with this
Deed (each a "Right") shall operate as a waiver of that Right,
nor shall any single or partial exercise of any Right preclude
any other or further exercise of that Right or the exercise of
any other Right. The Rights provided in this Deed are cumulative
and not exclusive of any other Rights (whether provided by law
or otherwise). Any express waiver of any breach of this Deed
shall not be deemed to be a waiver of any subsequent breach.
38.7 Severance
If any provision in this Deed shall be held to be illegal,
invalid or unenforceable, in whole or in part under any
enactment or rule of law, such provision or part shall to that
extent be deemed not to form part of this Deed but the legality,
validity and enforceability of the remainder of this Deed shall
not be affected.
38.8 Variation
No variation of this Deed shall be effective unless in writing
and signed by or on behalf of each of the parties.
38.9 Assignment
The parties shall not assign or transfer all or any of their
rights or obligations under this Deed nor any benefit arising
under or out of this Deed without the prior written consent of
the other parties (such consent not to be unreasonably withheld
or delayed).
38.10 Further assurance
At any time after the date of this Deed the parties shall, and
shall use all reasonable endeavours to procure that any
necessary third party shall, at the cost of the relevant party
execute such documents and do such acts and things as that party
may reasonably require for the purpose of giving to that party
the full benefit of all the provisions of this Deed.
38.11 Invalidity
If any provision in this Deed shall be held to be illegal,
invalid or unenforceable, in whole or in part, under the law of
any jurisdiction, the legality, validity or enforceability of
such provision or part under the law of any other jurisdiction
and the legality, validity and enforceability of the remainder
of this Deed shall not be affected.
38.12 Counterparts
This Deed may be entered into in any number of counterparts, all
of which taken together shall constitute one and the same
instrument. Any party may enter into this Deed by signing any
such counterpart.
38.13 Costs
Each party shall bear all costs incurred by it in connection
with the preparation, negotiation and entry into this Deed,
except that the Shareholders shall be jointly and severally
responsible for such costs reasonably incurred by the Company,
including any
<PAGE>
irrecoverable VAT thereon and each party shall on
demand reimburse to the Company the amount of such costs.
39 Governing law and submission to jurisdiction
39.1 Governing law
This Deed shall be governed by and construed in accordance with
English law.
39.2 Jurisdiction
Subject only to Clause 35 (Arbitration) the parties irrevocably
agree that the courts of England are to have exclusive
jurisdiction to settle any dispute which may arise out of or in
connection with this Deed.
39.3 Appointment of Process Agent
39.3.1 SpectraSite hereby irrevocably appoints SpectraSite
Communications Limited of West Park House, 23
Cumberland Place, Southampton, Hampshire SO15 2BB (fax:
01703 481 620, F.A.O. Company Secretary) as its agent
to accept service of process in England in any legal
action or proceedings arising out of this Deed, service
upon whom shall be deemed completed whether or not
forwarded to or received by SpectraSite provided that a
copy of any such communication is despatched to
SpectraSite in accordance with Clause 36.1 at the same
time.
39.3.2 If such process agent ceases to be able to act as such
or to have an address in England, SpectraSite
irrevocably agrees to appoint a new process agent in
England acceptable to the other parties and to deliver
to the other parties within 14 days a copy of a written
acceptance of appointment by the new process agent.
<PAGE>
In witness whereof this document has been executed as a Deed the day and year
first before written.
Signed as a Deed by SpectraSite International, Inc.
acting by:
Director
Alex Gellman
Director/Secretary Christopher Jackman
Signed as a Deed by Transco Telecommunications
Asset Development Company Limited
acting by:
Director
Philip Nolan
Director/Secretary Steve Copley
Signed as a Deed by EVER 1267 Limited acting by:
Director
Alex Gellman
Director/Secretary Christopher Jackman
SpectraSite to Acquire Lodestar Towers, Inc.
478 Multi-Tenant Broadcast and Wireless Towers Enhance Top 100 Major
Market Footprint
CARY, N.C., April 12 /PRNewswire/ -- SpectraSite Holdings, Inc.
(Nasdaq: SITE news), a leading provider of outsourced antennae site and network
services to the wireless and broadcast industries, announced today that it has
signed a definitive agreement to acquire Lodestar Towers, Inc. ("Lodestar"), a
wholly-owned subsidiary of LeBlanc & Royal Enterprises, Inc., in a cash
transaction valued at approximately $170 million. The acquisition is expected to
close in the second quarter, subject to customary regulatory approvals.
