SPECTRASITE HOLDINGS INC, S-1/A, 2000-01-31

SPECTRASITE HOLDINGS INC
S-1/A, 2000-01-31
COMMUNICATIONS SERVICES, NEC

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 31, 2000

Registration No. 333-93873
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SPECTRASITE HOLDINGS, INC.
(Exact name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 4899 56-2027322
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

<TABLE>
<S> <C>
100 REGENCY FOREST DRIVE DAVID P. TOMICK
SUITE 400 SPECTRASITE HOLDINGS, INC.
CARY, NORTH CAROLINA 27511 100 REGENCY FOREST DRIVE
(919) 468-0112 SUITE 400
(Address, including zip code, and telephone number, including CARY, NORTH CAROLINA 27511
area code, of registrant's principal executive offices) (919) 468-0112
(Name, address, including zip code, and telephone number,
including area code, of registrant's agent for service)
</TABLE>

------------------------------------

Copies to:

TIMOTHY J. KELLEY RICHARD A. DRUCKER
THOMAS D. TWEDT DAVIS POLK & WARDWELL
DOW, LOHNES & ALBERTSON, PLLC 450 LEXINGTON AVENUE
1200 NEW HAMPSHIRE AVENUE, N.W. NEW YORK, NY 10017
WASHINGTON, D.C. 20036 (212) 450-4000
(202) 776-2000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment file pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

------------------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
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EXPLANATORY NOTES

This registration statement contains two separate prospectuses. The first
prospectus relates to a public offering in the United States and Canada. The
second prospectus relates to a concurrent offering outside the United States and
Canada. The complete prospectus relating to the U.S. offering follows
immediately after this explanatory note. The prospectuses for each of the U.S.
offering and the international offering will be identical with the exception of
an alternate front cover page. This alternate page appears in this registration
statement immediately following the complete prospectus for the U.S. offering.
<PAGE> 3

The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and we are not
soliciting offers to buy these securities in any jurisdiction where the
offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued January 31, 2000

22,300,000 Shares

[SpectraSite Logo]

SpectraSite Holdings, Inc.
COMMON STOCK
------------------------

SPECTRASITE HOLDINGS, INC. IS OFFERING 22,300,000 SHARES OF ITS COMMON STOCK.

------------------------

OUR COMMON STOCK IS QUOTED ON THE NASDAQ NATIONAL MARKET UNDER THE SYMBOL
"SITE." ON JANUARY 28, 2000, THE REPORTED LAST SALE PRICE FOR OUR COMMON STOCK
ON THE NASDAQ NATIONAL MARKET WAS $21 1/4 PER SHARE.

------------------------

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 7.
------------------------

PRICE $ A SHARE
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<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS SPECTRASITE
-------- ------------- -----------
<S> <C> <C> <C>
Per Share......................... $ $ $
Total............................. $ $ $
</TABLE>

SpectraSite Holdings, Inc. has granted the underwriters the right to purchase up
to an additional 3,345,000 shares to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on
, 2000.
------------------------

MORGAN STANLEY DEAN WITTER GOLDMAN, SACHS & CO.

CIBC WORLD MARKETS
CREDIT SUISSE FIRST BOSTON
DEUTSCHE BANC ALEX. BROWN
LEHMAN BROTHERS
SALOMON SMITH BARNEY

, 2000
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Summary..................... 3
Risk Factors........................... 7
Special Note Regarding Forward-Looking
Statements........................... 14
Use of Proceeds........................ 15
Price Range of Common Stock............ 15
Dividend Policy........................ 15
Capitalization......................... 16
Unaudited Pro Forma Financial Data..... 17
Selected Historical Financial Data..... 32
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 34
Business............................... 41
</TABLE>

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Management............................. 51
Certain Transactions................... 62
Ownership of Capital Stock............. 69
Description of Capital Stock........... 71
Description of Certain Indebtedness.... 73
Shares Eligible for Future Sale........ 76
Certain United States Federal Tax
Considerations to Non-U.S. Holders... 78
Underwriters........................... 82
Legal Matters.......................... 85
Experts................................ 85
Where You Can Find More Information.... 85
Index to Financial Statements.......... F-1
</TABLE>

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SpectraSite Holdings, Inc. is a Delaware corporation. Our principal
executive offices are located at 100 Regency Forest Drive, Suite 400, Cary,
North Carolina 27511, and our telephone number at that address is (919)
468-0112. Our World Wide Web site address is http://www.spectrasite.com. The
information in our website is not part of this prospectus.

In this prospectus, Holdings refers to SpectraSite Holdings, Inc., and
SpectraSite, we, us and our refer to SpectraSite Holdings, Inc., its wholly
owned subsidiaries and all predecessor entities collectively, unless the context
requires otherwise. The term common stock refers to the common stock, par value
$0.001 per share, of Holdings.

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of common stock.

1
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(This page intentionally left blank)

2
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PROSPECTUS SUMMARY

This summary highlights the most important features of this offering and
the information contained elsewhere in this prospectus. This summary is not
complete and does not contain all of the information that you should consider
before investing in our common stock. You should read the entire prospectus
carefully, especially the risks of investing in our common stock discussed under
"Risk Factors."

SPECTRASITE

OVERVIEW

We are 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. Our businesses include the ownership and leasing of antennae
sites on towers, managing rooftop and in-building telecommunications access on
commercial real estate, network planning and deployment, and construction of
towers and related wireless facilities. Our 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. As of
December 31, 1999 and after giving effect to the acquisition of Apex Site
Management Holdings, Inc., we owned or managed over 15,000 sites, including
2,765 owned towers, in 98 of the top 100 markets in the United States.

The wireless communications industry is growing rapidly as the demand for
wireless services continues to increase. In addition, as the number and type of
wireless service providers has grown, the industry has also become increasingly
competitive. To meet the increased demand for their services and enhance their
competitive positions, wireless carriers continue to make large capital
investments to expand their networks as well as to satisfy customer demands for
enhanced services, seamless and comprehensive coverage, better call quality,
faster data transmission and lower prices.

We believe that as carriers face the increased challenges of expanding
their networks and improving their services, they must allocate their available
capital and resources in the most efficient manner. In particular, carriers are
increasingly outsourcing tower ownership, as well as network planning,
deployment and management to independent tower owners like SpectraSite. This
outsourcing allows our customers to focus on their core competencies and to rely
on us for planning and deploying their networks. Our services are designed to
improve our customers' competitive positions through the efficient planning,
deployment and management of their networks. Our services include:

-- WIRELESS TOWER OWNERSHIP AND LEASING. We are one of the largest
independent owners and operators of wireless communications towers in the
United States and Canada, with 2,765 owned towers in 43 states and 3
Canadian provinces.

-- WIRELESS ROOFTOP AND IN-BUILDING ACCESS. We are the largest independent
providers of rooftop and in-building access to the wireless communications
industry in the United States, with approximately 12,700 sites under
management across the country.

-- NETWORK DESIGN AND DEPLOYMENT SERVICES. We are a leading provider of
design and deployment services for wireless networks. These services
include radio frequency engineering, network architecture, microwave
relocation, fixed network engineering, site development, tower and
facility construction and network installation and optimization.

-- BROADCAST TOWER DEVELOPMENT AND LEASING. We are a leading provider of
broadcast tower analysis, design, fabrication, installation and technical
services. We have over 50 years of experience in the broadcast tower
industry and have worked on the development of more than 700 broadcast
towers, which we believe represents approximately 50% of the existing
broadcast tower infrastructure in the United States. We intend to
capitalize on our broadcast tower development expertise to create tower
ownership and leasing opportunities.

3
<PAGE> 7

GROWTH STRATEGY

Our objective is to be the leading independent provider of outsourced
antenna site and network services to the telecommunications and broadcast
industries. Key elements of our strategy include:

-- MAXIMIZING THE UTILIZATION OF OUR TOWERS AND MANAGED SITES. We intend to
capitalize on the substantial opportunities for revenue and cash flow
growth by maximizing the number of tenants we have on each of our towers
and managed sites. We believe that our strategy of owning clustered groups
of towers and managed sites in major metropolitan markets and providing
our customers with a full range of products and services allows us to
deliver reliable, scalable network solutions and will result in increased
co-location on our towers and managed sites.

-- EXPANDING OUR TOWER PORTFOLIO. We seek to expand our tower portfolio by
building new towers for anchor tenants and by making selective
acquisitions of towers. We believe that Nextel's agreement to lease space
on an additional 1,543 towers we own, acquire or construct for Nextel or
other tenants will substantially increase the number of towers we own and
operate.

-- EXPANDING THE SUITE OF SERVICES WE OFFER AND PURSUING CROSS-SELLING
OPPORTUNITIES. We believe our ability to provide a package of integrated
services, which have traditionally been offered by multiple subcontractors
coordinated by a carrier's deployment staff, will make us a preferred
provider of all outsourced antennae site and network services.

4
<PAGE> 8

THE OFFERING

Common stock offered.................... 22,300,000 shares

Common stock to be outstanding after
the offering.......................... 119,474,225 shares

Use of proceeds......................... We will receive net proceeds from
this offering of approximately
$280.8 million. We intend to use
the net proceeds from this offering
to fund costs related to the
construction and acquisition of
towers, and for general corporate
purposes.

Nasdaq National Market symbol........... SITE

------------------------

Unless we specifically state otherwise, the information in this prospectus
does not take into account the sale of up to 3,345,000 shares of common stock
which the underwriters have the option to purchase from us to cover
over-allotments.

The number of shares of our common stock that will be outstanding
immediately after the offering includes 70,749,625 shares of common stock that
will be issued upon the conversion of all outstanding shares of our Series A,
Series B and Series C preferred stock in connection with the completion of this
offering, as well as 6,007,996 and 225,000 shares of our common stock issued in
connection with the Apex merger and the Vertical Properties merger,
respectively, on January 5, 2000. However, the number of shares listed above
does not include 5,723,791 shares issuable upon the exercise of outstanding
stock options as of December 31, 1999, having a weighted average exercise price
of $6.02 per share.

5
<PAGE> 9

SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION

We present the following summary unaudited pro forma financial information
to give you a better understanding of what the results of operations and
financial position of the combined businesses of SpectraSite and Westower
Corporation may have been for the year ended December 31, 1998 and the nine
months ended September 30, 1999, if the Westower merger, the acquisition of
2,000 towers from Nextel Communications, Inc. and the other transactions
described under "Unaudited Pro Forma Financial Data" had occurred on January 1,
1998. We prepared the unaudited pro forma statement of operations by adding or
combining the historical pro forma results of each company with adjustments. The
companies may have performed differently had they actually been combined on
January 1, 1998. The unaudited pro forma information is not necessarily
indicative of the historical results that we actually would have had or the
future results we will experience.

Tower cash flow consists of site leasing revenues less site leasing costs
of operations. EBITDA consists of operating income (loss) before depreciation
and amortization expense and provisions for restructuring and other
non-recurring charges. Adjusted EBITDA consists of EBITDA less estimated
incremental operating expenses related to the Nextel tower acquisition. Tower
cash flow, EBITDA and adjusted EBITDA are not measurements of financial
performance under generally accepted accounting principles and should not be
considered alternatives to net income (loss) as a measure of performance or to
cash flow as a measure of liquidity. Tower cash flow, EBITDA and adjusted EBITDA
are not necessarily comparable with similarly titled measures for other
companies. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by
revenues. Tower cash flow, EBITDA and adjusted EBITDA are provided because they
are used in the communications site industry as measures of operating
performance and financial position.

<TABLE>
<CAPTION>
POST-MERGER POST-MERGER
PRO FORMA PRO FORMA
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1998 SEPTEMBER 30, 1999
----------------- ------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................................. $138,850 $120,817
Costs of operations...................................... 86,192 68,654
Selling, general and administrative expenses............. 23,646 40,348
Depreciation and amortization............................ 56,372 45,843
Restructuring and non-recurring charges.................. 404 7,727
-------- --------
Operating loss........................................... $(27,764) $(41,755)
======== ========
OTHER DATA:
Tower cash flow.......................................... $ 28,466 $ 27,837
EBITDA................................................... 29,012 11,815
Adjusted EBITDA.......................................... 10,445 7,173
Adjusted EBITDA margin................................... 7.5% 5.9%

SELECTED OPERATING DATA:
Number of towers owned................................... 2,217 2,405
</TABLE>

6
<PAGE> 10

RISK FACTORS

This offering involves a high degree of risk. You should consider carefully
the risks and uncertainties described below and the other information in this
prospectus, including the financial statements and related notes, before
deciding to invest in shares of our common stock. While these are the risks and
uncertainties we believe are most important for you to consider, you should know
that they are not the only risks or uncertainties facing us or which may
adversely affect our business. If any of the following risks or uncertainties
actually occurs, our business, financial condition or results of operations
would likely suffer. In that event, the market price of our common stock could
decline, and you could lose all or part of your investment.

OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT.

SpectraSite was formed in May 1997, purchased 2,000 towers from Nextel in
April 1999, which represented approximately 72% of our towers as of December 31,
1999, and acquired Westower Corporation in September 1999. As a result, we have
only a limited operating history on which you can evaluate our business and
prospects. Our prospects must be considered in the light of the risks,
uncertainties, expenses and difficulties frequently encountered by companies in
their early stages of development, particularly, companies in new and rapidly
evolving industries, such as wireless communications. To address these risks and
uncertainties we must, among other things, successfully:

-- co-locate tenants on our towers;

-- perform under our agreements with Nextel; and

-- integrate our acquisitions.

We may not be successful in accomplishing these objectives.

WE ARE NOT PROFITABLE AND EXPECT TO CONTINUE TO INCUR LOSSES.

On a pro forma basis, we incurred net losses of $103.2 million and $104.8
million for the year ended December 31, 1998 and the nine months ended September
30, 1999, respectively. Our losses are principally due to significant
depreciation, amortization and interest expense. We have not achieved
profitability and expect to continue to incur losses for the foreseeable future.

WE HAVE SUBSTANTIAL INDEBTEDNESS, AND SERVICING OUR INDEBTEDNESS COULD REDUCE
FUNDS AVAILABLE TO GROW OUR BUSINESS.

We are, and will continue to be, highly leveraged. As of September 30,
1999, we had total consolidated indebtedness of $657.1 million. Our high level
of indebtedness could interfere with our ability to grow. For example, it could:

-- increase our vulnerability to general adverse economic and industry
conditions;

-- limit our ability to obtain additional financing;

-- require the dedication of a substantial portion of our cash flow from
operations to the payment of principal of, and interest on, our
indebtedness;

-- limit our flexibility in planning for, or reacting to, changes in our
business and the industry; and

-- place us at a competitive disadvantage relative to less leveraged
competitors.

Our ability to generate sufficient cash flow from operations to pay
principal of, and interest on, our indebtedness is uncertain. In particular, we
may not meet our anticipated revenue growth and operating expense targets, and
as a result, our future debt service obligations could exceed cash available to
us. Further, we may not be able to refinance any of our indebtedness on
commercially reasonable terms or at all.

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OUR BUSINESS DEPENDS ON THE DEMAND FOR WIRELESS COMMUNICATIONS SITES AND OUR
ABILITY TO SECURE CO-LOCATION TENANTS.

Our business depends on demand for communications sites from wireless
service providers, which, in turn, depends on the demand for wireless services.
A reduction in demand for communications sites or increased competition for
co-location tenants could have a material adverse effect on our business,
financial condition or results of operations. In particular, the success of our
business model requires us to secure co-location tenants, and securing
co-location tenants depends upon the demand for communications sites from a
variety of service providers in a particular market. The extent to which
wireless service providers lease communications sites on our towers depends on
the level of demand for wireless services, the financial condition and access to
capital of those providers, the strategy of providers with respect to owning or
leasing communications sites, government licensing of communications licenses,
changes in telecommunications regulations, the characteristics of each company's
technology, and geographic terrain.

A SIGNIFICANT PORTION OF OUR REVENUES AND TOWER CONSTRUCTION ACTIVITY DEPENDS ON
NEXTEL.

Nextel accounts for a significant portion of our total revenues. On a pro
forma basis, Nextel represented approximately 34% and 28% of our revenues for
the year ended December 31, 1998 and for the nine months ended September 30,
1999, respectively. If Nextel were to suffer financial difficulties or if Nextel
were unwilling or unable to perform its obligations under its arrangements with
us, our business, financial condition or results of operations could be
materially and adversely affected.

The financial data related to the Nextel towers set forth in the unaudited
pro forma financial statements are estimated amounts provided by Nextel. Neither
the independent auditors of SpectraSite nor Nextel have separately audited this
financial data. We believe the estimated amounts are factually supported and
based on reasonable assumptions. However, these amounts may not accurately
reflect the results of operations from the Nextel towers for the periods
presented or the operating results that we can expect from the Nextel towers in
the future.

Nextel agreed to lease 1,700 additional sites on our towers as part of its
national service deployment, and as of December 31, 1999, they had leased 157 of
those sites. Under the terms of our agreements with Nextel, we are required to
construct or purchase agreed upon numbers of qualified towers at specified
times, and in the case of towers we purchase from Nextel, at specified prices.
Our failure to construct or purchase the towers as agreed could result in the
cancellation of our right to construct or purchase additional towers under these
agreements. Such a cancellation could have a material adverse effect on our
business, financial condition or results of operations and on our ability to
implement or achieve our business objectives in the future.

Under our agreements with Nextel, subject to limited exceptions, we will be
required to construct new towers in locations to be determined by Nextel. These
towers may have limited appeal to other providers of wireless communications
services, which may limit our opportunities to attract additional tenants,
which, in turn, could have a material adverse effect on our business, financial
condition or results of operations.

WE MAY ENCOUNTER DIFFICULTIES IN INTEGRATING ACQUISITIONS WITH OUR OPERATIONS,
WHICH COULD LIMIT OUR REVENUE GROWTH AND OUR ABILITY TO ACHIEVE OR SUSTAIN
PROFITABILITY.

Acquiring additional tower assets and complementary businesses is an
integral part of our business strategy. We may not be able to realize the
expected benefits of past or future acquisitions or identify suitable
acquisition candidates. Our ability to complete future acquisitions will depend
on a number of factors, some of which are beyond our control, including the
attractiveness of acquisition prices and the negotiation of acceptable
definitive acquisition agreements. In addition, the process of integrating
acquired operations into our existing operations may result in unforeseen
operating difficulties, divert managerial attention or require significant
financial resources that could otherwise be used for existing tower construction
and network deployment contracts. Future acquisitions also may require us to
incur additional indebtedness and contingent liabilities, which could have a
material adverse effect on our business, financial condition and results of
operations.

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<PAGE> 12

WE MAY BE UNABLE TO INCREASE OUR CONSTRUCTION ACTIVITIES OR TO ACQUIRE TOWERS AS
CONTEMPLATED BY OUR GROWTH STRATEGY.

Our growth strategy depends on our ability to construct, acquire and
operate towers as wireless service providers expand their tower network
infrastructure. Regulatory and other barriers could adversely affect our ability
to construct towers in accordance with the requirements of our customers, and,
as a result, we may be subject to penalties and forfeiture provisions under our
anchor tenant leases. Our ability to construct new towers may be affected by a
number of factors beyond our control, including zoning and local permitting
requirements, FAA considerations, FCC tower registration procedures,
availability of tower components and construction equipment, availability of
skilled construction personnel and weather conditions. In addition, because the
concern over tower proliferation has grown in recent years, certain communities
now restrict new tower construction or delay granting permits required for
construction.

Our expansion plans call for a significant increase in construction
activity. We may not be able to overcome the barriers to new construction, and
we may not complete the number of towers planned for construction. Our failure
to complete the necessary construction could have a material adverse effect on
our business, financial condition or results of operations.

We compete for tower acquisition opportunities with wireless service
providers, broadcasters, site developers and other independent tower owners and
operators, and we expect competition to increase. Increased competition for
acquisitions may result in fewer acquisition opportunities and higher
acquisition prices. We regularly explore acquisition opportunities; however, we
may have trouble identifying towers or tower companies to acquire in the future.

WE COMPETE WITH COMPANIES THAT MAY HAVE GREATER FINANCIAL RESOURCES.

If we are unable to successfully compete, our business will suffer. We
believe that tower location and capacity, price, quality of service and density
within a geographic market historically have been, and will continue to be, the
most significant competitive factors affecting the site leasing business. We
compete for site leasing tenants with:

-- wireless service providers that own and operate their own towers and
lease, or may in the future decide to lease, antenna space to other
providers;

-- other independent tower operators;

-- site acquisition companies which acquire antenna space on existing
towers for wireless service providers, manage new tower construction
and provide site acquisition services; and

-- owners of non-tower antenna sites, including rooftops, water towers
and other alternate structures.

Wireless service providers that own and operate their own towers generally
are substantially larger and have substantially greater financial resources than
SpectraSite. For example, AT&T Wireless and Sprint PCS own and operate their own
tower networks.

We compete for acquisition, new tower construction and network development
opportunities primarily with other independent tower companies and site
construction firms. Some of these competitors may have greater financial
resources than we have.

RAPID GROWTH COULD STRAIN OR DIVERT OUR MANAGEMENT TEAM AND WILL INCREASE OUR
OPERATING EXPENSES.

Implementation of our business strategy may impose significant strains on
our management, operating systems and financial resources. In addition, we
anticipate that operating expenses will increase significantly as we build and
acquire additional tower assets. Our failure to manage growth or unexpected
difficulties encountered during our expansion could have a material adverse
effect on our business, financial condition or results of operations. The
pursuit and integration of acquisitions, investments, joint ventures and
strategic alliances will require substantial attention from our senior
management, which will limit the amount of time they have available to devote to
existing operations.

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WE ANTICIPATE SIGNIFICANT CAPITAL EXPENDITURES AND MAY NEED ADDITIONAL FINANCING
WHICH MAY NOT BE AVAILABLE.

Our current plans call for approximately $200.0 million of capital
expenditures during the first half of 2000 for the construction and acquisition
of communication sites, primarily towers. We had approximately $300.0 million
available under our credit facility as of December 31, 1999. As of September 30,
1999 and after giving effect to this offering, we will have approximately $401.0
million of cash and cash equivalents. However, if acquisitions or other
opportunities present themselves more rapidly than we currently anticipate or if
our estimates prove to be inaccurate, we may need additional sources of debt or
equity capital prior to the end of 2000. Additional financing may not be
available or may be restricted by the terms of the credit facility and the
indentures governing our senior discount notes.

COMPETING TECHNOLOGIES AND OTHER ALTERNATIVES COULD REDUCE THE DEMAND FOR OUR
SERVICES.

Most types of wireless services currently require ground-based network
facilities, including communications sites for transmission and reception. The
development and growth of communications technologies which do not require
ground-based sites or other alternatives could reduce the demand for space on
our towers.

In particular, the emergence of new technologies that do not require
terrestrial antenna sites and can be substituted for those that do, could have a
negative impact on our operations. For example, the FCC has granted license
applications for several low-earth orbiting satellite systems that are intended
to provide mobile voice and data services; one system is currently operating,
and another has recently initiated service. In addition, the FCC has issued
licenses for several low-earth orbiting satellite systems that are intended to
provide solely data services, and one of those systems is operational. Although
these systems are highly capital-intensive and have only begun to be tested,
mobile satellite systems could compete with land-based wireless communications
systems, thereby reducing the demand for the infrastructure services we provide.
Reduced demand for ground-based antenna sites could have a material adverse
effect on our business, financial condition or results of operations.

In addition, wireless service providers frequently enter into agreements
with competitors allowing them to utilize one another's wireless communications
facilities to accommodate customers who are out of range of their home
providers' services. These roaming agreements may be viewed by wireless service
providers as a superior alternative to leasing space for their own antennae on
communications sites we own. The proliferation of these roaming agreements could
have a material adverse effect on our business, financial condition or results
of operations.

A SMALL NUMBER OF STOCKHOLDERS CONTROLS THE VOTING POWER OF HOLDINGS, AND THESE
STOCKHOLDERS' INTERESTS MAY BE DIFFERENT FROM YOURS.

Affiliates of Welsh, Carson, Anderson & Stowe will own approximately 32
million shares, or approximately 27%, of our common stock after giving effect to
this offering, the conversion of our preferred stock and the issuance of common
stock in connection with our acquisitions of Apex and Vertical Properties, Inc.
This ownership will allow Welsh, Carson to exert significant influence over the
management and policies of SpectraSite. In addition, Welsh, Carson and certain
other Holdings' stockholders have a right to board representation under a
stockholders' agreement. Welsh, Carson and the other parties to the
stockholders' agreement may have interests that are different from yours. See
"Certain Transactions--Stockholders' Agreement."

OUR BUSINESS DEPENDS ON OUR KEY PERSONNEL.

Our future success depends to a significant extent on the continued
services of our Chief Executive Officer, Stephen H. Clark, our Chief Operating
Officer, Timothy G. Biltz, our Chief Financial Officer, David P. Tomick, our
Executive Vice President--Business Development, Richard J. Byrne, and our
Executive Vice President--Design and Construction, Calvin J. Payne. Although
each of these officers other than Mr. Biltz has an employment agreement with
Holdings, the loss of any of these key employees would likely have a
significantly detrimental effect on our business.
10
<PAGE> 14

OUR OPERATIONS REQUIRE COMPLIANCE WITH AND APPROVAL FROM FEDERAL AND STATE
REGULATORY AUTHORITIES.

We are subject to a variety of regulations, including those at the federal,
state and local levels. Both the FCC and the FAA regulate towers and other sites
used for wireless communications transmitters and receivers. Failure to comply
with applicable requirements may lead to civil penalties and tort liability.
These regulations control siting, marking, and lighting of towers and may,
depending on the characteristics of the tower, require registration of tower
facilities with the FCC. Wireless communications devices operating on towers are
separately regulated and independently licensed by the FCC based upon the
particular frequency used and the services being provided. Any proposals to
construct new communications sites or modify existing communications sites that
could affect air traffic must be reviewed by the FAA to ensure that the
proposals will not present a hazard to aviation. Tower owners may have an
obligation to paint their towers or install lighting to conform to FCC and FAA
standards and to maintain such painting or lighting. Tower owners also may bear
the responsibility for notifying the FAA of any tower lighting failure.
SpectraSite generally indemnifies its customers against any failure by
SpectraSite to comply with applicable standards.

Local regulations include city or other local ordinances, zoning
restrictions and restrictive covenants imposed by community developers. These
regulations vary greatly, but typically require tower owners to obtain approval
from local officials or community standards organizations prior to tower
construction. Local regulations can delay or prevent new tower construction or
site upgrade projects, thereby limiting our ability to respond to customers'
demands. In addition, these regulations increase the costs associated with new
tower construction. Existing regulatory policies may adversely affect the timing
or cost of new tower construction, and additional regulations may be adopted
that will increase these delays or result in additional costs to SpectraSite.
These factors could have a material adverse effect on our business, financial
condition or results of operations and on our ability to implement or achieve
our business objectives.

The FCC has initiated a rulemaking proceeding to consider how to improve
telecommunications service providers' access to rooftops, other rights-of-way
and conduits in multi-tenant buildings. The FCC is considering whether such
access should be mandated and, if so, under what rules, terms, and conditions.
While new telecommunications entrants have supported the proposals, building
owners and incumbent local exchange carriers have argued that the proposals are
unconstitutional and that the agency lacks the statutory authority to adopt
them. Federal legislation addressing access by telecommunications providers to
multi-tenant buildings has also been introduced and may be considered in the
coming year. Other legislative proposals concerning tower siting and related
environmental issues may also be considered. We cannot predict whether these
regulatory and legislative initiatives will be adopted and, if they are, the
effect that they will have on our business.

As part of the Westower merger, we acquired operations in Canada and an
interest in a Brazilian joint venture. As a result, we are subject to regulation
in those jurisdictions. If we pursue additional international opportunities, we
will be subject to regulation in additional foreign jurisdictions. In addition,
our customers also may become subject to new regulatory policies which may
adversely affect the demand for communications sites.

WE GENERALLY LEASE THE LAND UNDER OUR TOWERS AND MAY NOT BE ABLE TO MAINTAIN
THESE LEASES.

Our real property interests relating to towers primarily consist of
leasehold interests, private easements and licenses, easements and rights-of-way
granted by governmental entities. A loss of these interests would interfere with
our ability to conduct our business and generate revenues. Our ability to
protect our rights against persons claiming superior rights in towers depends on
our ability to:

-- recover under title policies, the policy limits of which may be less
than the purchase price of a particular tower;

-- in the absence of title insurance coverage, recover under title
warranties given by tower sellers, which warranties often terminate
after the expiration of a specific period, typically one to three
years; and

-- recover under title covenants from landlords contained in lease
agreements.

11
<PAGE> 15

WE ARE SUBJECT TO ENVIRONMENTAL LAWS THAT IMPOSE LIABILITY WITHOUT REGARD TO
FAULT.

Our operations are subject to federal, state, provincial, local, and
foreign environmental laws and regulations regarding the use, storage, disposal,
emission, release and remediation of hazardous and nonhazardous substances,
materials or wastes. Under these laws, SpectraSite could be held strictly, as
well as jointly and severally, liable for the investigation and remediation of
hazardous substance contamination at its facilities or at third-party waste
disposal sites and also could be held liable for any personal or property damage
related to such contamination. Although we believe that we currently have no
material liability under applicable environmental laws, the costs of complying
with existing or future environmental laws, investigating and remediating any
contaminated real property and resolving any related liability could have a
material adverse effect on our business, financial condition or results of
operations.

The FCC requires tower owners who are subject to the agency's antenna
structure registration program to comply at the time of registration with
federal environmental rules that may restrict the siting of towers. Under these
rules, tower owners are required initially to identify whether proposed sites
are in environmentally sensitive locations. If so, the tower owners must prepare
and file environmental assessments, which must be reviewed by the FCC staff
prior to registration and construction of the particular towers.

OUR TOWERS MAY BE DAMAGED BY NATURAL DISASTERS.

Our towers are subject to risks associated with natural disasters such as
ice and wind storms, tornadoes, hurricanes and earthquakes. We self-insure
almost all of our towers against such risks. A tower accident for which we are
uninsured or underinsured, or damage to a tower or group of towers, could have a
material adverse effect on our business, financial condition or results of
operations.

PERCEIVED HEALTH RISKS OF RADIO FREQUENCY EMISSIONS COULD IMPACT OUR BUSINESS.

The wireless service providers that utilize our towers are subject to FCC
requirements and other guidelines relating to radio frequency emissions. The
potential connection between radio frequency emissions and certain negative
health effects, including some forms of cancer, has been the subject of
substantial study by the scientific community in recent years. To date, the
results of these studies have been inconclusive. If radio frequency emissions
were conclusively proved harmful, our tenants and possibly we could face
lawsuits claiming damages from such emissions and demand for wireless services
and new towers would be adversely affected. Although we have not been subject to
any claims relating to radio frequency emissions, we cannot assure you that
these claims will not arise in the future.

WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE AND, BECAUSE WE ARE
A HOLDING COMPANY, WE MAY BE UNABLE TO PAY DIVIDENDS.

We have never declared or paid any cash dividends on our common stock. For
the foreseeable future, we intend to retain any earnings to finance the
development and expansion of our business, and we do not anticipate paying any
cash dividends on our common stock. In addition, our credit facility and the
indentures governing our senior discount notes restrict our ability to pay
dividends. Any future determination to pay dividends will be at the discretion
of our board of directors and will be dependent upon then existing conditions,
including our financial condition and results of operations, capital
requirements, contractual restrictions, business prospects and other factors
that the board of directors considers relevant. Furthermore, because Holdings is
a holding company, it depends on the cash flow of its subsidiaries, and
SpectraSite Communications' credit facility imposes restrictions on Holdings'
subsidiaries' ability to distribute cash to Holdings.

OUR STOCK PRICE MAY BE HIGHLY VOLATILE, AND YOU COULD LOSE A SIGNIFICANT PART OF
YOUR INVESTMENT AS A RESULT.

Prior to the Westower merger, our common stock was privately held with no
public trading market. On September 1, 1999, our common stock was approved for
trading on the Nasdaq National Market under the symbol "SITE", and public
trading commenced on September 3, 1999. The average daily trading volume for the
week ending December 24, 1999 was only 103,438 shares. Accordingly, only limited
public trading exists
12
<PAGE> 16

for our common stock and the market price of our common stock may be highly
volatile. Further, our common stock may be highly volatile due to factors such
as the following, some of which are beyond our control:

-- quarterly variations in our operating results;

-- operating results that vary from the expectations of securities
analysts and investors;

-- changes in expectations as to our future financial performance,
including financial estimates by securities analysts and investors;

-- changes in market valuations of other communications tower companies;

-- announcements of technological innovations or new services by us or
our competitors;

-- announcements of significant contracts, acquisitions, strategic
partnerships, joint ventures or capital commitments by us or our
competitors;

-- additions or departures of key personnel;

-- future sales of our common stock; and

-- stock market price and volume fluctuations.

In addition, the stock market in general has experienced extreme volatility
that often has been unrelated to the operating performance of particular
companies. These broad market and industry fluctuations may adversely affect the
trading price of our common stock, regardless of our actual operating
performance.

SUBSTANTIAL SALES OF OUR COMMON STOCK COULD ADVERSELY AFFECT OUR STOCK PRICE.

Sales of a substantial number of shares of our common stock into the public
market after this offering, or the perception that these sales could occur,
could adversely affect our stock price. Given the volatility that will likely
exist for our shares, such sales could cause the market price of the common
stock to decline.

After this offering, including the mandatory conversion of all our
preferred stock into common stock and after giving effect to the issuance of
common stock in connection with our acquisitions of Apex and Vertical
Properties, we will have 119,474,225 outstanding shares of common stock, and, as
of December 31, 1999, we had reserved an additional 5,723,791 shares of common
stock for issuance under outstanding stock options. All of the shares of common
stock to be sold in this offering will be freely tradable without restriction or
further registration under the federal securities laws unless purchased by our
affiliates, as that term is defined in Rule 144 under the Securities Act.
Approximately 80,880,928 shares of outstanding common stock, representing
approximately 67.7%, of the outstanding common stock upon completion of this
offering and after giving effect to the issuance of common stock in connection
with the acquisitions of Apex and Vertical Properties, will be restricted
securities under the Securities Act, subject to restrictions on the timing,
manner and volume of sales of such shares.

We have also filed registration statements on Form S-8 under the Securities
Act covering 10,000,000 shares of common stock reserved for issuance under our
stock incentive plan. As of December 31, 1999, options to purchase 1,765,666
shares were vested. We also have reserved 1,000,000 shares of common stock for
issuance under our employee stock purchase plan.

We cannot predict whether future sales of our common stock or the
availability of our common stock for sale will adversely affect the market price
for our common stock or our ability to raise capital by offering equity
securities.

13
<PAGE> 17

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21C of the Securities
Exchange Act of 1934, including statements concerning possible or assumed future
results of operations of SpectraSite and those preceded by, followed by or that
include the words may, will, should, could, expects, plans, anticipates,
believes, estimates, predicts, potential or continue or the negative of such
terms and other comparable terminology. You should understand that the factors
described below, in addition to those discussed elsewhere in this document,
could affect our future results and could cause those results to differ
materially from those expressed in such forward-looking statements. These
factors include:

-- material adverse changes in economic conditions in the markets we
serve;

-- future regulatory actions and conditions in our operating areas;

-- competition from others in the communications tower industry;

-- the integration of our operations with those of businesses we have
acquired or may acquire in the future and the realization of the
expected benefits; and

-- other risks and uncertainties as may be detailed from time to time in
our public announcements and SEC filings.

14
<PAGE> 18

USE OF PROCEEDS

Our net proceeds from the sale of the 22,300,000 shares of common stock in
this offering are estimated to be $280.8 million, or $323.2 million if the
underwriters exercise their over-allotment option in full, assuming a public
offering price of $13.375 per share and after deducting underwriting discounts
and commissions and estimated offering expenses of $1.8 million payable by us.

We intend to use the net proceeds from this offering to fund costs related
to the construction and acquisition of towers, and for working capital and
general corporate purposes, including the expansion of our sales and marketing
activities. A portion of the net proceeds may also be used to acquire or invest
in additional tower assets or tower companies and complementary businesses,
technologies or products. We have no current agreements or commitments with
respect to any material business acquisitions. Pending such uses, the net
proceeds of this offering will be invested in short term investments.

PRICE RANGE OF COMMON STOCK

Prior to the Westower merger, our common stock was privately held with no
public trading market. On September 1, 1999, our common stock was approved for
trading on the Nasdaq National Market under the symbol "SITE", and public
trading commenced on September 3, 1999. The following table sets forth on a per
share basis the high and low sales prices for consolidated trading in our common
stock as reported on the Nasdaq National Market for the period from September 3,
1999 through September 30, 1999, the fourth quarter of 1999 and the first
quarter of 2000 through January 28, 2000.

<TABLE>
<CAPTION>
COMMON STOCK
-------------
HIGH LOW
---- ---
<S> <C> <C>
1999
Third quarter (beginning September 3)....................... $14 7/8 $11
Fourth quarter.............................................. 12 1/8 7 3/8
2000
First quarter (through January 28, 2000).................... 24 10 3/4
</TABLE>

The last reported sale price for our stock on January 28, 2000 is set forth
on the cover page to this prospectus. As of January 28, 2000, there were
approximately 255 holders of record of our common stock.

DIVIDEND POLICY

15
<PAGE> 19

CAPITALIZATION

The following table sets forth our cash and capitalization as of September
30, 1999:

-- on an actual basis; and

-- on an as adjusted basis to give effect to this offering and the
conversion upon the closing of the offering of all outstanding shares
of preferred stock.

This information should be read in conjunction with our financial
statements and related notes thereto included elsewhere in this prospectus.

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, 1999
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................... $ 120,241 $ 401,045
========== ==========
Long-term debt:
Credit facility........................................... $ 150,000 $ 150,000
12% senior discount notes due 2008........................ 144,850 144,850
11 1/4% senior discount notes due 2009.................... 356,532 356,532
Other debt................................................ 5,718 5,718
---------- ----------
Total long-term debt................................... 657,100 657,100
Stockholders' equity:
Series A convertible preferred stock, $0.001 par value,
3,462,830 shares authorized, 3,462,830 shares
outstanding, actual.................................... 10,000 --
Series B convertible preferred stock, $0.001 par value,
7,000,000 shares authorized, 7,000,000 shares
outstanding, actual.................................... 28,000 --
Series C convertible preferred stock, $0.001 par value,
60,286,795 shares authorized, 60,286,795 shares
outstanding, actual.................................... 301,494 --
Common stock, $0.001 par value, 300,000,000 shares
authorized, 19,060,219 shares outstanding, actual and
112,109,844 shares outstanding, as adjusted............ 19 112
Additional paid-in capital................................ 209,376 829,581
Accumulated other comprehensive income.................... 135 135
Accumulated deficit....................................... (77,928) (77,928)
---------- ----------
Total stockholders' equity............................. 471,096 751,900
---------- ----------
Total capitalization................................. $1,128,196 $1,409,000
========== ==========
</TABLE>

16
<PAGE> 20

UNAUDITED PRO FORMA FINANCIAL DATA

GENERAL

The unaudited pro forma financial data are based on the historical
financial statements of SpectraSite and Westower and the adjustments described
in the accompanying notes. The unaudited pro forma financial data do not purport
to represent what SpectraSite's, Westower's or the combined entity's financial
position or results of operations would actually have been if the transactions
had in fact occurred on the dates indicated and are not necessarily
representative of SpectraSite's financial position or results of operations at
any future date or for any future period. The unaudited pro forma consolidated
financial data should be read in conjunction with "Selected Historical Financial
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations," and the consolidated financial statements and related notes
thereto included elsewhere in this prospectus.

SPECTRASITE

The following unaudited pro forma consolidated financial data present both
the pre-merger and post-merger unaudited pro forma consolidated statements of
operations of SpectraSite for the year ended December 31, 1998 and for the nine
months ended September 30, 1999. The SpectraSite pro forma column and the
Westower pro forma column presented in the post-merger SpectraSite unaudited pro
forma consolidated statements of operations for the twelve months ended December
31, 1998 and for the nine months ended September 30, 1999 are derived from the
pre-merger SpectraSite and Westower pro forma consolidated statements of
operations for the corresponding periods. The unaudited pro forma consolidated
statement of operations data give effect to the following transactions as if
they had occurred on January 1, 1998:

-- the issuance and sale of SpectraSite's 12% senior discount notes due
2008;

-- the acquisition of 2,000 communications towers from Nextel, the
leaseback of antenna space by Nextel and SpectraSite's exclusive
agreement to acquire or construct 1,700 additional sites for Nextel;

-- the issuance and sale of SpectraSite's 11 1/4% senior discount notes
due 2009;

-- the issuance and sale of SpectraSite's Series C preferred stock;

-- initial borrowings under SpectraSite's credit facility;

-- the acquisition of 45 towers from Airadigm and the release of
escrowed funds to SpectraSite; and

-- the consummation of the Westower merger.

Certain of the data presented in the "Nextel" columns to the unaudited pro
forma statements of operations of SpectraSite are estimates provided by Nextel.
None of SpectraSite's independent accountants, Nextel's independent accountants
or Westower's independent accountants have audited or otherwise tested this
data.

The acquisition of tower assets from Nextel and the leaseback of antenna
space by Nextel are presented as if the purchase of assets had occurred on
January 1, 1998. Adjustments for revenues are based on the terms of the master
site lease agreement and on historical co-location revenues. Adjustments for
costs of operations consist of direct operating expenses, which include ground
lease payments, historical routine maintenance costs and property taxes
associated with the towers. Depreciation expense is straight-line depreciation
of the aggregate cost of the towers. Ground leases are non-cancelable operating
leases, generally for terms of five years and include options for renewal, and
pro forma ground lease expense is based on executed ground leases. Nextel has
leased space on each of the 2,000 towers we acquired, primarily for five-year
terms with options for renewal.

17
<PAGE> 21

The pro forma minimum ground lease expenses and minimum rental income for
these leases assuming the Nextel transaction occurred and the related leases
commenced January 1, 1998 are as follows:

<TABLE>
<CAPTION>
GROUND LEASE RENTAL
EXPENSE INCOME
------------ --------
(IN THOUSANDS)
<S> <C> <C>
1998............................... $17,648 $ 40,766
1999............................... 17,648 40,766
2000............................... 17,648 40,766
2001............................... 17,648 40,766
2002............................... 17,648 40,766
------- --------
Total............................ $88,240 $203,830
======= ========
</TABLE>

The acquisition of tower assets from Airadigm and the leaseback of antenna
space by Airadigm are presented as if the purchase of assets had occurred on
January 1, 1998. Adjustments for revenues are based on the executed tenant lease
terms for the Airadigm towers. Adjustments for costs of operations consist of
the cost of the executed ground leases, historical routine maintenance costs and
property taxes associated with the towers. Depreciation expense is straight-line
depreciation of the aggregate cost of $11.25 million of the 45 towers. The
Airadigm ground leases are non-cancelable operating leases, generally for terms
of five years and include options for renewal, and pro forma ground lease
expense is based on executed ground leases. Airadigm has leased space on these
towers for a five-year term with options for renewal. Airadigm has recently
filed for protection under Chapter 11 of the U.S. Bankruptcy Code. We cannot
predict the impact of this proceeding on our future results of operations or
financial condition. The pro forma minimum ground lease expenses and minimum
rental income for these leases assuming the transaction occurred and the related
leases commenced January 1, 1998 are as follows:

<TABLE>
<CAPTION>
GROUND LEASE RENTAL
EXPENSE INCOME
------------ ------
(IN THOUSANDS)
<S> <C> <C>
1998................................. $ 260 $1,007
1999................................. 260 1,007
2000................................. 260 1,007
2001................................. 260 1,007
2002................................. 260 1,007
------ ------
Total.............................. $1,300 $5,035
====== ======
</TABLE>

WESTOWER

The following unaudited pro forma consolidated financial data of Westower
present the unaudited pro forma consolidated statements of operations of
Westower for the twelve months ended December 31, 1998 and the period from
January 1, 1999 through September 2, 1999, the date on which SpectraSite
acquired Westower. The unaudited consolidated statement of operations data give
effect to the following transactions as if they had occurred on January 1, 1998:

-- the acquisition of Cord Communications, Inc.;

-- the acquisition of Summit Communications, LLC; and

-- the acquisition of communications towers from Koch Industries, Inc.
and its affiliates.

These statements include pro forma adjustments to reflect the results of
operations of Cord and Summit for the period from January 1, 1998 through the
dates of acquisition, August 31, 1998 and November 11, 1998, respectively, and
give effect to the Koch tower acquisition, which occurred in February 1999, as
if this

18
<PAGE> 22

acquisition occurred on January 1, 1998. In addition to the above acquisitions,
from March 1, 1998 through August 31, 1999, Westower acquired Jovin
Communications, Inc., Acier Filteau, Inc., CNG Communications, Inc., Teletronics
Management Services, Inc., Cypress Real Estate Services, Inc. and
Telecommunications R. David. These acquisitions, which are included in the
historical financial statements of Westower, were not considered significant
transactions, individually or in the aggregate, and therefore, were not included
in the unaudited pro forma consolidated statement of operations of Westower.

The acquisition of tower assets from Koch and the leaseback of antenna
space by Koch are presented as if the purchase of assets had occurred on January
1, 1998. Adjustments for revenues are based on the executed tenant lease terms
for the Koch towers. Adjustments for costs of operations consist of direct
operating expenses, which include ground lease payments, estimated routine
maintenance costs, property taxes and insurance associated with the towers.
Depreciation expense is straight-line depreciation of the aggregate cost of
$17.0 million. The Koch ground leases are non-cancelable operating leases for a
term of 49 years, and pro forma ground lease expense is based on executed ground
leases. Koch has leased space on these towers for a ten-year term with options
for renewal. The pro forma minimum ground lease expense and minimum rental
income for these leases assuming the transaction occurred and the related leases
commenced January 1, 1998 are as follows:

<TABLE>
<CAPTION>
GROUND LEASE RENTAL
EXPENSE INCOME
------------ -------
(IN THOUSANDS)
<S> <C> <C>
1998................................ $ 439 $ 1,364
1999................................ 439 1,364
2000................................ 439 1,364
2001................................ 439 1,364
2002................................ 439 1,364
Thereafter.......................... 19,322 6,824
------- -------
Total............................. $21,517 $13,644
======= =======
</TABLE>

19
<PAGE> 23

PRE-MERGER SPECTRASITE HOLDINGS, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRE-MERGER
SPECTRASITE
HISTORICAL NEXTEL AIRADIGM PRO FORMA
---------- -------- -------- -----------
<S> <C> <C> <C> <C>
Revenues:
Site leasing............................ $ 29,450 $ 14,954(a) $17(f) $ 44,421
Network services........................ 13,967 -- 13,967
-------- -------- --- --------
Total revenues............................ 43,417 14,954 17 58,388
-------- -------- --- --------
Operating expenses:
Costs of operations:
Site leasing......................... 10,490 6,913(b) 6(f) 17,409
Network services..................... 7,265 -- -- 7,265
Selling, general and administrative
expenses............................. 21,909 --(c) -- 21,909
Depreciation and amortization........... 21,833 11,808(d) 14(f) 33,655
Restructuring and other non-recurring
charges.............................. 7,727 -- -- 7,727
-------- -------- --- --------
Total operating expenses.................. 69,224 18,721 20 87,965
-------- -------- --- --------
Loss from operations...................... (25,807) (3,767) (3) (29,577)
-------- -------- --- --------
Other income (expense):
Interest income......................... 7,212 -- -- 7,212
Interest expense........................ (47,519) (20,554)(e) -- (68,073)
Other income (expense).................. (295) -- -- (295)
-------- -------- --- --------
Total other income (expense)......... (40,602) (20,554) -- (61,156)
-------- -------- --- --------
Loss before income taxes.................. (66,409) (24,321) (3) (90,733)
Income tax expense........................ 107 -- -- 107
-------- -------- --- --------
Net income (loss)......................... $(66,516) $(24,321) $(3) $(90,840)
======== ======== === ========
Net loss.................................. $(66,516)
Accretion of redemption value of preferred
stock................................... (760)
--------
Net loss applicable to common
shareholders............................ $(67,276)
========
Net loss per share:
Basic and diluted.................... $ (16.85)
========
Weighted average number of shares of
common stock outstanding:
Basic and diluted.................... 3,993
========
</TABLE>

See accompanying notes to unaudited pro forma consolidated statement of
operations.
20
<PAGE> 24

PRE-MERGER SPECTRASITE HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)

(a) Consists of $2,611 of historical co-location revenues received by
Nextel prior to the acquisition, which are based on fixed payment lease
terms. This information was provided to us by Nextel. Also consists of
$12,343 of additional revenues to be recognized by SpectraSite under the
terms of the Nextel master site lease agreement.

(b) Reflects certain direct operating expenses, primarily the cost of
executed ground leases, historical routine maintenance and property taxes
associated with the towers, paid by Nextel prior to the acquisition.

(c) SpectraSite has incurred incremental operating expenses as a
result of the Nextel tower acquisition. Such incremental expenses are
estimated to have been approximately $1.5 million per month. These
incremental operating expenses are based upon management's estimates rather
than on any contractual obligation; as such, these amounts have not been
presented as adjustments in the accompanying pro forma financial
statements.

(d) Reflects the depreciation of the acquired towers calculated on a
straight-line basis over 15 years.

(e) Reflects adjustment to interest expense as if SpectraSite had
issued its 11 1/4% senior discount notes due 2009 and had entered into the
credit facility on January 1, 1998 as follows:

<TABLE>
<S> <C>
PRO FORMA INTEREST EXPENSE:
Interest on 2009 notes at 11.25%.................... $ 1,170
Interest on $150,000 term loan...................... 3,964
Amortization of debt issuance costs................. 13,794
Commitment fees on unused portion of credit
facility.......................................... 1,626
-------
Total adjustment.................................... $20,554
=======
</TABLE>

(f) Reflects the acquisition from Airadigm of one tower, which was
placed into service on June 30, 1999, and one month of revenue and related
expenses for each of the four Airadigm towers placed into service on
January 31, 1999.