Lodestar, headquartered in Tequesta, Florida, was founded in 1984 and is one of
the nation's oldest tower owners and operators. Currently, Lodestar owns and
operates 90 wireless towers and 10 broadcast towers located in major markets,
including a recently completed state-of-the-art broadcast facility at Mt.
Harvard in Los Angeles, and nine additional broadcast towers located in top
markets, including Daytona Beach, North Palm Beach, St. Petersburg,
Jacksonville, Orlando, New Orleans, St. Louis and Charlotte. Lodestar also has
149 towers under management, including 10 broadcast towers and 139 Florida
Department of Transportation (FDOT) wireless towers. Lodestar has entered into a
30-year contract with the FDOT under which it has exclusive rights to develop
tower sites along 2,200 miles of FDOT rights of way. Lodestar is in the process
of acquiring 27 multi-tenant towers in four separate transactions. Additionally,
Lodestar is developing approximately 202 wireless towers throughout the United
States. Of the towers under development, 20 will be complete by the end of April
2000, 100 more will be completed by year-end, and the remaining 82 by the end of
2001.
"Lodestar is a perfect fit for SpectraSite," said Steve Clark, President
and Chief Executive Officer of SpectraSite. "Assembled by true pioneers in the
business, these are premium assets and prime locations that enhance
SpectraSite's scale and clustering in key markets. This deal represents an
important deliverable as we continue to broaden and strengthen our Broadcast and
Wireless groups. It is another milestone in our continued strategy of
diversifying our business mix and creating shareholder value.
"We are very excited about the growth opportunities afforded by Lodestar,"
added Timothy Biltz, Chief Operating Officer of SpectraSite. "On the wireless
side, the FDOT contract provides exclusive rights to prime real estate
throughout Florida, enhancing our current presence and complementing our
exclusive contract with Orange County. In addition, Lodestar has developed
strategically clustered tower sites along high-growth corridors nationwide,
including 31 sites in Southern California. Lodestar's wireless towers
strengthen SpectraSite's existing portfolio of approximately 3,000 towers
and 12,700 rooftops with a high concentration in the top 100 markets,
and add specific value in two of SpectraSite's top markets -- Southern
California and Florida. Finally, the 149 managed towers have similar
economic benefits of owned towers, enhancing the overall tower cash flow.
With a total of 478 towers, Lodestar will add significant revenues and
cash flow with tremendous growth rates, making this transaction both
strategically and financially attractive.
"LeBlanc concurs with Stephen Clark that SpectraSite is the most natural
fit for Lodestar," states Paul Dickie, LeBlanc's President. "Lodestar's
presence in the broadcast site leasing market, strengthened by the LeBlanc
relationship, fits well with SpectraSite's broadcast strategy. The addition
<PAGE>
of the Lodestar people to the SpectraSite team is a winning combination. We
look forward to leveraging our new relationship with SpectraSite in both the
wireless and broadcast sectors.
" About LeBlanc Group
LeBlanc was founded in 1962 and consists of over 15 subsidiaries and
affiliates that provide products and services to the broadcast and
telecommunications industries worldwide. The company employs more than 2,000
people, with its world headquarters located in Ontario, Canada, and has major
business units in North America, Asia, Australia and the Middle East. Its
customers are located in over 85 countries consisting of utilities, sovereign
governments, military organizations, broadcasters, telecommunications providers
and manufacturers. LeBlanc is involved in a wide range of business activities
including broadcast and wireless tower manufacturing and installation, technical
services/system integration, transmitter and radio manufacturing, and
communications site management.
About SpectraSite Communications, Inc.
SpectraSite Communications, Inc. (http://www.spectrasite.com), based in Cary,
North Carolina, is one of the leading providers of outsourced antennae site and
network services to the wireless communications and broadcast industries in the
United States and Canada. SpectraSite's business includes the ownership and
leasing of antennae sites on towers, managing rooftops and in-building
telecommunications access on commercial real estate, network planning and
deployment, and construction of towers and related wireless facilities.
SpectraSite owns or manages more than 15,000 sites, including approximately
3,000 owned towers, in 98 of the top 100 markets in the United States.
SpectraSite's customers are leading wireless communications providers and
broadcasters, including Nextel, Sprint PCS, AT&T Wireless, VoiceStream
Communications, Tritel Communications, Teligent, Winstar, Cox Broadcasting,
Clear Channel Communications and Paxson Communications.
This press release contains "forward-looking statements" concerning future
expectations, plans or strategies that involve a number of risks and
uncertainties. The Company wishes to caution readers that certain factors may
have affected the Company's actual results and could cause results for
subsequent periods to differ materially from those expressed in any
forward-looking statement made by or on behalf of the Company. Such factors
include, but are not limited to (i) substantial capital requirements and
leverage principally as a consequence of its ongoing acquisitions and
construction activities, (ii) dependence on demand for wireless communications,
(iii) the success of the Company's tower construction program and (iv) the
successful operational integration of the Company's business acquisitions.
The Company undertakes no obligation to update forward-looking statements to
reflect subsequently occurring events or circumstances.
SOURCE:SpectraSite Holdings, Inc.
SpectraSite International, Inc. and Transco (BG Group plc) Announce Joint
Venture to Develop an Independent Communications Towers Business
CARY, N.C., April 13 /PRNewswire/ -- SpectraSite International, Inc., a
subsidiary of SpectraSite Holdings, Inc. (Nasdaq: SITE - news) and Transco, the
arm of BG Group plc which runs Britain's gas network, today announced an
agreement to develop jointly a towers business to support Europe's growing
mobile communications industry as it upgrades from the second to the third
generation (3G) of mobile phone technology.
The joint venture, which is subject to satisfaction of a number of conditions,
will be owned 50:50. The main aspects of it are as follows:
-- The joint venture will provide a full array of infrastructure services to
wireless communications operators, ranging from the construction and
leasing out of communications towers through to the planning, maintenance
and management of wireless networks as a comprehensive service.
-- Transco will transfer into the joint venture existing operational
communications towers, and industrial land suitable for the construction
of new towers. The terms of the transfer of these assets will not affect
Transco's ability to meet its telecommunications requirements for the
ongoing provision of gas transportation services.
-- SpectraSite will provide intellectual property and extensive know-how in
addition to wireless network development skills and expertise to manage
and market the joint venture. They will also be incorporating a wireless
network development services company into the venture and providing funds
for future developments and possible acquisitions. Alex Gellman,
currently of SpectraSite has been named Chief Executive Officer of the
joint venture.
-- Initially, it is intended that some 700 established communications
structures, previously operated by Transco, will be transferred into the
joint venture. Also, the joint venture will have rights to use Transco's
substantial portfolio of industrial and commercial property -- some
18,000 sites -- from which it is planned that an initial 1,500 new towers
will be developed as a first phase.
-- The enterprise value of the company on formation is estimated at 260
million pounds sterling ("pounds")(US $412 million). This reflects the
assets, funds and options initially injected into the joint venture by
the partners.
-- The initial focus of the joint venture will be Great Britain where demand
for communications towers is being driven by the introduction of 3G
technology and the imminent award of licences following the current
auction process. Britain is ahead of most other European countries in
making the step to 3G mobile phones, which will offer services such as
high-speed internet access, e-mail and the capacity to download music
<PAGE>
and video. Building on this experience, the partners plan to
pursue opportunities to develop similar telecommunications
infrastructure in other selected European markets as they upgrade to 3G
technology.
-- It is foreseen that 3G mobile phone licensees planning countrywide
coverage will each require access to some 10,000 communications towers
sites compared with 3,000 for existing second generation mobile networks.
Recognizing the environmental and planning pressures, which will stem
from this expansion, the joint venture will offer access to its towers to
any wireless communications operator, thereby facilitating the maximum
shared utilisation of the available assets.
Consistent with the BG Group's 22 March announcement that it intends to pursue a
demerger, the joint venture will be undertaken initially by the BG Group and,
after demerger, by the new Transco group.
Commenting on the deal, Phil Nolan,
the BG Executive Director responsible for Transco and Chief Executive designate
of the proposed Transco group, said:
"Today's announcement of our joint venture
with SpectraSite is an important first step in developing a substantial telecoms
business based on the complementary use of Transco's assets and capabilities,
and the comprehensive countrywide coverage of the gas network.
"As the network
operator and service provider for Britain's information- based gas industry,
this is a natural move for us -- especially now that the telecoms infrastructure
requires major expansion. SpectraSite has an excellent track record in wireless
network development in the US, and together we plan to make the most of this
expertise in conjunction with our assets."
Stephen Clark, Chief Executive
Officer of SpectraSite, said: "This joint venture will make a significant impact
on the deployment and adoption of 3G technology throughout Europe. The
multi-carrier network that we develop will be crucial, particularly for new
entrants to the British market, as it eliminates the need to build a mobile
infrastructure from scratch. We plan to build out our British network, then
expand into other Western European markets.