21
<PAGE> 25

WESTOWER CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 1999 THROUGH SEPTEMBER 2, 1999

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
HISTORICAL KOCH WESTOWER
WESTOWER ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Revenues:
Site leasing..................................... $ 1,649 $ 227(a) $ 1,876
Network services................................. 62,002 -- 62,002
-------- ----- --------
Total revenues................................... 63,651 227 63,878
-------- ----- --------
Operating expenses:
Costs of operations:
Site leasing.................................. 928 123(b) 1,051
Network services.............................. 43,943 -- 43,943
Selling, general and administrative expenses..... 18,439 -- 18,439
Depreciation and amortization.................... 2,920 142(c) 3,062
Restructuring and other non-recurring charges.... 4,629 -- 4,629
-------- ----- --------
Total operating expenses........................... 70,859 265 71,124
-------- ----- --------
Loss from operations............................... (7,208) (38) (7,246)
-------- ----- --------
Other income (expense):
Interest income.................................. 151 -- 151
Interest expense................................. (2,317) (213)(d) (2,530)
Other income (expense)........................... 154 -- 154
-------- ----- --------
Total other income (expense).................. (2,012) (213) (2,225)
-------- ----- --------
Loss before income taxes........................... (9,220) (251) (9,471)
Income tax expense................................. 223 (100)(e) 123
-------- ----- --------
Net loss........................................... $ (9,443) $(151) $ (9,594)
======== ===== ========
Net loss per share:
Basic and diluted................................ $ (1.10)
========
Weighted average number of shares of common stock
outstanding:
Basic and diluted................................ 8,562
========
</TABLE>

See accompanying notes to unaudited pro forma consolidated statement of
operations.
22
<PAGE> 26

WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 1999 THROUGH SEPTEMBER 2, 1999

(a) Consists of additional revenues to be recognized by Westower in
connection with site lease agreements with Koch.

(b) Reflects certain direct operating expenses, primarily the cost of
executed ground leases, estimated routine maintenance, property taxes and
insurance associated with the towers.

(d) Reflects adjustment to interest expense related to additional
borrowings under Westower's credit facility to acquire the Koch towers, based on
the credit facility's approximate interest rate of 7.5%.

(e) Reflects income tax benefit for the Koch tower operating results at
Westower's estimated tax rate of 40%.

23
<PAGE> 27

POST-MERGER SPECTRASITE HOLDINGS, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
POST-MERGER
SPECTRASITE WESTOWER MERGER SPECTRASITE
PRO FORMA PRO FORMA ADJUSTMENTS PRO FORMA
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Site leasing..................... $ 44,421 $ 1,876 $ -- $ 46,297
Network services................. 13,967 62,002 (1,449)(a) 74,520
-------- ------- ------- ---------
Total revenues..................... 58,388 63,878 (1,449) 120,817
-------- ------- ------- ---------
Operating expenses:
Costs of operations:
Site leasing.................. 17,409 1,051 -- 18,460
Network services.............. 7,265 43,943 (1,014)(a) 50,194
Selling, general and
administrative expenses....... 21,909 18,439 -- 40,348
Depreciation and amortization.... 33,655 3,062 9,577(b) 45,843
(451)(c)
Restructuring and other
non-recurring charges......... 7,727 4,629 (4,629)(d) 7,727
-------- ------- ------- ---------
Total operating expenses........... 87,965 71,124 3,483 162,572
-------- ------- ------- ---------
Loss from operations............... (29,577) (7,246) (4,932) (41,755)
-------- ------- ------- ---------
Other income (expense):
Interest income.................. 7,212 151 (1,466)(e) 5,897
Interest expense................. (68,073) (2,530) 2,052(f) (68,551)
Other income (expense)........... (295) 154 -- (141)
-------- ------- ------- ---------
Total other income
(expense)................... (61,156) (2,225) 586 (62,795)
-------- ------- ------- ---------
Loss before income taxes........... (90,733) (9,471) (4,346) (104,550)
Income tax expense................. 107 123 -- 230
-------- ------- ------- ---------
Net loss........................... $(90,840) $(9,594) $(4,346) $(104,780)
======== ======= ======= =========
Net loss per share:
Basic and diluted................ $ (5.50)(g)
=========
Weighted average number of shares
of common stock outstanding:
Basic and diluted................ 19,060
=========
</TABLE>

See accompanying notes to unaudited pro forma consolidated statement of
operations.
24
<PAGE> 28

POST-MERGER SPECTRASITE HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)

(a) Reflects the elimination of intercompany site construction revenues
and costs of site construction for towers built by Westower for SpectraSite
during the period from January 1, 1999 through September 2, 1999.

(b) Reflects amortization of goodwill as if the merger of Westower and
SpectraSite had occurred on January 1, 1998. Goodwill is amortized over 15
years.

(c) Reflects adjustments to eliminate amortization of historical goodwill
of Westower of $1,062 and to convert Westower tower depreciation from 20 years
to 15 years, increasing expense by $611.

(d) Reflects the elimination of certain non-recurring charges resulting
directly from the transaction which were incurred by Westower prior to its
acquisition by Spectrasite.

(e) Reflects an adjustment to eliminate interest income as if SpectraSite
had used cash-on-hand to repay Westower's outstanding indebtedness.

(f) Reflects adjustments to eliminate interest expense as if Westower's
credit facility and its $15,000 convertible note from BET Associates were paid
in full on January 1, 1998.

(g) SpectraSite's earnings per share for the nine months ended September
30, 1999 reflects the adoption of Statement of Financial Accounting Standards
No. 128, "Earnings Per Share", which requires companies to compute earnings per
share under two different methods, basic and diluted. The weighted average
common shares outstanding at September 30, 1999 reflects the issuance of 15,497
shares of SpectraSite common stock in exchange for all of the outstanding shares
of Westower common stock.

If SpectraSite had positive net income during this period, diluted earnings
per share would have included potential common shares related to its convertible
preferred stock and outstanding options. These potential common shares were not
included in the diluted earnings per share calculation for the nine months ended
September 30, 1999 because the effect would have been antidilutive.

25
<PAGE> 29

PRE-MERGER SPECTRASITE HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRE-MERGER
SPECTRASITE
HISTORICAL NEXTEL AIRADIGM PRO FORMA
---------- -------- -------- -----------
<S> <C> <C> <C> <C>
Revenues:
Site leasing............................ $ 656 $ 49,388(a) $1,007 $ 51,051
Network services........................ 8,142 -- -- 8,142
-------- -------- ------ --------
Total revenues............................ 8,798 49,388 1,007 59,193
-------- -------- ------ --------
Operating expenses:
Costs of operations:
Site leasing......................... 299 22,830(b) 326 23,455
Network services..................... 2,492 -- -- 2,492
Selling, general and administrative
expenses............................. 9,690 --(c) -- 9,690
Depreciation and amortization........... 1,268 39,000(d) 750 41,018
-------- -------- ------ --------
Total operating expenses.................. 13,749 61,830 1,076 76,655
-------- -------- ------ --------
Loss from operations...................... (4,951) (12,442) (69) (17,462)
-------- -------- ------ --------
Other income (expense):
Interest income......................... 3,569 -- -- 3,569
Interest expense........................ (8,170) (67,865)(e) -- (76,035)
Other income (expense).................. 473 -- -- 473
-------- -------- ------ --------
Total other income (expense)......... (4,128) (67,865) -- (71,993)
-------- -------- ------ --------
Net loss.................................. $ (9,079) $(80,307) $ (69) $(89,455)
======== ======== ====== ========
Net loss.................................. $ (9,079)
Accretion of redemption value of preferred
stock................................... (2,156)
--------
Net loss applicable to common
shareholders............................ $(11,235)
========
Net loss per share:
Basic and diluted....................... $ (12.09)
========
Weighted average number of shares of
common stock outstanding:
Basic and diluted....................... 929
========
</TABLE>

See accompanying notes to unaudited pro forma consolidated statement of
operations.
26
<PAGE> 30

PRE-MERGER SPECTRASITE HOLDINGS, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

(IN THOUSANDS)

(a) Consists of $8,622 of historical co-location revenues received by
Nextel prior to the acquisition, which are based on fixed payment lease terms.
This information was provided to us by Nextel. Also consists of $40,766 of
additional revenues to be recognized by SpectraSite under the terms of the
Nextel master site lease agreement.

(b) Reflects certain direct operating expenses, primarily ground lease
payments, historical routine maintenance and property taxes associated with the
towers, paid by Nextel prior to the acquisition.

(c) SpectraSite would have incurred incremental operating expenses as a
result of the Nextel tower acquisition. Such incremental expenses are estimated
to have been approximately $1.5 million per month. These incremental operating
expenses are based upon management's estimates rather than on any contractual
obligation; as such, these amounts have not been presented as adjustments in the
accompanying pro forma financial statements.

(d) Reflects the depreciation of the acquired towers calculated on a
straight-line basis over 15 years.

(e) Reflects adjustment to interest expense as if SpectraSite had issued
its 12% senior discount notes due 2008 and its 11 1/4% senior discount notes due
2009, as well as completed the Nextel tower acquisition and related financing
transactions, on January 1, 1998. The table below outlines the adjustment:

<TABLE>
<S> <C>
PRO FORMA INTEREST EXPENSE:
Commitment fees on credit facility.................... $ 4,000
$150,000 of term loan at 8.50%........................ 12,750
$125,000 (gross proceeds) of 2008 notes at 12.00%..... 15,450
$340,004 (gross proceeds) of 2009 notes at 11.25%..... 39,326
Amortization of debt issuance costs................... 4,272
Less: historical interest expense of 2008 notes....... (7,933)
-------
Total adjustment...................................... $67,865
=======
</TABLE>

27
<PAGE> 31

WESTOWER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL
------------------------------ ------------------
WESTOWER WESTOWER WESTOWER WESTOWER CORD SUMMIT
1/1/98- 3/1/98- 10/1/98- 1/1/98- 1/1/98- 1/1/98- KOCH OTHER
2/28/98 9/30/98 12/31/98 12/31/98 8/31/98 11/11/98 ADJUSTMENTS ADJUSTMENTS
-------- -------- -------- -------- ------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Site leasing..................... $ 49 $ 170 $ 74 $ 293 $ -- $ -- $1,364(a) $ --
Network services................. 7,784 31,774 24,914 64,472 6,714 8,818 -- --
------ ------- ------- ------- ------- ------ ------ -------
Total revenues................. 7,833 31,944 24,988 64,765 6,714 8,818 1,364 --
------ ------- ------- ------- ------- ------ ------ -------
Operating expenses:
Costs of operations:
Site leasing................... 11 25 13 49 -- -- 738(b) --
Network services............... 5,971 23,833 18,131 47,935 6,219 6,707 -- --
Selling, general and
administrative expenses........ 991 4,958 4,258 10,207 2,636 1,040 -- 73(f)
Depreciation and amortization.... 149 578 589 1,316 132 279 850(c) 673(g)
Merger related expenses.......... -- 327 77 404 -- -- -- --
------ ------- ------- ------- ------- ------ ------ -------
Total operating expenses.......... 7,122 29,721 23,068 59,911 8,987 8,026 1,588 746
------ ------- ------- ------- ------- ------ ------ -------
Loss from operations.............. 711 2,223 1,920 4,854 (2,273) 792 (224) (746)
------ ------- ------- ------- ------- ------ ------ -------
Other income (expense):
Interest income.................. 14 130 53 197 4 -- -- --
Interest expense................. (42) (771) (572) (1,385) (45) (93) (1,275)(d) --
Other income (expense)........... 128 (2) -- 126 17 30 -- --
------ ------- ------- ------- ------- ------ ------ -------
Total other income (expense)... 100 (643) (519) (1,062) (24) (63) (1,275) --
------ ------- ------- ------- ------- ------ ------ -------
Loss before income taxes.......... 811 1,580 1,401 3,792 (2,297) 729 (1,499) (746)
Income tax expense................ 556 351 610 1,517 (919) -- (600)(e) 262(e)
------ ------- ------- ------- ------- ------ ------ -------
Net income (loss)................. $ 255 $ 1,229 $ 791 $ 2,275 $(1,378) $ 729 $ (899) $(1,008)
====== ======= ======= ======= ======= ====== ====== =======
Net income per share:
Basic............................ $ 0.34
=======
Diluted.......................... $ 0.30
=======
Weighted average number of shares
of common stock outstanding:
Basic............................ 6,786
=======
Diluted.......................... 7,548
=======

WESTOWER
PRO FORMA
---------
<S> <C>
Revenues:
Site leasing..................... $ 1,657
Network services................. 80,004
-------
Total revenues................. 81,661
-------
Operating expenses:
Costs of operations:
Site leasing................... 787
Network services............... 60,861
Selling, general and
administrative expenses........ 13,956
Depreciation and amortization.... 3,250
Merger related expenses.......... 404
-------
Total operating expenses.......... 79,258
-------
Loss from operations.............. 2,403
-------
Other income (expense):
Interest income.................. 201
Interest expense................. (2,798)
Other income (expense)........... 173
-------
Total other income (expense)... (2,424)
-------
Loss before income taxes.......... (21)
Income tax expense................ 260
-------
Net income (loss)................. $ (281)
=======
Net income per share:
Basic............................
Diluted..........................
Weighted average number of shares
of common stock outstanding:
Basic............................
Diluted..........................
</TABLE>

See accompanying notes to unaudited pro forma consolidated statement of
operations.
28
<PAGE> 32

WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998

(a) Consists of additional revenues to be recognized by Westower in
connection with site lease agreements with Koch.

(b) Reflects certain direct operating expenses, primarily ground lease
payments, estimated routine maintenance, property taxes and insurance associated
with the towers.

(e) Reflects a tax benefit for the Koch tower operating results and an
increase of the tax provision based on the pro forma operating results related
to the Cord and Summit acquisitions at Westower's estimated tax rate of 40%.

(f) Reflects adjustments in selling, general, and administrative expense
related to compensation of former owners of Cord and Summit.

(g) Reflects the amortization of goodwill as if the acquisitions of Cord
and Summit had each occurred on January 1, 1998. Goodwill is amortized over a
period of 20 years.

29
<PAGE> 33

POST-MERGER SPECTRASITE HOLDINGS, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRE-MERGER POST-MERGER
PRO FORMA WESTOWER MERGER SPECTRASITE
SPECTRASITE PRO FORMA ADJUSTMENTS PRO FORMA
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Site leasing..................... $ 51,051 $ 1,657 $ -- $ 52,708
Network services................. 8,142 80,004 (2,004)(a) 86,142
-------- ------- -------- ---------
Total revenues..................... 59,193 81,661 (2,004) 138,850
-------- ------- -------- ---------
Operating expenses:
Costs of operations:
Site leasing.................. 23,455 787 -- 24,242
Network services.............. 2,492 60,861 (1,403)(a) 61,950
Selling, general and
administrative expenses....... 9,690 13,956 -- 23,646
Depreciation and amortization.... 41,018 3,250 12,769(b) 56,372
(665)(c)
Merger related expenses.......... -- 404 -- 404
-------- ------- -------- ---------
Total operating expenses........... 76,655 79,258 10,701 (166,614)
-------- ------- -------- ---------
Income (loss) from operations...... (17,462) 2,403 (12,705) (27,764)
-------- ------- -------- ---------
Other income (expense):
Interest income.................. 3,569 201 (1,954)(d) 1,816
Interest expense................. (76,035) (2,798) 1,034(e) (77,799)
Other income (expense)........... 473 173 -- 646
-------- ------- -------- ---------
Total other income
(expense)................... (71,993) (2,424) (920) (75,337)
-------- ------- -------- ---------
Loss before income taxes........... (89,455) (21) (13,625) (103,101)
Income tax expense................. -- 260 (146)(f) 114
-------- ------- -------- ---------
Net loss........................... $(89,455) $ (281) $(13,479) $(103,215)
======== ======= ======== =========
Net loss per share:
Basic and diluted................ $ (5.60)(g)
=========
Weighted average number of shares
of common stock outstanding:
Basic and diluted................ 18,426
=========
</TABLE>

See accompanying notes to unaudited pro forma statement of operations.
30
<PAGE> 34

POST-MERGER SPECTRASITE HOLDINGS, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

(IN THOUSANDS)

(a) Reflects the elimination of intercompany site construction revenues
and costs of site construction for towers built by Westower for SpectraSite for
the year ended December 31, 1998.

(b) Reflects amortization of goodwill as if the merger of Westower and
SpectraSite had occurred on January 1, 1998. Goodwill is amortized over 15
years.

(c) Reflects adjustments to eliminate amortization of historical and pro
forma goodwill of Westower of $979 and to convert Westower tower depreciation
from 20 years to 15 years, increasing expense by $314.

(d) Reflects an adjustment to eliminate interest income as if SpectraSite
had used cash-on-hand to repay Westower's outstanding indebtedness.

(e) Reflects adjustments to eliminate interest expense as if Westower's
credit facility and the $15,000 convertible note were paid in full on January 1,
1998.

(f) Reflects a reduction of the tax provision based on the consolidated
results of post-merger SpectraSite.

(g) SpectraSite's earnings per share for the year ended December 31, 1998
reflects the adoption of Statement of Financial Accounting Standards No. 128,
"Earning Per Share," which requires companies to compute earnings per share
under two different methods, basic and diluted. The weighted average common
shares outstanding at December 31, 1998 reflects the issuance of 18,426 shares
of SpectraSite common stock in exchange for all of the outstanding shares of
Westower common stock.

If SpectraSite had net income during this period, diluted earnings per
share would have included potential common shares related to its convertible
preferred stock and outstanding options. These potential common shares were not
included in the diluted earnings per share calculation for the year ended
December 31, 1998 because the effect would have been antidilutive.

31
<PAGE> 35

SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth summary historical financial data derived
from the audited financial statements included elsewhere in this prospectus, as
of and for:

-- the year ended December 31, 1996;

-- the period from January 1, 1997 to May 12, 1997;

-- the period from SpectraSite's inception on April 25, 1997 to December
31, 1997;

-- the year ended December 31, 1998; and

-- the nine months ended September 30, 1999.

The data for the nine months ended September 30, 1998 were derived from
SpectraSite's audited financial statements for that period. Operating results
for the nine months ended September 30, 1999 are not necessarily indicative of
results expected for the entire year.

The information set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and related notes thereto
included elsewhere in this prospectus.

32
<PAGE> 36

<TABLE>
<CAPTION>
YEAR ENDED
TELESITE (PREDECESSOR) SPECTRASITE DECEMBER 31, SPECTRASITE
------------------------- ------------ ------------------------- ---------------------
NINE MONTHS
JANUARY 1, APRIL 25, TELESITE & ENDED
YEAR ENDED 1997- 1997- SPECTRASITE SEPTEMBER 30,
DECEMBER 31, MAY 12, DECEMBER 31, COMBINED SPECTRASITE ---------------------
1996 1997 1997 1997 1998 1998 1999
------------ ---------- ------------ ----------- ----------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Site leasing..................... $ -- $ -- $ -- $ -- $ 656 $ 211 $ 29,450
Network services................. 8,841 1,926 5,002 6,928 8,142 5,154 13,967
------ ------ ------- ------- -------- -------- ----------
Total revenues..................... 8,841 1,926 5,002 6,928 8,798 5,365 43,417
------ ------ ------- ------- -------- -------- ----------
Operating expenses:
Costs of operations:
Site leasing, exclusive of
depreciation................. -- -- -- -- 299 143 10,490
Network services............... 2,255 595 1,120 1,715 2,492 1,721 7,265
Selling, general and
administrative................. 4,256 1,742 7,390 9,132 9,690 5,997 21,909
Depreciation and amortization
expense........................ 91 56 489 545 1,268 780 21,833
Restructuring and other
non-recurring charges.......... -- -- -- -- -- -- 7,727
------ ------ ------- ------- -------- -------- ----------
Total operating expenses........... 6,602 2,393 8,999 11,392 13,749 8,641 69,224
------ ------ ------- ------- -------- -------- ----------
Income (loss) from operations...... $2,239 $ (467) $(3,997) $(4,464) $ (4,951) $ (3,276) $ (25,807)
====== ====== ======= ======= ======== ======== ==========
Net income(loss)................... 2,289 (503) (3,890) (4,393) (9,079) (5,028) (66,516)
Net income (loss) applicable to
common shareholders.............. 2,289 (503) (4,390) (4,893) (11,235) (6,424) (67,276)
OTHER DATA:
Net cash provided by (used in)
operating activities............. $1,109 $ (71) $ 223 $ 152 $ (2,347) $ 340 $ 19,734
Net cash provided by (used in)
investing activities............. (853) (322) (7,178) (7,500) (45,002) (71,348) (682,141)
Net cash provided by (used in)
financing activities............. (266) 390 9,189 9,579 144,663 144,978 683,100
EBITDA(a).......................... 2,330 (411) (3,508) (3,919) (3,683) (2,496) 3,753
Capital expenditures(b)............ 498 64 850 914 26,598 (12,496) 566,359
SELECTED OPERATING DATA (AT END OF PERIOD):
Number of owned towers....................................................... 5 106 45 2,405
BALANCE SHEET DATA (AT END OF PERIOD):
Cash, cash equivalents and short term investments............................ $ 2,234 $114,962 $121,766 $ 120,241
Total assets................................................................. 13,642 161,946 163,171 1,169,666
Total debt................................................................... 2,986 132,931 132,973 654,575
Total stockholders' (deficiency) equity...................................... (1,898) (14,067) (8,681) 471,096
</TABLE>

- ---------------

(a) EBITDA consists of operating income (loss) before depreciation and
amortization expense and restructuring charges. EBITDA is provided because
it is a measure commonly used in the communications site industry as a
measure of a company's operating performance. EBITDA is not a measurement of
financial performance under generally accepted accounting principles and
should not be considered an alternative to net income as a measure of
performance or to cash flow as a measure of liquidity. EBITDA is not
necessarily comparable with similarly titled measures for other companies.
SpectraSite believes that EBITDA can assist in comparing company performance
on a consistent basis without regard to depreciation and amortization
expense, which may vary significantly depending on accounting methods where
acquisitions are involved or non-operating factors such as historical cost
bases. EBITDA presented in the table is consistent with EBITDA calculated
under the indentures governing SpectraSite's 2008 notes and its 2009 notes.

(b) Capital expenditures for Telesite have been reduced for the periods ended
December 31, 1996 and May 12, 1997 by $340 and $258, respectively. These
expenditures were for land and construction in progress which were sold
prior to the closing of the acquisition of Telesite.

33
<PAGE> 37

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BUSINESS OVERVIEW

SpectraSite's primary focus is on the ownership of multi-tenant towers and
leasing of antenna space on such towers. As of December 31, 1999, we had 2,765
towers in service, as compared to 106 towers at December 31, 1998. As a result
of our limited operating history and primary focus on tower ownership and
leasing, management believes that our results of operations for the period ended
December 31, 1997 and for the year ended December 31, 1998 are not indicative of
our results of operations in the future.

Historically, we have derived most of our revenues from network services
activities. As a result of recent acquisitions, principally the Nextel and
Westower transactions, we expect that network services and antenna site leasing
will generate most of our revenues. On a pro forma basis, after giving effect to
the Nextel tower acquisition, the Westower merger and certain other
transactions, site leasing and network services would have represented 38% and
62% of our revenues, respectively, for the year ended December 31, 1998.
Similarly, site leasing and network services would have represented 38% and 62%
of revenues, respectively, for the nine months ended September 30, 1999. We
believe that our antenna site leasing business will continue to represent a
substantial portion of our revenues and will continue to grow as we increase our
network of towers.

Our two largest expense line items have been depreciation and amortization
and selling, general and administrative expense. Depreciation expense primarily
relates to our towers, which we depreciate over 15 years. In 1999, amortization
expense is primarily due to goodwill associated with the Westower merger. On a
pro forma basis, after giving effect to the Nextel tower acquisition, the
Westower merger and certain other transactions, depreciation and amortization
expense would have represented 41% and 38% of revenues for the year ended
December 31, 1998 and the nine months ended September 30, 1999, respectively. We
experienced a significant increase in selling, general and administrative
expense in 1999 as we integrated Westower's operations and increased our
employee base to market and manage the 2,000 Nextel towers and build towers for
Nextel under the master site commitment agreement.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THE RESULTS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1998

Consolidated revenues for the nine months ended September 30, 1999 were
$43.4 million, an increase of $38.1 million from the nine months ended September
30, 1998. Revenues from site leasing increased to $29.5 million for the nine
months ended September 30, 1999 from $0.2 million for the nine months ended
September 30, 1998, primarily as a result of revenues derived from 2,000
communication towers which we acquired from Nextel in April 1999. We owned 2,405
communications towers at September 30, 1999 compared to 45 communications towers
at September 30, 1998.

Revenues from network services increased to $14.0 million for the nine
months ended September 30, 1999 compared to $5.2 million in the nine months
ended September 30, 1998, primarily as a result of the acquisition of Westower
in September 1999. In September 1999, we announced that we would no longer
directly provide site acquisition services. Revenues from site acquisition
activities were $6.2 million and $5.2 million in the nine months ended September
30, 1999 and 1998, respectively.

Costs of operations increased to $17.8 million for the nine months ended
September 30, 1999 from $1.9 million for the nine months ended September 30,
1998. The increase in costs was attributable to operating costs of the 2,000
communication towers purchased from Nextel in April 1999. Costs of operations
for site leasing as a percentage of site leasing revenues decreased to 35.6% for
the nine months ended September 30, 1999 from 67.8% for the nine months ended
September 30, 1998 primarily due to revenues generated from the acquisition of
towers from Nextel and co-location revenues on those towers. As our site leasing
operations mature, additional tenants on a tower will generate decreases in
costs of operations for site leasing as a percentage of site leasing revenues
and increases in cash flow because a significant proportion of tower operating
costs are fixed and do not increase with additional tenants. Costs of operations
for network
34
<PAGE> 38

services as a percentage of network services revenues increased to 52.0% for the
nine months ended September 30, 1999 from 33.4% for the nine months ended
September 30, 1998. This increase is due to construction activities associated
with Westower's operations which have higher levels of direct costs than our
historical site acquisition activities.

Selling, general and administrative expenses increased to $21.9 million for
the nine months ended September 30, 1999 from $6.0 million for the nine months
ended September 30, 1998. The increase is a result of expenses related to
additional corporate overhead and field operations implemented to manage and
operate the growth in the ongoing activities of SpectraSite and the acquisition
of Westower.

Depreciation and amortization expense increased to $21.8 million for the
nine months ended September 30, 1999 from $0.8 million for the nine months ended
September 30, 1998, primarily as a result of the increased depreciation from the
towers we acquired or constructed and amortization of goodwill related to the
Westower acquisition.

For the nine months ended September 30, 1999, we recorded restructuring and
other non-recurring charges of $7.7 million. In September 1999, we announced
that we would no longer directly provide site acquisition services. As a result,
we recorded restructuring charges of $7.1 million, of which $6.2 million related
to the write-off of goodwill associated with the purchase of TeleSite Services,
LLC and $0.9 million related to costs of employee severance. In March 1999,
SpectraSite announced that it would relocate its marketing and administrative
operations from Little Rock, Arkansas and Birmingham, Alabama to its corporate
headquarters in Cary, North Carolina. As a result, we recorded a non-recurring
charge of $0.6 million for employee termination and other costs related to the
relocation of these activities.

As a result of the factors discussed above, our loss from operations was
$25.8 million for the nine months ended September 30, 1999 compared to $3.3
million for the nine months ended September 30, 1998.

Net interest expense increased to $40.3 million during the nine months
ended September 30, 1999 from $2.2 million for the nine months ended September
30, 1998, reflecting additional interest expense due to the issuance of the 2008
notes in June 1998 and the 2009 notes in April 1999, as well as borrowings under
our credit facility in April 1999.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO THE COMBINED RESULTS FOR THE YEAR
ENDED DECEMBER 31, 1997

The following is a discussion of the financial condition and results of
operations of SpectraSite for the year ended December 31, 1998 and the year
ended December 31, 1997, which consists of the period from April 25, 1997
through December 31, 1997 and Telesite's results of operations for the period
from January 1, 1997 through May 12, 1997.

Revenues increased to $8.8 million for the year ended December 31, 1998
from $6.9 million for the year ended December 31, 1997 due to the initiation of
site leasing activity and an increase in the number and size of site development
services projects.

Selling, general and administrative expenses, including depreciation
expense, increased to $11.0 million for the year ended December 31, 1998 from
$9.7 million for the year ended December 31, 1997. The increase is a result of
expenses related to additional corporate overhead to manage and operate the
ongoing activities of SpectraSite. Marketing expenses related to tower
development activities as well as the site acquisition operations also
contributed to the increase in expenses. Telesite did not actively market its
services, relying primarily on its reputation in the industry and customer
referrals to generate revenues. To support our entry into tower development and
leasing, we have established a dedicated marketing effort which promotes tower
development and leasing as well as site acquisition services. Amortization of
goodwill increased to approximately $0.6 million in the year ended December 31,
1998 compared to approximately $0.3 million in the year ended December 31, 1997
as a result of acquisitions.

As a result of the factors discussed above, our operating loss was $5.0
million for the year ended December 31, 1998, compared to $4.5 million for the
year ended December 31, 1997.

35
<PAGE> 39

Other income, which consists primarily of gain on sales of assets and
equity in earnings of affiliates, increased to approximately $0.5 million for
the year ended December 31, 1998 from approximately $0.1 million for the year
ended December 31, 1997. The increase is a result of a gain on the sale of
assets in connection with the disposal of Metrosite during the first quarter of
1998 of approximately $0.5 million. During the year ended December 31, 1997, we
recognized approximately $0.2 million as equity earnings of Communication
Management Specialists. We disposed of our interest in Communication Management
Specialists during the second quarter of 1998 and did not recognize any equity
in the earnings of this affiliate during 1998.

COMBINED RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO
TELESITE'S RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996

The following is a discussion of the financial condition and results of
operations of SpectraSite for the year ended December 31, 1997, which consists
of and for the period from April 25, 1997 through December 31, 1997 and
Telesite's results of operations for the period from January 1, 1997 through May
12, 1997, and of Telesite for the year ended December 31, 1996.

Total revenues decreased to $6.9 million for the year ended December 31,
1997 from $8.8 million for the year ended December 31, 1996 due primarily to the
decreased demand for site development services from more established personal
communications services licensees as a result of their completing the first
phase of construction in their initial markets and not yet commencing secondary
build-outs in such markets or in additional markets, and the fact that holders
of certain more recently issued licenses had not yet commenced construction of
tower networks in their respective markets.

Selling, general and administrative expenses increased to $9.1 million for
the year ended December 31, 1997 from $4.3 million for the year ended December
31, 1996. The increase is a result of the expenses related to management of the
ongoing activities of SpectraSite, expenses related to the implementation of
tower development and marketing activities, one-time non-cash charges of
approximately $2.6 million as a result of the formation of SpectraSite,
amortization of goodwill of approximately $0.3 million in connection with our
acquisition of Telesite and expenses incurred in connection with the operations
of Metrosite. We sold our interest in Metrosite during early 1998. We anticipate
that in the future costs related to tower development activities will be
capitalized as part of the cost of the towers.

Operating loss was $4.5 million for the year ended December 31, 1997
compared to $2.2 million of operating income for the year ended December 31,
1996. The change is primarily a result of the decline in revenues and the
increase in selling, general and administrative expenses attributable to the
commencement of operations of SpectraSite.

Other income, which consists primarily of equity in earnings of affiliates,
was approximately $0.1 million for the year ended December 31, 1997 and for the
year ended December 31, 1996.

LIQUIDITY AND CAPITAL RESOURCES

For the nine months ended September 30, 1999, cash flows provided by
operating activities were $19.7 million as compared to $0.3 million for the nine
months ended September 30, 1998. The change is primarily attributable to the
favorable cash flows generated from communication tower acquisitions in 1999.

For the nine months ended September 30, 1999, cash flows used in investing
activities were $682.1 million compared to $71.3 million for the nine months
ended September 30, 1998. In the nine months ended September 30, 1999,
SpectraSite invested $614.5 million in purchases of property and equipment and
deposits on future acquisitions, primarily related to the acquisition of
communication towers from Nextel. In addition, we used $78.7 million to acquire
Westower in September 1999. These investments were partially offset by $15.4
million in maturities of short-term investments.

In the nine months ended September 30, 1998, we invested $45.6 million in
short-term investments. In the nine months ended September 30, 1999, cash flows
provided by financing activities were $683.1 million as compared to $145.0
million in the nine months ended September 30, 1998. The increase in cash
provided by
36
<PAGE> 40

financing activities was attributable to the proceeds from the sales of Series C
preferred stock and the 2009 notes, as well as proceeds from borrowings under
the credit facility.

Net cash used in operating activities during the year ended December 31,
1998 was $2.3 million compared to $0.2 million provided by operating activities
during the comparable period in 1997. The increase in cash used in operating
activities was primarily attributable to an increase in accounts receivable
resulting from the timing of billings related to site development services and
the net loss incurred during the year. Net cash used for investing for the year
ended December 31, 1998 was $45.0 million compared to $7.5 million for the year
ended December 31, 1997. The cash used for investing activities during the year
ended December 31, 1998 was primarily the result of the investment of unused
proceeds from the sale of the 2008 notes in short-term investments, costs
associated with tower construction, the acquisition of towers from Airadigm and
the acquisition of GlobalComm. The cash used for investing activities during the
year ended December 31, 1997 primarily related to the acquisition of Telesite.
Net cash provided by financing activities for the year ended December 31, 1998
was $144.7 million compared to $9.6 million for the same period in 1997. The
increase in cash provided by financing activities was attributable to the
proceeds from the sales of Series B preferred stock and the 2008 notes.

Holdings is a holding company whose only significant asset is the
outstanding capital stock of its subsidiary, SpectraSite Communications. Our
only source of cash to pay interest on and principal of our indebtedness is
distributions from SpectraSite Communications. Prior to July 15, 2003, interest
expense on the 2008 notes will consist solely of non-cash accretion of an
original issue discount and the notes will not require annual cash interest
payments. After such time, the 2008 notes will have accreted to approximately
$225.2 million and will require semi-annual cash interest payments of $13.5
million. In addition, the notes mature on July 15, 2008. Similarly, the 2009
notes will not require cash interest payments prior to October 15, 2004 and
mature on April 15, 2009. After October 15, 2004, the 2009 notes will have
accreted to approximately $586.8 million and will require semi-annual cash
interest payments of $33.0 million. Furthermore, the new credit facility
provides for periodic principal and interest payments.

We acquired 45 communications towers and certain related assets from
Airadigm Communications, Inc. for an aggregate purchase price of $11.25 million
in 1998 and 1999. Airadigm is the anchor tenant on 48 of our towers and has
recently filed for protection under Chapter 11 of the U.S. Bankruptcy Code. We
cannot predict the impact of this proceeding on our future results of operations
or financial condition.

On April 20, 1999, SpectraSite acquired 2,000 communications towers from
Nextel in a merger transaction. All the sites were then leased back to Nextel
under a master lease agreement. In addition, in connection with this
transaction, Nextel and its controlled affiliates agreed to offer SpectraSite
certain exclusive opportunities relating to the construction or purchase of an
additional 1,700 sites. Some of these sites may in the future be leased to
Nextel Partners Operating Corp. instead of Nextel. Nextel Partners, Inc., the
parent of Nextel Partners Operating Corp., is an entity in which Nextel has a
minority equity interest. In connection with this acquisition, we paid $560.0
million in cash and issued 14.0 million shares of Series C preferred stock,
valued at $70.0 million, to Nextel.

37
<PAGE> 41

The following table sets forth the sources and uses of funds for the Nextel
tower acquisition in thousands of dollars:

<TABLE>
<S> <C>
SOURCES OF FUNDS:
Credit facility..................................... $150,000
11 1/4% senior discount notes due 2009.............. 340,004
Series C preferred stock issued to Nextel........... 70,000
Series C preferred stock sold to the Series C
investors......................................... 231,434
--------
Total sources..................................... $791,438
========
USES OF FUNDS:
Cash paid to Nextel................................. $560,000
Series C preferred stock issued to Nextel........... 70,000
Cash available for general corporate purposes....... 127,688
Estimated fees and expenses......................... 33,750
--------
Total uses........................................ $791,438
========
</TABLE>

The merger agreement required that SpectraSite and Nextel and certain other
persons enter into several ancillary agreements. For a summary of the material
terms of the new stockholders' agreement, the new registration rights agreement
and the ancillary agreements, see "Certain Transactions--Stockholders'
Agreement," "--Agreements with Nextel," and "--Registration Rights Agreement"
respectively.

In connection with the Nextel tower acquisition, SpectraSite privately
placed 46,286,795 shares of Holdings' Series C preferred stock for an aggregate
purchase price of $231.4 million. On April 20, 1999, SpectraSite completed the
private offering of $586.8 million aggregate principal amount at maturity of
11 1/4% senior discount notes due 2009. We used a portion of the net proceeds
from these offerings to partially fund the Nextel tower acquisition and to pay
related fees and expenses. We intend to use the remaining proceeds for general
corporate purposes, including construction of new towers and selective
acquisitions.

Also on April 20, 1999, SpectraSite entered into a $500.0 million
seven-year credit facility. We borrowed $150.0 million under this facility at
the closing of the Nextel tower acquisition. We also issued 2.0 million shares
of common stock to various parties as consideration for providing financing
commitments related to the Nextel tower acquisition. We did not utilize these
commitments for the Nextel acquisition primarily because of the success of the
2009 notes offering. We currently have $300.0 million available under our credit
facility to fund new tower construction or acquisition activity. In addition, as
of September 30, 1999, our cash and cash equivalents were $120.2 million.

On September 2, 1999, we acquired Westower Corporation, a Washington
corporation, in a stock-for-stock merger. In this transaction, Westower
stockholders received 1.81 shares of Holdings' common stock, plus cash for any
fractional Westower share, in exchange for each of their shares of Westower
common stock. In connection with the merger, SpectraSite repaid approximately
$70.0 million of Westower indebtedness with cash-on-hand. Westower Corporation
now operates as a wholly-owned subsidiary of SpectraSite Communications, which
in turn is a wholly-owned subsidiary of Holdings.

On September 8, 1999, we acquired a 33% interest in Concourse
Communications Group, LLC for an aggregate purchase price of $2.5 million.
Concourse was established to build certain wireless communications
infrastructures at facilities owned by the Port Authority of New York and New
Jersey, including the Holland and Lincoln Tunnels, World Trade Center Concourse
and New York's three major airports. As part of our investment, we agreed to
provide approximately $14.4 million of working capital and construction
financing to Concourse in the form of secured loans over the next three years.
In addition, after three years, we have an option to purchase an additional 33%
interest in Concourse, and after six years, we have an option to purchase the
remaining interest in Concourse.

On September 15, 1999, we completed the exchange offers for our 2008 notes
and our 2009 notes. Under a registration rights agreement with the initial
purchasers of the 2008 notes, Holdings agreed to complete an exchange offer for
the privately placed 2008 notes prior to March 10, 1999. Since we did not
complete this exchange offer prior to March 10, 1999, the interest rate on the
2008 notes increased by 0.50% per year. This

38
<PAGE> 42

additional interest accrued on the 2008 notes until we completed the exchange
offer, and we will pay this interest in cash on January 15, 2000. Similarly,
under a registration rights agreement with the initial purchasers of the 2009
notes, Holdings agreed to file a registration statement with the SEC for an
exchange offer of registered notes for the privately placed 2009 notes before
July 20, 1999. Since we did not file the 2009 notes exchange offer registration
statement before July 20, 1999, the interest rate on the 2009 notes increased by
0.50% per year. This additional interest accrued on the 2009 notes until we
filed the exchange offer registration statement on August 12, 1999, and we paid
this interest in cash on October 15, 1999.

In November 1999, we entered into an agreement to acquire 94 communications
towers from DigiPH PCS, Inc. for $36.0 million in cash. The towers span the
corridor connecting Jackson, Mississippi, Mobile, Alabama and Tallahassee,
Florida. We acquired 61 towers for approximately $23.9 million on December 29,
1999, and we expect to acquire the remaining towers during the first quarter of
2000.

On December 30, 1999, we acquired Stainless, Inc., formerly a wholly-owned
subsidiary of Northwest Broadcasting, L.P., for $40.0 million in cash. Stainless
provides engineering, fabrication and other services in connection with the
erection of towers used for television broadcast companies. Also on December 30,
1999, we acquired Doty-Moore Tower Services, Inc., Doty-Moore Equipment Company,
Inc. and Doty-Moore RF Services, Inc. for $2.5 million in cash and 500,000
unregistered shares of our common stock. Doty-Moore is a leading source for
broadcast tower construction and technical services. In addition, on January 5,
2000, we acquired Vertical Properties, Inc. in a merger transaction under which
we issued 225,000 unregistered shares of our common stock and repaid outstanding
indebtedness of approximately $2.0 million. Vertical Properties is a broadcast
tower development company formed to meet the needs of broadcasters in secondary
broadcast markets faced with the complexities of converting to digital
technology through site acquisition, tower placement and leasing of antenna
space. On January 28, 2000, we acquired substantially all of the assets of
International Towers, Inc. and its subsidiaries, including S&W Communications,
Inc. International Towers owns a modern broadcast tower manufacturing facility
and, through S&W Communications, provides integrated services for the erection
of broadcast towers, foundations and multi-tenant transmitter buildings. We paid
$5.5 million and will issue an aggregate of 350,000 unregistered shares of our
common stock in connection with this acquisition. Also in January 2000, we
signed a non-binding letter of intent to acquire 11 broadcast towers from
Pegasus Communications Corporation. The purchase price will be a multiple of
tower cash flow and will be payable primarily in shares of our unregistered
common stock. The letter also contemplates that we will have a right for five
years to develop, own and operate any broadcast towers Pegasus requests. This
acquisition is subject to the negotiation of definitive documents and other
customary conditions, and although we cannot assure you when or if this
transaction will be consummated, we expect to complete the acquisition in early
second quarter of 2000.

On January 5, 2000, we acquired Apex Site Management Holdings, Inc. in a
merger transaction. Apex provides rooftop and in-building access to wireless
carriers. We issued approximately 4.5 million unregistered shares of our common
stock to the stockholders of Apex and approximately 190,000 options to purchase
common stock at an exercise price of $3.58 per share to certain option holders
of Apex at the closing of the merger. In addition, we issued approximately 1.5
million additional shares of common stock into escrow, which shares may be
released to Apex's stockholders six months after this offering based on the
average trading price for our common stock for the 30-day period immediately
preceding the six-month anniversary of this offering. We also used approximately
$6.2 million in cash to repay outstanding indebtedness and other obligations of
Apex in connection with the merger.

Our ability to fund capital expenditures, make scheduled payments of
principal of, or pay interest on, our debt obligations, and our ability to
refinance any such debt obligations, including the 2008 notes and the 2009
notes, will depend on our future performance, which, to a certain extent is
subject to general economic, financial, competitive, legislative, regulatory and
other factors that are beyond our control. Our business strategy contemplates
substantial capital expenditures, including an expected approximate amount of
$200 million during the first half of 2000, primarily to fund the construction
and acquisition of additional communications towers. Management believes that
cash flow from operations, available cash as of September 30, 1999 of
approximately $120.2 million, and anticipated available borrowings under the
credit

39
<PAGE> 43

facility will be sufficient to fund our capital expenditures for the foreseeable
future. However, if acquisitions or other opportunities present themselves more
rapidly than we currently anticipate or if our estimates prove inaccurate, we
may seek additional sources of debt or equity capital prior to the end of 2000
or reduce the scope of tower construction activity. We cannot assure you that we
will generate sufficient cash flow from operations or that future borrowings or
equity or debt financings will be available on terms acceptable to us, in
amounts sufficient to service our indebtedness and make anticipated capital
expenditures.

Some of our expenses, such as those for marketing, wages and benefits,
generally increase with inflation. However, we do not believe that our financial
results have been, or will be, adversely affected by inflation in a material
way.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS 133
requires that derivative instruments be recognized as either assets or
liabilities in the consolidated balance sheet based on their fair values.
Changes in the fair values of such derivative instruments will be recorded
either in results of operations or in other comprehensive income, depending on
the intended use of the derivative instrument. The initial application of SFAS
133 will be reported as the effect of a change in accounting principle. SFAS 133
is effective for all fiscal years beginning after June 15, 2000. We have not yet
determined the effect that the adoption of SFAS 133 will have on our
consolidated financial statements.

YEAR 2000 COMPLIANCE

We have not experienced any immediate adverse impact from the transition to
the year 2000. However, we cannot assure you that we or our suppliers and
customers have not been affected in a manner that is not yet apparent. In
addition, certain computer programs which were date sensitive to the year 2000
may not process the year 2000 as a leap year, and any negative consequential
effects remain unknown. As a result, we continue to monitor our year 2000
compliance and the year 2000 compliance of our suppliers and customers.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We use financial instruments, including fixed and variable rate debt, to
finance our operations. The information below summarizes our market risks
associated with debt obligations outstanding as of September 30, 1999. The
following table presents principal cash flow and related weighted average
interest rates by fiscal year of maturity. Variable interest rate obligations
under the credit facility are not included in the table. We have no long-term
variable interest obligations other than borrowings under the credit facility.

<TABLE>
<CAPTION>
EXPECTED MATURITY DATE
----------------------------------------------------------------------------
1999 2000 2001 2002 2003 THEREAFTER TOTAL
-------- -------- -------- -------- -------- ---------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Long-term obligations:
Fixed rate............ $ -- $ -- $ -- $ -- $ -- $501,382 $501,382
Average interest
rate............. -- -- -- -- -- 11.5% 11.5%
</TABLE>

40
<PAGE> 44

BUSINESS

OVERVIEW

We are 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. Our businesses include the ownership and leasing of antennae
sites on towers, managing wireless rooftop and in-building telecommunications
access on commercial real estate, network planning and deployment, and
construction of towers and related wireless facilities. Our 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. As of December 31, 1999 and after giving effect to our
acquisition of Apex, we owned or managed over 15,000 sites, including 2,765
owned towers, in 98 of the top 100 markets in the United States.

The wireless communications industry is growing rapidly and carriers are
making large capital investments to expand their networks. We believe that the
number of wireless communications sites, including towers, is likely to continue
to increase together with the growth in demand for wireless services. This
expected growth in communications sites is the result of several factors,
including:

-- the continuing build-out of higher frequency technologies, such as
personal communications services, which have a reduced cell range and
require a more concentrated network of towers than previous wireless
technologies;

-- the need to expand the capacity of existing networks;

-- the issuance of new wireless network licenses requiring the
construction of new wireless networks; and

-- the emergence of new wireless technologies.

As carriers deploy these networks, they are faced with a proliferation in
both the number and type of competitors. Because of this increasingly
competitive environment, carriers must also focus on satisfying customer demand
for enhanced services, seamless and comprehensive coverage, better call quality,
faster data transmission and lower prices.

We believe that as carriers face the increased challenges of expanding
their networks and improving their services, they must allocate their available
capital and resources in the most efficient manner. In particular, carriers are
increasingly outsourcing tower ownership, as well as network planning deployment
and management to independent tower owners like SpectraSite. This outsourcing
allows our customers to focus on their core competencies and to rely on us for
planning and deploying their networks. Our services are designed to improve our
customers' competitive positions through the efficient planning, deployment and
management of their networks.

GROWTH STRATEGY

Our objective is to be the leading independent provider of outsourced
antennae site and network services to the telecommunications and broadcast
industries. Our growth strategy involves the following key elements:

MAXIMIZING THE UTILIZATION OF OUR TOWERS AND MANAGED SITES

We intend to capitalize on the substantial opportunities for revenue and
cash flow growth by maximizing the number of tenants we have on each of our
towers and managed sites. We believe that our strategy of owning clustered
groups of towers and managed sites in major metropolitan markets and providing
our customers with a full range of products and services allows us to deliver
reliable, scalable network solutions and will result in increased co-location on
our towers and managed sites. Since most tower costs are fixed, leasing
available space on an existing tower results in minimal additional expenses
while generating a larger percentage increase in tower cash flow. In addition,
tenant turnover is low because of the relatively high cost of antenna
relocation. We generally construct towers to accommodate at least three
broadband tenants and have a dedicated sales force which markets co-location
opportunities to wireless communications providers. Our

41
<PAGE> 45

objective is to use our national tower presence to enable wireless service
providers to more quickly establish wireless coverage in individual and multiple
markets.

EXPANDING OUR TOWER PORTFOLIO

We seek to expand our tower portfolio by building new towers for anchor
tenants and by making selective acquisitions of towers. We believe that Nextel's
agreement to lease space on an additional 1,543 towers we own, acquire or
construct for Nextel or other tenants will substantially increase the number of
towers we own and operate. We also continue to pursue attractive network
development opportunities with other wireless service providers. In addition, we
evaluate other tower development opportunities from time to time which we
believe have higher than average co-location opportunities. We intend to
continue to make selective acquisitions in the highly fragmented tower owner and
operator industry. Our strategy is to acquire towers that have some, or all, of
the following criteria:

-- underutilized with additional co-location potential;

-- favorably located, either individually or in clusters, in large urban
areas and along major transportation corridors; and

-- complementary to our existing coverage areas.

We believe there are tower acquisition opportunities currently available
from both wireless service providers and smaller independent tower operators.
Furthermore, we believe that the number of tower opportunities available in the
future is likely to grow as large wireless communications service providers and
smaller independent tower companies continue to divest their tower holdings. We
regularly evaluate acquisition opportunities, engage in negotiations and submit
bids with respect to acquisitions of individual towers, groups of towers and
entities that own or manage towers and related businesses. In addition to our
transaction with Nextel, we continue to seek partnerships and other strategic
arrangements with other major wireless communications carriers in order to
assume ownership of their towers. We have no current agreements or commitments
with respect to any material acquisition.

EXPANDING THE SUITE OF SERVICES WE OFFER AND PURSUING CROSS-SELLING
OPPORTUNITIES.

We believe our ability to provide a package of integrated services, which
have traditionally been offered by multiple subcontractors coordinated by a
carrier's deployment staff, will make us a preferred provider of all outsourced
antennae site and network services. For example, we believe that our leadership
in rooftop and in-building access will give us an advantage across all of our
product offerings as fixed wireless carriers expand their networks and as
wireless telephone and data companies increasingly focus on network deployment
and in-building service. In addition, our leadership in broadcast tower design,
fabrication and construction will give us a competitive advantage as
broadcasters increasingly outsource tower and facilities ownership and
management.