"We believe that the increase in
demand for sites combined with Transco's properties and our experience provides
a unique opportunity for the venture.
"The zoning climate throughout the UK has
become increasingly difficult, so gaining access to Transco's properties
provides us with a significant advantage moving forward. Some of the existing
Transco towers have capacity for 3-4 additional tenants, which represents
significant recurring revenue potential. The joint venture marks SpectraSite's
first move into Europe, and is consistent with our overall strategy to pursue
high-growth wireless markets."
In a separate transaction also released today,
SpectraSite announced that it has acquired Ample Design Ltd., one of the UK's
largest wireless network development services providers, for approximately 12
million pounds (US $19 million). Ample will be incorporated into the joint
venture and will play a key role in providing network development services to
future clients of the venture.
Notes:
* SpectraSite Holdings, Inc based in Cary, North Carolina, is one of the
leading providers of outsourced antennae site and network services to
the wireless communications and broadcast industries in the United
States and Canada. SpectraSite's business includes the ownership and
leasing of antennae sites on towers, managing rooftops and in-building
telecommunications access on commercial real estate, network planning
and deployment, and construction of towers and related wireless
<PAGE>
facilities. SpectraSite owns or manages more than 15,000 sites,
including 3,000 owned towers, in 98 of the top 100 markets in the
United States. SpectraSite's customers are leading wireless
communications providers and broadcasters, including Nextel, Sprint
PCS, AT&T Wireless, VoiceStream Communications, Tritel Communications,
Teligent, Winstar, Cox Broadcasting, Clear Channel Communications and
Paxson Communications.
* BG Group, formed from the demerger of Centrica from British Gas early
in 1997, is a leading international energy company, involved in gas and
oil exploration and production, gas transmission and distribution,
liquefied natural gas manufacture and transportation, power generation
and gas market development. BG International is active in more than
20 countries. In Britain, BG's Transco business owns and operates the
regulated gas transportation network used by shippers to transport gas
to 20 million customers.
* On 22 March 2000, the BG Group announced its intention to pursue a
demerger which will separate its two principal businesses, Transco and BG
International, in order to provide each with greater opportunities to
realise their potential for growth, based on different core skills and
markets. The new Transco group which would be formed from this demerger
would partner SpectraSite in the joint venture which is the subject of
this press release.
* Ample Design Ltd, was founded in 1996 and is dedicated to telecom and
data network development. For the past five years, Ample has helped the
major operators and equipment vendors rollout wireless and wire line
networks. To date Ample has delivered 3000 sites in over 18 countries.
The introduction of 3G network technology, and the increase in overseas
demand has seen significant growth in the need for the services and the
skills that Ample offers.
* 3G technology will allow mobile companies to offer services such as
high-speed Internet access, e-mail and the capacity to download music
and video at speeds of up to two megabits per second -- more than 200
times faster than current standards. It is expected that the first
consumer products using the new technology will be launched in 2002.
The auction of the UK's five 3G licences continues, with bids totaling
over 18 billion pounds (US $28.5 billion) at close of business
April 12, 2000.
* Investment bankers Dresdner Kleinwort Benson and Morgan Stanley Dean
Witter have advised and represented BG and SpectraSite, respectively,
during the negotiations to form the joint venture.
For further information please contact:
BG Group
Investor Relations: Gary Rawlinson, Tel: +44-118-929-3021
Media Relations: Gillian Home, Tel: +44-118-929-3007
Jim Willison, Tel: +44-118-929-3301
Web site -- http://www.BG-Group.com
SpectraSite Holdings, Inc. and Ample Design Ltd.
Investor Relations: Ryan Barr, Tel: 212-986-6667,
e-mail: [email protected]
Media Relations: Noreen Allen, Tel: 919-465-6678
e-mail: [email protected]
<PAGE>
Web site -- http://www.spectrasite.com
This press release contains "forward-looking statements" concerning future
expectations, plans or strategies that involve a number of risks and
uncertainties. The Company wishes to caution readers that certain factors may
have affected the Company's actual results and could cause results for
subsequent periods to differ materially from those expressed in any
forward-looking statement made by or on behalf of the Company. Such factors
include, but are not limited to (i) substantial capital requirements and
leverage principally as a consequence of its ongoing acquisitions and
construction activities, (ii) dependence on demand for wireless communications,
(iii) the success of the Company's tower construction program and (iv) the
successful operational integration of the Company's business acquisitions. The
Company undertakes no obligation to update forward-looking statements to reflect
subsequently occurring events or circumstances.
SOURCE: SpectraSite International, Inc.