PRODUCTS AND SERVICES

WIRELESS TOWER OWNERSHIP AND LEASING

We are one of the largest independent owners and operators of wireless
communications towers in the United States and Canada. We provide antennae site
leasing services, which primarily involve the leasing of antennae space on our
communications towers to wireless carriers. Each of our towers has an anchor
tenant, and we seek to add several co-location tenants over time. In leasing
antennae space, we generally receive monthly lease payments from customers. Our
customer leases typically have original terms of five years, with four or five
renewal periods of five years each, and usually provide for periodic price
increases. Monthly lease pricing varies with the number and type of antennae
installed on a communications site.

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<PAGE> 46

The following chart shows the locations of our owned towers as of December
31, 1999:

<TABLE>
<CAPTION>
NUMBER
STATE OF TOWERS
- ----- ---------
<S> <C>
California........... 408
Florida.............. 186
Michigan............. 168
Ohio................. 166
Texas................ 165
Illinois............. 155
Georgia.............. 154
North Carolina....... 130
Louisiana............ 99
Alabama.............. 94
Washington........... 88
Wisconsin............ 85
Tennessee............ 81
</TABLE>

<TABLE>
<CAPTION>
NUMBER
STATE OF TOWERS
- ----- ---------
<S> <C>
Missouri............. 62
Indiana.............. 55
Mississippi.......... 54
Pennsylvania......... 52
South Carolina....... 52
Arizona.............. 48
Massachusetts........ 44
Oregon............... 43
Oklahoma............. 39
Nevada............... 38
Maryland............. 35
Colorado............. 33
</TABLE>

<TABLE>
<CAPTION>
NUMBER
STATE OF TOWERS
- ----- ---------
<S> <C>
New Mexico........... 30
Minnesota............ 25
Utah................. 23
New Jersey........... 19
Virginia............. 18
Kansas............... 17
New York............. 16
Iowa................. 14
Alberta.............. 13
Other................ 56
-----
Total................ 2,765
=====
</TABLE>

In addition to towers we build for Nextel under the master site commitment
agreement and towers we selectively build and acquire, we also expect to expand
our tower portfolio through build-to-suit programs. Under build-to-suit
programs, we utilize our network development capabilities to construct tower
networks after having signed an antenna site lease agreement with an anchor
tenant and having made the determination that the initial or planned capital
investment for that tower network would not exceed a targeted multiple of tower
cash flow after a certain period of time.

In addition to leasing antenna space, we also provide maintenance and
management services at our communication sites. In providing these services to
our customers we use a combination of in-house personnel and independent
contractors. In-house personnel are responsible for oversight and supervision of
all aspects of site maintenance and management and are particularly responsible
for monitoring, security, access and lighting, radio frequency emission and
interference issues, signage, structural engineering and tower capacity, tenant
relations and supervision of independent contractors. We hire local independent
contractors to perform routine maintenance functions, such as landscaping, pest
control, snow removal and site access.

WIRELESS ROOFTOP AND IN-BUILDING ACCESS

We are the largest independent provider of rooftop and in-building access
services in the United States. We are the exclusive site manager for
approximately 12,700 diverse real estate properties, with significant access
clusters in New York, Philadelphia, Baltimore/Washington, D.C., Atlanta, New
England, Florida, Western Pennsylvania/Ohio/Indiana, Chicago, Seattle, Southern
California, Texas and St. Louis. A principal attraction of this portion of our
business is the opportunity to develop new sources of revenue and value for
building owners by managing:

-- rooftops for transmitting and receiving installations; and

-- rooftops, risers and internal telecommunications equipment space for
competitive voice, data and Internet services offered to in-building
tenants.

Wireless communications carriers utilize our managed sites as transmitting
locations, often where there are no existing towers for co-location or where new
towers are difficult to build. Our transmitting tenants encompass a broad array
of wireless communications providers, including personal communications service,
cellular, enhanced specialized mobile radio, specialized mobile radio, wireless
data, two-way radio, microwave, wireless cable and paging companies. As the
largest rooftop and in-building access manager in the United States, we provide
services to the facilities-based (wired and wireless) competitive local exchange
carrier and Internet service provider market. We have executed agreements
allowing these carriers access to over 3,000 properties, including agreements
with national providers such as Adelphia Business Solutions, AT&T Local

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<PAGE> 47

Services, Eureka Broadband, NEXTLINK, Site Line, Teligent and WinStar, as well
as numerous regional carriers. These access agreements are, to date,
predominantly for office and industrial properties.

Our managed portfolio contains over 3,300 office and industrial properties
encompassing over 375 million square feet. We are engaged by ten of the top
nineteen office real estate investment trusts, based on market capitalization,
in the United States, according to the National Association of Real Estate
Investment Trusts. In most cases, multiple carriers will access a single
property. Our management contracts are generally for a period of three to five
years, and contain renewal periods unless terminated by either party before
renewal or upon an uncured default. Under these contracts, we are engaged as the
exclusive site manager for rooftop management. In most cases, we are also
engaged as the exclusive manager for riser and telecommunications access
management. As the site manager, we are responsible for marketing the properties
as part of our portfolio of potential telecommunications sites, reviewing
existing license agreements, negotiating new license agreements, managing and
enforcing those agreements, supervising installation of equipment by carriers to
ensure, among other things, non-interference with other users, as well as site
billing, collections and contract administration. For these services, we receive
a percentage of occupancy fees, which is higher for the new carriers we add than
for existing carriers. Upon any termination of a contract, unless due to our
default, we are entitled to continue to receive our percentage with respect to
carriers added during the term of our management agreement for so long as they
remain tenants.

NETWORK DESIGN AND DEPLOYMENT SERVICES

We are a leading provider of design and deployment services for wireless
networks. These services include architectural and engineering design, tower
construction, line and antenna installation and site acquisition services. We
offer these services individually and as an integrated package. We believe that
we have a competitive advantage in our ability to provide comprehensive network
development services by eliminating our customers' need to seek services from
different providers.

In providing these network design and deployment services, we have
developed the capability to effectively manage multiple site acquisition and
tower development projects in various locations at the same time. Where
appropriate, we supplement our in-house expertise with a pre-qualified pool of
local contractors and advisors. In addition, we have developed detailed and
standardized site acquisition and construction specifications and procedures
that allow us to rapidly construct tower networks. Wireless carriers require
aggressive network build-out schedules, and uniform procedures and
specifications allow for reduced employee training time, improved vendor
performance and quicker identification of potential tower sites.

Architectural and Engineering Design. Our architecture and engineering
team manages a complex array of electrical, structural and architectural
elements while interfacing with our clients and construction crews to ensure
that site-specific objectives are reflected in construction documents. Our
structural engineering and design abilities enable us to construct towers that
have maximum antenna site capacity based on the physical features of the land on
which the tower is constructed and the demand in the market in which the tower
is located. We seek to design aesthetically acceptable sites and construct
towers with minimal environmental impact. Our custom structure design abilities
combined with our engineering skills also allow us to build towers in
geographically difficult locations at competitive prices. We believe that this
specialty service will enable us to compete effectively in regions in which
other companies are not able to participate on a cost-efficient basis.

Tower Construction. Our engineering, general contracting, electrical,
structural steel and other specialty licenses allow us to perform services
required to design, develop and construct communications towers. Our ability to
perform civil and electrical engineering as well as tower construction enables
us to expedite and simplify this phase of development by minimizing the need to
subcontract.

During tower construction, a project team of five to seven people is
dispatched to the site. A temporary field office is established at the site. The
project team is typically composed of our permanent employees, but may be
supplemented with local hires.

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<PAGE> 48

We use our information technology abilities to create construction models,
development budgets, critical path schedules and status reports covering
schedules and costs throughout the course of a project. Our civil engineering
capability allows us to prepare the construction site by leveling the land,
removing vegetation and installing access roads as needed. Based on the results
of soil tests that we conduct at each site, we design and build the tower
foundation. After the foundation is in place, we erect the tower. We utilize our
structural engineering capability by constructing a tower designed for maximum
antenna capacity.

Line and Antenna Installation. After erecting the tower and placing the
equipment shelter, we install the antennae and feed lines, including the sweep,
test and orientation. Depending on the project, electricity is installed either
during the erection process to conform with the FAA lighting requirements or
after the tower has been constructed. Our technical crews are regularly trained
in cellular, microwave, fiber optic and direct current power plant system
installation and testing methods. We are also a leader in designing and
implementing in-building wireless systems, as well as a broad range of cellular
and personal communications services repeater systems. Our test equipment and
dedicated radio frequency testing teams allow us to monitor and maintain system
integrity and quality control.

We also offer the ability to construct the switch facility that controls an
antenna's communications with other communications sites. Although switch
construction is not performed at every project site, it is an additional
specialty service we provide.

After constructing the tower, placing the equipment shelter and completing
the antenna work, we install grounding lines and protective fencing around the
site. We then perform final grounding and landscaping as necessary to complete
the project.

Site Acquisition Services. We offer a full range of site acquisition
services, including network pre-design, communication site selection,
communication site acquisition and local zoning and permitting. We offer these
services through local contractors who have knowledge and expertise in the
specific geographic area.

BROADCAST TOWER DEVELOPMENT AND LEASING

We are a leading provider of broadcast tower analysis, design, fabrication,
installation, and technical services. We have over 50 years of experience in the
broadcast tower industry and have worked on the development of more than 700
broadcast towers, which we believe represents approximately 50% of the existing
broadcast tower infrastructure in the United States. Our broadcast tower group
extends our core business of outsourced wireless antenna sites to broadcast
towers. We intend to capitalize on our broadcast tower development expertise to
create tower ownership and leasing opportunities.

In 1996, the FCC mandated the conversion of analog television signals to
digital. The mandate specifies that by May 1, 2003, each television station in
the United States must complete construction of new digital broadcasting
facilities and, beginning April 21, 2003, must be simulcasting at least 50% of
its programming on both its analog and digital facilities. This conversion
creates significant potential demand for co-location on broadcast towers.

Broadcast towers require a high level of technical design and erection
expertise, as they reach heights of up to 2,000 feet. Broadcast towers support
extremely powerful television and FM radio signals over entire metropolitan
areas. The existing domestic broadcast tower infrastructure was generally
developed to accommodate individual broadcast signals. This broadcast tower
infrastructure was built primarily in the 1940's and 1950's. Today, it is
considered to be at capacity and somewhat antiquated. The FCC mandate creates
significant infrastructure deployment requirements and burdens for the broadcast
community in the United States. In addition, the engineering and construction
expertise for broadcast towers is limited to a relatively small number of
fabrication and construction companies that specialize in broadcast towers.

Recognizing this opportunity to capitalize on the broadcast infrastructure
tower development and leasing requirement, we have developed a strategic plan
that is designed to position us as the leading tower resource in the broadcast
sector. We have identified the critical core competencies necessary to fulfill
broadcast industry requirements. Through our acquisition of Stainless and Doty
Moore, we can now offer broadcast tower engineering, fabrication and erection
services. In addition, we have original tower design specifications and
45
<PAGE> 49

considerable tower modification historical information on approximately 50% of
the existing broadcast tower infrastructure. We believe that this intellectual
property positions us as one of broadcasters' first points of contact for any
broadcast tower project.

CUSTOMERS

Our primary customer currently is Nextel. On a pro forma basis after giving
effect to the Nextel acquisition, the Westower merger and certain other
transactions described under "Unaudited Pro Forma Financial Data," Nextel
represented approximately 28% and 34% of our revenues for the nine months ended
September 30, 1999 and the year ended December 31, 1998, respectively.

Nextel provides a wide array of digital wireless communications services
throughout the United States. Nextel offers a differentiated, integrated package
of digital wireless communications services under the Nextel brand name,
primarily to business users. Nextel's digital mobile network constitutes one of
the largest integrated wireless communications systems utilizing a single
transmission technology in the United States. Nextel has significant specialized
mobile radio spectrum holdings in and around every major business population
center in the country, including all of the top 50 metropolitan statistical
areas in the United States. Nextel files periodic reports and other information
with the SEC. For more information about Nextel, you should read Nextel's SEC
filings. However, we are not incorporating any of Nextel's SEC filings by
reference into this document.

In addition, our customers also include several of the largest wireless
service providers in the United States, including AT&T Wireless and Sprint PCS.
We also have provided services to enhanced specialized mobile radio, specialized
mobile radio and cellular wireless providers. For the year ended December 31,
1997, Powertel, Sprint PCS, GTE Mobility, Intercel and Horizon accounted for
38.9%, 18.8%, 14.7%, 13.0% and 11.2%, respectively, of our revenues. For the
year ended December 31, 1998 before giving effect to the Nextel acquisition,
related financings and the Westower merger, Powertel and Tritel accounted for
46.6% and 24.3%, respectively, of our revenues. During this period, no other
customer accounted for more than 10% of SpectraSite's revenues. The preceding
disclosures are historical and do not reflect our acquisition of the Nextel
towers, Westower or the other acquisitions we have completed in 1999 or expect
to complete in January 2000.

SALES AND MARKETING

We believe that our ability to satisfy a wide range of our customer's
network deployment requirements will make us a preferred provider of all
outsourced antennae site and network services. Our sales and marketing goals are
to:

-- use existing relationships and develop new relationships with
wireless service providers to lease antenna space on our owned and
managed communication sites; and

-- form affiliations with select communications system vendors who
utilize end-to-end services, including those provided by SpectraSite,
which will enable us to market our services and products through
additional channels of distribution.

Historically, we have capitalized on the strength of our experience,
performance and relationships with wireless service providers to obtain
build-to-suit mandates, and we intend to continue to emphasize our capability in
these areas in selling our broad range of services.

Maintaining and cultivating relationships with wireless service providers
is a main focus of senior management. In addition, we have a dedicated group of
representatives focused on sales efforts and establishing relationships with
wireless service providers. The representatives are assigned specific accounts
based on historical experience with a provider and the quality of the
relationship between the SpectraSite representative and such provider. Most
wireless service providers have national corporate headquarters with regional
offices. We believe that most decisions for site acquisition and site leasing
services are made by providers at the regional level with input from their
corporate headquarters. Our sales representatives work with provider
representatives at the local level and, when appropriate, at the national level.
Our sales staff
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<PAGE> 50

compensation is heavily weighted to incentive-based goals and measurements. In
addition to our dedicated marketing and sales staff, we rely upon our executive
and operations personnel at the national and field office levels to identify
sales opportunities within existing customer accounts, as well as acquisition
opportunities.

COMPETITION

Our principal competitors include American Tower Corporation, Crown Castle
International Corp., Pinnacle Holdings Inc. and SBA Communications Corporation.

Towers are not the only kind of platform for radio transmitters. The FCC
has authorized numerous entities and is considering applications from many
others to provide fixed and mobile satellite services using various frequency
bands in a manner that may compete with terrestrial service providers. Iridium
LLC, for example, has commenced space-borne provision of mobile satellite
service, although it is currently subject to bankruptcy proceedings. Teledesic
plans to provide high-speed fixed satellite data services through low-earth-
orbit satellites. In 1997, the FCC allocated one gigahertz of spectrum in the 47
GHz band for any use consistent with the spectrum allocation table. The FCC has
decided to auction this spectrum in 200 MHz blocks for the provision of
communications services. It is unclear whether these new technologies will be
commercially feasible, and to what extent they will offer significant
competitive alternatives to terrestrial structures.

EMPLOYEES

As of December 31, 1999, SpectraSite had 1,198 employees, none of whom are
represented by a collective bargaining agreement. We consider our employee
relations to be good. Due to the nature of the site construction business, we
may experience increases and decreases in employees as site construction
contracts are entered into or completed.

PROPERTIES

SpectraSite is headquartered in Cary, North Carolina, where it currently
leases 62,136 square feet of space. We have established full-service regional
offices in the New York, Atlanta, Chicago and San Francisco areas. We open and
close project offices from time to time in connection with our network design
and development services, which offices are generally leased for periods not
exceeding 18 months.

We own a broadcast tower manufacturing facility located in Pine Forge,
Pennsylvania. We also own five acres of land in Surrey, British Columbia,
Canada, on which a 10,000 square foot fabrication, assembly and storage facility
and a 5,000 square foot office building are located; four acres of land near
Montreal, Quebec, Canada, on which a 7,000 square foot facility is located; and
a one acre lot in Houston, Texas, on which approximately 2,500 square feet of
office space and 5,000 square feet of warehouse space are located. We also lease
office space in the following locations:

-- Phoenix and Tucson, Arizona;

-- Little Rock, Arkansas;

-- Burbank, Los Angeles, Newport Beach, Sacramento and San Jose,
California;

-- Ft. Lauderdale, Palm Beach Gardens, Tampa and Orlando, Florida;

-- Ridgeland, Mississippi;

-- Las Vegas, Nevada;

-- Syracuse, New York;

-- Charlotte and Greensboro, North Carolina;

-- Columbus, Ohio;

-- Portland and Roseburg, Oregon;

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<PAGE> 51

-- Conshohocken, Forty Fort and Upper Gwynedd Township, Pennsylvania;

-- Austin, Dallas and Houston, Texas;

-- Redmond and Seattle, Washington; and

-- Alberta, Nova Scotia and Ontario, Canada.

Our interests in communications sites are comprised of a variety of fee
interests, leasehold interests created by long-term lease agreements, private
easements, easements and licenses or rights-of-way granted by government
entities. In rural areas, a communications site typically consists of a
three-to-five acre tract which supports towers, equipment shelters and guy wires
to stabilize the structure. Less than 2,500 square feet are required for a
self-supporting tower structure of the kind typically used in metropolitan
areas. Land leases generally have an initial term of five years, with five
additional five-year renewal periods. You should read "--Products and
Services--Wireless Tower Ownership and Leasing" for a list of the locations of
our owned towers.

LEGAL PROCEEDINGS

From time to time, SpectraSite is involved in various legal proceedings
relating to claims arising in the ordinary course of business. We are not
currently a party to any such legal proceeding, the adverse outcome of which,
individually or in the aggregate, is expected to have a material adverse effect
on our business, financial condition or results of operations.

INTERNATIONAL

Our primary focus is on operations in the United States and Canada.
However, we evaluate possible international opportunities and may, in the
future, pursue opportunities we consider attractive.

REGULATORY AND ENVIRONMENTAL MATTERS

FEDERAL REGULATIONS

Both the FCC and the FAA regulate towers used for wireless communications
transmitters and receivers. Such regulations control the siting, marking and
lighting of towers and may, depending on the characteristics of particular
towers, require registration of tower facilities. Wireless communications
antennae operating on towers are separately regulated and independently licensed
by the FCC based upon the particular frequency being used and the service being
provided. In addition to these regulations, SpectraSite must comply with certain
environmental laws and regulations. See "Risk Factors--We are subject to
environmental laws that impose liability without regard to fault" and
"--Perceived health risks of radio frequency emissions could impact our
business."

Under the requirements of the Communications Act of 1934, as amended, the
FCC, in conjunction with the FAA, has developed standards to consider proposals
for new or modified antennae. These standards mandate that the FCC and the FAA
consider the height of the proposed antenna structure, the relationship of the
structure to existing natural or man-made obstructions and the proximity of the
structure to runways and airports. Proposals to construct or modify existing
structures above certain heights or within certain proximity to airports are
reviewed by the FAA to ensure they will not present a hazard to aviation. The
FAA may condition its issuance of no-hazard determinations upon compliance with
specified lighting and marking requirements. The FCC will not license the
operation of wireless telecommunications antennae on towers unless the tower has
been registered with the FCC or a determination has been made that such
registration is not necessary. The FCC will not register a tower unless it has
received all necessary clearances from the FAA. The FCC also enforces special
lighting and painting requirements. Owners of towers on which wireless
communications antennae are located have an obligation to maintain painting and
lighting to conform to FCC standards. Tower owners may also bear the
responsibility of notifying the FAA of any tower lighting failures. SpectraSite
generally indemnifies its customers against any failure to comply with
applicable regulatory standards. Failure to comply with the applicable
requirements may lead to civil penalties and tort liability.

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<PAGE> 52

In 1995, the FCC adopted regulations making the owners of towers, rather
than communications licensees, primarily responsible for compliance with antenna
structure painting and lighting requirements. These rule changes are based on
statutory amendments adopted by Congress in 1992 extending regulatory
jurisdiction to tower owners. Communications licensees are now secondarily
responsible for tower maintenance if the tower owners are unwilling or unable to
perform those duties. Currently, these requirements apply to antenna structures
that are more than 200 feet in height, or that may interfere with the approach
or departure space of a nearby airport runway.

The regulatory requirements adopted in 1995 required tower owners, like
SpectraSite, to register existing structures by state, in accordance with filing
windows, over a two-year period between July 1, 1996 and June 30, 1998.
Historically, tower locations were determined using area maps. The FCC has
recognized that, with the proliferation of inexpensive, satellite-based locating
devices, such as Global Positioning System receivers, structures can now be
easily located with a higher degree of accuracy. Accordingly, the FCC has told
owners who determined that tower registration information conflicted with
previously issued licenses for antennae on their towers to register their
structures using the new data and to seek new FAA determinations of no hazard as
necessary under the FAA's rules. The FCC also has instructed licensees or
permittees who discovered that the coordinates on their authorizations differed
from those determined by more accurate means to submit corrective construction
permit applications. In February 1999, the FCC's Wireless Telecommunications
Bureau announced a new policy under which defective applications for wireless
authorizations and antenna structure registrations will be summarily dismissed,
without giving the applicants an opportunity to amend but requiring them to
correct and retender their applications. As part of the new policy, the Bureau
said that effective May 1, 1999, it will return and not process tower
registration applications including data that do not agree with information
listed on previously issued FAA determinations. The FCC also announced that
applications for FCC communications authorizations would be dismissed if a tower
registration number is not listed on the FCC application. Although the FCC
initially said the rule affecting communications applications would apply
beginning May 1, 1999, for applicants proposing antennae on existing structures,
and July 1, 1999, for applicants proposing to utilize new towers, the FCC in
late April 1999 extended these deadlines. For services, such as cellular,
paging, and personal communications services, which have already had their
records converted to the FCC's new Uniform Licensing System database, the new
tougher dismissal rule applied effective July 1, 1999. For other communications
services that have not yet been converted to the Uniform Licensing System, the
FCC said the new processing rules would go into effect six months after each
service's incorporation into the Uniform Licensing System. This new policy means
that for towers to be of use to FCC applicants, it will be necessary for tower
owners to notify the FAA and obtain FCC tower registrations well in advance of
the date tenants will be filing FCC applications.

In December 1998, the FCC announced that a recent audit of existing antenna
structures revealed that over one quarter of the audited structures had not been
registered as required by the FCC's rules. In light of this finding and several
reported near misses of towers by aircraft, the FCC in January 1999 announced a
no-tolerance policy, requiring all owners of existing unregistered structures to
register them immediately or face monetary forfeitures or civil fines.
SpectraSite has been working to review the registration of the towers it has
acquired and to confirm the accuracy of the information submitted to the FAA and
the FCC by the prior owners.

The Telecommunications Act of 1996 amended the Communications Act of 1934
by limiting state and local zoning authorities' jurisdiction over the
construction, modification and placement of wireless communications towers. The
new law preserves local zoning authority but prohibits any action that would
discriminate between different providers of wireless services or ban altogether
the construction, modification or placement of communications towers. The 1996
Telecom Act also requires the federal government to help licensees for wireless
communications services gain access to preferred sites for their facilities.
This may require that federal agencies and departments work directly with
licensees to make federal property available for tower facilities.

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<PAGE> 53

STATE AND LOCAL REGULATIONS

Most states regulate certain aspects of real estate acquisition and leasing
activities. Where required, SpectraSite conducts the site acquisition portions
of its site acquisition services business through licensed real estate brokers
or agents, who may be employees of SpectraSite or hired as independent
contractors. Local regulations include city and other local ordinances, zoning
restrictions and restrictive covenants imposed by community developers. These
regulations vary greatly, but typically require tower owners to obtain approval
from local officials or community standards organizations prior to tower
construction. Local zoning authorities generally have been hostile to
construction of new transmission towers in their communities because of the
height and visibility of the towers. Companies owning or seeking to build towers
have encountered an array of obstacles arising from state and local regulation
of tower site construction, including environmental assessments, fall radius
assessments, marketing/lighting requirements, and concerns with interference to
other electronic devices. The delays resulting from the administration of such
restrictions can last for several months, and when appeals are involved, can
take several years.

ENVIRONMENTAL REGULATIONS

Owners and operators of communications towers are subject to, and,
therefore, must comply with environmental laws. The FCC's decision to register a
proposed tower may be subject to environmental review under the National
Environmental Policy Act of 1969, which requires federal agencies to evaluate
the environmental impacts of their decisions under certain circumstances. The
FCC has issued regulations implementing the National Environmental Policy Act.
These regulations place responsibility on each applicant to investigate any
potential environmental effects of operations and to disclose any significant
effects on the environment in an environmental assessment prior to constructing
a tower. In the event the FCC determines the proposed tower would have a
significant environmental impact based on the standards the FCC has developed,
the FCC would be required to prepare an environmental impact statement. This
process could significantly delay the registration of a particular tower. In
addition, we are subject to environmental laws which may require investigation
and clean-up of any contamination at facilities we own or operate or at third-
party waste disposal sites. These laws could impose liability even if we did not
know of, or were not responsible for, the contamination. Although we believe
that we currently have no material liability under applicable environmental
laws, the costs of complying with existing or future environmental laws,
investigating and remediating any contaminated real property and resolving any
related liability could have a material adverse effect on our business,
financial condition or results of operations.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers, directors and key employees of SpectraSite are as
follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- ------------------------------------------------------
<S> <C> <C>
Stephen H. Clark..................... 55 President and Chief Executive Officer and a Director
Timothy G. Biltz..................... 41 Chief Operating Officer
David P. Tomick...................... 47 Executive Vice President, Chief Financial Officer and
Secretary
Richard J. Byrne..................... 42 Executive Vice President--Business Development
Calvin J. Payne...................... 47 Executive Vice President--Design and Construction and
a Director
Terry L. Armant...................... 51 Senior Vice President--Operations
John H. Lynch........................ 42 Vice President, General Counsel
Daniel I. Hunt....................... 35 Vice President--Finance and Administration
Steven C. Lilly...................... 30 Vice President and Treasurer
Doug Standley........................ 42 President--Broadcast Group
Alexander L. Gellman................. 38 Chief Executive Officer--Site Management Group
Lawrence B. Sorrel................... 40 Chairman of the Board
Timothy M. Donahue................... 50 Director
Andrew R. Heyer...................... 42 Director
James R. Matthews.................... 32 Director
Thomas E. McInerney.................. 58 Director
Michael J. Price..................... 42 Director
Rudolph E. Rupert.................... 34 Director
Steven M. Shindler................... 36 Director
Michael R. Stone..................... 37 Director
</TABLE>

Stephen H. Clark is President and Chief Executive Officer of SpectraSite
and a director of Holdings. He has been a director of SpectraSite since its
formation in May 1997. Mr. Clark has 22 years of general management experience
in high growth, start-up companies in the communications, technology and
manufacturing sectors. In 1994, he co-founded PCX Corporation, a manufacturer of
electrical distribution systems. Prior to starting PCX, Mr. Clark co-founded and
served as Chairman and President of Margaux, a supplier of building automation
systems. Prior to starting Margaux, he worked at several technology based,
start-up companies. Mr. Clark has a BA in physics and an MBA from the University
of Colorado.

Timothy G. Biltz is Chief Operating Officer. Prior to joining SpectraSite
in August 1999, Mr. Biltz spent 10 years at Vanguard Cellular Systems, Inc.,
most recently as Executive Vice President and Chief Operating Officer. He joined
Vanguard in 1989 as Vice President of Marketing and Operations and was Executive
Vice President and President of U.S. Wireless Operations from November 1996
until May 1998 when he became Chief Operating Officer. Mr. Biltz was
instrumental in Vanguard's development from an initial start-up to an enterprise
with over 800,000 subscribers.

David P. Tomick is Executive Vice President, Chief Financial Officer and
Secretary. Mr. Tomick has extensive experience raising capital in both private
and public markets for high growth companies in the telecommunications industry.
From 1994 to 1997, Mr. Tomick was Chief Financial Officer of Masada Security,
Inc., a company engaged in the security monitoring business. From 1988 to 1994,
he was Vice President--Finance of Falcon Cable TV, a multiple system operator of
cable television systems, where he was responsible for debt management, mergers
and acquisitions, equity origination and investor relations. Prior to 1988, he
managed a team of corporate finance professionals focusing on the communications
industry for The

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<PAGE> 55

First National Bank of Chicago. Mr. Tomick holds a Master of Management degree
from the Kellogg Graduate School of Management at Northwestern University.

Richard J. Byrne is Executive Vice President--Business Development. Prior
to joining SpectraSite in April 1999, Mr. Byrne served as the Director of
Business Development for Nextel. He had primary responsibility for the tower
sale/lease-back and build-to-suit commitment. In addition, Mr. Byrne was
responsible for all carrier-to-carrier co-location agreements. Before joining
Nextel in 1997, Mr. Byrne held positions of increasing responsibility in the
System Development Group of AT&T Wireless Services. Prior to entering the
wireless communications industry, Mr. Byrne spent 15 years in the real-estate
industry. His work centered on property management, ownership and brokerage of
investment properties.

Calvin J. Payne is Executive Vice President--Design and Construction of
SpectraSite and a director of Holdings. Mr. Payne was Co-founder, Chairman of
the Board and Chief Executive Officer of Westower and had been a director of
Westower or its predecessor since 1990. Prior to founding Westower, Mr. Payne
acquired experience in all aspects of the construction of steel communications
towers. Mr. Payne, an award-winning tower designer, has engineered over 600
towers. Mr. Payne is a graduate of the University of British Columbia and the
University of Western Australia.

Terry L. Armant is Senior Vice President--Operations. Prior to joining
SpectraSite in August 1998, Mr. Armant was Director -- System Implementation at
AT&T Wireless Services. In this position, he was responsible for site
acquisition, construction, equipment installation and site management for the
Northeast region. Mr. Armant oversaw eight departments and a staff of over 115.

John H. Lynch is Vice President, General Counsel. Prior to joining
SpectraSite in August 1999, Mr. Lynch served as General Counsel for Qualex Inc.,
the wholly-owned photofinishing subsidiary of Eastman Kodak Company. Before
joining Qualex in 1989, Mr. Lynch practiced corporate and real estate law in the
Atlanta, Georgia offices of Wildman, Harrold, Allen, Dixon and Branch. Mr. Lynch
holds a B.A. in Economics and English from Ohio Wesleyan University, an M.B.A.
from Ohio State University, and a J.D. from Ohio State University.

Daniel I. Hunt is Vice President--Finance and Administration. Prior to
joining SpectraSite in April 1999, Mr. Hunt served as Director of Accounting and
Financial Reporting at Wavetek Wandel & Goltermann, Inc., a developer and
manufacturer of communications test equipment based in North Carolina and
Eningen, Germany. Previously, Mr. Hunt was Controller for Wandel & Goltermann
Technologies, Inc. Before joining Wandel & Goltermann, Mr. Hunt worked in the
audit and business consulting practice of Arthur Anderson. Mr. Hunt is a
certified public accountant and a graduate of Wake Forest University.

Steven C. Lilly is Vice President and Treasurer. Prior to joining
SpectraSite in July 1999, Mr. Lilly served as a Vice President in First Union
Corporation's loan syndications group where he was primarily responsible for
structuring and negotiating transactions for emerging telecommunications
companies, including wireless service providers, competitive local exchange
carriers and tower companies.

Doug Standley is President of SpectraSite's Broadcast Group. Prior to
joining SpectraSite in December 1999, Mr. Standley was President of Stainless,
Inc. From 1997 to 1999, Mr. Standley was the Chief Executive Officer and
President of FWT, Inc., a provider of wireless infrastructure products, and from
1995 to 1997, he was a director of Synergetics, Inc., a boutique international
management consulting firm. Mr. Standley holds B.A. in Business Administration
from California State University and is completing a Presidential Key Executive
MBA through Pepperdine University.

Alexander L. Gellman is Chief Executive Officer of SpectraSite's Site
Management Group. Prior to joining SpectraSite in January 2000, Mr. Gellman was
Chief Executive Officer of Apex, which he co-founded in March 1995. Prior to
founding Apex, Mr. Gellman co-founded Horizon Cellular Group, where he most
recently served as Vice President of Development. Mr. Gellman has founded and
developed several other telecommunications-related start-up companies. Mr.
Gellman holds an MBA in Finance and Accounting from The Wharton School of the
University of Pennsylvania and a BA in Biology from Tufts University.

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<PAGE> 56

Lawrence B. Sorrel has been Chairman of the Board of Holdings since April
1999. Mr. Sorrel joined Welsh, Carson, Anderson & Stowe in 1998 and is a
managing member or general partner of the respective sole general partners of
WCAS VIII and other associated investment partnerships. Prior to joining Welsh,
Carson, Mr. Sorrel spent 12 years at Morgan Stanley, where he was a Managing
Director and senior executive in Morgan Stanley's private equity group, Morgan
Stanley Capital Partners. Mr. Sorrel is a director of Select Medical Corp.,
Emmis Communications, Westminster Healthcare Ltd, Valor Telecommunications, LLC
and Winstar Communications, Inc.

Timothy M. Donahue has been a director of Holdings since April 1999. Mr.
Donahue has served as Chief Executive Officer of Nextel since July 15, 1999, and
as a director of Nextel since May 1996. Prior to being named Chief Executive
Officer, Mr. Donahue served as President, and on February 29, 1996, he was
elected to the additional position of Chief Operating Officer of Nextel. From
1986 to January 1996, Mr. Donahue held various senior management positions with
AT&T Wireless Services, Inc., including Regional President for the Northeast.
Mr. Donahue serves as a director of Nextel International.

Andrew R. Heyer has been a director of Holdings since April 1999. Mr. Heyer
is a Managing Director at CIBC World Markets Corp., where he serves as co-head
of The High Yield Group. Prior to joining CIBC World Markets, Mr. Heyer was
founder and Managing Director of the Argosy Group L.P., which was acquired by
CIBC World Markets in 1995. Mr. Heyer is also Chairman of the Board of Directors
of the Hain Food Group, and is a director of Niagara Corporation, Hayes Lemmerz
International, Inc., Lancer Industries, Fairfield Manufacturing Company and
Millenium Digital Media Holdings, Inc.

James R. Matthews has been a director of Holdings since August 1998. Mr.
Matthews has been employed by J. H. Whitney & Co. since 1994 and serves as a
General Partner. Previously, he was with Gleacher & Co. Inc. and Salomon
Brothers Inc. Mr. Matthews is a director of ClearSource, Inc. and NewPath
Holdings, Inc.

Thomas E. McInerney has been a director of Holdings since April 1999. Mr.
McInerney joined Welsh, Carson, Anderson & Stowe in 1986 and is a managing
member or general partner of the respective sole general partners of WCAS VIII
and other associated investment partnerships. Formerly, he co-founded and served
as President and Chief Executive Officer of Dama Telecommunications Corp., a
telecommunications services company. Earlier, he was Group Vice
President--Financial Services at ADP and Senior Vice President--Operations at
the American Stock Exchange. Mr. McInerney is a director of, among others,
Centennial Cellular Corp., Control Data Systems, Bridge Information Systems, The
BISYS Group, The Cerplex Group, Attachmate Corp., Global Knowledge Network and
Valor Telecommunications, LLC.

Michael J. Price has been a director of Holdings since April 1999. Mr.
Price is Co-Chief Executive Officer of FirstMark Communications International
LLC, a broadband wireless telecommunications company. Prior to that, he worked
at Lazard Freres & Co. LLC, starting in 1987, serving first as a Vice President
and then as a Managing Director, where he led their global technology and
telecommunications practice.

Rudolph E. Rupert has been a director of Holdings since April 1999. Mr.
Rupert joined Welsh, Carson, Anderson & Stowe in 1997 and is a managing member
or general partner of the respective sole general partners of Welsh, Carson,
Anderson, & Stowe VIII and other associated investment partnerships. Previously
he was at General Atlantic Partners and Lazard Freres. Mr. Rupert is a director
of Centennial Cellular and Control Data Systems, Inc.

Steven M. Shindler has been a director of Holdings since April 1999. Mr.
Shindler joined Nextel in May 1996 and serves as Executive Vice President and
Chief Financial Officer. Between 1987 and 1996, Mr. Shindler was an officer with
Toronto Dominion Bank, where most recently he was a Managing Director in its
Communications Finance Group. Mr. Shindler serves as a director of Nextel
International.

Michael R. Stone has been a director of Holdings since its formation in May
1997. Mr. Stone has been employed by J. H. Whitney & Co. since 1989 and serves
as a General Partner. Previously, he was with Bain & Company. Mr. Stone is a
director of TBM Holdings, Inc., Scirex Corporation, MedSource Technologies, Inc.
and Physicians Surgical Care, Inc.

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<PAGE> 57

BOARD OF DIRECTORS

Each member of the board of directors holds office until the next annual
meeting of stockholders and until his or her successor has been duly elected and
qualified. For information regarding certain voting arrangements with respect to
the board of directors, see "Certain Transactions--Stockholders' Agreement."

COMMITTEES OF THE BOARD OF DIRECTORS

The board of directors has formed the following committees:

-- Executive Committee;

-- Audit Committee; and

-- Compensation Committee.

EXECUTIVE COMMITTEE. The members of the executive committee are Stephen
Clark, Andrew Heyer, Thomas McInerney, Steven Shindler, Lawrence Sorrel and
Michael Stone. The principal functions of the executive committee include
exercising the powers of the board of directors during intervals between board
meetings and acting as an advisory body to the board of directors by reviewing
various matters prior to their submission to the board.

AUDIT COMMITTEE. The members of the audit committee are James Matthews,
Michael Price and Rudolph Rupert. The audit committee performs the following
functions:

-- approves the selection of independent auditors for SpectraSite;

-- reviews the scope and results of the annual audit;

-- approves the services to be performed by the independent auditors;

-- reviews the independence of the auditors;

-- reviews the adequacy of the system of internal accounting controls;

-- reviews the scope and results of internal auditing procedures; and

-- reviews related party transactions.

COMPENSATION COMMITTEE. The members of the compensation committee are
Thomas McInerney, Lawrence Sorrel and Michael Stone. The compensation committee
performs the following functions:

-- adopts and oversees the administration of compensation plans for
executive officers and senior management of SpectraSite;

-- determines awards granted to executive officers under such plans;

-- approves the Chief Executive Officer's compensation; and

-- reviews the reasonableness of such compensation.

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<PAGE> 58

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the cash and non-cash compensation paid by
or incurred on behalf of SpectraSite to its Chief Executive Officer and four
other most highly compensated executive officers for the years ended December
31, 1997, 1998 and 1999. Amounts shown for 1997 include compensation paid by
Holdings to the named executive officers from April 25, 1997, the date of
Holdings' inception, through December 31, 1997.

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
-----------------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
--------------------------------------- UNDERLYING
NAME AND PRINCIPAL OTHER RESTRICTED OPTIONS/ ALL OTHER
POSITION YEAR SALARY($) BONUS($) ANNUAL($) STOCK($) SARS(#) COMPENSATION($)(E)
------------------ ---- --------- -------- --------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen H. Clark.......... 1999 269,342 150,000 -- -- 775,000 2,535
Chief Executive
Officer............... 1998 168,000 68,000 300,000 2,400
1997 107,046 425,000
David P. Tomick........... 1999 232,712 77,360 -- -- 225,000 2,442
Chief Financial
Officer............... 1998 140,000 56,000 50,000 2,178
1997 64,029 225,000
Terry L. Armant(a)........ 1999 148,073 51,845 -- -- 25,000 2,316
Senior Vice
President-Operations... 1998 55,192 68,150 125,000
Richard J. Byrne(b)....... 1999 97,015 70,613 138,613 224,500(d) 200,000 22,172
Executive Vice
President-Business
Development
Timothy G. Biltz(c)....... 1999 106,186 50,000 17,609 -- 400,000 32,064
Chief Operating Officer
</TABLE>

- ---------------

(a) Mr. Armant joined SpectraSite in August 1998.

(b) Mr. Byrne joined SpectraSite in April 1999.

(d) Mr. Byrne received 50,000 shares of restricted common stock in April 1999 in
connection with his employment by SpectraSite, and he is entitled to
dividends, if any, paid on his restricted stock. As of December 31, 1999,
Mr. Byrne held 50,000 shares of restricted common stock with a fair market
value of $544,000. No other named executive officer holds shares of
restricted stock.

(e) Amounts reported for 1999 include SpectraSite's contribution under its
401(k) plan of $2,535, $2,442, $2,316 and $707 for Messrs. Clark, Tomick,
Armant and Byrne, respectively, and relocation allowances of $21,465 and
$32,064 for Messrs. Byrne and Biltz, respectively.

OPTIONS/SAR GRANTS IN LAST FISCAL YEAR

All options become exercisable immediately upon a change in control. Unless
a particular option grant provides otherwise, a change in control occurs upon a
merger, consolidation, reorganization or any transaction in which all or
substantially all of Holdings' assets are sold, leased or transferred. However,
a transaction in which the holders of Holdings' capital stock immediately prior
to the transaction continue to hold at least a majority of the voting power of
the surviving corporation does not constitute a change in control, and no
options become exercisable upon a change in control as to which a performance
milestone has not been achieved as of the date of the change in control. Holders
of options at the time of the Nextel tower acquisition in April 1999 agreed that
the acquisition and related financing transactions did not constitute a change
of control under their options.

The present value of the options granted was estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
dividend yield of 0.0%, volatility of 0.7, risk-free interest rate of 5.0% and
expected option lives of seven years.

55
<PAGE> 59

<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE PRICE EXPIRATION GRANT DATE
NAME GRANTED(#) 1999 PER SHARE($) DATE PRESENT VALUE($)
- ---- ------------ ------------ -------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Stephen H. Clark..... 775,000 29 5.00 4/20/99 2,187,825
David P. Tomick...... 225,000 8 5.00 4/20/99 635,175
Terry L. Armant...... 25,000 1 5.00 4/20/99 70,575
Richard J. Byrne..... 200,000 7 5.00 4/20/99 564,600
Timothy G. Biltz..... 300,000 11 5.00 8/31/99 1,153,985
100,000 4 9.26 11/23/99 598,370
</TABLE>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
NUMBER OF OPTIONS AT DECEMBER 31, IN-THE-MONEY OPTIONS
SHARES 1999(#) AT DECEMBER 31, 1999($)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen H. Clark..... -- -- 212,500 1,287,500 1,697,875 8,318,875
David P. Tomick...... 112,500 535,500 0 387,500 0 2,565,875
Terry L. Armant...... -- -- 31,250 118,750 249,688 896,063
Richard J. Byrne..... -- -- 0 200,000 0 1,176,000
Timothy G. Biltz..... -- -- 0 400,000 0 1,926,000
</TABLE>

EMPLOYMENT AGREEMENTS

SpectraSite has entered into employment agreements with each of Messrs.
Clark, Tomick and Byrne effective April 20, 1999. The initial term of the
employment agreements is five years. The annual salaries for Messrs. Clark,
Tomick and Byrne are $225,000, $200,000 and $175,000, respectively, and they are
eligible to receive annual bonuses determined at the discretion of the board of
directors. Mr. Byrne also received a $40,000 bonus in connection with his
relocation to Cary, North Carolina. If their employment is terminated as a
result of their death, disability, or termination without cause Messrs. Clark,
Tomick and Byrne will be entitled to receive continued salary, bonus and health
benefits for a period of 24 months.

Under the employment agreements, Messrs. Clark, Tomick and Byrne were
granted incentive stock options to purchase 775,000, 225,000 and 200,000 shares
of common stock, respectively. The exercise price for the options will be $5.00.
Twenty percent of the stock options will become exercisable each year over the
five-year employment period. If SpectraSite terminates the employment of Mr.
Byrne without cause, or if he dies or becomes disabled, then his stock options
shall be fully exercisable. If SpectraSite terminates the employment of Mr.
Clark or Mr. Tomick without cause, or if either of them dies or becomes
disabled, then the stock options that they held prior to entering into the
employment agreement, but not those granted under the employment agreement,
shall be fully exercisable.

Messrs. Clark, Tomick and Byrne have agreed that for a period of 24 months
following the termination of their employment with SpectraSite they will not:

-- engage in competition, own any interest in, or perform any services
for any business which engages in competition with SpectraSite;

-- solicit management employees of SpectraSite or otherwise interfere
with the employment relationship between SpectraSite and its
employees; or

56
<PAGE> 60

-- engage or work with any supplier, contractor or entity with a
business relationship with SpectraSite, if such action would have a
material adverse effect on SpectraSite.

In addition, in connection with his employment with SpectraSite, Mr. Byrne
purchased 50,000 shares of common stock for a nominal amount. Mr. Byrne's right
to retain these shares of common stock vests in equal 25% installments on each
of the first four anniversaries of his employment agreement. Vesting will
accelerate upon Mr. Byrne's termination without cause or if he dies or becomes
disabled. Mr. Byrne will also receive a bonus to pay income taxes incurred in
connection with this purchase of common stock.

STOCK INCENTIVE PLAN

The SpectraSite Holdings, Inc. Stock Incentive Plan was originally
effective June 24, 1997 and was amended and restated effective August 5, 1999.
The plan has a term of ten years and provides for the issuance of incentive
stock options, non-qualified stock options and other stock-based awards to key
employees, directors, advisors and consultants of SpectraSite, as well as any
subsidiary of SpectraSite. An aggregate of 10,000,000 shares of common stock has
been reserved for issuance under the plan. The number of shares available for
grant as options may be adjusted in the event of a stock split, stock dividend,
combination of shares, spin-off, spin-out or other similar change, exchange or
reclassification of the common stock at the discretion of the board, and shares
subject to an option which expires, is terminated or canceled, or is repurchased
by SpectraSite, shall be available for future grants under the plan.

ADMINISTRATION. The plan may be administered by the board of directors or
by a duly appointed committee having powers specified by the board. This
committee shall consist solely of directors who are non-employee directors, for
purposes of Section 16 of the Exchange Act, and outside directors, for purposes
of Section 162(m) of the Internal Revenue Code. The specific terms of any award
under the plan will be reflected in a written agreement. The committee
administering the plan has the discretion to determine which eligible
individuals will receive awards, the number of shares to be covered by the
awards, the exercise date of the awards, whether the options should be incentive
stock options or non-qualified stock options, and the terms and conditions of
the awards.

STOCK OPTIONS--INCENTIVE STOCK OPTIONS AND NONQUALIFIED STOCK
OPTIONS. Under the plan, the committee has the discretion to grant incentive
stock options qualifying for special tax treatment under Section 422 of the
Internal Revenue Code and nonqualified stock options that do not qualify for
such treatment. The exercise price of any incentive stock option may not be less
than the fair market value of the stock on the date the option is granted,
provided the exercise price of any incentive stock option shall not be less than
110% of the fair market value of a share of stock on the date the option is
granted in the event the participant owns stock possessing more than 10% of the
total combined voting power of all classes of stock of Holdings. Payment of the
option price is to be made in cash, by check, in cash equivalent or by any other
form permitted by the committee, including by promissory note to SpectraSite or
by delivering other shares. Only employees are eligible to receive incentive
stock options, and at the time an incentive stock option is granted, the fair
market value of the common stock for which the incentive stock option will
become exercisable in any year may not exceed $100,000.

The committee is authorized to award re-load options to participants in
order to enable the participant to use previously owned shares to pay the
exercise price of the stock options and/or to satisfy any tax withholding
requirements incident to the exercise of the underlying options, without
reducing the participant's overall ownership of shares. Re-load options are not
intended to be incentive stock options, become exercisable twelve months after
the date of grant, and must be exercised within the term of the original stock
option.

OTHER AWARDS. Under the plan, the committee has the discretion to grant
restricted stock, performance awards, dividend equivalents, deferred stock,
stock appreciation rights and other stock-based awards on terms and conditions
determined by the committee.

Restricted stock means shares that are subject to certain transfer
restrictions and/or risk of forfeiture. Except as specifically set forth in the
restricted stock award agreement, the participant will have all rights and
privileges of a stockholder as to his or her restricted stock, including the
rights to vote and to receive dividends.

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<PAGE> 61

Performance award means an award of the right to receive shares, cash or
other property upon the achievement of performance criteria determined by the
committee.

Dividend equivalent means the award of the right to the payment of amounts
equal to the value of dividends that may be paid with respect to shares in the
future. The committee may provide that dividend equivalents will be paid or
distributed when accrued or will be deemed to have been reinvested in additional
shares or awards, or otherwise reinvested.

Deferred stock means an award of the right to receive shares upon
expiration of a deferral period subject to certain restrictions and the risk of
forfeiture as provided under the plan and the award agreement related to the
award. Holdings will deliver shares under a deferred stock award upon expiration
of the deferral period or other conditions specified by the committee or, if
permitted by the committee, as elected by the participant.

Stock appreciation right means a right to receive an amount measured by the
appreciation in the fair market value of shares from the date of grant of the
stock appreciation right to the date of exercise of the right. A stock
appreciation right may be exercised at such times and in such manner as is
determined by the committee and, as determined by the committee, may be settled
in cash, shares or other property.

The committee may grant other stock-based awards purely as bonuses that are
not subject to any restrictions or conditions. Such awards will be denominated
or payable in, valued by reference to, or otherwise based on or related to,
shares.

RESTRICTIONS ON PERFORMANCE-BASED AWARDS. Performance awards,
performance-based restricted stock, and certain other stock-based awards subject
to performance criteria are intended to be qualified performance-based
compensation within the meaning of Section 162(m) of the Internal Revenue Code,
and will be paid solely on account of the attainment of one or more
preestablished, objective performance goals within the meaning of Section 162(m)
and the regulations thereunder. As selected by the committee, the performance
goal will be the attainment of one or more preestablished amounts of sales
revenue, net income, operating income, cash flow, return on assets, return on
equity or total shareholder return of SpectraSite. No participant may be granted
any combination of performance awards, restricted stock or other stock-based
awards subject to performance criteria in any single year, the value of which is
based on more than 1,000,000 shares. The payout of any such award to a
participant may be reduced, but not increased, based on the degree of attainment
of other performance criteria or otherwise at the direction of the committee.

VESTING AND EXERCISABILITY. Generally, SpectraSite expects the committee
to award options that vest and become exercisable according to a vesting
schedule of not less than four years. In the event of a merger, consolidation,
corporate reorganization, or any transaction in which all or substantially all
of the assets of SpectraSite are sold, leased, transferred or otherwise disposed
of, all outstanding options shall immediately vest and become exercisable as of
a date prior to the change in control, unless the options were to become
exercisable upon attainment of a performance milestone which has not been
achieved as of the date of the change in control.

VESTING AND EXERCISABILITY FOR INCENTIVE STOCK OPTIONS. Once vested, an
incentive stock option may remain exercisable until the earliest of:

-- ten years from the date of grant or five years from the date of grant
if the participant owns stock possessing more than 10% of the total
combined voting power of all classes of stock of SpectraSite;

-- three months from the date on which the participant terminates
employment with SpectraSite; or

-- if the participant's employment ceases by reason of his or her death
or disability, 12 months from the date on which the participant's
employment terminated.

In no event shall an incentive stock option be exercisable after one month
following the date a participant's employment with SpectraSite is terminated for
cause, as determined by the committee.

VESTING FOR RESTRICTED STOCK. Restricted stock awards will be subject to
the vesting schedules stated in the applicable award agreements. Any restricted
stock awards that are not vested or are subject to restrictions upon the
employee's termination of employment for any reason with SpectraSite will be
forfeited, provided
58
<PAGE> 62

that the committee may determine that a participant may become vested in all or
any portion of his award if his employment termination constitutes a dismissal
without cause and/or follows a change in control.

VESTING FOR DEFERRED STOCK. In general, any deferred stock that is subject
to deferral, other than deferral at the employee's election, will be forfeited
upon the employee's termination of employment for any reason during the deferral
period, subject to the committee's authority to waive such forfeiture
conditions.

VESTING FOR OTHER STOCK BASED AWARDS. A participant's rights in other
awards will be subject to forfeiture in accordance with the terms and conditions
of each award as set forth in the award agreement related to that award.

RIGHT OF FIRST REFUSAL. Generally, SpectraSite expects the committee to
award options subject to a right of first refusal. When a participant proposes
to sell, pledge or otherwise transfer any shares acquired upon the exercise of
an option, SpectraSite would have the right to repurchase those shares under a
right of first refusal, in accordance with the terms set forth in the individual
option agreements. If SpectraSite fails to exercise the right of first refusal,
the participant may conclude the proposed transfer, but the subsequent
transferee would be required, as a condition of the transfer, to hold the shares
subject to SpectraSite's right of first refusal with respect to any subsequent
transfer. SpectraSite's right of first refusal would not apply to transfers of
shares:

-- in connection with a change in control;

-- to one or more members of the participant's immediate family;

-- that constitute a pledge to SpectraSite as security for a loan by
SpectraSite to the participant in connection with exercise of an
option; or

-- that have been approved by the board.

In addition, SpectraSite's right of first refusal would terminate upon a
change in control, unless the successor assumes the plan, or at such time as the
common stock is traded on a public market.

ASSIGNMENT OF INTEREST/NON-TRANSFERABILITY. Awards under the plan
generally are not assignable or transferable except by the laws of descent and
distribution. A participant's rights under the plan belong to the participant
alone and may not be sold, transferred, assigned or pledged to any other person
during his or her lifetime, provided the committee may permit an option or
restricted stock to be transferable to members of the participant's immediate
family or to a trust, partnership or other entity for the benefit of the
participant and/or member of the participant's immediate family to the extent
the shares underlying the options or restricted stock may be registered pursuant
to a Form S-8.

MAXIMUM NUMBER OF SHARES. The maximum number of shares with respect to
which options and awards may be granted to a participant in any single taxable
year is 1,000,000.

COMPETITION. Notwithstanding any plan provisions to the contrary, the
committee may provide under the terms of any award agreement that all rights of
the participant in any award, to the extent such rights have not already expired
or been exercised, will terminate and be extinguished immediately if a
participant engages in competition, as defined in the applicable award
agreement, with SpectraSite or any of its subsidiaries, affiliates or
successors, whether during or after his or her employment. In the event that a
participant exercises an option or other award at a time when, without the
committee's knowledge or consent, he or she has already engaged in competition
with SpectraSite, the committee may rescind and void such exercise, and the
participant will return upon demand by the committee such stock certificate(s)
representing the shares issued to him or her upon the exercise of the option or
award and still owned by the participant.

AMENDMENT OR TERMINATION OF PLAN. The plan may be amended, suspended or
terminated by the board in whole or in part at any time, provided that such
amendment, suspension or termination of the plan may not adversely affect the
rights of or obligations to the participants without the participants' consent.
The board must obtain stockholder approval for any change in the plan that
would:

-- extend the period during which options may be granted beyond June 24,
2007;

-- materially increase the number of shares which may be issued under
the plan; or
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<PAGE> 63

-- materially modify the requirements as to eligibility for
participation under the plan.

STOCK INCENTIVE PLAN TAX CONSEQUENCES

STOCK OPTIONS. The grant of an option under the plan will not have any
immediate effect on the federal income tax liability of SpectraSite or the
participant. If the board grants a participant a non-qualified stock option,
then the participant will recognize ordinary income at the time he or she
exercises the non-qualified stock option equal to the difference between the
fair market value of the common stock and the exercise price paid by the
participant, and SpectraSite will receive a deduction for the same amount.

If the board grants a participant an incentive stock option, then the
participant generally will not recognize any taxable income at the time he or
she exercises the incentive stock option, other than potential liability for
alternative minimum tax, but will recognize income only at the time he or she
sells the common stock acquired by exercise of the incentive stock option. Upon
sale of the common stock acquired upon exercise of the incentive stock option,
the participant will recognize income equal to the difference between the
exercise price paid by the participant and the amount received upon sale, and
such income generally will be eligible for capital gain treatment. SpectraSite
generally is not entitled to an income tax deduction for the grant of an
incentive stock option or as a result of either the participant's exercise of an
incentive stock option or the participant's sale of the common stock acquired
through exercise of an incentive stock option. However, if the participant sells
the common stock either within two years of the date of the grant to him or her
of the incentive stock option, or within one year of the date of the transfer to
him or her of the common stock following exercise of the incentive stock option,
then the option is treated for federal income tax purposes as if it were a
non-qualified stock option; the income recognized by the participant will not be
eligible for capital gain treatment and SpectraSite will be entitled to a
federal income tax deduction equal to the amount of income recognized by the
participant.

AWARDS OF RESTRICTED STOCK. If the participant receives restricted stock,
the participant will be taxed in accordance with Section 83 of the Internal
Revenue Code. In general, under Section 83(a) a participant will not recognize
ordinary income, and SpectraSite will not receive a deduction, with respect to
restricted stock until such shares are no longer subject to risk of forfeiture
or are transferable. The amount included in ordinary income will be the fair
market value of the restricted stock determined as of the date the shares are no
longer subject to risk of forfeiture or are transferable. However, under Section
83(b), the participant may accelerate the recognition of ordinary income to the
time of the grant of the restricted stock award by filing an election with the
Internal Revenue Service and SpectraSite no later than 30 days after the date of
grant. In that case, the amount of ordinary income recognized by the participant
and the amount of SpectraSite's deduction will be equal to the fair market value
of the restricted stock determined as of the date of grant of the restricted
stock award.

OTHER AWARDS. In general, there will be no tax consequences to the
participant upon the issuance of other awards under the plan, and the
participant will recognize ordinary income only at the time that cash, shares or
other property are received by the participant under the award. The amount of
ordinary income recognized by the participant will be equal to the cash received
by the participant and/or the fair market value of the shares or other property
received by the participant, determined as of the date of receipt. The
disclosure contained in this prospectus of the stock incentive plan will
constitute approval of SpectraSite's adoption of the plan for purposes of the
stockholder approval requirements of SEC Rule 16b-3, which will exempt certain
transactions involving the plan from short-swing profit liability under Section
16(b) of the Exchange Act.

SPECTRASITE'S EMPLOYEE STOCK PURCHASE PLAN

SpectraSite has adopted the SpectraSite Holdings, Inc. Employee Stock
Purchase Plan. The stock purchase plan is administered by a committee designated
by the board of directors. The board of directors has reserved and authorized
for issuance under the stock purchase plan 1,000,000 shares of common stock. We
intend to register the shares reserved under the stock purchase plan with the
SEC. However, we currently do not expect to issue shares under this plan before
September 30, 2000.

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All individuals employed by SpectraSite as of a grant date who customarily
work at least 20 hours per week and five months per year will be eligible to
participate in the stock purchase plan. Each eligible employee will be given an
option to purchase a number of shares of common stock equal to the total dollar
amount contributed by the employee to his or her payroll deduction account
during each six month offering period, divided by the purchase price per share
under the option. In no event may an employee receive an option which would
permit him or her during any one calendar year to purchase shares which have a
fair market value on the grant date in excess of $25,000. The price of the
shares offered to employees under the stock purchase plan will be the lesser of:

-- 85% of the fair market value of the common stock on the grant date;
or

-- 85% of the fair market value of the common stock at the exercise
date.

Generally, the employee does not recognize taxable income, and SpectraSite
is not entitled to an income tax deduction, on the grant or exercise of an
option issued under the stock purchase plan. If the employee sells the shares
acquired upon exercise of his or her option at least one year after the date he
or she exercised the option and at least two years after the date the option was
granted to him or her, then the employee will recognize ordinary income equal to
the difference between the fair market value of the stock as of the date of
grant and the exercise price. Any additional appreciation realized on the sale
of the option stock will be treated as a capital gain. SpectraSite will be
entitled to an income tax deduction corresponding to the amount of ordinary
income recognized by the employee. If the employee sells the shares acquired
upon the exercise of his or her option at any time within one year after the
date of exercise of the option, or two years after the date the option was
granted, then the employee will recognize ordinary income in an amount equal to
the excess, if any, of

-- the lesser of the sale price or the fair market value on the date of
exercise, over

-- the exercise price of the option.

Payment of an eligible employee's subscription amount will be made through
payroll deductions, and an employee's participation in the stock purchase plan
is contingent on the employee providing SpectraSite with written authorization
to withhold from his or her pay an amount to be applied toward the purchase of
shares of common stock. An eligible employee is deemed to have exercised his or
her option granted under the stock purchase plan as of the exercise date.

SpectraSite will generally be entitled to a deduction in an amount equal to
the amount of ordinary income recognized by the employee.

The stock purchase plan may be amended, suspended or terminated by the
board of directors at any time, provided such amendment, suspension or
termination of the stock purchase plan may not adversely affect the rights of or
obligations to the participants without the participants' consent, and any such
amendment, suspension or termination will be subject to the approval of
SpectraSite stockholders to the extent required by any federal or state law or
regulation of any stock exchange.

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CERTAIN TRANSACTIONS

REPURCHASE OF COMMON STOCK FROM FORMER EMPLOYEE

In an agreement dated September 15, 1998, a former employee agreed to sell
125,000 shares of common stock to SpectraSite and to release SpectraSite from
any potential claims for an agreed upon price. In addition, the agreement
provided that stockholders of Holdings would have an option to purchase the
former employee's remaining 37,605 shares of common stock for the same price per
share, provided that SpectraSite advise the former employee in writing of the
exercise of all or any portion of such option by November 15, 1998. On October
9, 1998, SpectraSite paid the former employee $0.5 million for his shares and
the release under the agreement, and on February 5, 1999, David P. Tomick
purchased the remaining 37,605 shares for an aggregate purchase price of
$150,240.

THE PREFERRED STOCK OFFERINGS

According to the terms of a stock purchase agreement, dated as of May 12,
1997, Whitney Equity Partners, L.P. and Kitty Hawk Capital Limited Partnership,
III purchased an aggregate of 3,462,830 shares of Holdings' Series A preferred
stock for an aggregate purchase price of $10.0 million in a transaction exempt
from registration under the Securities Act.

According to the terms of a stock purchase agreement, dated as of March 23,
1998, Whitney Equity Partners, L.P., J.H. Whitney III, L.P., Whitney Strategic
Partners III, L.P., Waller-Sutton Media Partners, L.P., Kitty Hawk Capital
Limited Partnership, III, Kitty Hawk Capital Limited Partnership IV, Eagle Creek
Capital, L.L.C., The North Carolina Enterprise Fund, L.P., Finley Family Limited
Partnership, William R. Gupton, Jack W. Jackman and Alton D. Eckert purchased an
aggregate of 7,000,000 shares of Holdings' Series B preferred stock for an
aggregate purchase price of $28.0 million. As of March 23, 1998 the Series B
investors purchased the first installment of 4,250,000 shares of Series B
preferred stock for $17.0 million. As of August 27, 1998, the Series B investors
(other than Whitney Equity Partners, L.P.) purchased 2,074,016 shares for an
aggregate purchase price of approximately $8.3 million and as of September 21,
1998, Whitney Equity Partners, L.P. purchased the remaining 675,874 shares of
Series B preferred stock for an aggregate purchase price of approximately $2.7
million.

According to the terms of a stock purchase agreement, dated as of February
10, 1999, as amended on April 20, 1999, Welsh, Carson, Anderson & Stowe VIII,
L.P., certain other persons and entities affiliated with Welsh, Carson, Anderson
& Stowe, J.H. Whitney III, L.P., Whitney Strategic Partners III, L.P., CIBC WG
Argosy Merchant Fund 2, L.L.C., Co-Investment Merchant Fund 3, LLC, The North
Carolina Enterprise Fund, L.P., Waller-Sutton Media Partners, L.P., Kitty Hawk
Capital Limited Partnership, IV, Finley Family Limited Partnership, Eagle Creek
Capital, L.L.C., David P. Tomick, Jack W. Jackman, Alton D. Eckert, William R.
Gupton, The Price Family Limited Partnership and Benake L.P. agreed to purchase
46,286,795 shares of Holdings' Series C convertible preferred stock in
connection with and partially to fund the Nextel tower acquisition. The Series C
investors paid an aggregate purchase price of approximately $231.4 million on
April 20, 1999 for the shares of Holdings' Series C preferred stock in a
transaction exempt from registration under the Securities Act.

The Series C investors, including the holders of the Series A preferred
stock and the Series B preferred stock, and certain other stockholders of
Holdings are entitled to certain rights under the stockholders' agreement and
the registration rights agreement, described below.

AGREEMENTS WITH NEXTEL

On April 20, 1999, Nextel and SpectraSite entered into several agreements
in connection with SpectraSite's acquisition of tower assets from Nextel. The
following is a summary of the material terms of these agreements.

Master Site Commitment Agreement. SpectraSite and certain of Nextel's
subsidiaries entered into a master site commitment agreement under which Nextel
and its controlled affiliates will offer SpectraSite certain exclusive
opportunities, under specified terms and conditions, relating to the
construction or purchase
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of, or co-location on, additional communications sites. These sites will then be
leased by subsidiaries of Nextel under the terms of the master site lease
agreement. If the number of new sites leased, whether purchased from Nextel,
constructed at Nextel's request or otherwise made available for co-location by
Nextel, its affiliates and Nextel Partners, is less than the agreed upon numbers
as of particular dates, then commencing with the 37th month after the closing,
Nextel has agreed to make certain payments to SpectraSite. The master site
commitment agreement terminates on the earlier of April 20, 2004 or the date on
which the number of sites purchased or constructed or made available for
co-location under the master site commitment agreement equals or exceeds 1,700.
The master site commitment agreement also gives SpectraSite a right of first
refusal to acquire any towers that Nextel or certain affiliates desire to sell.

The master site commitment agreement specifies that SpectraSite is not
obligated to develop more than 566 new sites each year. SpectraSite has agreed
to abide by Nextel's deployment plan. To date, Nextel's plan has emphasized
filling gaps in current coverage areas to increase capacity and enhance signal
quality, as well as deploying sites in areas contiguous to Nextel's existing
markets and deploying sites in new markets to expand the Nextel network. These
sites also include sites operated or to be developed by Nextel Partners in their
service areas. This strategy contemplates expansion and deployment in most major
metropolitan areas of the contiguous United States, including highway corridors
that connect existing and planned markets, particularly in the eastern half of
the United States and along the west coast. SpectraSite is not obligated to
develop sites outside of Nextel's or Nextel Partners' currently delineated
network deployment area to the extent these sites account for more than 10% of
the total sites developed under this agreement.

The agreement may be terminated by either side, by written notice, under
certain conditions. SpectraSite may terminate the agreement if:

-- Nextel or one of its subsidiaries that transferred assets to
SpectraSite becomes insolvent, or is unable to pay its debts as they
become due; or

-- Nextel or a transferring subsidiary is liquidated, voluntarily or
involuntarily, or a receiver or liquidator is appointed for that
entity.

Nextel may terminate the agreement if:

-- either Holdings or its subsidiary holding the Nextel towers becomes
insolvent, or is unable to pay its debts as they become due;

-- either Holdings or such subsidiary is liquidated, voluntarily or
involuntarily, or a receiver or liquidator is appointed for such
entity; or

-- at or after the end of any calendar year, Nextel has exercised its
rights to recover a penalty payment, as specified in the agreement,
because, for more than 10% of the total number of towers required to
be developed by SpectraSite during each year, SpectraSite has failed
to complete development of new towers during the allotted time
period.

Either SpectraSite or Nextel may terminate the agreement if the other party
is in breach of an obligation to pay money or in breach of a material
nonmonetary obligation, if the breach is neither waived nor cured.

Master Site Lease Agreement. SpectraSite and Nextel entered into a master
site lease agreement under which SpectraSite has agreed to lease to Nextel's
subsidiaries space on wireless communications towers or other transmission
space:

-- at the sites transferred to SpectraSite as part of the Nextel tower
acquisition;

-- at the sites subsequently constructed or acquired by SpectraSite
under the master site commitment agreement; or

-- at other sites and related wireless communications towers or
transmission space owned, leased or licensed by SpectraSite.

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In addition, an entity in which Nextel holds a minority equity interest,
Nextel Partners, may in the future enter into a separate master site lease
agreement. Under this separate agreement, SpectraSite would agree to lease to
Nextel Partners space on wireless communications towers or other transmission
space:

-- at some of the sites transferred to SpectraSite as part of the Nextel
tower acquisition;

-- at some of the sites subsequently constructed or acquired by
SpectraSite under the master site commitment agreement; or

-- at other sites and related space on wireless communications towers or
transmission space owned, leased or licensed by SpectraSite.

If Nextel Partners does not enter into a master site lease agreement with
SpectraSite in the future, any site that would otherwise have been leased to
Nextel Partners thereunder will instead be leased to Nextel's subsidiaries under
the Nextel master site lease agreement.

The Nextel master site lease agreement and, if executed, the Nextel
Partners master site lease agreement will be supplemented from time to time to
provide for the lease of space on certain additional communications towers or
other transmission space at sites owned, constructed or acquired by SpectraSite.
Nextel and, if Nextel Partners executes a master site lease agreement, Nextel
Partners shall have a right of first refusal with respect to the sale of any
sites acquired by SpectraSite as part of the Nextel tower acquisition or
constructed or acquired by SpectraSite under the master site commitment
agreement.

The Nextel master site lease agreement and, if executed, the Nextel
Partners master site lease agreement provide that within 15 days of the
commencement of the lease of a given site, and on the first day of each month
thereafter for the term of the lease, a rental payment of $1,600 per month will
be due on each tower which SpectraSite leases to any of the tenants who are
parties to the agreement. Monthly payments will be adjusted for partial months
when appropriate. On each annual anniversary of a given lease's commencement,
the rent owed under the lease will increase by 3%.

Other rental provisions include:

-- an option for tenants to lease additional space, if available, on
sites where the tenant already leases space; and

-- a right allowing tenants to install, at their sole option and expense
and only when additional capacity exists at the rental site,
microwave antennae of various sizes and other equipment at additional
rental rates delineated in the agreement.

These provisions are subject to the same annual 3% rate increase as the
base rent.

The agreement further provides that each tenant is responsible for any
portion of personal property taxes assessed on any site and directly
attributable to the tenant's property, franchise and similar taxes imposed on
the tenant's business and sales tax imposed upon payment or receipt of rents
payable under the agreement. The landlord is responsible for all other taxes.
Additionally, the agreement provides that the landlord will be responsible for
certain types of insurance. Each tenant is also responsible for certain other
types of insurance.

The term of each lease contracted under the agreement is at least five
years, with a right to extend for five successive five-year periods. In certain
cases, the initial lease term will be six, seven or eight years. The lease is
automatically renewed unless the tenant submits notification of its intent to
terminate the lease, when its current term expires, prior to such expiration.
The tenant has the right to trade the term of any given site for the term of any
other site, upon written notice to the landlord. However, such a trade is
limited to one time per site per term.

A tenant may terminate a lease for any site, at its sole discretion,
without further liability to the landlord, with 30 days prior written notice,
if:

-- the tenant uses reasonable efforts and fails to obtain or maintain
any license, permit or other approval necessary for operation of its
communications equipment; or

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<PAGE> 68

-- the tenant is unable to use the tower due to FCC action which is not
a result of any action by the tenant.

Either party may terminate a lease for any site with 60 days prior written
notice, if the other party breaches a nonmonetary obligation, subject to certain
cure provisions. Either party may terminate a lease for any site with 10 days
prior written notice, if the other party breaches a monetary obligation and that
breach is not cured within the 10-day period. In addition, if Nextel or Nextel
Partners, if Nextel Partners executes a master site lease agreement, defaults on
rental payments with respect to more than 10% of the sites covered by its
respective master site lease agreement and Nextel or Nextel Partners, as the
case may be, remains in default for 30 days following notice from SpectraSite,
SpectraSite may cancel the master site lease agreement of the defaulting party
as to all sites covered by that agreement.

Security and Subordination Agreement. SpectraSite and Nextel entered into
a security and subordination agreement under which SpectraSite granted to Nextel
a continuing security interest in the assets acquired in the Nextel tower
acquisition or acquired or constructed under the master site commitment
agreement. This interest secures SpectraSite's obligations under the Nextel
master site lease agreement and, if applicable, the Nextel Partners master site
lease agreement. The terms of an intercreditor agreement render Nextel's lien
and the other rights and remedies of Nextel under the security and subordination
agreement subordinate and subject to the rights and remedies of the lenders
under the credit facility.

TRANSACTIONS RELATED TO THE NEXTEL TOWER ACQUISITION

On April 20, 1999, in connection with the Nextel tower acquisition, Messrs.
Sorrel, Rupert, McInerney and Price purchased 50,000, 25,000, 262,973 and
100,000 shares of Holdings' Series C preferred stock for $5.00 per share,
respectively. See "-- The Preferred Stock Offerings." In addition, Mr. Price
purchased 100,000 shares of common stock and executed promissory notes as
payment for the common stock. The promissory notes mature on April 20, 2009 and
bear interest at 5.67% per year. Under the purchase agreement for Mr. Price's
shares, 25% of the shares of common stock vest each year, with the first
installment vesting on April 20, 2000. In addition, SpectraSite has the right to
repurchase half of the shares at their original cost to Mr. Price at any time
prior to April 20, 2000 and upon the date Mr. Price ceases to perform services
for SpectraSite. Each of Messrs. Sorrel, Rupert, McInerney and Price are members
of Holdings' board of directors. Messrs. Sorrel, Rupert and McInerney are also
affiliates of Welsh, Carson, Anderson & Stowe.

Affiliates of Welsh, Carson, Anderson & Stowe, J. H. Whitney & Co., and
Canadian Imperial Bank of Commerce received an aggregate of two million shares
of Holdings common stock as consideration for financing commitments made in
connection with the Nextel tower acquisition. Welsh Carson, J. H. Whitney and
Canadian Imperial Bank of Commerce are each significant stockholders of Holdings
and affiliates of each entity are members of Holdings' board of directors.

To finance a portion of the cash consideration paid to Nextel, Holdings
issued and sold the 2009 notes in a private offering and borrowed $150.0 million
under its credit facility. CIBC World Markets Corp. was an initial purchaser in
the 2009 notes offering, and an affiliate of CIBC World Markets is an agent and
a lender under the credit facility. CIBC World Markets was also an initial
purchaser of Holdings' 2008 notes. CIBC World Markets and its affiliates
received customary fees for such services. Andrew M. Heyer is a director of
Holdings and a Managing Director of CIBC World Markets Corp.

TRANSACTIONS WITH EXECUTIVE OFFICERS

In May 1997, Stephen H. Clark agreed to invest additional personal funds in
SpectraSite at the average per share price of Holdings Series A and Series B
preferred stock. In satisfaction of this commitment, Mr. Clark purchased 210,000
shares of Holdings common stock for an aggregate purchase price of $772,800 on
April 20, 1999.

In August 1999, SpectraSite loaned David P. Tomick $325,000 in connection
with the exercise of certain stock options. The 112,500 shares Mr. Tomick
acquired through the exercise of these options are pledged to

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SpectraSite as security for this loan. The loan bears interest at the applicable
federal rate under the Internal Revenue Code, 5.36% per annum, and matures in
August 2002.

In September 1999, SpectraSite loaned Timothy G. Biltz $500,000 to purchase
a home as a relocation incentive. This loan will be secured by any shares of
Holdings common stock issued to Mr. Biltz upon his exercise of options, bears
interest at 5.82% per annum and matures in September 2004.

STOCKHOLDERS' AGREEMENT

In connection with the closing of the Nextel tower acquisition, Holdings
and its stockholders entered into the third amended and restated stockholders'
agreement, which superseded and replaced the existing stockholders' agreement
among Holdings and its stockholders. The following is a summary of the material
terms of the stockholders' agreement that will remain in effect following this
offering.

The stockholders' agreement contains a voting agreement provision under
which Holdings and certain stockholders agreed to take all appropriate action
to:

-- elect the greater of three and the number of directors Welsh, Carson
could appoint based on its proportionate ownership of Holdings stock
to Holdings' board;

-- elect two Nextel designees to Holdings' board;

-- elect two designees of funds affiliated with J.H. Whitney & Co. to
Holdings' board;

-- elect one designee of Canadian Imperial Bank of Commerce or its
affiliates to Holdings' board;

-- elect the Chief Executive Officer, initially Stephen H. Clark, to
Holdings' board;

-- remove and replace any director if requested to do so by the
stockholders who designated the director;

-- use their best efforts to cause Welsh, Carson designees to make up
two of the three members of a compensation committee created to,
among other things, set SpectraSite's employee compensation policy;

-- use their best efforts to cause Welsh, Carson and the J.H. Whitney
funds' designees to make up two of the three members of an audit
committee to, among other things, review and approve SpectraSite's
financial statements; and

-- use their best efforts to elect a Welsh, Carson affiliate, Lawrence
B. Sorrel, as Chairman of Holdings' board.

This voting agreement provision terminates on the earlier to occur of April
20, 2009 and the fifth anniversary of the consummation of this offering. The
voting agreement provision will terminate as to any given stockholder on the
earlier to occur of that stockholder's disposition of 50% or more of its
Holdings stock and the date on which the stockholder owns less than 8% of
Holdings' outstanding stock.

The stockholders' agreement also prohibits all stockholders that are
parties to the agreement other than Welsh, Carson from selling or otherwise
transferring their Holdings stock, except for transfers:

-- made with the prior written consent of Welsh, Carson;

-- in limited instances, made with the prior written consent of 60% of
the aggregate shares of capital stock held by affiliates of J.H.
Whitney & Co., Canadian Imperial Bank of Commerce and Nextel;

-- by an individual stockholder to his or her spouse or descendant;

-- in accordance with the tag-along provisions described below;

-- by institutional stockholders to their affiliates; and

-- by Nextel to its affiliates or creditors to secure obligations under
a secured credit facility.

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These transfer restrictions terminate upon the earlier of the sale,
transfer or other disposition by Welsh, Carson of 50% or more of its Holdings
stock, 18 months after the earlier of the closing date of this offering and
April 20, 2002. Holdings' stockholders also agreed that they would agree to a
longer transfer restriction period if asked to do so by the underwriter of an
initial public offering of Holdings' stock, so long as the lock-up binds
SpectraSite's executive officers and all holders of more than 5% of Holdings'
outstanding stock, and any exceptions to the lock-up provision apply equally to
all stockholders.

Once the transfer restrictions terminate, all transfers by stockholders
owning more than 5% of Holdings' stock will continue to be governed by the
coordinated distribution requirements of Holdings' second amended and restated
registration rights agreement. See "--Registration Rights Agreement."

The stockholders' agreement contains a tag-along provision which gives the
parties to the stockholders' agreement the right to participate in any sale by
Welsh, Carson of its Holdings stock on the same terms as Welsh, Carson sells its
stock. This provision will terminate at the same time as the transfer
restrictions terminate.

SpectraSite must make all redemptions of preferred stock equally among all
outstanding classes of preferred stock unless it receives written consent to do
otherwise from at least 80% of each outstanding class of preferred stock.
SpectraSite may not redeem any shares of common stock, except for repurchases
from employees of up to $0.5 million in any twelve-month period.

REGISTRATION RIGHTS AGREEMENT

In connection with the closing of the Nextel tower acquisition,
SpectraSite, Nextel, the Series A investors, the Series B investors, the Series
C investors and certain members of SpectraSite's management entered into a
second amended and restated registration rights agreement. In connection with
SpectraSite's acquisition of Apex, the former stockholders of Apex joined the
registration rights agreement. The following is a summary of the material terms
of the registration rights agreement.

Under the registration rights agreement, the holders of Holdings' stock
party to the agreement may require SpectraSite to register all or some of their
shares under the Securities Act. The following conditions must be met to trigger
this registration obligation:

-- SpectraSite must receive a request for registration from holders of
at least 25% of its outstanding stock covered by the registration
rights agreement, exclusive of stock held by management;

-- the request must be received at any time following the earliest of

(1) April 20, 2002,

(2) 18 months following an initial public offering of SpectraSite's
stock effected prior to April 20, 2001, and

(3) 180 days after an initial public offering effected on or after
April 20, 2001; and

-- SpectraSite must expect the aggregate offering price of the
registered securities will exceed $50.0 million.

SpectraSite is only obligated to effect three such registrations. Both
Holdings and its management have the right to include their shares in any
registration statement required by the registration rights agreement.

The registration rights agreement also provides that Holdings'
institutional stockholders and Nextel have the right to require SpectraSite to
file a registration statement on a Form S-3 covering their stock if and when
Holdings becomes eligible to file a such a registration statement. Nextel or the
institutional shareholders may request this registration if:

-- Holdings is eligible to file a registration statement on Form S-3;
and

-- SpectraSite expects the aggregate offering price of the registered
securities will exceed $10.0 million.

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In addition to SpectraSite's registration obligations discussed above, if
Holdings registers any of its common stock under the Securities Act for sale to
the public for SpectraSite's own account or for the account of others or both,
the registration rights agreement requires that it use its best efforts to
include in the registration statement stock held by other Holdings stockholders
who wish to participate in the offering. Registrations by Holdings on Form S-4,
Form S-8 or any other form not available for registering stock for sale to the
public will not trigger this registration obligation.

The parties to the registration rights agreement also agreed that if they
publicly sell their securities after an initial public offering they will
attempt to conduct the sale in a manner that will not adversely disrupt the
market for SpectraSite stock. The stockholders agreed, to the extent
practicable, to coordinate those sales and make them through a single broker or
market maker over a sufficient period of time to permit an orderly disposition
of their securities. This coordinated distribution restriction terminates:

-- with respect to any shares that have been effectively registered and
disposed of in accordance with the registration statement covering
those shares;

-- as to any stockholder who owns less than 5% of Holdings' outstanding
stock; or

-- at such time as the number of shares of common stock in the hands of
the public exceeds the number of shares of Holdings' restricted stock
and stock held by management.

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OWNERSHIP OF CAPITAL STOCK

The table below sets forth, as of December 31, 1999, information with
respect to the beneficial ownership of Holdings' capital stock by:

-- each person who is known by Holdings to be the beneficial owner of
more than 5% of any class or series of capital stock of Holdings;

-- each of the directors and named executive officers individually; and

-- all directors and executive officers as a group.

The percentage of total voting power of common stock before the offering is
based on 90,941,229 shares of capital stock, which consisted of 20,191,604
shares of common stock and 70,749,625 shares of preferred stock which are
convertible into common stock, outstanding as of December 31, 1999. The
percentage of total voting power of common stock after the offering gives effect
to this offering, the conversion of all of the preferred stock into 70,749,625
shares of common stock, and the issuance of 6,007,996 and 225,000 shares of
common stock in connection with the Apex merger and the Vertical Properties
merger, respectively, on January 5, 2000.

Each share of Series A preferred stock, each share of Series B preferred
stock and each share of Series C preferred stock is immediately convertible into
one share of common stock, subject to certain adjustments, and, therefore, the
holders of Series A preferred stock, Series B preferred stock and Series C
preferred stock are deemed to be the beneficial owners of the shares of common
stock into which their preferred stock can be converted. In addition, all shares
of Series A, Series B and Series C preferred stock will automatically convert
into shares of common stock upon consummation of this offering. The amounts and
percentages of common stock beneficially owned are reported on the basis of
regulations of the SEC governing the determination of beneficial ownership of
securities. Under the rules of the SEC, a person is deemed to be a beneficial
owner of a security if that person has or shares voting power, which includes
the power to vote or to direct the voting of such security, or investment power,
which includes the power to dispose of or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of any securities of
which that person has a right to acquire beneficial ownership within 60 days.
Under these rules, more than one person may be deemed to be a beneficial owner
of securities as to which such person has an economic interest.

<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SERIES A SERIES B SERIES C SHARES OF STOCK TOTAL VOTING
COMMON PREFERRED PREFERRED PREFERRED BENEFICIALLY POWER OF
NAME OF BENEFICIAL OWNER STOCK STOCK STOCK STOCK OWNED COMMON STOCK
- ------------------------ --------- --------- --------- ---------- --------------- -------------------
BEFORE AFTER
OFFERING OFFERING
-------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen H. Clark(a)..................... 1,159,435 -- -- -- 1,159,435 1.3% 1.0%
Timothy G. Biltz........................ -- -- -- -- -- -- --
David P. Tomick(b)...................... 150,105 -- -- 12,395 162,500 * *
Richard J. Byrne........................ 50,000 -- -- -- 50,000 * *
Terry L. Armant(c)...................... 31,250 -- -- -- 31,250 * *
Calvin J. Payne(d)...................... 2,091,454 -- -- -- 2,091,454 2.3% 1.8%
Michael R. Stone(e)..................... 312,500 3,203,118 5,161,219 4,000,000 12,676,837 13.6% 10.6%
James R. Matthews(e).................... 312,500 3,203,118 5,161,219 4,000,000 12,676,837 13.6% 10.6%
Lawrence B. Sorrel(f)................... 1,375,000 -- -- 29,500,000 30,875,000 34.0% 25.8%
Andrew R. Heyer(g)(j)................... 312,500 -- -- 10,000,000 10,312,500 11.0% 8.6%
Thomas E. McInerney(f).................. 1,375,000 -- -- 29,712,973 31,087,973 34.2% 26.0%
Michael J. Price(h)..................... 100,000 -- -- 100,000 200,000 * *
Rudolph E. Rupert(f).................... 1,375,000 -- -- 29,475,000 30,850,000 33.9% 25.8%
Timothy M. Donahue(i)................... -- -- -- 14,000,000 14,000,000 12.1% 11.7%
Steven M. Shindler(i)................... -- -- -- 14,000,000 14,000,000 12.1% 11.7%
Nextel Communications, Inc.(i).......... -- -- -- 14,000,000 14,000,000 12.1% 11.7%
Welsh, Carson, Anderson & Stowe(f)...... 1,375,000 -- -- 29,450,000 30,825,000 33.9% 25.8%
Funds affiliated with J.H. Whitney &
Co.(e)................................ 312,500 3,203,118 5,161,219 4,000,000 12,676,837 13.9% 10.6%
Canadian Imperial Bank of Commerce(g)... -- -- -- 10,000,000 10,000,000 11.0% 8.4%
</TABLE>

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- ---------------

* Less than 1%.

(a) Includes 212,500 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days. Of the shares reported in
the table, 816,327 are held by Holt Road, L.P. Mr. Clark owns a 1% general
partnership interest, certain family trusts own a 98% limited partnership
interest and Mary Clark, Mr. Clark's spouse, owns a 1% limited partnership
interest in Holt Road, L.P. Mr. Clark is a trustee of each family trust, and
he disclaims beneficial ownership of the shares held by Holt Road, L.P., as
well as those deemed to be beneficially owned by the family trusts.

(b) None of Mr. Tomick's outstanding options are exercisable within 60 days.

(d) Includes 177,380 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.

(e) Represents 3,203,118 shares of Series A preferred stock and 1,720,406 shares
of Series B preferred stock held by Whitney Equity Partners, L.P.; 3,359,852
shares of Series B preferred stock and 3,905,882 shares of Series C
preferred stock held by J.H. Whitney III, L.P.; 80,961 shares of Series B
preferred stock and 94,118 shares of Series C preferred stock held by
Whitney Strategic Partners III, L.P.; and 312,500 shares of common stock
held by J.H. Whitney Mezzanine Fund, L.P. Each of these funds is affiliated
with J.H. Whitney & Co. Each of Mr. Stone and Mr. Matthews disclaims
beneficial ownership of shares held by these entities except to the extent
of his pecuniary interest in such funds. The business address for Mr. Stone,
Mr. Matthews and the Whitney funds is 177 Broad Street, Stamford,
Connecticut 06901.

(f) Messrs. Sorrel, McInerney and Rupert are each principals of Welsh, Carson,
Anderson & Stowe and acquired directly 50,000, 262,973 and 25,000 shares of
Series C preferred stock, respectively. Messrs. Sorrel, McInerney and Rupert
each disclaim beneficial ownership of the shares held by Welsh, Carson. The
business address for Messrs. Sorrel, McInerney and Rupert and Welsh, Carson
is 320 Park Avenue, Suite 2500, New York, New York 10022.

(g) Andrew R. Heyer, an employee of an affiliate of Canadian Imperial Bank of
Commerce, along with Jay R. Bloom and Dean C. Kehler, who are also employees
of an affiliate of Canadian Imperial Bank of Commerce, have shared power to
vote and dispose of the Series C preferred stock reported in the table. The
business address for Canadian Imperial Bank of Commerce is 161 Bay Street,
PP Box 500, M51 258, Toronto, Canada, and the business address for Mr. Heyer
is 425 Lexington Avenue, 3rd Floor, New York, New York 10017.

(h) All of the Series C preferred shares reported as beneficially owned by Mr.
Price are held by The Price Family Limited Partnership. Mr. Price disclaims
beneficial ownership of all such shares.

(i) Messrs. Donahue and Shindler are executive officers of Nextel, own no shares
directly and disclaim beneficial ownership of the shares held by Nextel. The
business address for Messrs. Donahue and Shindler and Nextel is 2001 Edmund
Halley Drive, Reston, Virginia 20191.

(j) The general partner and investment manager of Caravelle Investment Fund,
L.L.C. are affiliates of Andrew R. Heyer, Jay R. Bloom and Dean C. Kehler.
See footnote (g). The business address for Caravelle is 425 Lexington
Avenue, New York, New York 10017.

(k) The percentage of total voting power of common stock after the offering
reflects 633,996 shares of common stock issued to Waller-Sutton Media
Partners, L.P. in connection with the Apex merger. The business address for
Waller-Sutton Media Partners, L.P. is c/o Waller-Sutton Management Group,
Inc., 1 Rockefeller Plaza, New York, New York 10020.

(l) The business address for Kitty Hawk Capital is 2700 Coltsgate Road, Suite
202, Charlotte, North Carolina 28211.

(m) Includes 177,380 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.

(n) Includes 115,840 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days and 755,000 shares held by
the Peter Jeffrey Family Trust. Mr. Jeffrey disclaims beneficial ownership
of the shares held by the trust.

(o) Includes 421,130 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days. Percentage of total voting
power of common stock after offering includes 695,806 shares of common stock
issued to an affiliate of an executive officer in connection with the Apex
merger.

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DESCRIPTION OF CAPITAL STOCK

The following is a summary of the material terms and provisions of
Holdings' capital stock. Holdings' amended and restated certificate of
incorporation authorizes 300,000,000 shares of common stock, $0.001 par value
per share, and 70,749,625 shares of preferred stock, of which 3,462,830 shares
have been designated as Series A convertible preferred stock, 7,000,000 shares
have been designated as Series B convertible preferred stock and 60,286,795
shares have been designated as Series C convertible preferred stock.

As of December 31, 1999, there were:

-- 20,191,604 shares of common stock issued and outstanding, including
200,006 shares of common stock issued upon the exercise of vested
options;

-- 3,462,830 shares of Series A preferred stock issued and outstanding;

-- 7,000,000 shares of Series B preferred stock issued and outstanding;
and

-- 60,286,795 shares of Series C preferred stock issued and outstanding.

All of the shares of Series A, Series B and Series C preferred stock will
convert into shares of common stock on a one-for-one basis in connection with
the consummation of this offering. Holdings is not authorized to issue any
preferred stock other than the outstanding Series A, Series B and Series C
preferred stock. In addition:

-- 1,000,000 shares of common stock are reserved for issuance under our
employee stock purchase plan;

-- 4,076,203 shares of common stock are reserved for issuance upon
exercise of stock options available for future grant under the stock
incentive plan;

-- 5,723,791 shares of common stock are reserved for issuance upon
exercise of stock options granted under the stock incentive plan; and

-- 70,749,625 shares of common stock are reserved for issuance upon the
conversion of the preferred stock.

COMMON STOCK

Holdings has two classes of authorized common stock which are identical in
all respects except that one class is non-voting. If a Holdings stockholder is
deemed a regulated entity under the Bank Holding Company Act of 1956, as
amended, its shares of common stock over 5% of the total issued and outstanding
common stock will become non-voting until transferred to a non-regulated entity.
The voting common stock is entitled to one vote per share. All outstanding
shares of common stock are validly issued, fully paid and nonassessable. The
common stock holders have no cumulative rights, subscription, redemption,
sinking fund or conversion rights and preferences. There are no preemptive
rights other than those granted under the stockholders' agreement. See "Certain
Transactions--Stockholders' Agreement." Subject to preferences that may be
applicable to the Series A, Series B and Series C preferred stock, the common
stock holders will be entitled to receive such dividends as the board of
directors may declare out of funds legally available for that purpose. The
rights and preferences of the common stock holders are subject to the rights of
the preferred stock holders.

PREFERRED STOCK

CONVERSION. The preferred stock will automatically convert into common
stock upon Holdings' completion of a firm commitment underwritten initial public
offering raising gross proceeds of at least $150.0 million at an offering price
per share greater than or equal to $8.00. Therefore, upon consummation of this
offering, all shares of preferred stock will convert into shares of common
stock. Until then, each holder of Series A, Series B and Series C preferred
stock has the right to convert his or her shares at any time. Currently each
share of preferred stock is convertible into one share of common stock, subject
to adjustment in the event of:

-- any dividend or distribution made in shares of common stock;

-- subdivision, combination or reclassification of Holdings' outstanding
common stock;

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-- any issue of common stock at less than a specified price per share;

-- any issue of rights, options or warrants to subscribe for or purchase
shares of common stock at less than a specified price per share;

-- any issue of rights for the purchase of shares of common stock or
other securities convertible or exchangeable into shares of common
stock at less than a specified price per share; and

-- any Holdings distribution, to the common stock holders of any shares
of its capital stock, other than common stock, or evidence of
indebtedness, cash or other assets.

DIVIDENDS. The holders of outstanding shares of preferred stock are not
entitled to receive dividends. However, when, as and if Holdings' board of
directors declares and pays a dividend on the common stock out of funds legally
available for that purpose, Holdings will declare and pay to each preferred
stock holder a dividend equal to the dividend that would have been payable to
such holder if his or her shares of preferred stock had been converted into
common stock on the date of determination of common stock holders entitled to
receive such dividend. No dividends will be paid on the common stock until all
accumulated and unpaid dividends have been paid on the preferred stock, or with
the prior written consent of 75% of the holders of outstanding preferred stock
voting as a single class. Accrued and unpaid dividends on the preferred stock
will be payable upon Holdings' liquidation, dissolution or winding-up.

LIQUIDATION. In the event of any liquidation, dissolution or winding-up of
Holdings, either voluntary or involuntary, before any distribution or payment to
holders of common stock or other capital stock, other than the Series A, the
Series B and the Series C preferred stock, the preferred stock holders shall be
entitled to receive an amount equal to the applicable liquidation preference.
The liquidation preference, for this purpose, is equal to the original issue
price plus all unpaid, accrued and accumulated dividends on the Series A, the
Series B and the Series C preferred stock. If Holdings' assets are insufficient
to permit payment in full to all the preferred stock holders, the assets shall
be distributed ratably among them. Any remaining assets available for
distribution shall be distributed to the common stock holders.

VOTING. Each of the Series A, the Series B and the Series C preferred
stock holders is entitled to such number of votes equal to the whole number of
shares of common stock into which such holder's preferred stock is convertible
immediately after the close of business on the record date of the meeting.

SPECIAL REQUIRED APPROVAL

Holdings may not take the following actions without approval by vote or
written consent of the holders of 60% of all issued shares of the Series A, the
Series B and the Series C preferred stock, voting as a single class:

-- the consummation of any sale or transfer of all or substantially all
of Holdings' assets, or any consolidation or merger with or into any
other corporation or corporations;

-- any amendment, restatement or modification of Holdings' certificate
of incorporation or bylaws which adversely affects the respective
preferences, qualifications, special or relative rights, or
privileges of preferred stock holders or which adversely affects the
common stock or its holders, provided, however, that any such change
which adversely affects the preferences, qualifications, special or
relative rights or privileges of any series of preferred stock but
does not affect the other series of preferred stock in a
substantially similar manner shall require the prior consent of the
holders of a majority of the outstanding shares of the affected
series of preferred stock;

-- Holdings' voluntary dissolution, liquidation or winding-up; or

-- the authorization, creation or issuance of any shares of capital
stock or other securities which are ranked prior to or ratably with
the preferred stock, increase the authorized amount of the preferred
stock, increase the authorized amount of any additional class of
shares of stock which are ranked prior to or ratably with the
preferred stock, or create or authorize any obligation or security
convertible into shares of preferred stock or any other class of
stock which is ranked prior to or ratably with the preferred stock as
to dividends and the distribution of assets on Holdings' liquidation,
dissolution or winding up.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

CREDIT FACILITY

SpectraSite Communications, Inc., a wholly-owned subsidiary of Holdings,
entered into a credit agreement, dated as of April 20, 1999, with CIBC
Oppenheimer Corp., now known as CIBC World Markets Corp., Credit Suisse First
Boston, New York Branch, and certain other lenders. This credit facility
provides a $500.0 million credit facility. Proceeds from the credit facility
were used to consummate the Nextel tower acquisition, and future borrowings will
be used to finance the construction and acquisition of additional towers and for
working capital and general corporate purposes.

The following is a summary of the material terms of the credit facility.
This summary is qualified in its entirety by the terms of the credit facility.

The credit facility consists of:

-- a $50.0 million revolving credit facility that may, subject to the
satisfaction of certain financial covenants, be drawn at any time and
from time to time prior to December 31, 2005, at which time all
amounts drawn under the revolving credit facility must be paid in
full;

-- a $300.0 million multiple draw term loan that may be drawn at any
time and from time to time through March 31, 2002; the amount drawn
must be repaid in quarterly installments commencing on June 30, 2002
and ending on December 31, 2005; and

-- a $150.0 million term loan that was drawn in full at the closing of
the Nextel tower acquisition and that amortizes at a rate of 1.0%
annually, payable in quarterly installments beginning in 2002, $67.5
million on March 31, 2006 with the balance due on June 30, 2006.

In addition, the credit facility contemplates borrowings to be funded by
affiliates of certain of Holdings' stockholders subject to the approval of a
majority of the lenders under the credit facility and the consent of such
affiliates.

The revolving credit loans and the multiple draw term loans will bear
interest, at SpectraSite Communications' option, at either:

-- Canadian Imperial Bank of Commerce's base rate, plus an applicable
margin of 1.5% per annum initially, which margin after a period of
time may decrease based on a leverage ratio; or

-- the reserve adjusted London interbank offered rate, plus an
applicable margin of 3.0% per annum initially, which margin after a
period of time may decrease based on a leverage ratio.

The term loan bears interest, at SpectraSite Communications' option, at
either:

-- Canadian Imperial Bank of Commerce's base rate, plus 2.0% per annum,
which margin after a period of time may decrease based on a leverage
ratio; or

-- the reserve adjusted London interbank offered rate, plus 3.5% per
annum, which margin after a period of time may decrease based on a
leverage ratio.

SpectraSite Communications will be required to pay a commitment fee of
between 1.25% and 0.50% per annum in respect of the undrawn portion of the
multiple draw term loan, depending on the amount undrawn. SpectraSite
Communications will be required to pay a commitment fee of 0.50% per annum in
respect of the undrawn portion of the revolving credit facility.

SpectraSite Communications may be required to prepay the credit facility in
part upon the occurrence of certain events, such as a sale of assets, the
incurrence of certain additional indebtedness and the generation of excess cash
flow.

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<PAGE> 77

Holdings and each of SpectraSite Communications' subsidiaries has guaranteed
SpectraSite Communications' obligations under the credit facility. The credit
facility is further secured by:

-- substantially all the tangible and intangible assets of SpectraSite
Communications and its subsidiaries; and

-- a pledge of all of the capital stock of SpectraSite Communications
and of all of its subsidiaries.

The credit facility contains a number of covenants that, among other
things, restrict the ability of Holdings, SpectraSite Communications and their
subsidiaries to:

-- incur additional indebtedness;

-- create liens on assets;

-- make investments, make acquisitions, or engage in mergers or
consolidations;

-- dispose of assets;

-- enter into new lines of business;

-- engage in certain transactions with affiliates; and

-- pay dividends or make capital distributions.

SpectraSite Communications, however, will be permitted to pay dividends
after July 15, 2003, for the purpose of paying interest on the 2008 notes and
the 2009 notes so long as no default under the credit facility then exists or
would exist after giving effect to such payment.

In addition, the credit facility requires compliance with certain financial
covenants, including requiring SpectraSite Communications and its subsidiaries,
on a consolidated basis, to maintain:

-- a maximum ratio of total debt to annualized EBITDA;

-- a minimum interest coverage ratio;

-- a minimum fixed charge coverage ratio; and

-- a minimum annualized EBITDA, for the first year only.

SpectraSite Communications does not expect that such covenants will
materially impact its ability and the ability of its subsidiaries to operate
their respective businesses.

The credit facility contains customary events of default.

SENIOR DISCOUNT NOTES

On June 26, 1998, Holdings issued $225.2 million in aggregate principal
amount at maturity of its 12% senior discount notes due 2008 under an indenture
between Holdings and the United States Trust Company of New York, as trustee.
The 2008 notes mature on July 15, 2008 and rank equally with the 2009 notes.

The 2008 notes were issued at a substantial discount to their principal
amount and were sold to investors at a price that yielded gross proceeds to
SpectraSite of $125.0 million. The 2008 notes accrete daily at a rate of 12% per
year, compounded semiannually, to an aggregate principal amount of $225.2
million as of July 15, 2003. Cash interest will not accrue on the 2008 notes
prior to July 15, 2003. Commencing July 15, 2003, cash interest on the 2008
notes will accrue and be payable semiannually in arrears on each January 15 and
July 15, commencing January 15, 2004, at a rate of 12% per year. Except as
described in this paragraph, the 2008 notes are not redeemable at Holdings'
option prior to July 15, 2003. Thereafter, the 2008 notes will be subject to
redemption at any time at the option of Holdings, in whole or in part, at the
redemption prices set forth in the indenture plus accrued and unpaid interest
thereon, if any, to the applicable redemption date. In addition, from time to
time prior to July 15, 2001, SpectraSite may on one or more occasions redeem up
to 25% of the aggregate principal amount at maturity of the 2008 notes issued at
a redemption price of 112% of their accreted value, to the redemption date, with
the net cash proceeds from one or more equity offerings; provided,
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<PAGE> 78

however, that at least 75% of the aggregate principal amount at maturity of 2008
notes originally issued remains outstanding immediately after the occurrence of
such redemption.

On April 20, 1999, Holdings issued $586.8 million in aggregate principal
amount at maturity of its 11 1/4% senior discount notes due 2009 under an
indenture between Holdings and the United States Trust Company of New York, as
trustee. The 2009 notes mature on April 15, 2009 and rank equally with the 2008
notes.

The 2009 notes were issued at a substantial discount to their principal
amount and were sold to investors at a price that yielded gross proceeds to
SpectraSite of $340.0 million. The 2009 notes accrete daily at a rate of 11 1/4%
per annum, compounded semiannually, to an aggregate principal amount of $586.8
million as of April 15, 2004. Cash interest will not accrue on the 2009 notes
prior to April 15, 2004. Commencing April 15, 2004, cash interest on the 2009
notes will accrue and be payable semiannually in arrears on each October 15 and
April 15, commencing October 15, 2004, at a rate of 11 1/4% per annum.

Except as described in this paragraph, the 2009 notes are not redeemable at
Holdings' option prior to April 15, 2004. Thereafter, the 2009 notes will be
subject to redemption at any time at the option of Holdings, in whole or in
part, at the redemption prices set forth in the indenture plus accrued and
unpaid interest thereon, if any, to the applicable redemption date. In addition,
from time to time prior to April 15, 2002, SpectraSite may on one or more
occasions redeem up to 35% of the aggregate principal amount at maturity of the
2009 notes issued at a redemption price of 111.25% of their accreted value, to
the redemption date, with the net cash proceeds from one or more equity
offerings; provided, however, that at least 65% of the aggregate principal
amount at maturity of 2009 notes originally issued remains outstanding
immediately after the occurrence of such redemption.

The 2008 notes and the 2009 notes are general unsecured obligations of
Holdings, rank senior in right of payment to any future indebtedness of Holdings
which is made expressly junior to, the notes and rank equal in right of payment
with all current and future unsecured senior indebtedness of Holdings. All of
the operations of Holdings are conducted through its subsidiaries, and Holdings'
subsidiaries did not guarantee the 2008 notes nor the 2009 notes. Accordingly,
the 2008 notes and the 2009 notes are effectively subordinated to all
indebtedness and all other liabilities or obligations of such subsidiaries,
including borrowings under the $500.0 million credit facility.

Upon the occurrence of a change of control, the holders of the 2008 notes
and the holders of the 2009 notes have the right to require Holdings to
repurchase such holders' 2008 notes, in whole or in part, at a price equal to
101% of their accreted value or principal amount, as applicable, plus accrued
and unpaid interest, if any, to the date of purchase.

The indentures governing the 2008 notes and the 2009 notes contain certain
covenants that, among other things, limit the ability of Holdings and its
subsidiaries to:

-- incur additional indebtedness and issue preferred stock;

-- pay dividends or make certain other restricted payments;

-- enter into transactions with affiliates;

-- make certain asset dispositions;

-- merge or consolidate with, or transfer substantially all its assets
to, another entity;

-- create liens securing indebtedness; and

-- permit subsidiaries to incur restrictions on their ability to pay
dividends to Holdings.

However, all of these limitations are subject to a number of important
qualifications.

On March 24, 1999, Holdings received consents from all holders of the 2008
notes to certain amendments to the indenture governing the 2008 notes. The
indenture amendments allowed for consummation of the Nextel tower acquisition
and the related financing transactions.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to the consummation of the Westower merger, there was no market for
our common stock. We cannot assure you that a significant public market for the
common stock will develop or be sustained after this offering. Future sales of
substantial amounts of common stock, including shares issued upon exercise of
outstanding options, in the public market after this offering could adversely
affect market prices prevailing from time to time and could impair our ability
to raise capital through the sale of our equity securities.

Upon completion of this offering, after giving effect to the conversion of
our preferred stock and the issuance of common stock in connection with our
acquisitions of Apex and Vertical Properties, we will have outstanding
119,642,226 shares of common stock, assuming no exercise of the underwriters'
over-allotment option and no exercise of outstanding options, of which, as of
December 31, 1999, 1,765,666 were vested and an additional 3,958,125 will vest
in the future. Of these shares, the 22,300,000 shares, or 25,645,000 shares if
the underwriters exercise their over-allotment option in full, of common stock
sold in this offering will be freely tradable without restriction under the
Securities Act unless purchased by our affiliates, as that term is defined in
Rule 144 under the Securities Act. Approximately 80,880,928 shares of common
stock outstanding, including shares of common stock issued upon conversion of
outstanding preferred stock, will be restricted securities under Rule 144 and
may in the future be sold without registration under the Securities Act to the
extent permitted by Rule 144 or any other applicable exemption under the
Securities Act. Some holders of outstanding shares of common stock immediately
prior to the offering may, under certain circumstances, include their shares in
a registration statement filed by Holdings for a public offering of common
stock. Some existing stockholders also have the right to demand that we register
their shares of common stock for resale. See "Certain Transactions--Registration
Rights Agreement."

Each of Holdings and the directors, executive officers and certain other
stockholders of Holdings has agreed that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the underwriters, it will not,
during the period ending 180 days after the date of this prospectus sell shares
of common stock or take related actions, subject to limited exceptions, all as
described under "Underwriters." In addition, certain executive officers,
directors and stockholders of Holdings are subject to certain transfer
restrictions under a stockholders' agreement. See "Certain
Transactions--Stockholders' Agreement."

In general, under Rule 144 as currently in effect, a person, or persons
whose shares are aggregated, who has beneficially owned restricted shares for at
least one year, including the holding period of any prior owner except an
affiliate, would be entitled to sell within any three-month period a number of
shares that does not exceed the greater of:

-- one percent of the number of shares of common stock then outstanding,
which will equal approximately shares immediately after this
offering, or

-- the average weekly trading volume of the common stock during the four
calendar weeks preceding the filing of a Form 144 with respect to the
sale.

Sales under Rule 144 also are subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about us. Under Rule 144(k), a person who is not deemed to have been an
affiliate of SpectraSite at any time during the three months preceding a sale
and who has beneficially owned the shares proposed to be sold for at least two
years, including the holding period of any prior owner except an affiliate, is
entitled to sell those shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.

Rule 701 permits resales of shares in reliance on Rule 144 but without
compliance with specified restrictions of Rule 144. Any employee, officer or
director of or consultant to SpectraSite who purchased his or her shares under a
written compensatory plan or contract may be entitled to rely on the resale
provisions of Rule 701. Rule 701 permits affiliates to sell their Rule 701
shares under Rule 144 without complying with the holding period requirements of
Rule 144. Rule 701 further provides that non-affiliates may sell those shares in
reliance on Rule 144 without having to comply with the holding period, public
information, volume limitation or notice provisions of Rule 144.

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We have filed registration statements on Form S-8 under the Securities Act
covering shares of common stock subject to outstanding options under our stock
incentive plan. Based on the number of shares subject to outstanding options at
December 31, 1999 and currently reserved for issuance under the stock incentive
plan, the stock incentive plan registration statement covers 10,000,000 shares
issuable on exercise of the options, of which 1,765,666 options have vested.
Accordingly, subject to the exercise of those options and any applicable lock-up
agreements, shares registered under that registration statement are available
for sale in the open market. We also have reserved 1,000,000 shares for issuance
under our employee stock purchase plan. We currently do not expect to issue
shares under this plan before September 30, 2000. Also, after this offering,
some holders of shares of common stock will be entitled to registration rights
for their shares of common stock for offer and sale to the public. However,
under lock-up agreements with the underwriters, those rights will not be
available for exercise until 180 days after the date of this prospectus. See
"Certain Transactions--Registration Rights Agreement" and "Underwriters."

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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS TO NON-U.S. HOLDERS

The following is a summary of the material United States federal income,
estate and gift tax consequences of the purchase, ownership and disposition of
the common stock by holders that are non-U.S. holders, as that term is defined
below. This summary does not purport to be a complete analysis of all potential
tax effects and is based upon the Internal Revenue Code of 1986, as amended,
existing and proposed regulations promulgated thereunder, published rulings and
court decisions, all as in effect and existing on the date hereof and all of
which are subject to change at any time, which change may be retroactive or
prospective. Unless otherwise specifically noted, this summary applies only to
those persons that hold the common stock as capital asset within the meaning of
Section 1221 of the Internal Revenue Code.

This summary is for general information only and does not address the tax
consequences to taxpayers who are subject to special rules or circumstances.
This summary does not address any tax consequences arising under any state,
municipality, foreign country or other taxing jurisdiction. Prospective
investors are urged to consult their tax advisors regarding the United States
federal tax consequences of purchasing, owning and disposing of the common
stock, including the investor's status as a non-U.S. holder, as well as any tax
consequences that may arise under the laws of any state, municipality, foreign
country or other taxing jurisdiction.

GENERAL

For purposes of this discussion, a non-U.S. holder is a beneficial owner of
the common stock that is not:

(1) a citizen or individual resident, as defined in Section 7701(b)
of the Internal Revenue Code, of the United States;

(2) a corporation or partnership, including any entity treated as a
corporation or partnership for United States federal income tax purposes,
created or organized under the laws of the United States, any State thereof
or the District of Columbia unless, in the case of a partnership, otherwise
provided by regulation;

(3) an estate the income of which is subject to United States federal
income tax without regard to its source; or

(4) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more
United States persons have the authority to control all substantial
decisions of the trust.

Notwithstanding the preceding sentence, certain trusts in existence on
August 20, 1996, and treated as a U.S. holder prior to such date, may elect to
continue to be treated as a U.S. holder.

DIVIDENDS

Although we do not anticipate paying any cash dividends for the foreseeable
future, any such dividends paid to a non-U.S. holder will generally be subject
to the withholding of United States federal income tax at the rate of 30% of the
gross amount of such dividends, unless:

-- the dividends are effectively connected with the conduct of a trade
or business or, if an income tax treaty applies, are attributable to
a permanent establishment, as defined therein, within the United
States of the non-U.S. holder, and such non-U.S. holder furnishes to
SpectraSite or its agent a duly executed Internal Revenue Service
Form W-8ECI, or any successor form; or

-- such non-U.S. holder is entitled to a reduced withholding tax rate
pursuant to any applicable income tax treaty.

For purposes of determining whether tax will be withheld at a reduced rate
as specified by an income tax treaty, current law permits SpectraSite to presume
that dividends paid to an address in a foreign country are paid to a resident of
such country absent definite knowledge that such presumption is not warranted.
However, under newly issued U.S. Treasury regulations, in the case of dividends
paid after December 31, 2000, in order to obtain a reduced rate of withholding
under an income tax treaty, a non-U.S. holder generally will be required to
furnish to SpectraSite or its agent a duly executed Internal Revenue Service
Form W-8BEN, or

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<PAGE> 82

any successor form, certifying, under penalties of perjury, that such non-U.S.
holder is entitled to benefits under an income tax treaty. The new regulations
also provide special rules for dividend payments made to foreign intermediaries,
U.S. or foreign wholly-owned entities that are disregarded for U.S. federal
income tax purposes and entities that are treated as fiscally transparent in the
United States, the applicable income tax treaty jurisdiction or both.
Prospective investors should consult their tax advisors concerning the effect,
if any, of the adoption of these new U.S. Treasury regulations on an investment
in the common stock. A non-U.S. holder who is eligible for a reduced withholding
rate may obtain a refund of any excess amounts withheld by filing an appropriate
claim for a refund with the Internal Revenue Service.

Dividends paid to a non-U.S. holder that are effectively connected with the
conduct of a trade or business, or, if an income tax treaty applies, are
attributable to a permanent establishment, as defined therein, within the United
States of the non-U.S. holder will generally be taxed on a net income basis,
that is, after allowance for applicable deductions, at the graduated rates that
are applicable to United States persons. In the case of a non-U.S. holder that
is a corporation, such income may also be subject to the United States federal
branch profits tax, which is generally imposed on a foreign corporation upon the
deemed repatriation from the United States of effectively connected earnings and
profits, at a 30% rate, unless the rate is reduced or eliminated by an
applicable income tax treaty and the non-U.S. holder is a qualified resident of
the treaty country.

GAIN ON SALE OR OTHER DISPOSITION

A non-U.S. holder generally will not be subject to regular United States
federal income or withholding tax on gain recognized on a sale or other
disposition of the common stock, unless:

(1) the gain is effectively connected with the conduct of a trade or
business, or, if an income tax treaty applies, is attributable to a
permanent establishment, as defined therein, within the United States of
the non-U.S. holder or of a partnership, trust or estate in which such
non-U.S. holder is a partner or beneficiary;

(2) SpectraSite has been, is or becomes a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Internal
Revenue Code at any time within the shorter of the five-year period
preceding such sale or other disposition or such non-U.S. holder's holding
period for the common stock; or

(3) the non-U.S. holder is an individual that:

(a) is present in the United States for 183 days or more in the
taxable year of the sale or other disposition; and

(b) either (i) has a tax home in the United States, as specially
defined for purposes of the United States federal income tax, or (ii)
maintains an office or other fixed place of business in the United
States and the gain from the sale or other disposition of the common
stock is attributable to such office or other fixed place of business.

Gains realized by a non-U.S. holder that are effectively connected with the
conduct of a trade or business, or, if an income tax treaty applies, are
attributable to a permanent establishment, as defined therein, within the United
States of the non-U.S. holder will generally be taxed on a net income basis,
that is, after allowance for applicable deductions, at the graduated rates that
are applicable to United States persons. In the case of a non-U.S. holder that
is a corporation, such income may also be subject to the United States federal
branch profits tax, which is generally imposed on a foreign corporation upon the
deemed repatriation from the United States of effectively connected earnings and
profits, at a 30% rate, unless the rate is reduced or eliminated by an
applicable income tax treaty and the non-U.S. holder is a qualified resident of
the treaty country.

A corporation is generally considered to be a United States real property
holding corporation if the fair market value of its United States real property
interests within the meaning of Section 897(c)(1) of the Internal Revenue Code
equals or exceeds 50% of the sum of the fair market value of its worldwide real

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<PAGE> 83

property interests plus the fair market value of any other of its assets used or
held for use in a trade or business. The determination of the fair market value
of our assets and, therefore, whether we are a United States real property
holding corporation at any given time will depend on the particular facts and
circumstances applicable at the time. Currently, it is our best estimate that
the fair market value of our United States real property interests is
approximately 50% of the fair market value of our United States and non-United
States real property interests and our other assets used or held for use in our
trade or business. Therefore, we believe that it is likely that we currently are
a United States real property holding corporation. Because the determination of
whether we are a United States real property holding corporation is based on the
fair market value of our United States real property interests and our other
assets, it is difficult to predict whether we will be a United States real
property holding corporation in the future.

Nevertheless, even if we are or have been a United States real property
holding corporation, a non-5% holder, as defined below, that is not otherwise
taxed under any other circumstance described above will not be taxed on any gain
realized on the sale or other disposition of the common stock if, at any time
during the calendar year of the disposition, the common stock was regularly
traded on an established securities market. A non-5% holder is a non-U.S. holder
that did not beneficially own, directly or indirectly, more than 5% of the total
fair market value of the common stock at any time during the shorter of the
five-year period ending on the date of disposition and the period that the
common stock was held by the non-U.S. holder. The common stock is quoted on the
Nasdaq National Market. Although the matter is not free from doubt, the common
stock should be considered to be regularly traded on an established securities
market during the time it is regularly quoted on Nasdaq.

If we are treated as a United States real property holding corporation and
either the common stock is not considered to be regularly traded on an
established securities market or the selling non-U.S. holder does not qualify as
a non-5% holder, then the selling non-U.S. holder will be taxed on any gain
realized on the disposition of such holder's common stock on a net income basis
at the rates and in the manner applicable to United States persons.

Furthermore, if we are treated as a United States real property holding
corporation and the common stock is not considered to be regularly traded on an
established securities market, the person acquiring the common stock from the
selling non-U.S. holder generally will be required to withhold a withholding tax
at a rate of 10% from the gross amount of the proceeds of the sale. The
witholding tax will be creditable against the selling non-U.S. holder's United
States federal income tax liability and might entitle the non-U.S. holder to a
refund upon furnishing required information to the Internal Revenue Service. In
addition, the witholding tax rate may be reduced or eliminated by obtaining a
withholding certificate from the Internal Revenue Service in accordance with
applicable U.S. Treasury regulations.

We urge all non-U.S. holders to consult their own tax advisors regarding
the application of the foregoing rules to them.

Individual non-U.S. holders may also be subject to tax pursuant to
provisions of United States federal income tax law applicable to certain United
States expatriates, including former long-term residents of the United States.

FEDERAL ESTATE AND GIFT TAXES

Common stock owned or treated as owned by a non-U.S. holder at the date of
death will be included in such individual's estate for United States federal
estate tax purposes, unless an applicable estate tax treaty provides otherwise.

A non-U.S. holder will not be subject to United States federal gift tax on
a transfer of common stock, unless such person is an individual domiciled in the
United States or such person is an individual subject to provisions of United
States federal gift tax law applicable to certain United States expatriates,
including certain former long-term residents of the United States.

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<PAGE> 84

BACKUP WITHHOLDING TAX AND INFORMATION REPORTING

SpectraSite must report annually to the Internal Revenue Service and to
each non-U.S. holder the amount of dividends paid to, and the tax withheld with
respect to, such non-U.S. holder, regardless of whether tax was actually
withheld and whether withholding was reduced by an applicable income tax treaty.
Under certain income tax treaties and other agreements, that information may
also be made available to the tax authorities of the country in which the
non-U.S. holder resides.

United States federal backup withholding, which generally is withholding
tax imposed at the rate of 31% on certain payments to persons not otherwise
exempt who fail to furnish certain identifying information, will generally not
apply to dividends paid to a non-U.S. holder that are subject to withholding at
the 30% rate, or that are subject to withholding at a reduced rate under an
applicable income tax treaty. Under current law, dividends paid to a non-U.S.
holder at an address outside of the United States are subject to withholding at
the rate of 30% or a reduced rate under an applicable income tax treaty, unless
the payor has knowledge that the payee is a United States person.

Under newly issued U.S. Treasury regulations, in the case of dividends paid
after December 31, 2000, a non-U.S. holder will generally be subject to backup
withholding, unless certain certification procedures, or in the case of payments
made outside of the United States with respect to an offshore account, certain
documentary evidence procedures, are satisfied, directly or through a foreign
intermediary.

The backup withholding and information reporting requirements will
generally also apply to the gross proceeds paid to a non-U.S. holder upon the
sale or other disposition of common stock by or through a United States office
of a United States or foreign broker, unless the non-U.S. holder certifies to
the broker under penalties of perjury as to, among other things, its name,
address and status as a non-U.S. holder by filing the Service's Form W-8BEN, or
any successor form with the broker, or unless the non-U.S. holder otherwise
establishes an exemption.

Information reporting requirements, but not backup withholding, will
generally apply to a payment of the proceeds of a sale or other disposition of
common stock effected at a foreign office of:

(i) a United States broker,

(ii) a foreign broker 50% or more of whose gross income for certain
periods is effectively connected with the conduct of a trade or business
within the United States,

(iii) a foreign broker that is a controlled foreign corporation for
United States federal income tax purposes, or

(iv) pursuant to newly issued U.S. Treasury regulations effective
after December 31, 2000, a foreign broker that is

(A) a foreign partnership one or more of whose partners are
U.S. persons that in the aggregate hold more than 50% of the income or
capital interest in the partnership at any time during its tax year,
or

(B) a foreign partnership engaged at any time during its tax
year in the conduct of a trade or business in the United States,
unless the broker has certain documentary evidence in its records that
the holder is a non-U.S. holder, and the broker has no knowledge to
the contrary, and certain other conditions are met, or unless the
non-U.S. holder otherwise establishes an exemption.

Neither backup withholding nor information reporting will generally apply
to a payment of the proceeds of a sale or other disposition of common stock
effected at a foreign office of a foreign broker not subject to the preceding
paragraph. Prospective investors should consult their tax advisors concerning
the effect, if any, of the adoption of the newly issued U.S. Treasury
regulations on backup withholding and information reporting on an investment in
the common stock.

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be refunded or credited against the non-U.S.
holder's United States federal income tax liability, provided that the non-U.S.
holder files an appropriate claim for a refund with the Internal Revenue
Service.

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<PAGE> 85

UNDERWRITERS

Under the terms and subject to the conditions of an underwriting agreement
dated the date of this prospectus, the U.S. underwriters named below, for whom
Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co., CIBC World Markets
Corp., Credit Suisse First Boston Corporation, Deutsche Bank Securities Inc.,
Lehman Brothers Inc. and Salomon Smith Barney, Inc. are acting as U.S.
representatives, and the international underwriters named below for whom Morgan
Stanley & Co. International Limited, Goldman Sachs International, CIBC World
Markets plc, Credit Suisse First Boston (Europe) Limited, Deutsche Bank AG
London, Lehman Brothers International (Europe) and Salomon Brothers
International Limited are acting as international representatives, have
severally agreed to purchase, and Holdings has agreed to sell to them,
severally, the number of shares of our common stock indicated below:

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
- ---- -----------
<S> <C>
U.S. Underwriters:

Morgan Stanley & Co. Incorporated.........................
Goldman, Sachs & Co. .....................................
CIBC World Markets Corp. .................................
Credit Suisse First Boston Corporation....................
Deutsche Bank Securities Inc. ............................
Lehman Brothers Inc. .....................................
Salomon Smith Barney Inc. ................................
-----------
Subtotal............................................... 18,955,000
International Underwriters:
Morgan Stanley & Co. International Limited................
Goldman Sachs International...............................
CIBC World Markets plc ...................................
Credit Suisse First Boston (Europe) Limited...............
Deutsche Bank AG London...................................
Lehman Brothers International (Europe)....................
Salomon Brothers International Limited....................
-----------
Subtotal............................................... 3,345,000
-----------
Total................................................ 22,300,000
===========
</TABLE>

The U.S. underwriters and the international underwriters, and the U.S.
representatives and the international representatives, are collectively referred
to as the "underwriters" and the "representatives," respectively. The
underwriters are offering the shares of common stock subject to their acceptance
of the shares from Holdings and subject to prior sale. The underwriting
agreement provides that the obligations of the several underwriters to pay for
and accept delivery of the shares of common stock offered by this prospectus are
subject to the approval of specific legal matters by their counsel and to
certain other conditions. The underwriters are obligated to take and pay for all
of the shares of common stock offered by this prospectus, if any are purchased.
However, the underwriters are not required to take or pay for the shares covered
by the underwriters' over-allotment option described below.

In the agreement between the U.S. and international underwriters, sales may
be made between the U.S. underwriters and international underwriters of any
number of shares as may be mutually agreed. The per share price of any shares so
sold by the underwriters shall be the public offering price listed on the cover
page of this prospectus, in United States dollars, less an amount not greater
than the per share amount of the concession to dealers described below.

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<PAGE> 86

The underwriters initially propose to offer part of the shares of common
stock directly to the public at the public offering price listed on the cover
page of this prospectus and part to certain dealers at a price that represents a
concession not in excess of $ a share under the public offering price.
Any underwriter may allow, and such dealers may reallow, a concession not in
excess of $ a share to other underwriters or to certain dealers. After
the initial offering of the shares of common stock, the offering price and other
selling terms may from time to time be changed by the representatives.

Holdings has granted to the U.S. underwriters an option, exercisable for 30
days from the date of this prospectus, to purchase up to an aggregate of
3,345,000 additional shares of common stock at the public offering price listed
on the cover page of this prospectus, less underwriting discounts and
commissions. The U.S. underwriters may exercise this option solely for the
purpose of covering over-allotments, if any, made in connection with the
offering of the shares of common stock offered by this prospectus. To the extent
the option is exercised, each U.S. underwriter will become obligated, subject to
specified conditions, to purchase about the same percentage of additional shares
of common stock as the number listed next to the U.S. underwriter's name in the
preceding table bears to the total number of shares of common stock listed next
to the names of all U.S. underwriters in the preceding table. If the U.S.
underwriters' option is exercised in full, the total price to the public for
this offering would be $ , the total underwriters' discounts and commissions
would be $ and total proceeds to SpectraSite would be $ .

Our common stock is quoted on the Nasdaq National Market under the symbol
"SITE."

At the request of SpectraSite, the underwriters have reserved for sale, at
the public offering price, shares offered by this prospectus for directors,
officers, employees, business associates, and related persons of SpectraSite.
Morgan Stanley & Co. Incorporated will administer the directed share program.
The number of shares of common stock available for sale to the general public
will be reduced to the extent such persons purchase such reserved shares. Any
reserved shares which are not so purchased, will be offered by the underwriters
to the general public on the same basis as the other shares offered by this
prospectus.

Each of Holdings and the directors, executive officers and certain other
stockholders of Holdings, has agreed that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the underwriters, it will not,
during the period ending 180 days after the date of this prospectus:

-- offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose
of, directly or indirectly, any shares of common stock or any
securities convertible into or exercisable or exchangeable for common
stock; or

-- enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of
the common stock;

whether any transaction described above is to be settled by delivery of common
stock or such other securities, in cash or otherwise. In addition, these
directors, executive officers and stockholders have agreed that, without the
prior written consent of Morgan Stanley & Co. Incorporated on behalf of the
underwriters, they will not, during the period ending 180 days after the date of
this prospectus, make any demand for, or exercise any right with respect to, the
registration of any shares of common stock or any securities convertible into or
exercisable or exchangeable for common stock.

The restrictions described in the preceding paragraph do not apply to:

-- the sale of shares to the underwriters under the underwriting
agreement;

-- the issuance by Holdings of shares of common stock upon the exercise
of an option or a warrant or the conversion of a security outstanding
on the date of this prospectus of which the underwriters have been
advised in writing;

-- transactions by any person other than Holdings relating to shares of
common stock or other securities acquired in open market transactions
after the completion of this offering;

-- the pledge or transfer of shares in accordance with certain
provisions of the stockholders' agreement;
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<PAGE> 87

-- the granting by Holdings of any options, deferred shares or other
equity awards under Holdings' stock incentive plan, so long as such
options do not vest and become exercisable or such deferred share or
other awards do not vest, in each case, in the absence of
extraordinary events or occurrences beyond the control of the grantee
or recipient, until after the expiration of such 180 day period;

-- the issuance by Holdings of shares of common stock in connection with
acquisitions of businesses or portions thereof; provided the parties
in any such acquisition agree in writing to be bound by the foregoing
restrictions;

-- the pledge of shares to us by our employees to secure loans from us;
or

-- any disposition made among such persons' family members or
affiliates.

In order to facilitate this offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
shares of common stock. Specifically, the underwriters may agree to sell or
allot more shares than the 22,300,000 shares of our common stock which we have
agreed to sell them. This over-allotment would create a short position in our
common stock for the underwriters' account. To cover any over-allotments or to
stabilize the price of the common stock, the underwriters may bid for, and
purchase, shares of common stock in the open market. Finally, the underwriting
syndicate may reclaim selling concessions allowed to an underwriter or a dealer
for distributing the common stock in the offering, if the syndicate repurchases
previously distributed common stock in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. The underwriters have
reserved the right to reclaim selling concessions in order to encourage
underwriters and dealers to distribute the common stock for investment, rather
than for short-term profit taking. Increasing the proportion of the offering
held for investment may reduce the supply of common stock available for
short-term trading. Any of these activities may stabilize or maintain the market
price of the common stock above independent market levels. The underwriters are
not required to engage in these activities and may end any of these activities
at any time.

From time to time, some of the underwriters have provided, and may continue
to provide, investment banking services to us. Affiliates of CIBC World Markets
Corp. and Credit Suisse First Boston Corporation are acting as agents and
lenders under SpectraSite's credit facility and each receives fees customary for
performing those services. Credit Suisse First Boston Corporation, Lehman
Brothers Inc. and CIBC World Markets Corp. were initial purchasers of Holdings'
2008 notes in June 1998, and each received customary fees for their services. In
addition, CIBC World Markets Corp., Credit Suisse First Boston Corporation and
Morgan Stanley & Co. Incorporated were initial purchasers of Holdings' 2009
notes in April 1999 and each received customary fees for their services.

Holdings and the underwriters have agreed to indemnify each other against a
variety of liabilities, including liabilities under the Securities Act.

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<PAGE> 88

LEGAL MATTERS

Dow, Lohnes & Albertson, PLLC, Washington, D.C., will pass upon the
validity of the shares of common stock offered by this prospectus. Davis Polk &
Wardwell in New York, New York will pass upon certain matters for the
underwriters.

EXPERTS

Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements for the period from inception (April 25, 1997) to December
31, 1997, the year ended December 31, 1998 and the nine months ended September
30, 1999 and the consolidated financial statements of our predecessor, Telesite
Services, LLC, for the year ended December 31, 1996 and for the period from
January 1, 1997 to May 12, 1997 included in this registration statement, as set
forth in their reports appearing elsewhere herein, and are included in reliance
upon such reports given upon the authority of such firm as experts in accounting
and auditing.

Westower's consolidated financial statements as of September 30, 1998 and
for the seven months then ended and Summit's financial statements as of
September 30, 1998 and for the nine months then ended have been included in this
registration statement in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

Westower's consolidated financial statements as of February 28, 1997 and
February 28, 1998 and for the three years ended February 28, 1998 and Cord's
financial statements as of June 30, 1998 and for the two years ended June 30,
1998 have been included in this prospectus in reliance on the report of Moss
Adams LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.

The financial statements of MJA Communications Corp. as of December 31,
1996 and December 31, 1997 and for the three years ended December 31, 1997, have
been consolidated with those of Westower in this prospectus in reliance on the
report of Lamn, Krielow, Dytrych & Darling, independent accountants, given on
the authority of said firm as experts in auditing and accounting.

The financial statements of Summit Communications LLC as of December 31,
1997 and for the period from inception, May 24, 1997, to December 31, 1997 have
been included in this prospectus in reliance on the report of Shearer, Taylor &
Co., P.A., independent accountants, given on the authority of said firm as
experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

Holdings filed a registration statement on Form S-1 with the SEC for this
offering, and this prospectus is part of that registration statement. For
further information on SpectraSite, you should refer to our registration
statement and its exhibits. This prospectus summarizes material provisions of
contracts and other documents that we refer you to. Since the prospectus may not
contain all the information that you may find important, you should review the
full text of these documents. We have included copies of these documents as
exhibits to our registration statement.

Holdings files reports with the SEC as the Exchange Act requires. In
addition, the indentures governing Holdings' outstanding notes require that we
file Exchange Act reports with the SEC and provide those reports to the
indenture trustee and holders of notes. Our SEC filings are also available over
the Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York and Chicago. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms and their copy charges.

85
<PAGE> 89

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES
Report of Independent Auditors.............................. F-3
Consolidated Balance Sheets as of December 31, 1997,
December 31, 1998 and September 30, 1999.................. F-4
Consolidated Statements of Operations for the period from
inception (April 25, 1997) to December 31, 1997, for the
year ended December 31, 1998 and for the nine months ended
September 30, 1999........................................ F-5
Consolidated Statements of Redeemable Convertible Preferred
Stock and Shareholders' Deficiency........................ F-6
Consolidated Statements of Cash Flows for the period from
inception (April 25, 1997) to December 31, 1997, for the
year ended December 31, 1998 and for the nine months ended
September 30, 1999........................................ F-7
Notes to Consolidated Financial Statements.................. F-8
TELESITE SERVICES, LLC
Report of Independent Auditors.............................. F-26
Consolidated Balance Sheet as of December 31, 1996.......... F-27
Consolidated Statements of Operations for the year ended
December 31, 1996 and for the period from January 1, 1997
through May 12, 1997...................................... F-28
Consolidated Statements of Members' Equity.................. F-29
Consolidated Statements of Cash Flows for the year ended
December 31, 1996 and for the period from January 1, 1997
through May 12, 1997...................................... F-30
Notes to Consolidated Financial Statements.................. F-31
WESTOWER CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets at September 30, 1998
and June 30, 1999 (unaudited)............................. F-35
Unaudited Condensed Consolidated Statements of Operations
for the three and nine months ended June 30, 1999 and
1998...................................................... F-36
Unaudited Condensed Consolidated Statements of Stockholders'
Equity for the nine months ended June 30, 1999............ F-37
Unaudited Condensed Consolidated Statements of Cash Flows
for the nine months ended June 30, 1999 and 1998.......... F-38
Notes to Unaudited Condensed Consolidated Financial
Statements................................................ F-39
Reports of Independent Accountants.......................... F-46
Consolidated Balance Sheets as of February 28, 1997 and 1998
and September 30, 1998.................................... F-49
Consolidated Statements of Income for the years ended
February 29, 1996, February 28, 1997 and 1998 and for the
seven months ended September 30, 1997 (unaudited) and
1998...................................................... F-50
Consolidated Statements of Stockholders' Equity for the
years ended February 29, 1996, February 28, 1997 and 1998
and for the seven months ended September 30, 1998......... F-51
</TABLE>

F-1
<PAGE> 90

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Statements of Cash Flows for the years ended
February 29, 1996, February 28, 1997 and 1998 and for the
seven months ended September 30, 1997 (unaudited) and
1998...................................................... F-52
Notes to Consolidated Financial Statements.................. F-53
CORD COMMUNICATIONS, INC.
Report of Independent Auditors.............................. F-73
Balance Sheets as of June 30, 1998 and 1997................. F-74
Statements of Operations for the years ended June 30, 1998
and 1997.................................................. F-75
Statement of Changes in Stockholders' Equity (Deficit) for
the years ended June 30, 1998 and 1997.................... F-76
Statements of Cash Flows for the years ended June 30, 1998
and 1997.................................................. F-77
Notes to Financial Statements............................... F-78
SUMMIT COMMUNICATIONS, LLC
Report of Independent Accountants........................... F-86
Balance Sheets as of December 31, 1997 and September 30,
1998...................................................... F-88
Statements of Income for the period from May 24, 1997
(Inception) to December 31, 1997 and for the nine months
ended September 30, 1998.................................. F-89
Statement of Members' Equity for the period from May 24,
1997 (Inception) to December 31, 1997 and for the nine
months ended September 30, 1998........................... F-90
Statements of Cash Flows for the period from May 24, 1997
(Inception) to December 31, 1997 and for the nine months
ended September 30, 1998.................................. F-91
Notes to Financial Statements............................... F-92
</TABLE>

F-2
<PAGE> 91

REPORT OF INDEPENDENT AUDITORS

Board of Directors
SpectraSite Holdings, Inc. and Subsidiary

We have audited the accompanying consolidated balance sheets of SpectraSite
Holdings, Inc. (the "Company") and subsidiaries as of September 30, 1999,
December 31, 1998 and December 31, 1997, and the related consolidated statements
of operations, redeemable convertible preferred stock and shareholders' equity
(deficiency) and cash flows for the nine months ended September 30, 1999, the
year ended December 31, 1998 and for the period from April 25, 1997 (inception)
to December 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of SpectraSite
Holdings, Inc. and subsidiaries at September 30, 1999, December 31, 1998 and
December 31, 1997 and the consolidated results of its operations and its cash
flows for the nine months ended September 30, 1999, the year ended December 31,
1998 and for the period from April 25, 1997 (inception) to December 31, 1997 in
conformity with accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

Raleigh, North Carolina

January 21, 2000

F-3
<PAGE> 92

SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, AS OF
------------------ SEPTEMBER 30,
1997 1998 1999
------- -------- -------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................... $ 2,234 $ 99,548 $ 120,241
Short-term investments.................................. -- 15,414 --
Accounts receivable..................................... 1,610 3,353 24,721
Costs and estimated earnings in excess of billing....... -- -- 7,314
Inventories............................................. -- -- 4,055
Prepaid expenses and other.............................. 34 253 2,825
------- -------- ----------
Total current assets...................................... 3,878 118,568 159,156
Property and equipment, net............................... 1,176 28,469 695,921
Goodwill, and other tangible assets, net.................. 6,792 12,757 257,834
Other assets.............................................. 1,796 2,152 56,755
------- -------- ----------
Total assets.............................................. $13,642 $161,946 $1,169,666
======= ======== ==========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Line of credit.......................................... $ 629 $ -- $ --
Accounts payable........................................ 1,049 1,635 24,548
Accrued and other expenses.............................. 1,031 809 16,461
Billing in excess of costs and estimated earnings....... -- -- 2,986
------- -------- ----------
Total current liabilities................................. 2,709 2,444 43,995
Long-term debt, less current portion...................... 19 -- 152,291
Other long-term liabilities............................... -- 224 902
Note payable to shareholder............................... 2,312 -- --
Senior discount notes..................................... -- 132,689 501,382
------- -------- ----------
Total liabilities......................................... 5,040 135,357 698,570
Series A redeemable convertible preferred stock, $0.001
par, 3,462,830 shares authorized, and 3,462,830
outstanding, stated at liquidation value................ 10,500 11,300 --
Series B redeemable convertible preferred stock, $0.001
par, 7,000,000 shares authorized, and 7,000,000
outstanding, stated at liquidation value................ -- 29,356 --
Shareholders' equity (deficiency).........................
Common stock, $0.001 par, 12,000,000 and 20,000,000
authorized, respectively, 931,753, 956,753 and
19,060,219 issued and outstanding, respectively...... 1 1 19
Series A convertible preferred stock, $0.001 par,
3,462,830 shares authorized and outstanding, stated
at liquidation value................................. -- -- 10,000
Series B convertible preferred stock, $0.001 par,
7,000,000 shares authorized and outstanding, stated
at liquidation value................................. -- -- 28,000
Series C convertible preferred stock, $0.001 par,
60,286,795 shares authorized and outstanding, stated
at liquidation value................................. -- -- 301,494
Additional paid-in-capital.............................. 1,991 -- 209,376
Accumulated other comprehensive income.................. -- -- 135
Accumulated deficit..................................... (3,890) (14,068) (77,928)
------- -------- ----------
Total shareholders' equity (deficiency)................... (1,898) (14,067) 471,096
------- -------- ----------
Total liabilities, redeemable preferred stock and
shareholders' equity (deficiency)....................... $13,642 $161,946 $1,169,666
======= ======== ==========
</TABLE>

See accompanying notes.
F-4
<PAGE> 93

SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM YEAR NINE MONTHS
INCEPTION ENDED ENDED
(APRIL 25, 1997) TO DECEMBER 31, SEPTEMBER 30,
DECEMBER 1997 1998 1999
------------------- ------------ -------------
<S> <C> <C> <C>
Revenues:
Site leasing.............................. $ -- $ 656 $ 29,450
Network services.......................... 5,002 8,142 13,967
------- -------- --------
Total revenues.............................. 5,002 8,798 43,417
------- -------- --------
Operating Expenses:
Cost of operations excluding depreciation,
amortization and selling, general and
administrative expenses:
Site leasing......................... -- 299 10,490
Network services..................... 1,120 2,492 7,265
Selling, general and administrative
expenses.................................. 7,390 9,690 21,909
Depreciation and amortization expense....... 489 1,268 21,833
Restructuring and non-recurring charges..... -- -- 7,727
------- -------- --------
Total operating expenses.................... 8,999 13,749 69,224
------- -------- --------
Operating loss.............................. (3,997) (4,951) (25,807)
------- -------- --------
Other income (expense):
Interest income........................... 122 3,569 7,212
Interest expense.......................... (164) (8,170) (47,519)
Other income (expense).................... 149 473 (295)
------- -------- --------
Total other income (expense)................ 107 (4,128) (40,602)
------- -------- --------
Loss before income taxes.................... (3,890) (9,079) (66,409)
Income tax expense.......................... -- -- 107
------- -------- --------
Net loss.................................... $(3,890) $ (9,079) $(66,516)
======= ======== ========
Loss applicable to common shareholders:
Net loss.................................... $(3,890) $ (9,079) $(66,516)
Accretion of redemption value of preferred
stock..................................... (500) (2,156) (760)
------- -------- --------
Net loss applicable to common
shareholders.............................. $(4,390) $(11,235) $(67,276)
======= ======== ========
Net loss per common share:
Basic and diluted......................... $ (5.21) $ (11.98) $ (16.85)
======= ======== ========
Weighted average common shares outstanding:
Basic and diluted......................... 842 938 3,993
======= ======== ========
</TABLE>

See accompanying notes.
F-5
<PAGE> 94

SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF REDEEMABLE
CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY (DEFICIENCY)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
REDEEMABLE CONVERTIBLE PREFERRED STOCK SHAREHOLDERS' EQUITY (DEFICIENCY)
--------------------------------------- ---------------------------------

COMMON STOCK CONVERTIBLE CONVERTIBLE CONVERTIBLE
--------------------- PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK
SERIES A SERIES B SHARES AMOUNT SERIES A SERIES B SERIES C
-------- -------- ---------- -------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at April 25,
1997 (inception)... $ -- $ -- -- $ -- $ -- $ -- $ --
Issuance of common
stock.............. -- -- 931,753 1 -- -- --
Issuance of
warrants........... -- -- -- -- -- -- --
Issuance of preferred
stock.............. 10,000 -- -- -- -- -- --
Stock issuance
costs.............. -- -- -- -- -- -- --
Accretion of
redemption value... 500 -- -- -- -- -- --
Net loss............. -- -- -- -- -- -- --
-------- -------- ---------- -------- ------- ------- --------
Balance at December
31, 1997........... 10,500 -- 931,753 1 -- -- --
Repurchase of common
stock.............. -- -- (125,000) -- -- -- --
Exercise of
warrants........... -- -- 150,000 -- -- -- --
Issuance of preferred
stock.............. -- 28,000 -- -- -- -- --
Stock issuance
costs.............. -- -- -- -- -- -- --
Accretion of
redemption value... 800 1,356 -- -- -- -- --
Net loss............. -- -- -- -- -- -- --
-------- -------- ---------- -------- ------- ------- --------
Balance at December
31, 1998........... 11,300 29,356 956,753 1 -- -- --
Net loss............. -- -- -- -- -- -- --
Foreign currency
translation
adjustment......... -- -- -- -- -- -- --
Total comprehensive
loss...............
Issuance of common
stock.............. -- -- 18,103,466 18 -- -- --
Stock issuance
costs.............. -- -- -- -- -- -- --
Issuance of Series C
preferred stock.... -- -- -- -- -- -- 301,494
Accretion of
redemption value... 200 560 -- -- -- -- --
Cancellation of
redemption status
of preferred
stock.............. (11,500) (29,916) -- -- 10,000 28,000 --
-------- -------- ---------- -------- ------- ------- --------
Balance at September
30, 1999........... $ -- $ -- 19,060,219 $ 19 $10,000 $28,000 $301,494
======== ======== ========== ======== ======= ======= ========

<CAPTION>
REDEEMABLE CONVERTIBLE PREFERRED STOCK SHAREHOLDERS' EQUITY (DEFICIENCY)
--------------------------------------- ---------------------------------
ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE COMPREHENSIVE
PAID-IN INCOME INCOME ACCUMULATED
CAPITAL (LOSS) (LOSS) DEFICIT TOTAL
---------- ------------- ------------- ----------- --------
<S> <C> <C> <C> <C> <C>
Balance at April 25,
1997 (inception)... $ $ -- $ -- $ --
Issuance of common
stock.............. 2,281 -- -- 2,282
Issuance of
warrants........... 390 -- -- 390
Issuance of preferred
stock.............. -- -- -- --
Stock issuance
costs.............. (180) -- -- (180)
Accretion of
redemption value... (500) -- -- (500)
Net loss............. -- $ (3,890) -- (3,890) (3,890)
-------- ======== ---- -------- --------
Balance at December
31, 1997........... 1,991 -- (3,890) (1,898)
Repurchase of common
stock.............. -- -- (500) (500)
Exercise of
warrants........... -- -- -- --
Issuance of preferred
stock.............. -- -- -- --
Stock issuance
costs.............. (434) -- -- (434)
Accretion of
redemption value... (1,557) -- (599) (2,156)
Net loss............. -- $ (9,079) -- (9,079) (9,079)
-------- ======== ---- -------- --------
Balance at December
31, 1998........... -- (14,068) (14,067)
Net loss............. -- $(66,516) -- (66,516) (66,516)
Foreign currency
translation
adjustment......... -- 135 135 -- 135
--------
Total comprehensive
loss............... $(66,381)
========
Issuance of common
stock.............. 215,927 -- -- 215,945
Stock issuance
costs.............. (6,551) -- -- (6,551)
Issuance of Series C
preferred stock.... -- -- -- 301,494
Accretion of
redemption value... -- -- (760) (760)
Cancellation of
redemption status
of preferred
stock.............. -- -- 3,416 41,416
-------- ---- -------- --------
Balance at September
30, 1999........... $209,376 $135 $(77,928) $471,096
======== ==== ======== ========
</TABLE>

See accompanying notes.

F-6
<PAGE> 95

SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM INCEPTION
(APRIL 25, 1997) TO YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1997 DECEMBER 31, 1998 SEPTEMBER 30, 1999
--------------------- ----------------- ------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.......................................... $(3,890) $ (9,079) $ (66,516)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation.................................... 191 712 19,749
Amortization of goodwill and other
intangibles................................... 298 556 2,084
Amortization of debt issuance costs............. -- 244 2,085
Non-cash financing charge....................... -- -- 9,000
Loss (gain) on sale of assets................... 60 (473) 95
Amortization of discount -- senior discount
notes......................................... -- 7,689 28,689
Non-cash compensation charge.................... 2,600 -- --
Write-off of goodwill........................... -- -- 6,178
Changes in operating assets and liabilities, net
of acquisitions:
Accounts receivable............................. (289) (1,451) (3,859)
Interest receivable on short-term investments... -- (759) --
Costs and estimated earnings in excess of
billing....................................... -- -- (552)
Inventories..................................... -- -- (147)
Prepaid expenses and other...................... 136 (164) (1,938)
Accounts payable................................ 317 591 16,832
Other current liabilities....................... 1,005 (213) 8,372
Other, net........................................ (205) -- (338)
------- -------- ---------
Net cash provided by (used in) operating
activities...................................... 223 (2,347) 19,734
------- -------- ---------
INVESTING ACTIVITIES
Proceeds from note receivable..................... -- 41 114
Issuance of note receivable....................... -- -- (500)
Investment in affiliate........................... -- -- (1,300)
Loan to affiliate................................. -- -- (2,626)
Purchases of property and equipment............... (850) (26,598) (566,359)
Distribution from affiliate....................... -- 150 --
Purchases of investments.......................... -- (30,005) --
Maturities of short-term investments.............. -- 15,350 15,414
Proceeds from sale of assets...................... -- 299 22
Repurchase of common stock........................ -- (500) --
Acquisitions, net of cash acquired................ (5,028) (1,989) (78,720)
Deposits on acquisitions.......................... (1,300) (1,750) (48,186)
------- -------- ---------
Net cash used in investing activities............. (7,178) (45,002) (682,141)
------- -------- ---------
FINANCING ACTIVITIES
Proceeds from issuance of preferred stock......... 10,000 28,000 231,494
Proceeds from issuance of common stock............ -- -- 900
Stock issuance costs.............................. (179) (434) (6,551)
Proceeds from issuance of long-term debt.......... -- -- 150,052
Proceeds from issuance of senior discount notes... -- 125,000 340,004
Debt issuance costs............................... -- (4,836) (29,201)
Net repayments on line of credit.................. (568) (628) --
Repayment of note to shareholder and other debt... (64) (2,439) (3,598)
------- -------- ---------
Net cash provided by financing activities......... 9,189 144,663 683,100
------- -------- ---------
Net increase in cash and cash equivalents......... 2,234 97,314 20,693
Cash and cash equivalents at beginning of
period.......................................... -- 2,234 99,548
------- -------- ---------
Cash and cash equivalents at end of period........ $ 2,234 $ 99,548 $ 120,241
======= ======== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest.......... $ 64 $ 216 $ 4,498
======= ======== =========
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND
FINANCING ACTIVITIES:
Additional consideration (common stock) for
acquisition..................................... $ -- $ 224 $ 205,559
======= ======== =========
Series C preferred stock issued for purchase of
property and equipment.......................... $ -- $ -- $ 70,000
======= ======== =========
</TABLE>

See accompanying notes.

F-7
<PAGE> 96

SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

FORMATION OF COMPANY

SpectraSite Holdings, Inc. ("SpectraSite") and its wholly owned
subsidiaries (collectively referred to as the "Company"), are principally
engaged in providing services to companies operating in the telecommunications
industry, including leasing antennae sites on multi-tenant towers, network
design, tower construction and antenna installation throughout the United States
and Canada.

SpectraSite, formerly known as Integrated Site Development, Inc. ("ISD"),
was incorporated in the State of Delaware on April 25, 1997. On May 12, 1997,
SpectraSite issued 850,000 shares of its common stock and common stock warrants
for 150,000 shares in exchange for the 850,000 issued and outstanding shares of
common stock and common stock warrants for 150,000 shares of US Towers, Inc.
("UST"). SpectraSite's chief executive officer was the principal shareholder of
UST prior to this transaction. One of the primary purposes of the exchange of
shares was the hiring of the chief executive officer. Since UST had minimal
assets and operations, this transaction was compensatory in nature, rather than
a business combination or an asset acquisition. Accordingly, this transaction
resulted in a non-cash compensation charge of $2,600,000, based on the estimated
fair value of the stock of $2.60 per share and the estimated fair value of the
warrants of $2.60 per warrant at the date of issuance. The warrants entitled the
holder to the right to purchase 150,000 shares of SpectraSite common stock at a
price of $0.001 per share, through 2001. In September and October 1998, all of
the warrants were exercised.

On May 12, 1997, SpectraSite acquired all of the outstanding membership
interests of TeleSite Services, LLC ("TeleSite") and its subsidiary, MetroSite
Management, LLC ("MetroSite"), for consideration including $4,850,000 in cash,
81,753 shares of common stock valued at $177,200 and a $2,312,000 note payable.
Since SpectraSite had minimal operations prior to this acquisition, TeleSite is
considered SpectraSite's predecessor for financial reporting purposes. In
October 1997, TeleSite was merged into UST, and UST changed its name to
SpectraSite Communications, Inc. The acquisition was accounted for as a purchase
in accordance with the provisions of APB 16 and, accordingly, the results of
operations of TeleSite are included in the consolidated operations of the
Company from the date of acquisition.

In connection with the TeleSite acquisition, SpectraSite was required to
provide additional consideration of 55,919 shares of its common stock based upon
TeleSite achieving certain operating goals through the end of December 31, 1998,
pursuant to a provision in the TeleSite acquisition agreement. The Company
accounted for the obligation as an additional cost of the acquisition, recording
approximately $224,000 of goodwill and a related long-term liability based upon
the fair value of the Company's common stock at December 31, 1998. During 1999,
this obligation was satisfied on the issuance of 55,919 shares of common stock
valued at $224,000.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
SpectraSite and its subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.

USE OF ESTIMATES

F-8
<PAGE> 97
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

SHORT-TERM INVESTMENTS

At December 31, 1998, the Company's short-term investments consisted of
commercial paper and certificates of deposit with maturities of less than one
year. The carrying amount of these investments approximated market value.

REVENUE RECOGNITION

Site leasing revenues are recognized when earned. Escalation clauses
present in the lease agreements with the Company's customers are recognized on a
straight-line basis over the term of the lease. Network service revenues from
site selection, construction and construction management activities are derived
under service contracts with customers which provide for billing on a time and
materials or fixed price basis. Revenues are recognized as services are
performed with respect to time and materials contracts. Revenues are recognized
using the percentage-of-completion method for fixed price contracts, measured by
the percentage of contract costs incurred to date compared to estimated total
contract costs. Costs and estimated earnings in excess of billings on
uncompleted contracts represent revenues recognized in excess of amounts billed.
Billings in excess of costs and estimated earnings on uncompleted contracts
represent billings in excess of revenues recognized. Provisions for estimated
losses on uncompleted contracts are made in the period in which such losses are
determined.

INVENTORIES

Inventories are stated at the lower of cost or market using the first-in,
first-out method and consist primarily of materials purchased for future
construction not associated with specific jobs.

INVESTMENTS

Investments in entities in which the Company owns more than 20% but less
than 50% are accounted for using the equity method and are included in other
assets. Under the equity method, the investment is stated at cost plus the
Company's equity in net income (loss) of the entity since acquisition. The
equity in net income (loss) of such entity is recorded in "Other income
(expense)" in the accompanying consolidated statements of operations.

PROPERTY AND EQUIPMENT

Property and equipment, including towers, are stated at cost. The Company
capitalizes costs incurred in bringing towers to an operational state. Direct
costs related to the development and construction of towers, including interest,
are capitalized and are included in construction in progress. Approximately
$110,000 and $684,000 of interest was capitalized for the year ended December
31, 1998 and the nine months ended September 30, 1999, respectively.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets ranging from three to fifteen years.

GOODWILL

The Company has classified as goodwill the cost in excess of fair value of
net assets acquired in purchase transactions. Goodwill is being amortized on a
straight-line basis over fifteen years. On an on going basis, the Company
assesses the recoverability of its goodwill by determining its ability to
generate future cash flows sufficient to recover the unamortized balance over
the remaining useful life.

F-9
<PAGE> 98
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DEBT ISSUANCE COSTS

The Company capitalized costs relating to the issuance of long-term debt
and senior discount notes. The costs are amortized using the straight-line
method over the term of the related debt.

INCOME TAXES

The liability method is used in accounting for income taxes and deferred
tax assets and liabilities are determined based on differences between the
financial reporting and tax basis of assets and liabilities.

FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents and short-term investments
approximates fair value for these instruments. The estimated fair value of the
senior discount notes is based on the quoted market price. Although management
is not aware of any factors that would significantly affect the fair value of
amounts, such amounts have not been comprehensively revalued for purposes of
these financial statements since that date. The estimated fair values of the
Company's financial instruments, along with the carrying amounts of the related
assets (liabilities), are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1997 DECEMBER 31, 1998 SEPTEMBER 30, 1999
-------------------- --------------------- -------------------
CARRYING FAIR CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE AMOUNT VALUE
-------- ------ --------- --------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents...... $2,234 $2,234 $ 99,548 $ 99,548 $120,241 $120,241
Short-term investments......... -- -- 15,414 15,414 -- --
12% Senior Discount Notes due
2008......................... -- -- (132,689) (114,871) (144,850) (125,007)
11.25 % Senior Discount Notes
Due 2009..................... -- -- -- -- (356,532) (290,466)
Credit Facility................ -- -- -- -- (150,000) (150,000)
</TABLE>

EARNINGS PER SHARE

Basic and diluted earnings per share is calculated in accordance with
statement of Financial Accounting Standards No. 128 "Earnings per share." The
Company has potential common stock equivalents related to its convertible
preferred stock and outstanding stock options. These potential common stock
equivalents were not included in diluted earnings per share for all periods
because the effect would have been antidilutive. Accordingly, basic and diluted
net loss per share are the same for all periods presented.

COSTS OF OPERATIONS

Costs of operations for network services consist of direct costs incurred
to provide the related services excluding depreciation and amortization expense.
Costs of operations for site leasing consist of direct costs incurred to provide
the related services including ground lease cost, tower maintenance and related
real estate taxes. Costs of operations for site leasing does not include
depreciation expense of the related leased assets.

SIGNIFICANT CUSTOMERS

The Company's customer base consists of businesses operating in the
wireless telecommunications industry. The Company's exposure to credit risk
consists primarily of unsecured accounts receivable from

F-10
<PAGE> 99
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

these customers. Five customers accounted for 96.6% of the Company's 1997
revenue. Two customers accounted for 70.9% of the Company's 1998 revenue.
Following is a list of significant customers:

<TABLE>
<CAPTION>
PERCENT OF
REVENUES
FOR THE PERIOD FROM PERCENT OF REVENUES PERCENT OF
APRIL 25, 1997 PERCENT OF ACCOUNTS FOR THE YEAR ACCOUNTS
(INCEPTION) TO RECEIVABLE AT ENDED RECEIVABLE AT
DECEMBER 31, 1997 DECEMBER 31, 1997 DECEMBER 31, 1998 DECEMBER 31, 1998
------------------- ------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Customer 1........... 38.9% 75.0% 46.6% 15.6%
Customer 2........... 18.8% -- -- --
Customer 3........... 14.7% -- -- --
Customer 4........... 13.0% -- -- --
Customer 5........... 11.2% -- -- --
Customer 6........... -- -- 24.3% 45.0%
Customer 7........... -- -- -- 22.7%
</TABLE>

In the nine months ended September 30, 1999, one customer, which is a
significant stockholder of the Company, accounted for 40.4% of the Company's
revenues.

RESTRUCTURING AND NON-RECURRING CHARGES

In September 1999, the Company announced that it would no longer directly
provide site acquisition services. As a result, the Company recorded
restructuring charges of $7.1 million, of which $6.2 million related to the
write-off of goodwill related to the purchase of Telesite and $0.9 million was
related to the cost of employee severance. In March 1999, the Company announced
that it would relocate its marketing and administrative operations from Little
Rock, Arkansas and Birmingham, Alabama to its corporate headquarters in Cary,
North Carolina. As a result, the Company recorded a non-recurring charge of $0.6
million for employee termination and other costs related to the relocation of
these activities.

STOCK OPTIONS

The Company has elected under the provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock Based Compensation" ("SFAS
123") to account for its employee stock options in accordance with Accounting
Principle Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB
25"). Companies that account for stock based compensation arrangements for its
employees under APB No. 25 are required by SFAS 123 to disclose the pro forma
effect on net income (loss) as if the fair value based method prescribed by SFAS
123 had been applied. The Company plans to continue to account for stock based
compensation using the provisions of APB 25 and has adopted the disclosure
requirements of SFAS 123. Under APB 25, no compensation expense has been
recognized for stock options granted to its employees since the exercise price
of the options has equaled or exceeded the estimated fair value of the
underlying stock on the date of grant. Option grants to advisors and consultants
will be accounted for using the fair value method prescribed by SFAS 123.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In 1998, the Company adopted Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS 130"), which establishes
standards for reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. SFAS 130 only impacts
financial statement presentation as opposed to actual amounts recorded. Other
comprehensive income includes all nonowner changes in equity that are excluded
from net income. During the period from inception (April 25, 1997) to December
31, 1997 and during the year ended December 31, 1998, the

F-11
<PAGE> 100
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company had no items of other comprehensive income. During the nine months ended
September 30, 1999, the Company had other comprehensive income related to
foreign currency translation adjustments.

In 1998, the Company adopted Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"). SFAS 131 changes the way public companies report segment
information in annual financial statements and also requires those companies to
report selected segment information in interim financial statements to
shareholders. SFAS 131 also establishes standards for related disclosures about
products and services, geographic areas, and major customers. The application of
the new rules did not have a significant impact on the Company's financial
position at December 31, 1998 or its results of operations for the year ended
December 31, 1998 as the Company currently operated in only one segment. During
1999, the Company commenced operations in a second business segment.

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). SFAS 133 requires that derivative instruments be recognized as either
assets or liabilities in the consolidated balance sheet based on their fair
values. Changes in the fair values of such derivative instruments will be
recorded either in results of operations or in other comprehensive income,
depending on the intended use of the derivative instrument. The initial
application of SFAS 133 will be reported as the effect of a change in accounting
principle. SFAS 133 is effective for all fiscal years beginning after June 15,
2000. We have not yet determined the effect that the adoption of SFAS 133 will
have on our consolidated financial statements.

RECLASSIFICATIONS

Certain reclassifications have been made to the 1997 and 1998 consolidated
financial statements to conform to the 1999 presentation.

2. LONG-LIVED ASSETS

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
------------ ------------ -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Towers........................... $ 167 $24,780 $672,604
Equipment........................ 466 823 6,293
Furniture and fixtures........... 250 288 1,701
Other............................ 148 212 11,444
------ ------- --------
Total............................ 1,031 26,103 692,042
Less accumulated depreciation.... (161) (870) (20,619)
------ ------- --------
870 25,233 671,423
Construction in progress......... 306 3,236 24,498
------ ------- --------
Property and equipment, net...... $1,176 $28,469 $695,921
====== ======= ========
</TABLE>

F-12
<PAGE> 101
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Intangible assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
------------ ------------ -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Goodwill......................... $7,070 $ 8,963 $227,048
Debt issuance costs.............. -- 4,836 33,847
------ ------- --------
7,070 13,799 260,895
Less accumulated amortization.... (278) (1,042) (3,061)
------ ------- --------
$6,792 $12,757 $257,834
====== ======= ========
</TABLE>

Other assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
------------ ------------ -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Deposits......................... $1,300 $1,750 $49,244
Other............................ 496 402 7,511
------ ------ -------
$1,796 $2,152 $56,755
====== ====== =======
</TABLE>

3. DEBT

11.25% SENIOR DISCOUNT NOTES DUE 2009

In April 1999, the Company issued $586.8 million aggregate principal amount
at maturity of senior discount notes due 2009 (the "2009 Notes") for gross
proceeds of $340.0 million. Interest on the 2009 Notes accretes daily at a rate
of 11.25% per annum, compounded semiannually, to an aggregate principal amount
of $586.8 million on April 15, 2004. Cash interest will not accrue on the 2009
Notes prior to April 15, 2004. Commencing April 15, 2004, cash interest will
accrue and be payable semiannually in arrears on each April 15 and October 15,
commencing October 15, 2004, at a rate of 11.25% per annum. After April 15,
2004, the Company may redeem all or a portion of the 2009 Notes at specified
redemption prices, plus accrued and unpaid interest, to the applicable
redemption date. On one or more occasions prior to April 15, 2002, the Company
may redeem up to 35% of the aggregate principal amount at maturity of the 2009
Notes with the net cash proceeds from one or more equity offerings. The
redemption price would be 111.25% of the accreted value on the redemption date.
The Company is required to comply with certain covenants under the terms of the
2009 Notes that restrict the Company's ability to incur additional indebtedness,
make certain payments and issue preferred stock, among other things.

12% SENIOR DISCOUNT NOTES DUE 2008

In June 1998, the Company issued $225.2 million aggregate principal amount
at maturity of senior discount notes due 2008 (the "2008 Notes") with gross
proceeds of $125.0 million. The 2008 Notes accrete daily at a rate of 12% per
annum, compounded semiannually, to an aggregate principal amount of $225.2
million on July 15, 2003. Cash interest will not accrue on the 2008 Notes prior
to July 15, 2003. Commencing July 15, 2003, cash interest will accrue and be
payable semiannually in arrears on each January 15 and July 15, commencing
January 15, 2004, at a rate of 12% per annum. After July 15, 2003, the Company
may redeem all or a portion of the 2008 Notes at specified redemption prices,
plus accrued and unpaid interest, to the applicable redemption date. On one or
more occasions prior to July 15, 2001, the Company may redeem up to 25% of the
aggregate principal amount at maturity of the 2008 Notes issued with the net
cash proceeds from one or more equity offerings. The redemption price would be
112% of the accreted value on the redemption

F-13
<PAGE> 102
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

date. The Company is required to comply with certain covenants under the terms
of the 2008 Notes that restrict the Company's ability to incur indebtedness,
make certain payments and issue preferred stock among other things.

During the year ended December 31, 1998 and the nine months ended September
30, 1999, the Company recorded amortization of debt discount of approximately
$7,689,000 and $28,689,000 related to the senior discount notes as additional
interest expense. The senior discount notes consist of the following:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Senior discount notes.......................... $225,238 $ 812,038
Unamortized discount........................... (92,549) (310,656)
-------- ---------
Balance...................................... $132,689 $ 501,382
======== =========
</TABLE>

CREDIT FACILITY

In April 1999 in connection with the acquisition of communications towers
from Nextel Communications, Inc. ("Nextel"), SpectraSite Communications, Inc.
("Communications"), a wholly-owned subsidiary of SpectraSite, entered into a
$500.0 million credit facility. The credit facility consists of a $50.0 million
revolving credit facility that may, subject to the satisfaction of certain
financial covenants, be drawn at any time up to December 31, 2005, at which time
all amounts drawn under the revolving credit facility must be paid in full; a
$300.0 million multiple draw term loan that may be drawn at any through March
31, 2002, which requires that the amount drawn be repaid in quarterly
installments commencing on June 30, 2002 and ending on December 31, 2005; and a
$150.0 million term loan that was drawn in full at the closing of the Nextel
tower acquisition and that amortizes at a rate of 1.0% annually, payable in
quarterly installments beginning on June 30, 2002 through December 31, 2005,
$67.5 million on March 31, 2006 with the balance due on June 30, 2006.

The revolving credit loans and the multiple draw term loans will bear
interest, at our option, at either Canadian Imperial Bank of Commerce's base
rate, plus an applicable margin of 1.5% per annum initially, which margin after
a period of time may decrease based on a leverage ratio, or the reserve adjusted
London interbank offered rate, plus an applicable margin of 3.0% per annum
initially, which margin after a period of time may decrease based on a leverage
ratio.

The term loan bears interest, at our option, at either Canadian Imperial
Bank of Commerce's base rate, plus 2.0% per annum, which margin after a period
of time may decrease based on a leverage ratio, or the reserve adjusted London
interbank offered rate, plus 3.5% per annum, which margin after a period of time
may decrease based on a leverage ratio.

Communications will be required to pay a commitment fee of between 1.25%
and 0.50% per annum in respect of the undrawn portion of the multiple draw term
loan, depending on the amount undrawn. We are required to pay a commitment fee
of 0.50% per annum in respect of the undrawn portion of the revolving credit
facility.

Communications may be required to prepay the credit facility in part upon
the occurrence of certain events, such as a sale of assets, the incurrence of
certain additional indebtedness and the generation of excess cash flow.

SpectraSite and each of Communications' subsidiaries has guaranteed the
obligations under the credit facility. The credit facility is further secured by
substantially all the tangible and intangible assets of

F-14
<PAGE> 103
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Communications and its subsidiaries and a pledge of all of the capital stock of
Communications and its subsidiaries.

The credit facility contains a number of covenants that, among other
things, restrict our ability to incur additional indebtedness; create liens on
assets; make investments, make acquisitions, or engage in mergers or
consolidations; dispose of assets; enter into new lines of business; engage in
certain transactions with affiliates; and pay dividends or make capital
distributions. SpectraSite, however, will be permitted to pay dividends after
July 15, 2003, for the purpose of paying interest on its 2008 Notes and the 2009
Notes so long as no default under the credit facility then exists or would exist
after giving effect to such payment.

In addition, the credit facility requires compliance with certain financial
covenants, including requiring Communications and its subsidiaries, on a
consolidated basis, to maintain a maximum ratio of total debt to annualized
EBITDA; a minimum interest coverage ratio; a minimum fixed charge coverage
ratio; and a minimum annualized EBITDA, for the first year only.

OTHER LONG-TERM DEBT

Long-term debt, other than the senior discount notes, consists of the
following:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, SEPTEMBER 30,
----------------- -------------
1997 1998 1999
----- ----- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Credit facility.............................. $ -- $-- $150,000
Other obligations............................ 45 18 3,042
Less current portion......................... (26) 18 (751)
---- --- --------
Long-term debt, less current portion......... $ 19 $-- $152,291
==== === ========
</TABLE>

In connection with the acquisition of Westower Corporation ("Westower"),
the Company assumed certain long-term obligations of the acquired entity.
Substantially all of Westower's outstanding long-term obligations were repaid
prior to the acquisition, with the remaining unpaid obligations payable in
monthly installments through 2004. Other obligations for the year ended December
31, 1998 and 1997 consisted of installment notes payable to a bank, which were
subsequently paid during 1999.

BANK CREDIT AGREEMENT

In January 1998, the Company signed a letter of intent with a bank for a
$50.0 million revolving credit facility for the purpose of financing the
construction and/or the acquisition of telecommunication towers for PCS or other
wireless communication services and other permitted acquisitions as defined by
the agreement, contingent upon certain events. In the year ended December 31,
1998 the Company incurred approximately $252,000 in commitment fees related to
the agreement. The agreement expired on December 31, 1998.

LINE OF CREDIT

During 1997, the Company maintained a $1.5 million line of credit with a
bank, which bore interest at prime plus 0.5%. The balance at December 31, 1997
was $628,561. The line of credit was repaid in full in March 1998.

F-15
<PAGE> 104
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. CONVERTIBLE VOTING PREFERRED STOCK AND SHAREHOLDERS' EQUITY

SERIES A AND B CONVERTIBLE VOTING PREFERRED STOCK

At December 31, 1998, SpectraSite had mandatorily redeemable convertible
preferred stock consisting of Series A and Series B cumulative redeemable
preferred stock, each with a $0.001 par value, 10,462,830 shares authorized in
the aggregate and 3,462,830 and 7,000,000 shares issued and outstanding,
respectively. In connection with closing the Nextel tower acquisition,
provisions for dividends and redemption were eliminated with respect to the
Series A and Series B preferred stock. Previously accrued dividends have been
eliminated, and the outstanding balances have been reclassified as convertible
preferred stock in shareholders' equity in the balance sheet as of September 30,
1999. Each share of Series A and Series B preferred stock is convertible into
one share of common stock and entitles the holder to vote on an as-converted
basis with holders of common stock. In addition, contemporaneously with the
closing of an underwritten public offering of common stock resulting in gross
proceeds of at least $150.0 million at a per share price of $8.00 or greater,
the outstanding shares of Series A and Series B preferred stock shall
automatically convert to common stock on a share-for-share basis. SpectraSite
has reserved a sufficient number of its authorized shares of common stock for
the purpose of effecting the future conversion of the preferred stock.

SERIES C CONVERTIBLE PREFERRED STOCK

In connection with closing the Nextel tower acquisition, SpectraSite sold
46,286,795 shares of Series C preferred stock at a price of $5.00 per share. In
addition, Nextel received 14 million shares of Series C preferred stock. At
September 30, 1999, SpectraSite has 60,286,795 of $0.001 par value Series C
shares authorized, issued and outstanding. Each share of Series C preferred
stock is convertible into one share of common stock and entitles the holder to
vote on an as-converted basis with holders of common stock. In addition,
contemporaneously with the closing of an underwritten public offering of common
stock resulting in gross proceeds of at least $150.0 million at a per share
price of $8.00 or greater, the outstanding shares of Series C preferred stock
shall automatically convert to common stock. SpectraSite has reserved a
sufficient number of its authorized shares of common stock for the purpose of
effecting the future conversion of the preferred stock.

COMMON STOCK

In connection with the Nextel tower acquisition, SpectraSite also restated
its certificate of incorporation. The amended and restated certificate
authorized 85 million shares of common stock, $0.001 par value per share. In
addition, the Company increased the maximum number of shares for which options
may be granted under its stock option plan to 4.1 million.

In August 1999, SpectraSite amended its restated certificate of
incorporation to increase the authorized shares of common stock to 300 million.
In addition, SpectraSite increased the maximum number of shares for which
options may be granted under its stock option plan to 10 million and authorized
one million shares to be issued under the Employee Stock Purchase Plan.

WARRANTS

During September and October, 1998, 150,000 shares of common stock were
issued in connection with the exercise of common stock warrants at a price of
$0.001 per share.

On October 9, 1998, the Company paid a former employee $500,000 under an
agreement to buy 125,000 shares of SpectraSite common stock from the former
employee for an agreed upon price and to release the Company from any potential
claims. In addition, the agreement provided that shareholders of SpectraSite
would have an option to purchase the former employee's remaining 37,605 shares
of SpectraSite common stock for the same price per share, provided that the
Company advise the former employee in writing of the

F-16
<PAGE> 105
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

exercise of all or any portion of such option by November 15, 1998. The shares
were subsequently purchased by a shareholder of the Company on February 5, 1999
for an aggregate purchase price of $150,240.

STOCK OPTIONS

During 1997, the Company adopted a stock option plan which provides for the
purchase of common stock by key employees, directors, advisors and consultants
of the Company. The maximum number of shares for which options may be granted
under the plans shall not exceed 10,000,000 shares. Stock options are granted
under various stock option agreements. Each stock option agreement contains
specific terms. During the period from inception (April 25, 1997) to December
31, 1997, the year ended December 31, 1998 and the nine months ended September
30, 1999, option grants were solely to employees.

The options without a performance acceleration feature which were granted
under the terms of the incentive stock option agreement and options granted
under the terms of the non qualified stock option agreement vest and become
exercisable ratably over a four or five-year period, commencing one year after
date of grant.

The options with a performance acceleration feature which were granted
under the terms of the incentive stock option agreement and the non-qualified
stock option agreement vest and become exercisable upon the seventh anniversary
of the grant date. Vesting, however, can be accelerated upon the achievement of
certain milestones defined in each agreement.

In accordance with SFAS 123, the fair value of each option grant was
determined by using the Black-Scholes option pricing model with the following
weighted average assumptions for the period ended December 31, 1997, the year
ended December 31, 1998 and the nine months ended September 30, 1999: dividend
yield of 0.0%; volatility of .70; risk free interest rate of 6.0% to 5.0%; and
expected option lives of 7 years. Had compensation cost for the Company's stock
options been determined based on the fair value at the date of grant consistent
with the provisions of SFAS 123, the Company's net loss and net loss per share
would have been $4,023,000 and $5.37 for the period ended December 31, 1997,
$9,516,000 and $12.44 for the year ended December 31, 1998 and $67,402,000 and
$17.07 for the nine months ended September 30, 1999.

Option activity under the Company's plans is summarized below:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
SHARES EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Outstanding at beginning of April 25, 1997..... -- $ --
Options granted................................ 884,700 2.89
Options exercised.............................. -- --
Options canceled............................... -- --
---------
Outstanding at December 31, 1997............... 884,700 2.89
Options granted................................ 842,000 3.33
Options exercised.............................. -- --
Options canceled............................... (158,800) 2.92
---------
Outstanding at December 31, 1998............... 1,567,900 3.12
Options granted................................ 2,498,310 4.99
Options exercised.............................. (171,375) 2.31
Options canceled............................... (148,617) 1.91
---------
Options assumed in Westower acquisition........ 1,921,757 8.62
Outstanding at September 30, 1999.............. 5,667,975 5.86
=========
</TABLE>

F-17
<PAGE> 106
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At December 31, 1997, there were no options exercisable under the stock
option plan. There were 185,475 and 1,727,534 options exercisable under the
stock option plan at December 31, 1998 and September 30, 1999, respectively.

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ------------------------------------------------ -------------------------------------------------
NUMBER WEIGHTED NUMBER
OUTSTANDING AVERAGE EXERCISABLE
AS OF REMAINING WEIGHTED AVERAGE AS OF WEIGHTED AVERAGE
EXERCISE PRICES 9/30/99 CONTRACTUAL LIFE EXERCISE PRICE 9/30/99 EXERCISE PRICE
- --------------- ----------- ---------------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
$0.01-$ 4.56 2,145,404 8.20 $ 3.76 1,106,865 $ 3.97
$5.00-$ 5.00 2,438,810 9.66 $ 5.00 -- --
$6.35-$17.06 1,083,761 9.25 $11.98 620,669 12.28
--------- ---------
$0.01-$17.06 5,667,975 9.03 $ 5.86 1,727,534 $ 6.96
--------- ---------
</TABLE>

The weighted average remaining contractual life of the stock options
outstanding was 8.76 years, 9.98 years and 9.03 years at December 31, 1997,
December 31, 1998 and September 30, 1999, respectively.

EMPLOYEE STOCK PURCHASE PLAN

In August 1999, SpectraSite adopted the SpectraSite Holdings, Inc. Employee
Stock Purchase Plan. The board of directors has reserved and authorized 1
million shares of common stock for issuance under the plan. Eligible employees
may purchase a number of shares of common stock equal to the total dollar amount
contributed by the employee to a payroll deduction account during each six-month
offering period divided by the purchase price per share. The price of the shares
offered to employees under the plan will be 85% of the lessor of the fair market
value at the beginning or end of each six-month offering period. As of September
30, 1999, SpectraSite had not initiated an offering period.

COMMON STOCK RESERVED FOR FUTURE ISSUANCE

The Company had reserved shares of its authorized shares of common stock
for future issuance as follows:

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
<S> <C> <C>
Convertible preferred stock................................. 10,462,830 70,749,625
Outstanding stock options................................... 1,567,900 5,667,975
Possible future issuance under stock option plans........... 249,800 4,160,650
Employee stock purchase plan................................ -- 1,000,000
---------- ----------
Total............................................. 12,280,530 81,578,250
========== ==========
</TABLE>

5. LEASES

OPERATING LEASES FROM OTHERS

The Company leases land "ground leases", office space and certain office
equipment under noncancelable operating leases. Ground leases are generally for
terms of five years and are renewable at the option of the Company. Rent expense
was approximately $234,000, $588,000 and $10,339,000 for the period from April
25, 1997 (inception) to December 31, 1997, the year ended December 31, 1998 and
for the nine months ended

F-18
<PAGE> 107
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

September 30, 1999, respectively. The future minimum lease payments for these
leases at September 30, 1999 are as follows:

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, 1999
------------------
(IN THOUSANDS)
<S> <C>
2000............................................ $ 23,445
2001............................................ 21,655
2002............................................ 18,549
2003............................................ 13,352
2004............................................ 8,383
Thereafter...................................... 23,915
--------
Total........................................... $109,299
========
</TABLE>

ANTENNA SPACE LEASED TO OTHERS

The Company currently leases antenna space on multi-tenant towers to a
variety of wireless service providers under non-cancelable operating leases. The
tenant leases are generally for terms of five years and include options for
renewal. The approximate future minimum rental income under operating leases
that have initial or remaining non-cancelable terms in excess of one year are as
follows:

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, 1999
------------------
(IN THOUSANDS)
<S> <C>
2000............................................ $ 57,491
2001............................................ 60,081
2002............................................ 61,879
2003............................................ 63,751
2004............................................ 65,437
Thereafter...................................... 44,201
--------
Total........................................... $352,840
========
</TABLE>

6. INCOME TAXES

The provision for income taxes is comprised of the following:

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION NINE MONTHS
(APRIL 25, 1997) TO YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
State........................ $ -- $ -- $ 20
Foreign...................... -- -- 87
-------- -------- ----
Total provision for income
taxes...................... $ -- $ -- $107
======== ======== ====
</TABLE>

F-19
<PAGE> 108
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The reconciliation of income taxes computed at the U.S. federal statutory
rate to income tax provision (benefit) is as follows:

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION NINE MONTHS
(APRIL 25, 1997) TO YEAR ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------------- ------------ ------------
<S> <C> <C> <C>
Federal income tax benefit at statutory
rate....................................... (35.0)% (35.0)% (35.0)%
State income taxes........................... -- -- --
Foreign tax rate differential................ -- -- 0.2
Non-deductible goodwill amortization......... -- 0.7
Non-deductible interest expense.............. -- 5.8% 0.4
Change in valuation allowance................ 35.0% 29.2% 33.9
----- ----- -----
Effective income tax rate.................... --% --% 0.2%
===== ===== =====
</TABLE>

The components of net deferred taxes are as follows:

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, AS OF
---------------- SEPTEMBER 30,
1997 1998 1999
---- ------ -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Deferred tax assets:
Tax loss carry forwards................................... $183 $4,057 $ 17,077
Accreted interest on senior discount notes................ -- -- 13,587
Depreciation.............................................. -- -- 841
---- ------ --------
Total gross deferred tax assets........................ 183 4,057 31,505
Valuation allowance....................................... (183) (4,057) (31,505)
---- ------ --------
Total net deferred tax assets.......................... $ -- $ -- $ --
==== ====== ========
</TABLE>

The Company has a federal net operating loss carry forward of approximately
$42.7 million that begins to expire in the year 2012. Also, the Company has
state tax losses of $42.7 million that expire beginning in 2002. Based on the
Company's history of losses to date, management has provided a valuation
allowance to fully offset the deferred assets related to federal and state net
operating loss carry forwards.

7. RELATED PARTY TRANSACTIONS

In conjunction with the acquisition of TeleSite, the Company issued a
$2,312,000 note payable to a shareholder. In the period from April 25, 1997
(inception) to December 31, 1997 and during the year ended December 31, 1998,
the Company incurred approximately $100,000 and $81,000 of interest expense
related to the note payable to shareholder, respectively. The balance of the
note payable at December 31, 1997 was $2,312,000. In June 1998, the note was
repaid in full.

On April 20, 1999, in connection with the Nextel tower acquisition, four
directors purchased 50,000, 25,000, 262,973 and 100,000 shares of SpectraSite's
Series C preferred stock for $5.00 per share, respectively. In addition, one
director purchased 100,000 shares of common stock and executed promissory notes
as payment for the common stock. The promissory notes mature on April 20, 2009
and bear interest at 5.67% per year. Under the purchase agreement, 25% of the
shares of common stock vest each year, with the first installment vesting on
April 20, 2000. In addition, SpectraSite has the right to repurchase half of the
shares at

F-20
<PAGE> 109
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

their original cost to the director at any time prior to April 20, 2000 and upon
the date the director ceases to perform services for SpectraSite.

Affiliates of three significant stockholders received an aggregate of two
million shares of SpectraSite's common stock valued at $9 million as
consideration for financing commitments made in connection with the Nextel tower
acquisition. These commitments were not utilized and the value of these shares
has been reduced as a charge to interest expense in 1999. Affiliates of each
entity are members of the Company's board directors.

To finance a portion of the cash consideration paid to Nextel, SpectraSite
issued and sold the 2009 Notes in a private offering and borrowed $150.0 million
under its credit facility. CIBC World Markets Corp. was an initial purchaser in
the 2009 notes offering, and an affiliate of CIBC World Markets is an agent and
a lender under the credit facility. CIBC World Markets was also an initial
purchaser of SpectraSite's 2008 Notes. CIBC World Markets and its affiliates
received customary fees for such services. One director of SpectraSite is a
Managing Director of CIBC World Markets Corp.

In May 1997, an officer agreed to invest additional personal funds in
SpectraSite at the average per share price of Holdings Series A and Series B
preferred stock. In satisfaction of this commitment, the officer purchased
210,000 shares of common stock for an aggregate purchase price of $772,800 on
April 20, 1999.

In August 1999, SpectraSite loaned an officer $325,000 in connection with
the exercise of certain stock options. The 112,500 shares the officer acquired
through the exercise of these options are pledged to SpectraSite as security for
this loan. The loan bears interest at the applicable federal rate under the
Internal Revenue Code, 5.36% per annum, and matures in August 2002.

In September 1999, SpectraSite loaned an officer $500,000 to purchase a
home as a relocation incentive. This loan will be secured by any shares of
SpectraSite's common stock issued to the officer upon exercise of options, bears
interest at 5.82% per annum and matures in September 2004.

8. EMPLOYEE BENEFIT PLAN

The Company provides a 401(k) plan for the benefit of all its employees
meeting specified eligibility requirements. The Company's expense related to the
plan are discretionary and totaled approximately $11,000, $31,000 and $110,000
for the period from April 25, 1997 (inception) to December 31, 1997, for the
year ended December 31, 1998 and for the nine months ended September 30, 1999,
respectively.

9. SALE OF AFFILIATES

In February 1998, the Company entered into an agreement under which it sold
its wholly-owned subsidiary, MetroSite, for $298,575. The Company recognized a
gain on the sale of $257,251.

In May 1998, the Company sold its ownership interest in Communication
Management Specialists, LLC ("CMS") for $375,000, in exchange for a note
receivable bearing interest at 8.5% per annum, payable to the Company over 60
months. The total amount due to the Company at September 30, 1999 is $284,000 of
which the current portion, $65,000, is included in prepaid expenses and other
current assets in the accompanying balance sheet. The Company recognized a gain
on the sale of approximately $189,000. Prior to the sale, the Company's
ownership interest in CMS was accounted for using the equity method.

10. ACQUISITION ACTIVITY

In June 1998, the Company entered into an agreement under which it acquired
all of the membership interests of H&K Investments, LLC for $1,400,000 in a
transaction accounted for as a purchase. The results of operations of H&K are
included in the Company's operations from the date of acquisition. The Company
paid

F-21
<PAGE> 110
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$1,300,000 in cash and recorded notes payable for $100,000 in conjunction with
the acquisition. The outstanding note payable was subsequently paid in December
1998.

In August 1998, the Company entered into an asset purchase agreement with
Airadigm Communications, Inc. ("Airadigm") for the purchase of 47 towers for
approximately $11,750,000. As of December 31, 1998, 40 towers had been placed in
service and the remaining 7 towers were placed in service prior to September 30,
1999. Under the terms of the agreement, the Company will lease antenna space on
the towers to Airadigm.

In August 1998, the Company entered into an asset purchase agreement with
Amica Wireless Phone Service, Inc. for the purchase of the construction in
progress related to 14 towers for approximately $474,000.

In September 1998, the Company acquired all of the outstanding common stock
of GlobalComm, Inc. for $1,988,864 in cash in a transaction accounted for as a
purchase. The results of operations of GlobalComm are included in the Company's
operations from the date of acquisition. The Company recorded approximately
$1,669,000 of goodwill related to the transaction.

In April 1999, the Company purchased 2,000 communications towers from
Nextel for $560.0 million in cash and 14 million shares of Series C preferred
stock valued at $70.0, million obtaining an equity position representing
approximately 18% of all the Company's outstanding stock on a fully-diluted
basis. As part of the transaction, Nextel has agreed to lease 1,700 additional
sites on the Company's towers as part of Nextel's national deployment.
SpectraSite and certain of Nextel's subsidiaries entered into a master site
commitment agreement under which Nextel and its controlled affiliates will offer
SpectraSite exclusive opportunities, under specific terms and conditions,
relating to the construction or purchase of, on co-location on, additional
communications sites. These sites will then be leased by subsidiaries of Nextel
under the terms of the master site lease agreement. If the number of new sites
leased is less than the agreed upon number as of particular dates, Nextel has
agreed to make payments to SpectraSite. The master site commitment agreement
also gives SpectraSite a right of first refusal to acquire any towers that
Nextel or certain affiliates desire to sell. Of the total consideration paid to
Nextel, $45.0 million has been allocated as a deposit relating to this
commitment. The Company used $150.0 million of borrowings under a $500.0 million
committed credit facility, $340.0 million from the proceeds of a privately
placed high yield debt offering, and $231.4 million from the sale of new Series
C preferred stock, to fund the cash purchase price and to pay related fees and
expenses.

In connection with the purchase, Nextel entered into a master lease
agreement to become the anchor tenant on each of the acquired towers and also
conveyed to the Company certain third-party co-location site leases associated
with the acquired assets. Nextel also transferred to the Company certain
non-cancelable ground leases, and the Company assumed all operating and other
costs associated with the acquired assets.

In September 1999, the Company consummated the Agreement and Plan of
Merger, dated as of May 15, 1999 with Westower. Under the terms of the
agreement, Westower shareholders received 1.81 shares of SpectraSite common
stock for each share of Westower common stock. In the aggregate, SpectraSite
exchanged 15.5 million shares of its common stock valued at $205.6 million for
8.6 million shares of Westower common stock and assumed $81.5 million of debt.
The Company repaid $72.2 million of such assumed debt at closing. In addition,
the Company assumed the outstanding Westower employee stock options, which were
converted into options to purchase 1.7 million shares of SpectraSite's common
stock. The acquisition was accounted for as a purchase, and the excess of cost
over fair value of the net assets acquired is being amortized on a straight-line
basis over fifteen years. The operations of Westower are included in the
consolidated statement of operations from the date of acquisition

The following unaudited pro forma summary presents consolidated results of
operations for the Company as if the Westower, GlobalComm and H&K acquisitions
and Westower's purchases of Cord Communications, Inc. and Summit Communications,
LLC had been consummated as of January 1, 1998. The pro forma

F-22
<PAGE> 111
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

information does not necessarily reflect the actual results that would have been
achieved, nor is it necessarily indicative of future consolidated results for
the Company.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1998 1999
----------------- ------------------
(IN THOUSANDS OF DOLLARS EXCEPT
PER SHARE DATA)
<S> <C> <C>
Net revenues.............................. $ 89,349 $130,571
Net loss.................................. (20,844) (78,103)
Basic and diluted net loss per common
share................................... (1.40) (4.44)
</TABLE>

11. BUSINESS SEGMENTS

The Company previously operated in one business segment. As a result of the
Nextel tower and Westower acquisitions, the Company now operates in two business
segments, site leasing and network services. Prior period information has been
restated to reflect the current business segments. The site leasing segment
provides for leasing and subleasing of antennae sites on multi-tenant towers for
a diverse range of wireless communication services, including personal
communication services, paging, cellular and microwave. The network services
segment offers a broad range of network development services, including network
design, tower construction and antenna installation.

In evaluating financial performance, management focuses on operating profit
(loss), excluding depreciation and amortization and restructuring charges. This
measure of operating profit (loss) is also before interest income, interest
expense, other income (expense) and income taxes. All reported segment revenues
are generated from external customers as intersegment revenues are not
significant.

Summarized financial information concerning the reportable is shown in the
following table. The "Other" column represents amounts excluded from specific
segments, such as income taxes, corporate general and administrative expenses,
depreciation and amortization, restructuring and other non-recurring charges and
interest. In addition, "Other" also includes corporate assets such as cash and
cash equivalents, tangible and intangible assets and income tax accounts which
have not been allocated to a specific segment.

<TABLE>
<CAPTION>
SITE NETWORK
LEASING SERVICES OTHER TOTAL
-------- -------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
NINE MONTHS ENDED SEPTEMBER 30, 1999
Revenues........................................... $ 29,450 $13,967 $ -- $ 43,417
Income (loss) before income taxes.................. 18,930 4,658 (89,997) (66,409)
Assets............................................. 691,820 44,832 433,014 1,169,666
YEAR ENDED DECEMBER 31, 1998
Revenues........................................... $ 656 $ 8,142 $ -- $ 8,798
Income (loss) before income taxes.................. 357 5,650 (15,086) (9,079)
Assets............................................. 25,865 -- 136,081 161,946
PERIOD FROM INCEPTION (APRIL 25, 1997) TO DECEMBER
31, 1998
Revenues........................................... $ -- $ 5,002 $ -- $ 5,002
Income (loss) before income taxes.................. -- (3,997) 107 (3,890)
Assets............................................. -- -- 13,642 13,642
</TABLE>

F-23
<PAGE> 112
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

From inception (April 25,1997) until the acquisition of Westower on
September 2, 1999, all of the Company's operations were located in the United
States.

Net revenues for the nine months ended September 30, 1999 were located in
geographic areas as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
United States....................................... $41,601
Canada.............................................. 2,349
Eliminations........................................ (533)
-------
Consolidated net revenues........................... $43,417
=======
</TABLE>

At September 30, 1999, assets were located in geographic areas as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
United States....................................... $ 948,561
Canada.............................................. 61,949
----------
Consolidated long-lived assets...................... $1,010,510
==========
</TABLE>

12. YEAR 2000 ISSUE (UNAUDITED)

The Company has not experienced any immediate adverse impact from the
transition to the Year 2000; however, Management cannot provide assurance that
the Company or suppliers and customers have not been affected in a manner that
is not yet apparent. In addition, certain computer programs which were date
sensitive to the Year 2000 may not process the Year 2000 as a leap year, and any
negative consequential effects remain unknown. As a result, the Company
continues to monitor Year 2000 compliance and the Year 2000 compliance of its
suppliers and customers.

13. SUBSEQUENT EVENTS (UNAUDITED)

On December 30, 1999, SpectraSite acquired Stainless, Inc., formerly a
wholly-owned subsidiary of Northwest Broadcasting, L.P., for $40.0 million in
cash. Stainless provides engineering, fabrication and other services in
connection with the erection of towers used for television broadcast companies.

Also on December 30, 1999, SpectraSite acquired Doty-Moore Tower Services,
Inc., Doty-Moore Equipment Company, Inc. and Doty-Moore RF Services, Inc. for
$2.5 million in cash and 500,000 unregistered shares of SpectraSite's common
stock. Doty-Moore is a leading source for broadcast tower construction and
technical services.

On January 5, 2000, SpectraSite acquired Vertical Properties, Inc. in a
merger transaction under which SpectraSite issued 225,000 unregistered shares of
its common stock and repaid outstanding indebtedness of approximately $2.0
million. Vertical Properties is a broadcast tower development company formed to
meet the needs of broadcasters in secondary broadcast markets faced with the
complexities of converting to digital technology through site acquisition, tower
placement and leasing of antenna space.

Also on January 5, 2000, SpectraSite signed a definitive agreement to
acquire substantially all of the assets of International Towers, Inc. and its
subsidiaries, including S&W Communications, Inc. International Towers owns a
broadcast tower manufacturing facility and, through S&W Communications, provides
integrated services for the erection of broadcast towers, foundations and
multi-tenant transmitter buildings. SpectraSite has agreed to pay $5.5 million
and to issue an aggregate of 350,000 unregistered shares of its common stock in
connection with this acquisition. Consummation of the transaction is subject to
customary closing conditions, and SpectraSite expects to complete this
transaction in January 2000.

F-24
<PAGE> 113
SPECTRASITE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On January 5, 2000, SpectraSite acquired Apex Site Management Holdings,
Inc. ("Apex") in a merger transaction. Apex provides rooftop and in-building
access to wireless carriers. SpectraSite issued approximately 4.5 million
unregistered shares of its common stock and approximately 194,000 options to
purchase common stock at an exercise price of $3.58 per share to the
stockholders of Apex at the closing of the merger. In addition, SpectraSite
issued approximately 1.5 million additional shares of common stock into escrow,
which shares may be released to Apex's stockholders six months after
SpectraSite's currently pending public offering is consummated based on the
average trading price for SpectraSite's common stock for the 30-day period
immediately preceding the six-month anniversary of the public offering.
SpectraSite also used approximately $6.2 million in cash to repay outstanding
indebtedness and other obligations of Apex in connection with the merger.

F-25
<PAGE> 114

REPORT OF INDEPENDENT AUDITORS

The Members
TeleSite Services, LLC

We have audited the accompanying consolidated balance sheet of TeleSite
Services, LLC (the "Company") as of December 31, 1996 and the related
consolidated statements of operations and members' equity and cash flows for the
year ended December 31, 1996 and for the period from January 1, 1997 through May
12, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of TeleSite
Services, LLC at December 31, 1996 and the consolidated results of its
operations and its cash flows for the year ended December 31, 1996 and for the
period from January 1, 1997 through May 12, 1997, in conformity with accounting
principles generally accepted in the United States.

ERNST & YOUNG LLP

Raleigh, North Carolina
March 27, 1998

F-26
<PAGE> 115

TELESITE SERVICES, LLC

CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1996

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash...................................................... $ 4,854
Accounts receivable:
Trade.................................................. 1,777,611
Other.................................................. 37,107
Prepaid expenses and other................................ 39,964
----------
Total current assets........................................ 1,859,536
Property and equipment, net................................. 931,291
Investment in affiliate..................................... 131,459
----------
Total assets................................................ $2,922,286
==========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Line of credit............................................ $ 946,724
Accounts payable.......................................... 688,180
Accrued expenses.......................................... 33,092
Current portion of long-term debt......................... 295,711
----------
Total current liabilities................................... 1,963,707
Long-term debt, less current portion........................ 81,106
----------
Total liabilities........................................... 2,044,813
Members' equity............................................. 877,473
----------
Total liabilities and members' equity....................... $2,922,286
==========
</TABLE>

See accompanying notes.

F-27
<PAGE> 116

TELESITE SERVICES, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
FOR THE JANUARY 1, 1997
YEAR ENDED TO
DECEMBER 31, 1996 MAY 12, 1997
----------------- ---------------
<S> <C> <C>
Revenues................................................ $8,840,869 $1,925,985
Costs of operations..................................... 2,254,777 594,683
Selling, general and administrative expenses............ 4,255,840 1,741,856
Depreciation expense.................................... 91,133 55,870
---------- ----------
Operating income (loss)................................. 2,239,119 (466,424)
Interest expense........................................ (66,505) (35,695)
Equity in earnings (loss) of affiliate.................. 116,459 (1,087)
---------- ----------
Net income (loss)....................................... $2,289,073 $ (503,206)
========== ==========
Pro forma income data (unaudited):
Net income (loss) as reported......................... $2,289,073 $ (503,206)
Pro forma provision for income taxes.................. 892,783 --
---------- ----------
Pro forma net income (loss)........................... $1,396,290 $ (503,206)
========== ==========
</TABLE>

See accompanying notes.

F-28
<PAGE> 117

TELESITE SERVICES, LLC

CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY

<TABLE>
<S> <C>
Members' deficiency at January 1, 1996...................... $ (445,584)
Distributions to members.................................. (966,016)
Net income................................................ 2,289,073
----------
Members' equity at December 31, 1996........................ $ 877,473
Contribution to capital................................... 100
Distributions to members.................................. (211,256)
Net loss.................................................. (503,206)
----------
Members' equity at May 12, 1997............................. $ 163,111
==========
</TABLE>

See accompanying notes.

F-29
<PAGE> 118

TELESITE SERVICES, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
FOR THE JANUARY 1, 1997
YEAR ENDED TO
DECEMBER 31, 1996 MAY 12, 1997
----------------- ---------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)....................................... $ 2,289,073 $(503,206)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation.......................................... 91,133 55,870
Equity in (earnings) loss of affiliate................ (116,459) 1,087
Changes in operating assets and liabilities:
Trade accounts receivable.......................... (1,314,087) 456,345
Other accounts receivable.......................... (34,072) (76,610)
Prepaid expenses and other......................... (35,827) (17,487)
Accounts payable................................... 197,702 (42,534)
Accrued expenses................................... 31,568 55,593
----------- ---------
Net cash provided by (used in) operating
activities.................................... 1,109,031 (70,942)
INVESTING ACTIVITIES
Purchases of property and equipment..................... (837,808) (321,788)
Investment in affiliate................................. (15,000) --
----------- ---------
Net cash used in investing activities............ (852,808) (321,788)
FINANCING ACTIVITIES
Net proceeds from line of credit........................ 368,724 249,338
Net proceeds from long-term debt........................ 556,391 293,785
Repayment of long-term debt............................. (224,923) --
Proceeds from capital contribution...................... -- 100
Distribution to members................................. (966,016) (153,499)
----------- ---------
Net cash (used in) provided by financing
activities.................................... (265,824) 389,724
----------- ---------
Net decrease in cash.................................... (9,601) (3,006)
Cash at beginning of period............................. 14,455 4,854
----------- ---------
Cash at end of period................................... $ 4,854 $ 1,848
=========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest................ $ 64,000 $ 30,695
=========== =========
</TABLE>

See accompanying notes.

F-30
<PAGE> 119

TELESITE SERVICES, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

TeleSite Services, LLC (the "Company") was formed on August 1, 1995, for
the purpose of providing site development services, as agent, to companies
operating in the telecommunications industry. TeleSite's clients are located
primarily in the southeastern and south central regions of the United States.

MetroSite Management, LLC ("MetroSite") was formed on February 28, 1997 by
the contribution of $99 by the Company and $1 by a member of the Company for the
99% and 1% ownership of MetroSite, respectively. MetroSite was formed for the
purpose of negotiating agreements with municipalities to lease certain locations
to PCS providers (e.g., water towers, etc.) in return for a percentage of the
monthly rental amounts charged by the municipalities to the PCS providers.

PRINCIPLES OF CONSOLIDATION

The accompanying 1997 consolidated financial statements include the
accounts of TeleSite, LLC and MetroSite Management, LLC from the date of
MetroSite's formation. All significant intercompany transactions and balances
have been eliminated in consolidation. Minority interest related to the
membership interest not owned by the Company is insignificant.

USE OF ESTIMATES

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is computed using
straight-line and accelerated methods over the estimated useful lives of the
assets ranging from three to seven years.

REVENUE RECOGNITION

Revenue from projects is recognized when site selection services are
rendered.

COST OF REVENUES

Cost of revenues consist of the direct costs incurred to provide the
related services.

SIGNIFICANT CONCENTRATIONS

The Company's customer base consists of companies operating in the
telecommunications industry. The Company's exposure to credit risk consists
primarily of unsecured accounts receivable from these customers.

F-31
<PAGE> 120
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Following is information concerning revenue and accounts receivable
concentrations of the Company's major customers:

<TABLE>
<CAPTION>
% OF REVENUES
------------------------------------
PERIOD FROM
JANUARY 1, 1997
YEAR ENDED TO
DECEMBER 31, 1996 MAY 12, 1997
----------------- ---------------
<S> <C> <C>
Customer 1.............................. 21% 34%
Customer 2.............................. 63% 30%
Customer 3.............................. -- 12%
</TABLE>

<TABLE>
<CAPTION>
% OF ACCOUNTS RECEIVABLE AT
---------------------------------
DECEMBER 31, 1996 MAY 12, 1997
----------------- ------------
<S> <C> <C>
Customer 1................................ 11% 37%
Customer 2................................ 67% 24%
</TABLE>

INVESTMENT IN AFFILIATE

The Company's 33% ownership interest in Communication Management
Specialists, LLC, ("CMS") a company that provides construction management
services to telecommunications companies, is accounted for using the equity
method.

Summary financial information of CMS is as follows:

<TABLE>
<CAPTION>
AS OF AND FOR THE
AS OF AND FOR THE PERIOD FROM
YEAR ENDED JANUARY 1, 1997
DECEMBER 31, TO
1996 MAY 12, 1997
----------------- -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Current Assets.......................... $1,110,500 $810,200
Non-current Assets...................... 16,300 17,800
Current Liabilities..................... 747,400 452,000
Non-current............................. -- --
Liabilities Members' equity............. 379,400 376,000
Net Sales............................... 2,404,866 650,000
Gross Profit............................ 553,164 179,500
Net income.............................. 352,900 (3,300)
</TABLE>

INCOME TAXES

The Company is organized as a limited liability company and is therefore
not subject to income taxes. All taxable income or loss is reported by the
members on their respective income tax returns. Therefore the accompanying
Consolidated Statement of Operations and Members' Equity does not include any
provision for income tax expense.

F-32
<PAGE> 121
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31, 1996:

<TABLE>
<S> <C>
Land..................................................... $ 297,600
Equipment................................................ 304,148
Furniture and fixtures................................... 143,199
Vehicles................................................. 200,240
Leasehold improvements................................... 53,448
Construction in progress................................. 42,259
----------
Total.................................................... 1,040,894
Less accumulated depreciation............................ (109,603)
----------
Property and equipment, net.............................. $ 931,291
==========
</TABLE>

3. LINE OF CREDIT AND LONG-TERM DEBT

The Company has a maximum $1,500,000 line of credit with a bank, with an
outstanding balance of $946,724 at December 31, 1996. The line of credit bears
interest at a variable rate, not to exceed 10.0%, with interest payable monthly
and principal due May 31, 1997. The rate of interest at December 31, 1996 was
8.5%. The line of credit is collateralized by substantially all assets of the
Company.

Long-term debt consisted of the following at December 31, 1996:

<TABLE>
<S> <C>
Note payable to a bank, bearing interest at 8.5%, maturing
April 4, 1997, monthly payments of interest of $1,780,
collateralized by land.................................... $ 250,000
Installment notes payable to a bank, bearing interest at
rates ranging from 8.75% to 10.2%, maturing from October 20,
1998 to December 9, 1999, monthly payments of principal and
interest of $4,614, collateralized by vehicles.............. 126,817
---------
Total....................................................... 376,817
Less current maturities..................................... (295,711)
---------
Long-term debt.............................................. $ 81,106
=========
</TABLE>

Maturities of long-term debt at December 31, 1996 are as follows:

<TABLE>
<CAPTION>
FOR THE
YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
1997............................................. $295,711
1998............................................. 46,815
1999............................................. 34,291
--------
Total............................................ $376,817
========
</TABLE>

The Company estimates that the fair value of notes payable approximates the
carrying value based upon its effective current borrowing rate for debt with
similar terms and remaining maturities. Disclosure about fair value of financial
instruments is based upon information available to management as of December 31,
1996.

4. RELATED PARTY TRANSACTIONS

The Company is affiliated with other organizations by common ownership
and/or control. During the year ended December 31, 1996 and the period from
January 1, 1997 to May 12, 1997, the Company paid approximately $66,000 and
$22,000, respectively, to an affiliated organization for rent expense.

F-33
<PAGE> 122
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On May 9, 1997, a member of the Company assumed the Company's construction
line of credit with a bank of $562,135, in exchange for land and construction in
progress with carrying values of $297,600 and $322,292, respectively. The
Company recorded a non-cash shareholder's distribution of $57,757 associated
with this transaction.

5. LEASES

The Company leases office space and certain office equipment under
noncancelable operating leases. The future minimum lease payments under such
leases at December 31, 1996 are as follows:

<TABLE>
<S> <C>
1997...................................................... $164,597
1998...................................................... 136,409
1999...................................................... 93,696
2000...................................................... 66,429
2001...................................................... 27,500
--------
Total..................................................... $488,631
========
</TABLE>

Rent expense under operating leases was approximately $110,000 and $57,000
for the year ended December 31, 1996 and for the period from January 1, 1997 to
May 12, 1997, respectively.

6. EMPLOYEE BENEFIT PLAN

The Company provides a 401(k) plan for the benefit of its employees meeting
specified eligibility requirements. The Company's contributions to the plan are
discretionary and totaled $15,205 in 1996 and $12,342 for the period from
January 1, 1997 to May 12, 1997.

7. PRO FORMA INCOME DATA (UNAUDITED)

The pro forma provision for income taxes is based upon the statutory income
tax rates in effect during the year ended December 31, 1996. No provision was
provided in the period from January 1 to May 12, 1997 due to the net operating
loss.

8. SUBSEQUENT EVENT

On May 12, 1997, 100% of the members' interests of the Company and its
subsidiary, MetroSite, were acquired by SpectraSite Holdings, Inc., a Delaware
corporation.

F-34
<PAGE> 123

WESTOWER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
AT JUNE 30,1999 AND SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1999 1998
------------ -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................. $ 4,204,000 $ 9,331,000
Accounts receivable, net.................................. 20,506,000 13,289,000
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. 6,758,000 5,078,000
Inventory................................................. 3,133,000 2,151,000
Related party advances and receivables.................... 419,000 956,000
Income tax receivable..................................... 220,000 220,000
Other current assets...................................... 1,744,000 1,203,000
------------ -----------
Total current assets................................... 36,984,000 32,228,000
PROPERTY AND EQUIPMENT, net................................. 50,217,000 7,574,000
INTANGIBLE ASSETS, net...................................... 26,992,000 19,721,000
OTHER ASSETS................................................ 6,139,000 2,771,000
------------ -----------
TOTAL ASSETS................................................ $120,332,000 $62,294,000
============ ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable.................................... $ 8,374,000 $ 7,053,000
Other current liabilities................................. 1,909,000 2,810,000
Billings in excess of costs and estimated earnings on
uncompleted contracts.................................. 1,586,000 1,435,000
Income taxes payable...................................... 2,450,000 2,116,000
Deferred income taxes..................................... 395,000 428,000
Stockholder advances and notes payable to related
parties................................................ 154,000 228,000
Note payable.............................................. 68,000 1,089,000
Current portion of long-term debt and capital lease
obligations............................................ 1,576,000 2,419,000
------------ -----------
Total current liabilities......................... 16,512,000 17,578,000
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, excluding
current portion........................................... 57,059,000 14,991,000
DEFERRED INCOME TAXES....................................... 2,977,000 2,962,000
------------ -----------
Total liabilities................................. 76,548,000 35,531,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock ($.01 par value, 25,000,000 and 10,000,000
shares authorized, 8,562,000 and 7,047,000 shares
issued and outstanding at June 30, 1999 and September
30, 1998, respectively)................................ 85,000 70,000
Additional paid-in-capital................................ 39,818,000 22,610,000
Accumulated other comprehensive loss...................... (237,000) (581,000)
Retained earnings......................................... 4,118,000 4,664,000
------------ -----------
Total stockholders' equity........................ 43,784,000 26,763,000
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........ $120,332,000 $62,294,000
============ ===========
</TABLE>

F-35
<PAGE> 124

WESTOWER CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED JUNE 30, 1999 AND 1998

<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 1999 JUNE 30, 1998 JUNE 30, 1999 JUNE 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CONTRACT AND OTHER REVENUES
EARNED........................... $25,184,000 $12,637,000 $ 68,455,000 $35,995,000
COSTS OF REVENUES EARNED (exclusive
of depreciation shown below)....... 17,688,000 9,609,000 48,418,000 26,659,000
----------- ----------- ------------- -----------
Gross profit..................... 7,496,000 3,028,000 20,037,000 9,336,000
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES......................... 5,128,000 1,640,000 13,385,000 4,827,000
DEPRECIATION AND AMORTIZATION...... 1,078,000 146,000 2,537,000 407,000
MERGER RELATED EXPENSES............ 1,519,000 250,000 1,596,000 250,000
----------- ----------- ------------- -----------
OPERATING INCOME (LOSS)............ (229,000) 992,000 2,519,000 3,852,000
OTHER INCOME (EXPENSE)
Other income (expense)........... (53,000) 41,000 220,000 157,000
Interest income.................. 21,000 75,000 152,000 187,000
Interest and financing expense... (928,000) (31,000) (2,051,000) (103,000)
----------- ----------- ------------- -----------
Total other income
(expense).............. (960,000) 85,000 (1,679,000) 241,000
----------- ----------- ------------- -----------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES..................... (1,189,000) 1,077,000 840,000 4,093,000
PROVISION FOR INCOME TAXES......... (503,000) (213,000) (1,386,000) (1,270,000)
----------- ----------- ------------- -----------
NET INCOME (LOSS).................. $(1,692,000) $ 864,000 $ (546,000) $ 2,823,000
=========== =========== ============= ===========

EARNINGS (LOSS) PER SHARE:
BASIC.............................. $ (0.20) $ 0.14 $ (0.07) $ 0.46
=========== =========== ============= ===========
DILUTED............................ $ (0.20) $ 0.13 $ (0.07) $ 0.39
=========== =========== ============= ===========
</TABLE>

F-36
<PAGE> 125

WESTOWER CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
JUNE 30, 1999

<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER
------------------- PAID-IN RETAINED COMPREHENSIVE COMPREHENSIVE
SHARES AMOUNT CAPITAL EARNINGS INCOME (LOSS) INCOME (LOSS) TOTAL
--------- ------- ----------- ---------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, September 30,
1998.................. 7,047,000 $70,000 $22,610,000 $4,664,000 $(581,000) $26,763,000
Net loss................ (546,000) $(546,000)
Foreign currency
translation
adjustment............ 344,000 344,000
---------
Total comprehensive
loss.............. $(202,000) (202,000)
=========
Proceeds from warrants
and options exercised,
net................... 1,112,000 11,000 8,868,000 8,879,000
Stock issuances for
business
acquisitions.......... 403,000 4,000 8,280,000 8,284,000
Stock compensation
expense............... 60,000 60,000
--------- ------- ----------- ---------- --------- -----------
BALANCE, June 30,
1999.................. 8,562,000 $85,000 $39,818,000 $4,118,000 $(237,000) $43,784,000
========= ======= =========== ========== ========= ===========
</TABLE>

F-37
<PAGE> 126

WESTOWER CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
CASH FROM OPERATING ACTIVITIES
Net income (loss)........................................... $ (546,000) $ 2,823,000
Adjustments to reconcile net income(loss) to net cash from
operating activities
Depreciation and amortization............................. 2,537,000 407,000
Gain on sale of assets.................................... (125,000)
Non-cash interest and financing expense................... 361,000 142,000
Earnings from equity investment........................... (142,000)
Stock compensation expense................................ 60,000 55,000
Changes in operating assets and liabilities, net of effect
of acquisitions
Accounts receivable....................................... (3,609,000) (646,000)
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. (1,680,000) (1,138,000)
Inventory and other current assets........................ (1,333,000) (867,000)
Other assets.............................................. 13,000
Trade accounts payable.................................... 647,000 109,000
Billings in excess of costs and estimated earnings on
uncompleted contracts.................................. 151,000 141,000
Other current liabilities................................. (1,023,000) 19,000
Income taxes payable...................................... 334,000 1,280,000
Current and deferred income taxes......................... (18,000) (57,000)
------------ -----------
Net cash flows (used in) provided by operating
activities............................................. (4,261,000) 2,156,000
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquisitions, net of cash acquired.......... (6,583,000) (1,474,000)
Increase in other assets.................................. (2,700,000)
Purchases of property and equipment....................... (37,422,000) (1,405,000)
Proceeds from sale of assets.............................. 302,000
------------ -----------
Net cash flows used in investing activities............... (46,705,000) (2,577,000)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock issuances, net........................ 8,878,000 8,934,000
Redemption of preferred stock............................. (150,000)
Proceeds from long-term debt.............................. 1,207,000 15,884,000
Repayments to related parties............................. (2,080,000) (1,972,000)
Repayments from (advances to) related parties............. 696,000 (101,000)
Borrowings (repayments) on line of credit, net............ (1,871,000) (245,000)
Proceeds from credit facility............................. 41,600,000
Distributions to stockholders of acquired subsidiaries
prior to acquisition................................... (2,800,000)
Additions to financing costs.............................. (490,000) (349,000)
Repayments of long-term debt.............................. (2,140,000) (476,000)
------------ -----------
Net cash flow from financing activities................... 45,800,000 18,725,000
------------ -----------
EFFECT OF EXCHANGE RATES.................................... 39,000 28,000
------------ -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ (5,127,000) 18,332,000
CASH AND CASH EQUIVALENTS, beginning of period.............. 9,331,000 1,748,000
------------ -----------
CASH AND CASH EQUIVALENTS, end of period.................... $ 4,204,000 $20,080,000
============ ===========
</TABLE>

F-38
<PAGE> 127

WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--BASIS OF PRESENTATION

Westower Corporation (the "Company") designs, builds and maintains wireless
communications transmitting and receiving facilities for providers of wireless
communications services. The Company also owns and leases communications towers.
The Company operates throughout the U.S. and Canada.

The unaudited condensed consolidated financial statements and notes thereto
at June 30, 1999 and September 30, 1998 (audited), and for the three and nine
months ended June 30, 1999 and 1998, reflect the October 28, 1997 merger with
Western Telecom Construction Ltd., an Alberta corporation, the May 29, 1998
merger with MJA Communications Corp., a Florida corporation, and the August 31,
1998 merger with Standby Services, Inc., a Texas corporation. All companies
design, fabricate and construct wireless transmitting and receiving facilities
and shelters for communications providers. The Company issued 835,000 shares of
its common stock for all the common shares of Western Telecom Construction Ltd.,
397,000 shares of its common stock for all of the common shares of MJA
Communications Corp., and 544,000 shares of its common stock for all of the
common shares of Standby Services, Inc. All of these mergers were accounted for
as or similar to a pooling-of-interests.

On October 27, 1998, the Company changed its fiscal year-end from February
28 to September 30. All prior information has been restated to conform with a
September 30 year end.

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial reporting and in accordance with the instructions for Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and disclosures normally required by generally accepted
accounting principles for complete financial statements or those normally
reflected in the Company's Annual Report on Form 10-KSB. The financial
information included herein reflects all adjustments (consisting of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair presentation of results for interim periods. Results of interim periods are
not necessarily indicative of the results to be expected for a full year. These
unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements for the seven-month
Transition Period ended September 30, 1998 and the notes thereto included in the
Company's Form 10-KSB.

CONSOLIDATION--The consolidated financial statements include the accounts
of the Company and its wholly owned domestic and Canadian subsidiaries.
Investments in subsidiaries in which the Company exercises significant influence
but which it does not control are accounted for using the equity method.
Investment in a 60% owned affiliated company is accounted for on the equity
method of accounting. The Company's equity (loss) earnings from this investment
during the three and nine months ended June 30, 1999 was $(83,000) and $142,000,
respectively, which has been included in other income. All material intercompany
accounts and transactions have been eliminated in consolidation.

FOREIGN CURRENCY TRANSLATION--All asset and liability accounts of Canadian
operations are translated into U.S. dollars at current exchange rates. Revenues
and expenses are translated using the average exchange rate during the period.
Foreign currency translation adjustments are reported as a component of
comprehensive income and stockholders' equity in the consolidated balance sheet.
Exchange gains and losses from foreign currency transactions are included in
income currently.

USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the unaudited
condensed consolidated financial statements. Examples of estimates subject to
possible revision based upon the outcome of future events include costs and
estimated earnings on uncompleted contracts, depreciation of property and
equipment, accrued income tax liabilities, and purchase price allocations for
acquisitions. Actual results could differ from those estimates.

F-39
<PAGE> 128
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

RECLASSIFICATION--Certain prior year amounts have been reclassified to
conform to the current year presentation and did not impact previously reported
stockholders' equity or cash flow.

NOTE 2--INVENTORY

Inventory is stated at the lower of cost and estimated net realizable value
using the first-in, first-out method. Inventory consists of materials purchased
for future construction not associated with specific jobs.

NOTE 3--PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1999 1998
----------- -------------
<S> <C> <C>
Buildings....................................... $ 1,883,000 $ 1,795,000
Vehicles........................................ 4,016,000 2,540,000
Equipment....................................... 2,851,000 1,580,000
Communications towers........................... 37,479,000 1,401,000
Furniture and fixtures.......................... 1,840,000 943,000
Leasehold improvements.......................... 161,000 81,000
Construction in progress........................ 3,534,000
----------- -----------
51,764,000 8,340,000
Less accumulated depreciation and
amortization.................................. (2,878,000) (1,562,000)
----------- -----------
48,886,000 6,778,000
Land............................................ 1,331,000 796,000
----------- -----------
$50,217,000 $ 7,574,000
=========== ===========
</TABLE>

In February 1999, the Company completed the acquisition of certain
communications towers under contract in December 1998, at an aggregate cost of
approximately $17 million. In May 1999, the Company completed the acquisition of
certain communications towers under contract in October 1998, at an aggregate
cost of approximately $15.5 million.

NOTE 4--ACQUISITIONS

During the nine months ended June 30, 1999, the Company consummated the
following transactions which were accounted for under the purchase method of
accounting, and accordingly, the operating results of the acquired entities have
been included in the consolidated operating results since the date of
acquisition.

On October 30, 1998 the Company completed the acquisition of Teletronics
Management Services, Inc. ("Teletronics"). The acquisition was effected by
exchanging approximately 188,000 shares of common stock valued at approximately
$3.8 million, based on the publicly traded price, $1.8 million in cash,
including distributions payable to former shareholders in the amount of
$800,000, and the assumption of certain liabilities, for all outstanding shares
of Teletronics. The acquisition was accounted for using the purchase method for
business combinations resulting in goodwill of approximately $5.0 million.

F-40
<PAGE> 129
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

an additional 100,000 shares of common stock, based on certain performance
criteria during the three years following the date of acquisition. The
acquisition was accounted for using the purchase method for business
combinations resulting in goodwill of approximately $8.0 million.

On February 4, 1999 the Company completed the acquisition of Cypress Real
Estate Services, Inc. ("Cypress"), a Florida corporation. The acquisition was
effected by exchanging approximately 15,000 shares of common stock valued at
approximately $424,000, based on the publicly traded price, for all outstanding
shares of Cypress. The former shareholder of Cypress may also receive additional
shares of common stock, based on the number of towers, not to exceed 1,000
towers, acquired or constructed by the Company, subject to certain limitations
and restrictions.

The acquisition was accounted for using the purchase method for business
combinations with substantially all of the purchase price allocated to goodwill.

On February 26, 1999 the Company completed the acquisition of
Telecommunications R. David ("R. David"), a Quebec, Canada company which engages
in operations similar to those of the Company. The acquisition was effected by
exchanging approximately $330,000 in cash, and the assumption of certain
liabilities, for all outstanding shares of R. David. The acquisition was
accounted for using the purchase method for business combinations resulting in
goodwill of approximately $350,000.

The following is a summary of all consideration exchanged for acquisitions
that were accounted for as purchases:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
JUNE 30,
1999
-----------
<S> <C>
Shares issued......................................... 403,000
Value of shares....................................... $ 8,284,000
Cash.................................................. 6,583,000
-----------
Total purchase price........................ $14,867,000
===========
</TABLE>

The assets and liabilities of the acquired entities were recorded at their
estimated fair market values at the dates of acquisition. The initial
allocations of fair market values are preliminary and are subject to adjustments
during the first year following the acquisition. The initial allocations were as
follows:

<TABLE>
<CAPTION>
JUNE 30,
1999
-----------
<S> <C>
Non-compete agreements.................................. $ 136,000
Tangible assets......................................... 5,084,000
Goodwill................................................ 13,825,000
Liabilities assumed and deferred tax liabilities........ (4,178,000)
-----------
Total purchase price.......................... $14,867,000
===========
</TABLE>

Included in the operating results for the three and nine months ended June
30, 1999 are revenues of $5,273,000 and $14,552,000, respectively, and operating
income of $668,000 and $2,028,000, respectively, from the dates of acquisition.
Goodwill is generally amortized over a 20 year period.

F-41
<PAGE> 130
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 5--INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1999 1998
----------- -------------
<S> <C> <C>
Goodwill........................................ $27,864,000 $14,039,000
Communications tower purchase contract.......... -- 5,661,000
Non-compete agreements.......................... 355,000 219,000
----------- -----------
28,219,000 19,919,000
Less accumulated amortization................... (1,227,000) (198,000)
----------- -----------
$26,992,000 $19,721,000
=========== ===========
</TABLE>

NOTE 6--OTHER ASSETS

Other assets consist of the following:

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1999 1998
---------- -------------
<S> <C> <C>
Deposits on tower purchase contracts............. $1,176,000 $ --
Equity investment in joint venture............... 1,189,000 217,000
Other noncurrent assets, net..................... 3,774,000 2,554,000
---------- ----------
$6,139,000 $2,771,000
========== ==========
</TABLE>

During the nine months ended June 30, 1999, the Company paid approximately
$1.2 million as deposits to acquire additional towers. Equity investment in
joint venture represents the Company's cash investment and the Company's equity
earnings from this investment

NOTE 7--LONG-TERM DEBT

During the nine months ended June 30, 1999, the Company borrowed an
aggregate $41.6 million under its credit facility with Bank Boston N.A. As of
June 30, 1999, the effective interest rate on borrowings under the facility was
approximately 7.75%. The Company borrowed an additional $8.0 million under the
facility subsequent to June 30, 1999. The facility is collateralized by
substantially all of the Company's assets. At June 30, 1999, the Company was in
compliance with all of its covenants with the exception of certain financial
ratio requirements related to cash flow. The Company has received a waiver from
the lenders waiving the right to demand repayment as a result of the violation.

NOTE 8--COMMON STOCK

On October 15, 1997, the Company issued 1,200,000 shares of common stock
and 1,380,000 warrants to purchase common stock in a public offering. The
Company received proceeds, net of costs, of $7,493,000 from its public offering.
During the nine months ended June 30, 1999, the Company received net proceeds of
$7,291,000 on the exercise of 819,000 warrants, at $9.00 per share of common
stock. In addition to the warrants noted above, during the nine months ended
June 30, 1999, the Company's underwriters exercised warrants, issued in
connection with the Company's initial public offering, resulting in the Company
receiving $1,123,000 on the exercise of warrants to purchase 162,000 shares of
common stock at $9 per share. At June 30, 1999, there were unexercised warrants
to purchase approximately 79,000 shares of common stock held by underwriters.

F-42
<PAGE> 131
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 9--EARNINGS (LOSS) PER SHARE

The numerators and denominators of basic and fully diluted earnings (loss)
per share are as follows:

<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 1998 1999 1998
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Numerator--Net income(loss)
as reported............... $(1,692,000) $ 864,000 $ (546,000) $2,823,000
=========== ========== ========== ==========
Denominator--Weighted
average number of shares
outstanding:
Basic weighted average
number of shares....... 8,525,000 6,356,000 8,234,000 6,104,000
Effect of dilutive stock
options and warrants... 431,000 1,104,000
----------- ---------- ---------- ----------
Diluted weighted
average number of
shares............... 8,525,000 6,787,000 8,234,000 7,208,000
=========== ========== ========== ==========
</TABLE>

For the three and nine months ended June 30, 1999, all potential common
shares were excluded from the computation of diluted earnings (loss) per share
because inclusion would have had an anti-dilutive effect on earnings (loss) per
share. For the three months ended June 30, 1998, shares associated with
convertible debt were excluded from the computation of diluted earnings per
share because inclusion would have had an anti-dilutive effect on earnings per
share. All other potential common shares have been included in the diluted
earnings per share calculations for the three and nine months ended June 30,
1998.

NOTE 10--SEGMENT INFORMATION

The Company's operations are comprised of a number of communication tower
construction entities that were recently acquired. While management assesses the
operating results of each of these entities separately, as these entities and
its existing operations exhibit similar financial performance and have similar
economic characteristics, they have been aggregated as one segment.

The following table summarizes contract and other revenues and long-lived
assets related to the respective countries in which the Company operates.

<TABLE>
<CAPTION>
AS OF AND FOR THE NINE MONTHS ENDED JUNE 30,
---------------------------------------------
TOTAL UNITED STATES CANADA
----------- ------------- -----------
<S> <C> <C> <C>
1999
Contract and Other Revenues............. $68,455,000 $52,658,000 $15,797,000
Long-lived Assets..................... $50,217,000 $43,574,000 $ 6,643,000
</TABLE>

<TABLE>
<CAPTION>
AS OF AND FOR THE NINE MONTHS ENDED JUNE 30,
---------------------------------------------
TOTAL UNITED STATES CANADA
----------- ------------- -----------
<S> <C> <C> <C>
1998
Contract and Other Revenues............. $35,995,000 $19,206,000 $16,789,000
Long-lived Assets..................... $ 4,854,000 $ 1,251,000 $ 3,603,000
</TABLE>

Long-lived assets are comprised of property and equipment and exclude
intangible assets.

F-43
<PAGE> 132
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 11--MERGER OF THE COMPANY

On May 15, 1999, the Company entered into a definitive agreement with
SpectraSite Holdings, Inc. (SpectraSite), under which Westower will merge with a
subsidiary of SpectraSite. The transaction was consummated on September 2, 1999
and under the terms of the agreement, Westower shareholders received 1.81 shares
of SpectraSite common stock for each Westower share. During the nine months
ended June 30, 1999, the Company incurred approximately $1.5 million in expenses
related to the merger, which included $750,000 paid to the Company's investment
advisors for services in connection with the merger. Under the terms of the
arrangement the Company paid an additional $2,250,000 to its investment advisors
at closing.

F-44
<PAGE> 133

[PAGE INTENTIONALLY LEFT BLANK.]

F-45
<PAGE> 134

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
Westower Corporation

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of stockholders' equity, and of cash flows
present fairly, in all material respects, the financial position of Westower
Corporation and its subsidiaries at September 30, 1998, and the results of their
operations and their cash flows for the seven months ended September 30, 1998 in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above. The financial statements of Westower Corporation for the three years in
the period ended February 28, 1998 were audited by other independent accountants
whose report dated April 14, 1998, except for the third paragraph in Note 3, as
to which the date is May 31, 1998 and the fourth paragraph in Note 3, as to
which the date is June 14, 1999, expressed an unqualified opinion on those
statements.

/s/ PRICEWATERHOUSECOOPERS LLP

Seattle, Washington
February 4, 1999,
except for the fourth
paragraph in Note 3,
as to which the date
is June 17, 1999

F-46
<PAGE> 135

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Westower Corporation

We have audited the accompanying consolidated balance sheets of Westower
Corporation and Subsidiaries as of February 28, 1997 and 1998, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three years in the period ended February 28, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of MJA Communications
Corporation, which are included in the financial statements of Westower
Corporation as discussed in Note 3 to the financial statements, and which
statements reflect total assets constituting 56% and 16% of consolidated total
assets as of February 28, 1997 and 1998 and total revenues constituting 22%, 57%
and 33% of consolidated total revenues for each of the three years in the period
ended February 28, 1998, respectively. Those statements were audited by other
auditors, whose report has been furnished to us, and our opinion, insofar as it
relates to the amounts included for MJA Communications Corporation, is based
solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Westower Corporation
and Subsidiaries as of February 28, 1997 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
February 28, 1998 in conformity with generally accepted accounting principles.

/s/ MOSS ADAMS LLP

Bellingham, Washington
April 14, 1998, except for the third paragraph
in Note 3, as to which the date is
May 31, 1998, and the fourth paragraph in
Note 3, as to which the date is
June 14, 1999

F-47
<PAGE> 136

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholder of
MJA Communications Corp.
Palm Beach Gardens, Florida

We have audited the balance sheet of MJA Communications Corp. as of
December 31, 1996 and 1997, and the related statements of income and retained
earnings, and cash flows for each of the three years in the period ended
December 31, 1997 (not separately presented herein). These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of MJA Communications Corp. as
of December 31, 1996 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ LAMN, KRIELOW, DYTRYCH &
DARLING
--------------------------------------
LAMN, KRIELOW, DYTRYCH & DARLING
Certified Public Accountants

February 11, 1998, except for Note 4, as to which the date is August 12, 1998

F-48
<PAGE> 137

WESTOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
FEBRUARY 28, 1997 AND 1998 AND SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1997 1998 1998
------------ ------------ -------------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.............................. $ 7,131,000 $ 7,206,000 $ 9,331,000
Accounts receivable, net............................... 4,905,000 7,112,000 13,289,000
Costs and estimated earnings in excess of billings on
uncompleted contracts................................ 938,000 2,143,000 5,078,000
Inventory.............................................. 201,000 1,140,000 2,151,000
Related party advances and receivables................. -- 831,000 956,000
Income tax receivable.................................. -- -- 220,000
Other current assets................................... 63,000 125,000 1,203,000
----------- ----------- -----------
Total current assets................................. 13,238,000 18,557,000 32,228,000
Property and equipment, net.............................. 2,707,000 4,321,000 7,574,000
Intangible assets, net................................... -- 2,088,000 19,721,000
Other assets............................................. 58,000 91,000 2,771,000
----------- ----------- -----------
Total assets............................................. $16,003,000 $25,057,000 $62,294,000
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable................................. $ 4,980,000 $ 4,445,000 $ 7,053,000
Other current liabilities.............................. 275,000 929,000 2,810,000
Billings in excess of costs and estimated earnings on
uncompleted contracts................................ 3,850,000 1,745,000 1,435,000
Income taxes payable................................... 155,000 1,652,000 2,116,000
Deferred income taxes.................................. 580,000 534,000 428,000
Stockholder advances and notes payable to related
parties.............................................. 672,000 2,044,000 228,000
Note payable........................................... 208,000 147,000 1,089,000
Current portion of long-term debt and capital lease
obligations.......................................... 610,000 502,000 2,419,000
----------- ----------- -----------
Total current liabilities....................... 11,330,000 11,998,000 17,578,000
Long-term debt and capital lease obligations, excluding
current portion........................................ 212,000 292,000 14,991,000
Deferred income taxes.................................... 27,000 48,000 2,962,000
----------- ----------- -----------
Total liabilities............................... 11,569,000 12,338,000 35,531,000
Commitments and contingencies
Minority interest........................................ 40,000 -- --
----------- ----------- -----------
Redeemable preferred stock............................... 450,000 -- --
----------- ----------- -----------
Stockholders' equity
Common stock ($.01 par value, 10,000,000 shares
authorized, 4,776,000, 6,117,000 and 7,047,000 shares
issued and outstanding at February 28, 1997 and 1998,
and September 30, 1998, respectively)................ 48,000 61,000 70,000
Additional paid-in-capital............................. (48,000) 8,672,000 22,610,00
Accumulated other comprehensive income (loss).......... 27,000 (67,000) (581,000)
Retained earnings...................................... 3,917,000 4,053,000 4,664,000
----------- ----------- -----------
Total stockholders' equity...................... 3,944,000 12,719,000 26,763,000
----------- ----------- -----------
Total liabilities and stockholders' equity............... $16,003,000 $25,057,000 $62,294,000
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-49
<PAGE> 138

WESTOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED FEBRUARY 29, 1996 AND FEBRUARY 28, 1997 AND 1998
SEVEN MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED) AND 1998

<TABLE>
<CAPTION>
SEVEN MONTHS SEVEN MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED ENDED
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1998 1997 1998
------------ ------------ ------------ ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Contract and other revenues earned......... $14,775,000 $46,091,000 $41,662,000 $22,869,000 $31,944,000
Costs of revenues earned (exclusive of
depreciation and amortization shown
below)..................................... 10,755,000 33,936,000 29,508,000 16,778,000 23,858,000
----------- ----------- ----------- ----------- -----------
Gross profit............................. 4,020,000 12,155,000 12,154,000 6,091,000 8,086,000
Selling, general and administrative
expenses................................. 2,944,000 7,832,000 7,236,000 2,720,000 4,958,000
Depreciation and amortization.............. 196,000 268,000 473,000 187,000 578,000
Merger related expenses.................... -- -- -- -- 327,000
----------- ----------- ----------- ----------- -----------
Operating income........................... 880,000 4,055,000 4,445,000 3,184,000 2,223,000
Other income (expense)
Other income (expense)................... (24,000) 32,000 126,000 -- (2,000)
Interest income.......................... -- 70,000 127,000 41,000 130,000
Interest and financing expense........... (110,000) (72,000) (129,000) (32,000) (771,000)
----------- ----------- ----------- ----------- -----------
Total other income (expense)...... (134,000) 30,000 124,000 9,000 (643,000)
----------- ----------- ----------- ----------- -----------
Income before income taxes and minority
interest................................. 746,000 4,085,000 4,569,000 3,193,000 1,580,000
Minority interest.......................... (6,000) (19,000) -- -- --
----------- ----------- ----------- ----------- -----------
Income before provision for income taxes... 740,000 4,066,000 4,569,000 3,193,000 1,580,000
Provision for income taxes................. 193,000 636,000 1,633,000 1,141,000 351,000
----------- ----------- ----------- ----------- -----------
Net income................................. $ 547,000 $ 3,430,000 $ 2,936,000 $ 2,052,000 $ 1,229,000
=========== =========== =========== =========== ===========
Earnings per share:
Basic...................................... $ 0.11 $ 0.72 $ 0.56 $ 0.43 $ 0.19
=========== =========== =========== =========== ===========
Diluted.................................... $ 0.11 $ 0.72 $ 0.52 $ 0.43 $ 0.16
=========== =========== =========== =========== ===========
Pro forma earnings per share:
Basic...................................... $ 0.11 $ 0.53 $ 0.53 $ 0.37 $ 0.12
=========== =========== =========== =========== ===========
Diluted.................................... $ 0.11 $ 0.53 $ 0.50 $ 0.37 $ 0.10
=========== =========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-50
<PAGE> 139

WESTOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED FEBRUARY 29, 1996 AND FEBRUARY 28, 1997 AND 1998
SEVEN MONTHS ENDED SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
COMMON STOCK ACCUMULATED
------------------- ADDITIONAL OTHER
PAID-IN RETAINED COMPREHENSIVE COMPREHENSIVE
SHARES AMOUNT CAPITAL EARNINGS INCOME(LOSS) INCOME TOTAL
--------- ------- ----------- ----------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, FEBRUARY 28, 1995........ 4,776,000 $48,000 $ (48,000) $ 362,000 $ 29,000 $ 391,000
Net income........................ 547,000 7 $ 547,000
Foreign currency translation
adjustment...................... -- -- -- -- -- --
----------
Total comprehensive
income.................. $ 547,000 547,000
==========
Distributions of earnings to S
corporation stockholders of
acquired subsidiary prior to
acquisition..................... -- -- -- (39,000) -- (39,000)
--------- ------- ----------- ----------- --------- -----------
BALANCE, FEBRUARY 29, 1996........ 4,776,000 48,000 (48,000) 870,000 29,000 899,000
Net income........................ -- -- -- 3,430,000 -- $3,430,000
Foreign currency translation
adjustment...................... -- -- -- -- (2,000) (2,000)
----------
Total comprehensive
income.................. $3,428,000 3,428,000
==========
Distributions of earnings to S
corporation stockholders of
acquired subsidiary prior to
acquisition..................... -- -- -- (383,000) -- (383,000)
--------- ------- ----------- ----------- --------- -----------
BALANCE, FEBRUARY 28, 1997........ 4,776,000 48,000 (48,000) 3,917,000 27,000 3,944,000
Net income........................ -- -- -- 2,936,000 -- $2,936,000
Foreign currency translation
adjustment...................... -- -- -- -- (94,000) (94,000)
----------
Total comprehensive
income.................. $2,842,000 2,842,000
==========
Stock issuances................... 1,341,000 13,000 8,699,000 -- -- 8,712,000
Stock compensation expense........ -- -- 21,000 -- -- 21,000
Distributions of earnings to S
corporation stockholders of
acquired subsidiary prior to
acquisition..................... -- -- -- (2,800,000) -- (2,800,000)
--------- ------- ----------- ----------- --------- -----------
BALANCE, FEBRUARY 28, 1998........ 6,117,000 61,000 8,672,000 4,053,000 (67,000) $12,719,000
Net income........................ -- -- -- 1,229,000 -- $1,229,000
Foreign currency translation
adjustment...................... -- -- -- -- (514,000) (514,000)
----------
Total comprehensive
income.................. $ 715,000 715,000
==========
Adjustment to conform fiscal year
ends of acquired subsidiaries... -- -- -- 438,000 -- 438,000
Proceeds from warrants
exercised....................... 559,000 6,000 4,782,000 -- -- 4,788,000
Proceeds from stock options
exercised and related tax
benefit......................... 35,000 -- 556,000 -- -- 556,000
Stock issuances for business
acquisitions.................... 336,000 3,000 8,097,000 -- -- 8,100,000
Value ascribed to conversion
feature and warrants of
convertible debt, net of
deferred taxes.................. -- -- 468,000 -- -- 468,000
Stock compensation expense........ -- -- 35,000 -- -- 35,000
Distributions of earnings and for
taxes to stockholders of
acquired subsidiaries prior to
acquisition..................... -- -- -- (1,056,000) -- (1,056,000)
--------- ------- ----------- ----------- --------- -----------
BALANCE, SEPTEMBER 30, 1998....... 7,047,000 $70,000 $22,610,000 $ 4,664,000 $(581,000) $26,763,000
========= ======= =========== =========== ========= ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-51
<PAGE> 140

WESTOWER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED FEBRUARY 29, 1996 AND FEBRUARY 28, 1997 AND 1998
SEVEN MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED) AND 1998

<TABLE>
<CAPTION>
SEVEN
SEVEN MONTHS MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED ENDED
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1997 1998 1998
------------ ------------ ------------ ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income........................................... $ 547,000 $ 3,430,000 $ 2,936,000 $ 2,052,000 $ 1,229,000
Adjustments to reconcile net income to net cash from
operating activities
Depreciation and amortization...................... 196,000 268,000 473,000 187,000 578,000
Provision for bad debt............................. -- -- -- -- 221,000
Deferred income taxes.............................. 96,000 433,000 (41,000) (209,000) 367,000
Non-cash interest and financing expense............ -- -- -- -- 264,000
Gain on sale of assets............................. -- -- (125,000) -- --
Stock-based compensation........................... -- -- 56,000 -- 35,000
Earnings from equity investment.................... -- -- -- -- (46,000)
Minority interest.................................. 6,000 19,000 -- (40,000) --
Changes in operating assets and liabilities, net of
effect of acquisitions
Accounts receivable................................ (2,570,000) (1,402,000) (1,484,000) (1,962,000) (1,603,000)
Costs and estimated earnings in excess of billings
on uncompleted contracts......................... (284,000) (545,000) (1,200,000) (238,000) (1,350,000)
Inventory and other current assets............... (69,000) (143,000) (938,000) -- (990,000)
Other assets....................................... (32,000) (93,000) (5,000) (597,000) 135,000
Trade accounts payable............................. 1,163,000 3,387,000 (933,000) (810,000) (2,265,000)
Billings in excess of costs and estimated earnings
on uncompleted contracts......................... 1,464,000 2,380,000 (2,105,000) (3,156,000) (963,000)
Other current liabilities........................ 56,000 79,000 648,000 (198,000) 6,000
Income taxes payable............................... (44,000) 147,000 1,354,000 (155,000) 244,000
----------- ----------- ----------- ----------- -----------
Net cash flows (used) provided by operating
activities..................................... 529,000 7,960,000 (1,364,000) (5,126,000) (4,138,000)
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for acquisitions, net of cash acquired... -- -- (1,467,000) -- (6,348,000)
Sales of property and equipment.................... 155,000 -- 444,000 -- --
Purchases of property and equipment................ (301,000) (1,245,000) (1,692,000) (455,000) (1,657,000)
----------- ----------- ----------- ----------- -----------
Net cash flows used by investing activities...... (146,000) (1,245,000) (2,715,000) (455,000) (8,005,000)
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock issuances, net................. -- -- 7,493,000 -- --
Proceeds from stock warrant and option exercises,
net.............................................. -- -- -- -- 5,002,000
Redemption of preferred stock...................... -- -- (450,000) (300,000) --
Principal payments on long-term debt............... (583,000) (389,000) (326,000) (227,000) (392,000)
Distributions to stockholders...................... (39,000) (383,000) (2,800,000) -- (1,056,000)
Advances to related parties........................ -- -- (196,000) (384,000) (65,000)
Advances from related parties...................... 481,000 -- 457,000 1,117,000 34,000
Repayments to related parties...................... (17,000) (480,000) -- -- (1,816,000)
Borrowing (repayments) on line of credit, net...... -- 207,000 (57,000) (85,000) (88,000)
Additions to financing costs....................... -- -- -- -- (2,368,000)
Proceeds from debt incurred........................ 159,000 555,000 104,000 104,000 15,256,000
----------- ----------- ----------- ----------- -----------
Net cash flows provided (used) by financing
activities..................................... 1,000 (490,000) 4,225,000 225,000 14,507,000
----------- ----------- ----------- ----------- -----------
EFFECT OF CHANGES IN EXCHANGE RATES.................. -- -- (71,000) (27,000) (239,000)
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH...................... 384,000 6,225,000 75,000 (5,383,000) 2,125,000
----------- ----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD....... 522,000 906,000 7,131,000 7,131,000 7,206,000
----------- ----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD............. $ 906,000 $ 7,131,000 $ 7,206,000 $ 1,748,000 $ 9,331,000
=========== =========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-52
<PAGE> 141

WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--ORGANIZATION

Westower Corporation (the "Company") was incorporated in Washington state
in June 1997 for the purpose of acquiring Westower Holdings Ltd. and its
wholly-owned subsidiaries, Westower Communications Ltd. and Westower
Communications, Inc. In connection with an initial public offering on October
15, 1997, the Company raised approximately $7.5 million in net cash proceeds.
Proceeds have been used in part to acquire the assets and operations of other
businesses.

The Company is successor to operations begun in 1990 by Westower
Communication Ltd. It designs, builds and maintains wireless communication
transmitting and receiving facilities for providers of wireless communication
services. The Company also owns and leases wireless communication towers to
wireless communication providers. Principal operations are located in the
Pacific Northwest, including the Canadian provinces of British Columbia and
Alberta, and the Southeastern and Southwestern United States. Other operations
extend throughout the Western United States and into Eastern Canada.

On October 27, 1998, the Company changed its fiscal year-end from February
28 to September 30 resulting in a seven month reporting period from March 1,
1998 to September 30, 1998 (the "Transition Period").

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Consolidation--The consolidated financial statements include the
accounts of Westower Corporation and its wholly owned domestic and Canadian
subsidiaries.

Investments in subsidiaries in which the Company exercises significant
influence but which it does not control are accounted for using the equity
method. At September 30, 1998, the Company has an equity investment in a joint
venture which engages in operations in Brazil that are similar to those of the
Company, in which it has an economic ownership interest of 60 percent. Revenues
and associated expenses are transacted in Canadian dollars. As of September 30,
1998, the Company's investment totaled $217,000, which has been included in
other assets, and the Company's equity earnings from this investment during the
Transition Period totaled $46,000, which has been included in contract and other
revenues earned.

All material intercompany accounts and transactions have been eliminated in
consolidation.

(b) Use of Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements. Examples of estimates subject to possible revision based
upon the outcome of future events include costs and estimated earnings on
uncompleted contracts, depreciation of property and equipment, accrued income
tax liabilities, and purchase price allocations for acquisitions. Actual results
could differ from those estimates.

(c) Contract and Other Revenue and Cost Recognition--Revenue from
fixed-price construction contracts is recognized using the
percentage-of-completion method based on cost incurred to total estimated cost.
Revenue from contracts based upon time and materials is recognized based upon
hours worked and materials consumed. Most of the Company's contracts are
short-term and are completed in two to three months. Contract costs include all
direct material and labor costs and those indirect costs related to contract
performance. Provisions for estimated losses on uncompleted contracts are made
in the period in which such losses are determined.

Costs and estimated earnings in excess of billings on uncompleted contracts
represents revenues recognized in excess of amounts billed. Billings in excess
of costs and estimated earnings on uncompleted contracts represents billings in
excess of revenues earned.

F-53
<PAGE> 142
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company owns wireless communication towers which it leases to third
parties. Revenues are recognized on a monthly basis over the term of the leasing
agreement. Revenues and cost of services of approximately $170,000 and $25,000,
respectively, have been included in contract and other revenues earned and cost
of revenues earned, respectively, in the Transition Period.

(d) Cash and Cash Equivalents--Cash and cash equivalents consist of cash in
banks and money market investments on deposit with major Canadian and U.S.
financial institutions. Investments with maturities of three months or less when
purchased are considered cash equivalents.

(e) Inventory--Inventory consists of construction parts and supplies and is
stated at the lower of cost or market. Cost is determined using the first-in,
first-out (FIFO) method.

(f) Property and Equipment--Property and equipment is recorded at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Estimated useful lives by major asset category are
as follows: buildings--10-25 years; furniture, fixtures and equipment--3 to 10
years; wireless communication towers--20 years; vehicles--5 years. Gains or
losses on the dispositions of assets are recorded at the time of disposition.
The costs of normal repairs and maintenance are charged to expense as incurred.

(g) Capitalized Software--Purchased software is capitalized at cost and
amortized over its estimated useful life of 3 years.

(h) Intangible Assets--Business acquisition costs are allocated to the
tangible and identifiable intangible assets that are acquired. Business
acquisition costs allocated to contracts to purchase wireless communication
towers are amortized over a 20 year period upon acquisition of the wireless
communication towers, and costs allocated to non-compete agreements are
amortized over the term of the agreements, which are generally 5 years. The
excess of the aggregate purchase price over the fair value of the net assets
acquired and identifiable intangible assets acquired is recorded as goodwill.
Goodwill is amortized over a 20 year period. The Company amortizes its
intangible assets using the straight line method.

(i) Financing Costs--Direct costs associated with obtaining debt financing
are deferred and are amortized over the term of the debt using the effective
interest method. Direct costs of obtaining commitments for financing are
deferred and charged to expense over the term of the commitments. Direct costs
associated with obtaining equity financing are charged to additional paid-in
capital as the related funds are raised. Deferred financing costs totaled $2.4
million at September 30, 1998, which has been included in other assets.
Accumulated amortization of deferred financing costs totaled $113,000 at
September 30, 1998.

(j) Valuation of Long-Lived Assets--The Company periodically reviews its
long-lived assets and certain identifiable intangible assets, including
goodwill, whenever events or changes in circumstance indicate that the carrying
amount of an asset may be impaired and not recoverable. Adjustments are made if
the sum of the expected future undiscounted operating cash flows is less than
the carrying value of the asset.

(k) Income Taxes--The Company accounts for income taxes under the liability
method. Deferred taxes are recognized for temporary differences between the
basis of assets and liabilities for financial statement and income tax purposes
at the enacted tax rates. The significant differences relate primarily to the
timing and recognition of depreciation and amortization of long-lived assets,
profit on uncompleted contracts, amortization of financing costs and bad debt
expense. Deferred tax amounts represent the future tax consequences of those
differences, which will either be deductible or taxable when the assets and
liabilities are recovered or settled. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amounts expected to be realized.
The Company files a consolidated federal income tax return in the United States.
The Company files separate tax returns for each of its Canadian subsidiaries in
Canada. Additionally, certain of the Company's operations are subject to
Provincial income taxes in Canada and state income taxes in the United States.

F-54
<PAGE> 143
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(l) Foreign Currency Translation--All asset and liability accounts of
Canadian operations are translated into U.S. dollars at current exchange rates.
Revenues and expenses are translated using the average exchange rate during the
period. Foreign currency translation adjustments are reported as a component of
comprehensive income and stockholders' equity in the consolidated balance sheet.
Gains and losses resulting from foreign currency transactions are included in
income currently.

(m) Earnings Per Share and Change in Accounting Policy--During fiscal year
ended February 28, 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings Per Share. The new standard supersedes
Accounting Principles Board (APB) No. 15, Earnings Per Share and establishes
standards for computing and presenting earnings per share. Prior years have been
restated to conform with the new requirements.

Basic earnings per share amounts are computed based on the weighted average
number of shares outstanding during the period after giving retroactive effect
to stock dividends and stock splits. Diluted earnings per share amounts are
computed by determining the number of additional shares that are deemed
outstanding from stock options and warrants, using the treasury stock method,
and convertible debentures.

(n) Segment Information--In the Transition Period, the Company adopted SFAS
No. 131, Disclosures about Segments of an Enterprise and Related Information.
SFAS No. 131 supersedes SFAS 14, Financial Reporting for Segments of a Business
Enterprise, replacing the "industry segment" approach with the "management"
approach. The management approach designates the internal organization that is
used by management for making operating decisions and assessing performance as
the source of the Company's reportable segments. SFAS No. 131 also requires
disclosures about products and services, geographic areas, and major customers.
The adoption of SFAS No. 131 did not significantly affect the disclosure of
segment information previously reported (see "Segment Information" note).

(o) New Accounting Standards--In June 1997, the Financial Accounting
Standards Board issued SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities. Among other provisions, SFAS No. 133 requires that entities
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. Gains and losses
resulting from changes in the fair values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. This Statement becomes effective beginning June 15, 2000,
for the Company. The Company is currently assessing the impact, if any, to its
financial position or results of operations.

(p) Interim Financial Data (Unaudited)--As discussed in Note 1, on October
27, 1998 the Company changed its fiscal year end to September 30 from February
28. The information presented for the seven months ended September 30, 1997 is
unaudited. The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments necessary for a fair presentation of results of the
interim period have been made and such adjustments were of a normal and
recurring nature. The results of operations and cash flows for the seven months
ended September 30, 1997 are not necessarily indicative of the results that were
reported for the entire fiscal year ending February 28, 1998.

NOTE 3--MERGERS AND ACQUISITIONS

MERGERS

Westower Holdings Ltd. Concurrent with its incorporation in June 1997, the
Company completed a merger with Westower Holdings Ltd. by issuing 3,000,000
shares of common stock in exchange for all outstanding common stock of Westower
Holdings Ltd. Westower Holdings Ltd. is a Wyoming corporation

F-55
<PAGE> 144
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

that owns all outstanding common stock of Westower Communications Ltd. and
Westower Communications, Inc. The merger qualified as a tax-free exchange and is
accounted for similar to a pooling-of-interests.

WTC Holdings, Inc. and Western Telecom Construction Ltd. Effective October
28, 1997, the Company completed a merger with WTC Holdings, Inc. (formerly
411677 Alberta Ltd.) and its wholly owned subsidiary, Western Telecom
Construction Ltd., (collectively, "Western Telecom"). WTC Holdings, Inc. was
wholly-owned by a relative of a significant stockholder and a director of
Westower Corporation. WTC Holdings, Inc. is a Wyoming corporation, and Western
Telecom Construction Ltd. is a Canadian corporation. Western Telecom engages in
operations similar to those of the Company. The merger was effected by
exchanging 835,000 shares of common stock for all outstanding common stock of
Western Telecom. The merger qualified as a tax-free exchange and has been
accounted for using the pooling-of-interests method for business combinations.
Accordingly, the consolidated financial statements for the fiscal years ended
February 29, 1996 and February 28, 1997 and 1998 and the Transition Period have
been restated to include the combined financial position, results of operations,
and cash flows of Western Telecom.

MJA Communications Corporation. Effective May 31, 1998, the Company
completed a merger with MJA Communications Corporation ("MJA"). MJA is a Florida
corporation which engages in operations similar to those of the Company. In
connection with the merger, MJA's tax status was changed from an S corporation
to a C corporation. The merger was effected by exchanging 397,000 shares of
common stock for all outstanding common stock of MJA. The merger qualified as a
tax-free exchange and has been accounted for using the pooling-of-interests
method for business combinations. Accordingly, the consolidated financial
statements for the fiscal years ended February 29, 1996 and February 28, 1997
and 1998 and the Transition Period have been restated to include the combined
financial position, results of operations, and cash flows of MJA.

Standby Services, Inc. Effective August 31, 1998, the Company completed a
merger with Standby Services, Inc. ("Standby"). Standby is a Texas corporation
which engages in operations similar to those of the Company. In connection with
the merger, Standby's tax status was changed from an S corporation to a C
corporation. The merger was effected by exchanging 544,000 shares of common
stock for all outstanding common stock of Standby. The merger qualified as a
tax-free exchange and has been accounted for using the pooling-of-interests
method for business combinations. Accordingly, the consolidated financial
statements for the fiscal years ended February 29, 1996 and February 28, 1997
and 1998 and the Transition Period have been restated to include the combined
financial position, results of operations, and cash flows of Standby.

Prior to the respective mergers, Western Telecom had a fiscal year-end of
January 31 and MJA and Standby had a fiscal year end of December 31. In
recording the business combinations, the fiscal years ended 1998 and 1997
financial statements have not been restated to conform with Westower
Corporation's previous fiscal year end of February 28, as the effect on the
consolidated financial statements is not material. As a result of Western
Telecom, MJA and Standby having a different fiscal year end and the change in
the Company's fiscal year end, Western Telecom and MJA and Standby's results of
operations for the respective one and two-month periods ended February 28, 1998
have been excluded from the reported results of operations in the Transition
Period and, therefore, have been presented as an adjustment to the Company's
consolidated statement of stockholders' equity for the Transition Period.
Aggregate revenues, expenses, income before extraordinary items and net income,
attributable to these mergers, which have been excluded from the Company's
reported results of operations in the Transition Period, were $3,302,000,
$2,864,000, $438,000 and $438,000, respectively, for the period from January 1,
1998 to February 28, 1998.

F-56
<PAGE> 145
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Summarized results of operations for the separate companies and combined
amounts included in the consolidated financial statements, net of intercompany
transactions, are as follows:

<TABLE>
<CAPTION>
YEAR SEVEN MONTHS SEVEN MONTHS
ENDED YEAR ENDED YEAR ENDED ENDED ENDED
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1998 1997 1998
------------ ------------ ------------ ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Contract and other
revenues earned
Westower Corporation and
Subsidiaries, including
entities acquired........ $ 5,664,000 $10,415,000 $16,156,000 $ 8,652,000 $11,450,000
MJA.................... 3,305,000 26,164,000 13,929,000 8,418,000 10,824,000
Western Telecom........ 1,777,000 5,001,000 7,027,000 3,035,000 5,341,000
Standby................ 4,029,000 4,511,000 4,550,000 2,764,000 4,329,000
----------- ----------- ----------- ----------- -----------
$14,775,000 $46,091,000 $41,662,000 $22,869,000 $31,944,000
=========== =========== =========== =========== ===========
Net income (loss)
Westower Corporation
and Subsidiaries,
including entities
acquired............ $ 460,000 $ 815,000 $ 975,000 $ 784,000 $ (816,000)
MJA.................... (3,000) 2,617,000 527,000 195,000 513,000
Western Telecom........ (5,000) 364,000 1,475,000 442,000 387,000
Standby................ 95,000 (366,000) (41,000) 631,000 1,145,000
----------- ----------- ----------- ----------- -----------
$ 547,000 $ 3,430,000 $ 2,936,000 $ 2,052,000 $ 1,229,000
=========== =========== =========== =========== ===========
</TABLE>

The following pro forma net income and basic diluted earnings per share are
presented as if the Company had been required to provide for income taxes that
were previously taxable to the former shareholders of the merged entities that
were previously S corporations.

F-57
<PAGE> 146
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR SEVEN MONTHS SEVEN MONTHS
ENDED YEAR ENDED YEAR ENDED ENDED ENDED
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1998 1997 1998
------------ ------------ ------------ ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net income as reported... $547,000 $3,430,000 $2,936,000 $2,052,000 $1,229,000
Dividends on preferred
shares................... (39,000) -- -- -- --
Pro forma adjustment
for income taxes of
acquired entities
previously filing as
S corporations...... 1,000 (890,000) (165,000) (281,000) (454,000)
-------- ---------- ---------- ---------- ----------
Pro forma net income..... $509,000 $2,540,000 $2,771,000 $1,771,000 $ 775,000
======== ========== ========== ========== ==========
Pro forma basic earnings
per share.............. $ 0.11 $ 0.53 $ 0.53 $ 0.37 $ 0.12
======== ========== ========== ========== ==========
Pro forma diluted
earnings per share..... $ 0.11 $ 0.53 $ 0.50 $ 0.37 $ 0.10
======== ========== ========== ========== ==========
</TABLE>

ACQUISITIONS

The following acquisitions have been accounted for using the purchase
method of accounting for business combinations and, accordingly, the operating
results of the acquired companies have been included in the Company's
consolidated financial statements from the date of acquisition.

Acquisitions from November 1, 1997 to February 28, 1998. On dates ranging
between November 1, 1997 and January 17, 1998, the Company acquired all
outstanding shares of common stock of National Tower Service Ltd., 501053 B.C.
Ltd., and the minority interest in WTC Leasing Ltd. which are Canadian
corporations with operations similar to those of the Company. Additionally, on
January 17, 1998 the Company acquired the assets, principally communication
towers, of Ralph's Radio, Inc. and 344813 Alberta Ltd. The aggregate purchase
price of these transactions totaled approximately $2.7 million which consisted
of $1.5 million in cash and the issuance of 134,000 shares of common stock
valued at approximately $1.2 million, based on the publicly traded price.

Jovin Communications, Inc. and Acier Filteau, Inc. On June 12, 1998 the
Company completed the acquisitions of Jovin Communications, Inc. ("Jovin") and
Acier Filteau, Inc. ("Acier"), both Montreal, Quebec (Canada) corporations which
engage in operations similar to those of the Company. The acquisitions were
effected by exchanging shares of common stock of the Company and shares of a
separate class of common stock of an acquisition subsidiary, with rights
identical to those of the Company's common stock, aggregating 118,000 shares in
total and valued at approximately $2.8 million, based on the publicly traded
price, and the assumption of certain obligations of Jovin and Acier, for all
outstanding common shares of Jovin and Acier.

Cord Communications, Incorporated. On August 31, 1998 the Company
completed the acquisition of Cord Communications Incorporated ("Cord"), a
California corporation which engages in operations similar to those of the
Company. The acquisition was effected by exchanging 218,000 shares of common
stock valued at approximately $5.2 million, based on the publicly traded price,
$5 million in cash and the assumption of certain obligations of Cord for all
outstanding common shares of Cord. The former stockholders of Cord may also
receive an additional 348,000 shares of common stock, based on the attainment of
certain performance measures of Cord during the twelve month period following
the date of acquisition. Additional shares of common stock will be recorded as
an adjustment of the purchase price and will increase recorded goodwill.

F-58
<PAGE> 147
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CNG Communications, Inc. On September 28, 1998, the Company completed the
acquisition of CNG Communications, Inc. ("CNG") for approximately $1.7 million
in cash and the assumption of certain obligations of CNG. The former shareholder
of CNG may also receive up to an additional $3 million in cash pending the
successful acquisition of certain wireless communication towers under an
existing contract held by CNG. As part of the acquisition, the Company assumed
certain liabilities of CNG, including convertible debentures, outstanding
warrants and the termination costs relating to a financing agreement with a
third party investment banker. The Company entered into a settlement agreement
with the above parties that resulted in an aggregate payment of $3.25 million to
the convertible debenture holders, which included principal and interest, and
the third party investment banker. On October 22, 1998, the Company exercised
its right to acquire the wireless communication towers under contract at an
exercise price of $9.2 million. The consummation of the acquisition is subject
to regulatory approval.

The following is a summary of all consideration exchanged for acquisitions
that were accounted for as purchases:

<TABLE>
<CAPTION>
SEVEN
MONTHS
YEAR ENDED ENDED
FEBRUARY 28, SEPTEMBER 30,
1998 1998
------------ -------------
<S> <C> <C>
Shares issued.................................. 134,000 336,000
Value of shares................................ $1,184,000 $ 8,100,000
Cash........................................... 1,467,000 6,672,000
---------- -----------
Total purchase price........................... $2,651,000 $14,772,000
========== ===========
</TABLE>

The assets and liabilities of the acquired entities were recorded at their
estimated fair market values at the dates of acquisition. The initial
allocations of fair market values are preliminary subject to adjustments during
the first year following the acquisition. The initial allocations were as
follows:

<TABLE>
<CAPTION>
SEVEN
MONTHS
YEAR ENDED ENDED
FEBRUARY 28, SEPTEMBER 30,
1998 1998
------------ -------------
<S> <C> <C>
Non-compete agreements......................... $ -- $ 219,000
Tangible assets................................ 1,437,000 11,034,000
Communication tower purchase contracts......... -- 5,661,000
Goodwill....................................... 2,104,000 12,507,000
Liabilities assumed and deferred tax
liabilities.................................. (890,000) (14,649,000)
---------- ------------
Total purchase price........................... $2,651,000 $ 14,772,000
========== ============
</TABLE>

The results of operations of these businesses have been included in the
Company's consolidated financial statements from their respective acquisition
dates. The following summarizes the unaudited pro forma results of operations,
on a combined basis, as if the acquisitions had been consummated as of the
beginning of each of

F-59
<PAGE> 148
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the periods presented, after including the impact of certain adjustments such as
amortization of intangible assets and income tax effects:

<TABLE>
<CAPTION>
SEVEN
MONTHS
YEAR ENDED ENDED
FEBRUARY 28, SEPTEMBER 30,
1998 1998
------------ -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Contract and other revenues earned............. $72,720,000 $43,273,000
Pro forma net income........................... $ 4,323,000 $ 140,000
Pro forma basic earnings per share............. $ 0.82 $ 0.02
Pro forma diluted earnings per share........... $ 0.77 $ 0.02
</TABLE>

The unaudited pro forma results are not necessarily indicative of the
results of operations which would actually have been reported had the
acquisitions had been completed prior to the beginning of the periods presented.
In addition, they are not intended to be indicative of future results.

NOTE 4--UNCOMPLETED CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts are
summarized as follows:

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1997 1998 1998
------------ ------------ -------------
<S> <C> <C> <C>
Costs incurred on uncompleted
contracts............................. $ 15,356,000 $ 12,111,000 $ 15,461,000
Estimated earnings...................... 3,516,000 5,084,000 3,212,000
Less billings to date................... (21,784,000) (16,797,000) (15,030,000)
------------ ------------ ------------
Total................................... $ (2,912,000) $ 398,000 $ 3,643,000
============ ============ ============
Presentation in the accompanying balance
sheet:
Costs and estimated earnings in excess
of billings on uncompleted
contracts.......................... $ 938,000 $ 2,143,000 $ 5,078,000
Billings in excess of costs and
estimated earnings on uncompleted
contracts.......................... (3,850,000) (1,745,000) (1,435,000)
------------ ------------ ------------
Total................................... $ (2,912,000) $ 398,000 $ 3,643,000
============ ============ ============
</TABLE>

F-60
<PAGE> 149
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5--PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1997 1998 1998
------------ ------------ -------------
<S> <C> <C> <C>
Buildings............................... $ 550,000 $ 1,507,000 $ 1,795,000
Vehicles................................ 737,000 1,497,000 2,540,000
Equipment............................... 381,000 743,000 1,580,000
Communication towers.................... 387,000 620,000 1,401,000
Furniture and fixtures.................. 380,000 634,000 943,000
Leasehold improvements.................. 27,000 73,000 81,000
---------- ----------- -----------
2,462,000 5,074,000 8,340,000
Less accumulated depreciation........... (688,000) (1,458,000) (1,562,000)
---------- ----------- -----------
1,774,000 3,616,000 6,778,000
Land.................................... 933,000 705,000 796,000
---------- ----------- -----------
$2,707,000 $ 4,321,000 $ 7,574,000
========== =========== ===========
</TABLE>

Depreciation expense on property and equipment in the fiscal years ended
February 29, 1996 and February 28, 1997 and 1998 and the Transition Period was
$196,000, $262,000, $457,000 and $396,000, respectively.

NOTE 6--INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 28, SEPTEMBER 30,
1998 1998
------------ -------------
<S> <C> <C>
Goodwill....................................... $2,104,000 $14,039,000
Communication tower purchase contracts......... -- 5,661,000
Non-compete agreements......................... -- 219,000
---------- -----------
2,104,000 19,919,000
Less accumulated amortization.................. (16,000) (198,000)
---------- -----------
$2,088,000 $19,721,000
========== ===========
</TABLE>

Amortization expense on intangible assets in the fiscal years ended
February 29, 1996, February 28, 1997 and 1998 and the Transition Period was
$0.00, $8,000, $16,000 and $182,000, respectively.

NOTE 7--NOTES PAYABLE

NOTE PAYABLE TO FINANCE COMPANY

At September 30, 1998, through one of its acquired subsidiaries, the
Company had a $2.5 million line of credit facility with a finance company,
secured by accounts receivable, inventory, property and equipment, cash and cash
equivalents. At September 30, 1998 the outstanding balance was $1.09 million,
which was repaid in October 1998, and the line of credit was cancelled.

F-61
<PAGE> 150
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTES PAYABLE TO BANK

At February 28, 1998 the Company had a line of credit facility with a
Canadian bank that allowed for borrowings at the bank's prime rate plus .75%.
The line was collateralized by essentially all assets of Western Telecom
Construction Ltd. and was cancelled in May 1998.

NOTE 8--LONG TERM DEBT AND CAPITAL LEASE OBLIGATIONS

Long-term debt and capital lease obligations consists of the following:

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1997 1998 1998
------------ ------------ -------------
<S> <C> <C> <C>
Convertible note, interest at 7%, due
April 30, 2007, quarterly interest
payments through April 2005, quarterly
reductions thereafter, see further
description below..................... $ -- $ -- $14,154,000
Convertible notes of acquired
subsidiary, interest at rates ranging
from 12% to 14%, repaid in December 1998
(see Note 3)............................ -- -- 1,882,000
Notes payable to various Canadian banks
repaid in full during the Transition
Period and 1998, due on demand or in
aggregate monthly installments of
$8,200 including interest,
collateralized by assets and an
assignment of lease revenue........... 480,000 263,000 --
Notes payable to various U.S. and
Canadian Banks, repaid in full during
the transition period, due in
aggregate monthly installments of
$7,800, including interest at rates
ranging from 7.5% to 11.25% through
June 2002, collateralized by property,
plant and equipment................... 222,000 129,000 --
Vehicle purchase contracts and other
notes payable with U.S. and Canadian
finance corporations, aggregate
monthly installments of $30,000,
including interest at rates up to
11.15%, payments due through December
2001, collateralized by vehicles and
real property......................... 86,000 192,000 781,000
Capital lease obligations to U.S. and
Canadian lessors, due in aggregate
monthly installments of $19,000
through August 2003, collateralized by
leased equipment...................... 34,000 210,000 593,000
--------- --------- -----------
Total debt.............................. 822,000 794,000 17,410,000
Less current portion.................... (610,000) (502,000) (2,419,000)
--------- --------- -----------
Long-term portion....................... $ 212,000 $ 292,000 $14,991,000
========= ========= ===========
</TABLE>

F-62
<PAGE> 151
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Long-term debt and capital lease obligations matures as follows:

YEAR ENDING SEPTEMBER 30,
- -------------------------
<S> <C>
1999............................................... $ 2,419,000
2000............................................... 452,000
2001............................................... 225,000
2002............................................... 98,000
2003............................................... 62,000
Thereafter......................................... 14,154,000
-----------
$17,410,000
===========
</TABLE>

CONVERTIBLE NOTE

In June 1998, the Company issued a private placement of $15.0 million of 7%
convertible senior subordinated note (the "Convertible Debt") and warrant to
purchase 40,000 shares of common stock in exchange for $14.85 million net cash
proceeds. The Convertible Debt was immediately convertible at a ratio of $25.03
per share of common stock and the warrant provides for purchase of shares at
$23.00 per share of common stock at the holder's option. The purchase agreement
provides for an adjustment of the conversion amount for the subordinated debt
and warrant exercise price for any stock dividends, splits and other changes as
defined in the respective agreements, so as to preserve the Convertible Debt
holder's relative rights. The conversion ratio and warrant exercise price per
common share were less than the fair value of the Company's common stock at the
date of issuance. The value of the conversion features was approximately
$124,000 and was immediately charged to interest expense and an increase in
additional paid-in capital. The value ascribed to the warrant of approximately
$723,000, was reflected as both a debt discount and an increase in additional
paid-in capital. The debt discount is accounted for as a component of interest
expense using the effective interest rate method.

The Convertible Debt requires quarterly interest payments through April 30,
2005, when the Company will be required to make principal payments of $3 million
each April 30 and October 31 thereafter through the final maturity date, April
30, 2007. The Company may begin making optional prepayments of the Convertible
Debt beginning May 30, 2000 subject to a certain minimum trading price of the
Company's common stock commencing on or after April 30, 2000. The Company is
subject to various affirmative and negative covenants contained in the
agreement, including minimum net worth and earnings requirements, and
limitations on additional indebtedness, asset disposals and asset additions. The
agreement required the holder of the Convertible Debt to consent to
subordination of the obligation to senior bank indebtedness discussed below. On
September 30, 1998, the Company was in compliance with all covenants with the
exception of the certain indebtedness covenant, which was cured subsequent to
year end. The Company has received a waiver from the note holder waiving the
right to demand repayment of the note as a result of the violation.

CREDIT FACILITY

Under terms of a revolving credit facility, dated June 9, 1998 and expiring
April 25, 2005, with a consortium of U.S. and non-U.S. banks, the Company may
borrow up to $75.0 million. The credit facility provides for interest only
payments through August 30, 2000, with escalating principal reductions each
three months from that date through maturity. Borrowings under the credit
facility bear interest at optional rates as specified in the agreement, subject
to the Company's election at the borrowing date. The Company is also required to
pay quarterly commitment fees of .5% on the average undrawn balance of the
credit facility, which is included as a component of interest expense. There
were no borrowings under the credit facility at September 30, 1998. Subsequent
to year end, the Company has drawn approximately $24.0 million on the

F-63
<PAGE> 152
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

credit facility to finance business acquisitions, including the repayment of
acquired subsidiary debt, and to fund operations. Covenants of the credit
facility require the Company to maintain certain debt-to-earnings and interest
coverage ratios. Other provisions limit capital expenditures, subsidiary
indebtedness and require certain minimum levels of earnings and net worth. On
September 30, 1998, the Company was in compliance with all covenants with the
exception of the certain indebtedness covenant, which was cured subsequent to
September 30, 1998. The Company has received a waiver from the lenders waiving
their right to demand repayment of the credit facility as a result of this
violation.

NOTE 9--INCOME TAXES

The provision for income taxes is comprised by the following:

<TABLE>
<CAPTION>
SEVEN MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1996 1997 1998 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Current
U.S. federal and state... $ 38,000 $133,000 $ 272,000 $ 98,000
Canadian federal and
provincial.......... 59,000 70,000 1,402,000 767,000
-------- -------- ---------- ---------
97,000 203,000 1,674,000 865,000
-------- -------- ---------- ---------
Deferred
U.S. federal and
state............... $ -- $ (2,000) $ -- $ (20,000)
Canadian federal and
provincial.......... 96,000 435,000 (41,000) (494,000)
-------- -------- ---------- ---------
96,000 433,000 (41,000) (514,000)
-------- -------- ---------- ---------
Total.......... $193,000 $636,000 $1,633,000 $ 351,000
======== ======== ========== =========
</TABLE>

The total tax provision differs from the amount computed using the U.S.
federal statutory income tax rates as follows:

<TABLE>
<CAPTION>
SEVEN MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1996 1997 1998 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Pretax net income.......... $740,000 $4,066,000 $4,569,000 $1,580,000
U.S. statutory rates....... 34% 34% 34% 34%
Tax at statutory rates..... 252,000 1,382,000 1,553,000 537,000
Income taxable to S
Corporation
shareholders............. 1,000 (890,000) (165,000) (454,000)
Effect of change in tax
status................... -- 125,000 -- --
Non deductible expenses.... -- -- -- 185,000
U.S. state income taxes,
net of federal tax
benefit.................. -- 8,000 -- 5,000
</TABLE>

F-64
<PAGE> 153
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
SEVEN MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1996 1997 1998 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Effect of graduated
rates...................... (60,000) -- -- --
Excess income tax payable
in foreign
jurisdictions............ -- 11,000 245,000 78,000
-------- ---------- ---------- ----------
$193,000 $ 636,000 $1,633,000 $ 351,000
======== ========== ========== ==========
</TABLE>

Undistributed earnings of the Company's Canadian subsidiaries amounted to
approximately $5.7 million at September 30, 1998. Essentially all of those
earnings are considered to be indefinitely reinvested and, accordingly, no
provision for U.S. federal and state income taxes has been provided thereon.
Upon distribution of those earnings in the form of dividends or otherwise, the
Company would be subject to both U.S. income taxes, net of foreign tax credits,
and withholding taxes payable in Canada.

The tax effects of temporary differences that give rise to deferred tax
assets and liabilities are as follows:

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1997 1998 1998
------------ ------------ -------------
<S> <C> <C> <C>
Current
Assets:
Allowance for doubtful accounts.... $ -- $ -- $ (51,000)
Liabilities:
Deferred taxable income on
uncompleted contracts............ 580,000 534,000 479,000
-------- -------- ----------
$580,000 $534,000 $ 428,000
======== ======== ==========
Noncurrent
Liabilities:
Depreciation and amortization...... $ 27,000 $ 48,000 $2,626,000
Amortization of debt discount...... -- -- 322,000
Other.............................. -- -- 14,000
-------- -------- ----------
$ 27,000 $ 48,000 $2,962,000
======== ======== ==========
</TABLE>

NOTE 10--EARNINGS PER SHARE

The numerators and denominators of basic and fully diluted earnings per
share are as follows:

F-65
<PAGE> 154
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At September 30, 1998, 342,000 weighted-average shares associated with the
Convertible Debt discussed in Note 8 were excluded from the computation of
diluted earnings per share for the Transition Period because their inclusion
would have had an anti-dilutive effect on earnings per share. All other
potential common shares have been included in the diluted earnings per share
calculation. All potential common shares were included in the calculation of
diluted earnings per share for the years ended February 29, 1996 and February
28, 1997 and 1998.

NOTE 11--STOCKHOLDERS' EQUITY

REDEEMABLE PREFERRED STOCK

During the year ended February 28, 1998, the Company merged with WTC
Holdings Ltd. and its wholly-owned subsidiary, Western Telecom Construction Ltd.
(collectively, "Western Telecom"). The merger was accounted for as a
pooling-of-interests and the February 28, 1997 financial statements have been
restated to include the accounts of Western Telecom. In February 1994, Western
Telecom issued 467 shares of Class A redeemable preferred stock. The preferred
stock ranked in priority to common stock in the event of liquidation,
dissolution or winding up of the affairs of Western Telecom. The shares also
contain stated redemption values and rights to 5% noncumulative dividends when
declared by the Board of Directors. There were no unpaid dividends at February
28, 1997 and 1998. The preferred stock has no voting rights.

The shares have been reflected at their total redemption price of $450,000
in the February 28, 1997 balance sheet. During the year ended February 28, 1998,
the Company redeemed all outstanding shares.

COMMON STOCK

The Company has a single class of $0.01 par value common stock. Authorized
shares total 10 million, of which 2,580,000 have been registered on Form SB-2
with the Securities and Exchange Commission under the 1933 Securities Act. A
total of 1,200,000 of the registered securities were sold in connection with an
initial public offering on October 15, 1997. Proceeds from the offering totaled
$7.5 million, net of $485,000 of underwriting costs.

As disclosed in Note 3, an additional 1,277,000 shares were issued in
connection with various business combinations during the Transition Period and
an additional 3,969,000 shares were issued in the fiscal year ended February 28,
1998. During the fiscal year ended February 28, 1998, a total of 7,000 shares
were issued as stock awards to employees of the Company and acquired businesses
as incentive to remain in the employ of the Company.

F-66
<PAGE> 155
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STOCK WARRANTS

In connection with its initial public offering in October 1997, the Company
issued stock warrants to purchase 1,380,000 shares of common stock of the
Company with an exercise price of $9.00 per share. The warrants contained a
provision whereby the Company could call for redemption of the warrants if the
closing price of the Company's common stock equaled or exceeded $15.00 for ten
consecutive days. During the Transition Period 559,000 warrants to purchase
559,000 shares of common stock were tendered for exercise with aggregate
proceeds of $4.79 million to the Company, net of commissions and related
expenses of $243,000. On September 29, 1998, the Company exercised its right to
call the remaining warrants, with a redemption date of October 30, 1998.
Subsequent to September 30, 1998 and prior to the redemption date, 819,000
warrants were tendered for conversion with gross proceeds of $7.37 million,
resulting in the cancellation of the remaining warrants which were not tendered.

NOTE 12--STOCK OPTIONS

The Company has two stock option plans that provide for the granting of
stock options to certain officers, employees, directors and consultants of the
Company and its subsidiaries. These options generally vest over a period of
three years from the date of grant (as determined by the Company's Compensation
Committee) and have a maximum exercise term of ten years from the date of grant.
The 1998 Stock Incentive Compensation Plan (the "1998 Plan") is the only plan
with stock option awards currently available for grant; a prior plan has stock
options exercisable at September 30, 1998 to purchase up to 400,000 shares of
common stock. The Company is authorized to grant options for up to ten percent
of the issued shares of common stock under the 1998 Plan. A summary of awards
granted under the plans is as follows for the fiscal year ended February 28,
1998 and the Transition Period:

<TABLE>
<CAPTION>
YEAR ENDED SEVEN MONTHS ENDED
FEBRUARY 28, 1998 SEPTEMBER 30, 1998
--------------------------- ---------------------------
WEIGHTED- WEIGHTED-
NUMBER OF AVERAGE NUMBER OF AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE
--------- -------------- --------- --------------
<S> <C> <C> <C> <C>
Options outstanding at
beginning of year....... -- -- 592,000 $ 7.78
Options granted........... 592,000 $7.78 121,500 18.63
Options exercised......... -- -- 37,000 7.80
Options forfeited......... -- -- -- --
------- ----- ------- ------
Options outstanding at end
of year................. 592,000 $7.78 676,500 $ 9.87
======= ===== ======= ======
Options exercisable at end
of year................. 105,000 $8.07 125,500 $ 7.85
======= ===== ======= ======
</TABLE>

A summary of stock options outstanding as of September 30, 1998 is as
follows:

<TABLE>
<CAPTION>
NUMBER WEIGHTED-
OUTSTANDING AVERAGE WEIGHTED- NUMBER WEIGHTED-
AT REMAINING AVERAGE EXERCISABLE AT AVERAGE
SEPTEMBER 30, CONTRACTUAL EXERCISE SEPTEMBER 30, EXERCISE
RANGE OF EXERCISE PRICES 1998 LIFE PRICE 1998 PRICE
------------------------ ------------- ----------- --------- -------------- ---------
<S> <C> <C> <C> <C> <C>
$13.40 to 26.00.............. 137,000 4.8 years $18.60 -- --
$7.50 to 8.25................ 525,000 3.6 years 7.24 123,300 $7.99
$1.00........................ 4,500 3.4 years 1.00 1,500 1.00
$.01......................... 10,000 3.6 years 0.01 700 0.01
</TABLE>

F-67
<PAGE> 156
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company applies the accounting provisions of APB Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations for its
stock-based plans. Accordingly, costs for employee stock options or issuance of
shares is measured as the excess, if any, of the fair value of the Company's
common stock at the measurement date over the amount the employee must pay to
acquire the stock. The cost is recognized ratably by the Company as compensation
expense over the vesting period. The expense for the fiscal year ended February
28, 1998 and the Transition Period was $21,000 and $35,000 respectively.

The Company adopted the disclosure provisions of SFAS No. 123, Accounting
for Stock-Based Compensation ("SFAS No. 123"), which was effective as of January
1, 1996. The fair value of each option was estimated on the date of grant using
the Black-Scholes option pricing model and the following assumptions:

<TABLE>
<CAPTION>
SEVEN MONTHS
YEAR ENDED ENDED
FEBRUARY 28, SEPTEMBER 30,
1998 1998
------------ -------------
<S> <C> <C>
Risk-free interest rate........................ 6.38% 4.75%
Expected life.................................. 2.7 years 2.7 years
Expected volatility............................ 29% 70%
Expected dividend yield........................ 0% 0%
</TABLE>

Had the Company elected to recognize compensation expense as provided for
by SFAS No. 123, the Company's net income amounts on a pro forma basis for the
year ended February 28, 1998 and the Transition Period would have been as
follows:

<TABLE>
<CAPTION>
SEVEN MONTHS
YEAR ENDED ENDED
FEBRUARY 28, SEPTEMBER 30,
1998 1998
------------ -------------
<S> <C> <C>
Pro forma net income adjusted.................. $2,721,000 $838,000
========== ========
Pro forma basic earnings per share............. $ 0.52 $ 0.13
========== ========
Pro forma diluted earning per share............ $ 0.49 $ 0.11
========== ========
</TABLE>

The weighted average fair values per share at the date of grant for options
granted during the year ended February 28, 1998 and the Transition Period were
as follows:

<TABLE>
<CAPTION>
SEVEN MONTHS
YEAR ENDED ENDED
FEBRUARY 28, SEPTEMBER 30,
1998 1998
------------ -------------
<S> <C> <C>
Options with exercise prices less than the fair
value of the stock at the date of grant...... 39,500 19,100
- --weighted average fair value.................. $ 6.00 $ 12.00
Options with exercise prices equal to the fair
value of the stock at the date of grant...... 311,500 102,400
--weighted average fair value................ $ 1.25 $ 9.00
Options with exercise prices greater than the
fair value of the stock at the date of
grant........................................ 241,000 --
--weighted average fair value................ $ 0.50 --
</TABLE>

F-68
<PAGE> 157
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 13--SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information is as follows:

<TABLE>
<CAPTION>
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1996 1997 1998 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Cash paid for interest......... $ 91,000 $80,000 $ 107,000 $ 312,000
Cash paid for income taxes..... 128,000 77,000 177,000 280,000
Non-cash transactions
Stock issuances for business
acquisitions................. -- -- 1,184,000 8,100,000
</TABLE>

NOTE 14--RETIREMENT PLAN

The Company's subsidiary, Westower Communications Inc., adopted a defined
contribution retirement plan, effective January 1, 1997. The plan contains
certain participation criteria and allows for both employee and employer
discretionary contributions. The total Company funded discretionary contribution
for the years ended February 29, 1996 and February 28, 1997 and 1998 was $0,
$46,000 and $52,000, respectively. There were no employer contributions during
the Transition Period.

NOTE 15--RELATED PARTY TRANSACTIONS

ADVANCE TO RELATED PARTIES

During the fiscal year ended February 28, 1998, the Company advanced
$119,000 to a Canadian corporation owned by certain stockholders of Westower
Corporation. Proceeds were used by the Corporation to purchase facilities leased
by two of the Company's subsidiaries. The advance was repaid during the
Transition Period. The Company also advanced $77,000 to several stockholders
during the fiscal year ended February 28, 1998 which were repaid during the
Transition Period. At September 30, 1998, additional related party advances
include $379,000 of unsecured non-interest bearing shareholder loans made by
subsidiaries, prior to acquisition, during the Transition Period which are
expected to be paid in full subsequent to September 30, 1998. At September 30,
1998, the Company has a $65,000 receivable from a former shareholder of an
acquired S corporation. The acquired S corporation made a distribution to the
shareholder, prior to the combination, in an amount to meet the shareholder's
current estimated tax obligation. Subsequent to the combination it was
determined that the tax liability was approximately $65,000 overestimated and a
receivable for the excess distribution has been recorded. The Company expects to
collect this amount in full subsequent to September 30, 1998.

NOTE RECEIVABLE

At September 30, 1998, the Company had a note receivable for $495,000, plus
accrued interest of $17,000, from an organization with which they share a common
director. The note bears interest at 12% and is collateralized by warrants to
purchase shares of the Company's common stock, and is due on demand.

MANAGEMENT SERVICES AND ACCOUNTS PAYABLE

In prior years the Company received consulting services from Westower
Consulting Ltd., a Canadian corporation owned by a stockholder of Westower
Corporation. Charges for these services were $94,000 and $126,000 in the fiscal
years ended February 28, 1997 and 1998, respectively. Included in trade accounts
payable at February 28, 1998 is $39,000 due to Westower Consulting Ltd. Fees
billed by related entities generally do not continue subsequent to acquisition
by the Company as the related services are performed by employees and officers
of the Company.

F-69
<PAGE> 158
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTES AND ADVANCES PAYABLE TO RELATED PARTIES

Notes and advances payable to related parties consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1997 1998 1998
------------ ------------ -------------
<S> <C> <C> <C>
Current
Unsecured advances and notes payable to
stockholders and officers, paid in full
during the Transition Period............ $ -- $ 871,000 $ --
Unsecured advances payable to officers
and stockholders, in Canadian
dollars, with no stated interest
rate and no specific repayment
terms, paid in full during the
Transition Period.................. -- 173,000 --
Unsecured advances payable to officers
and stockholders, with no stated
interest rate, and no specific
repayment terms.................... -- -- 228,000
Unsecured notes payable to officers
and stockholders, paid in full
during the transition period....... 672,000 1,000,000 --
-------- ---------- --------
$672,000 $2,044,000 $228,000
======== ========== ========
</TABLE>

FACILITY LEASES

Two subsidiaries acquired during the fiscal year ended February 28, 1998,
501053 B.C. Ltd. and National Tower Service Ltd., lease their operating
facilities, on a month-to-month basis, from Canadian corporations owned by
certain stockholders of Westower Corporation. Lease payments made during the
Transition Period were $39,000 and there were no significant lease payments made
to the stockholders during the fiscal year ended February 28, 1998.

NOTE 16--COMMITMENTS AND CONTINGENCY

The Company leases operating facilities, office equipment and vehicles
under noncancelable operating lease agreements. Future minimum lease payments
are as follows:

<TABLE>
<CAPTION>
YEAR ENDING SEPTEMBER 30:
- ---------------------------------------------------------
<S> <C>
1999..................................................... $ 607,000
2000..................................................... 348,000
2001..................................................... 203,000
2002..................................................... 67,000
2003..................................................... 63,000
Thereafter............................................... 52,000
----------
Total.................................................... $1,340,000
==========
</TABLE>

Rent and lease expense was $29,000, $224,000, $259,000 and $632,000 for the
fiscal years ended February 29, 1996 and February 28, 1997 and 1998 and the
Transition Period, respectively.

F-70
<PAGE> 159
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

LITIGATION

The Company is subject to lawsuits and other legal claims in the normal
course of its operations. Management believes that the resolution of any such
lawsuits and legal claims, if any, will not have a material impact on the
Company's financial position, results of operations or cash flows.

NOTE 17--CREDIT RISK AND BUSINESS CONCENTRATIONS

Financial instruments that potentially subject the Company to
concentrations of credit consist primarily of cash, cash equivalents and trade
accounts receivable. The Company places its temporary cash investments with a
major financial institution. At times, deposits with any one institution may
exceed federally insured limits. The Company extends credit to customers based
on evaluation of customer's financial condition and credit history. Collateral
is generally not required. Customers include large Canadian and U.S. companies
concentrated in the telecommunications industry.

Contract revenues from two customers accounted for 29% of revenues during
the fiscal year ended February 28, 1998, and one customer accounted for 56% of
revenues during the fiscal year ended February 28, 1997. Accounts receivable
from two customers comprise 48% of accounts receivable at February 28, 1998 and
one customer accounted for 39% of account receivable at February 28, 1997. There
were no customers who accounted for greater than 10% of sales for the Transition
Period and there were no customers with accounts receivable representing 10% or
more of the total accounts receivable at September 30, 1998.

Management expects that sales to relatively few customers will continue to
account for a high percentage of its revenues into the foreseeable future and
believes the Company's financial results depend in significant part upon the
success of these customers. Although the composition of the group comprising the
Company's largest customers may vary from period to period, the loss of a
significant customer or reduction in orders by any significant customers,
including reductions due to market, economic or competitive conditions in the
wireless communications industry, may have an adverse effect on the Company's
business, financial condition and results of operations.

NOTE 18--SEGMENT INFORMATION

The following table summarizes contract and other revenues and long-lived
assets related to the respective countries in which the Company operates.

<TABLE>
<CAPTION>
FEBRUARY 29, 1996
------------------------------------------
TOTAL UNITED STATES CANADA
----------- ------------- ----------
<S> <C> <C> <C>
Contract and other revenues................ $14,775,000 $8,897,000 $5,878,000
</TABLE>

<TABLE>
<CAPTION>
FEBRUARY 28, 1997
------------------------------------------
TOTAL UNITED STATES CANADA
----------- ------------- ----------
<S> <C> <C> <C>
Contract and other revenues................ $46,091,000 $39,177,000 $6,914,000
Long-lived assets.......................... $ 2,707,000 $ 1,000,000 $1,707,000
</TABLE>

F-71
<PAGE> 160
WESTOWER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
FEBRUARY 28, 1997
-------------------------------------------
TOTAL UNITED STATES CANADA
----------- ------------- -----------
<S> <C> <C> <C>
Contract and other revenues............... $41,662,000 $22,160,000 $19,502,000
Long-lived assets......................... $ 4,321,000 $ 1,196,000 $ 3,125,000
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
-------------------------------------------
TOTAL UNITED STATES CANADA
----------- ------------- -----------
<S> <C> <C> <C>
Contract and other revenues............... $31,944,000 $19,982,000 $11,962,000
Long-lived assets......................... $ 7,574,000 $ 3,729,000 $ 3,845,000
</TABLE>

Long-lived assets are comprised of property, plant and equipment and
excludes intangible assets.

NOTE 19--DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values of cash and cash equivalents, trade accounts receivable and
payable, and other current liabilities approximate their carrying amounts. The
fair values of advances to and from related parties approximate their fair value
due to the short term nature of the instruments. The fair values of long-term
debt, which are based on the present values of the underlying cash flows
discounted at the Company's incremental borrowing rates, are as follows:

<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 28, SEPTEMBER 30,
1997 1998 1998
------------ ------------ -------------
<S> <C> <C> <C>
Long-term debt.......................... $822,000 $794,000 $19,446,000
</TABLE>

NOTE 20--SUBSEQUENT EVENTS

On November 10, 1998 the Company completed the acquisition of Summit
Communications, LLC ("Summit"), a Mississippi limited liability company which
engages in operations similar to those of the Company. The merger was effected
by exchanging 200,000 shares of common stock valued at approximately $4.1
million, based on the publicly traded price, $4.4 million in cash, and the
assumption of certain liabilities, for all membership interests in Summit. The
former members of Summit may also receive an additional 100,000 shares of common
stock, based on certain performance criteria during the three years following
the date of acquisition. The acquisition was accounted for using the purchase
method for business combinations resulting in goodwill of approximately $8.0
million.

On October 30, 1998 the Company completed the acquisition of Teletronics
Management Services, Inc. ("Teletronics"). The acquisition was effected by
exchanging 188,000 shares of common stock valued at approximately $4 million,
based on the publicly traded price, $1 million in cash, and the assumption of
certain liabilities including distributions payable to former shareholders in
the amount of $800,000, for all outstanding shares of Teletronics. The
acquisition was accounted for using the purchase method for business
combinations resulting in goodwill of approximately $5.0 million.

The Company is currently in negotiations with certain tower construction
companies concerning acquisition by Westower. The Company is also in
negotiations with certain third parties concerning the acquisition of wireless
communication towers, and with a financial institution to arrange financing for
the wireless communication tower purchases, should the negotiations conclude
successfully. None of the negotiations are finalized and there is no assurance
that the Company will be successful in concluding these negotiations, or if the
Company is successful, that the acquisitions will not be dilutive to existing
shareholders.

F-72
<PAGE> 161

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors
CORD Communications, Inc.

We have audited the accompanying balance sheets of CORD Communications,
Inc. as of June 30, 1998 and 1997, and the related statements of operations,
changes in stockholders' equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of CORD Communications, Inc. as
of June 30, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

As described in note 13 to the financial statements, the Company was sold
subsequent to June 30, 1998.

/S/ MOSS ADAMS LLP

Beaverton, Oregon
October 21, 1998

F-73
<PAGE> 162

CORD COMMUNICATIONS, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
JUNE 30,
------------------------
1998 1997
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 27,730 $ 913,514
Accounts receivable--trade, (net of allowance)............ 1,951,901 2,452,205
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. 151,817 735,634
Unbilled amounts on completed contracts................... 175,209 394,502
Accrued interest receivable............................... 14,410 7,744
Employee advances......................................... 1,471 5,961
Refundable income taxes................................... 440,320 --
Prepaid expenses.......................................... 43,392 11,069
---------- ----------
Total current assets........................................ 2,806,250 4,520,629
Property and equipment, net of accumulated depreciation..... 401,834 399,218
Other assets................................................ 42,949 39,749
---------- ----------
Total assets................................................ $3,251,033 $4,959,596
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable--trade................................... $1,459,981 $1,247,921
Note payable.............................................. 500,000 155,000
Notes payable--stockholder and related party.............. -- 87,402
Current portion, long-term debt and capital lease
obligations............................................ 38,897 48,474
Accrued wages and payroll taxes........................... 243,426 193,051
Other accrued liabilities................................. 83,562 17,832
Billings in excess of costs and estimated earnings on
uncompleted contracts.................................. 443,185 69,352
Income taxes payable...................................... -- 547,000
Deferred income taxes..................................... 194,800 841,478
---------- ----------
Total current liabilities................................... 2,963,851 3,207,510
---------- ----------
Long-term debt and capital lease obligations................ 53,766 86,121
---------- ----------
Deferred income taxes....................................... 260,700 --
---------- ----------
Stockholders' equity (deficit):
Common stock, $1 par value, 1,000,000 shares authorized,
2,000 shares issued, 873 shares outstanding............ 873 873
Additional paid-in-capital................................ 350,878 350,878
Retained earnings (deficit)............................... (318,437) 1,374,812
Note receivable--stock subscription....................... (60,598) (60,598)
---------- ----------
Total stockholders' equity (deficit)........................ (27,284) 1,665,965
---------- ----------
Total liabilities and stockholders' equity.................. $3,251,033 $4,959,596
========== ==========
</TABLE>

See accompanying notes.
F-74
<PAGE> 163

CORD COMMUNICATIONS, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
CONTRACT REVENUES........................................... $11,010,207 $15,902,768
COST OF CONTRACTS:
Subcontractors............................................ 3,642,346 3,522,513
Labor..................................................... 2,754,248 3,672,345
Materials and supplies.................................... 1,532,546 2,008,403
Equipment costs and rental................................ 615,980 867,399
Other..................................................... 805,431 875,529
----------- -----------
Total cost of contracts..................................... 9,350,551 10,946,189
GROSS PROFIT................................................ 1,659,656 4,956,579
GENERAL AND ADMINISTRATIVE EXPENSES......................... 4,157,468 1,916,076
----------- -----------
OPERATING INCOME (LOSS)..................................... (2,497,812) 3,040,503
OTHER INCOME (EXPENSES):
Interest income........................................... 10,887 8,044
Interest expense.......................................... (41,521) (100,982)
Other..................................................... 37,088 18,826
----------- -----------
Total other income (expenses)............................... 6,454 (74,112)
INCOME (LOSS) BEFORE INCOME TAXES........................... (2,491,358) 2,966,391
PROVISION FOR INCOME TAXES.................................. (798,109) 1,339,829
----------- -----------
NET (LOSS) INCOME........................................... $(1,693,249) $ 1,626,562
=========== ===========
</TABLE>

See accompanying notes.
F-75
<PAGE> 164

CORD COMMUNICATIONS, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
NOTE
COMMON STOCK ADDITIONAL RETAINED RECEIVABLE
--------------- PAID-IN EARNINGS STOCK
SHARES AMOUNT CAPITAL (DEFICIT) SUBSCRIPTION TOTAL
------ ------ ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1996..... 873 $873 $350,878 $ (251,750) $(80,207) $ 19,794
Receipts on note receivable
stock subscription......... -- -- -- -- 19,609 19,609
Net income for the year.... -- -- -- 1,626,562 -- 1,626,562
--- ---- -------- ----------- -------- -----------
Balance, June 30, 1997..... 873 873 350,878 1,374,812 (60,598) 1,665,965
--- ---- -------- ----------- -------- -----------
Loss for the year.......... -- -- -- (1,693,249) -- (1,693,249)
--- ---- -------- ----------- -------- -----------
Balance, June 30, 1998..... 873 $873 $350,878 $ (318,437) $(60,598) $ (27,284)
=== ==== ======== =========== ======== ===========
</TABLE>

See accompanying notes.
F-76
<PAGE> 165

CORD COMMUNICATIONS, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)........................................... $(1,693,249) $ 1,626,562
Adjustments to reconcile net income (loss) to net cash from
operating activities:
Depreciation and amortization............................. 131,561 73,507
Deferred income taxes..................................... (385,978) 780,000
Gain (loss) on sale of fixed assets....................... 10,436 (4,284)
Changes in certain operating assets and liabilities:
Accounts receivable--trade............................. 500,304 (1,716,878)
Costs and estimated earnings in excess of billings..... 583,817 (662,048)
Unbilled amounts on completed contracts................ 219,293 (394,502)
Accrued interest receivable............................ (6,666) 3,466
Employee advances...................................... 4,490 (4,976)
Refundable income taxes................................ (440,320) --
Prepaid expenses....................................... (32,323) (16)
Other assets........................................... (3,200) (26,074)
Accounts payable--trade................................ 212,060 875,528
Accrued wages and payroll taxes........................ 50,375 143,130
Other accrued liabilities.............................. 65,730 (1,702)
Billings in excess of costs and estimated earnings..... 373,833 (65,560)
Income taxes payable................................... (547,000) 542,654
----------- -----------
Net cash (used in) from operating activities......... (956,837) 1,168,807
----------- -----------
CASH FLOWS RELATED TO INVESTING ACTIVITIES
Decrease (increase) in note receivable--stock
subscription.............................................. -- 19,609
Proceeds from sale of equipment............................. 2,800 --
Purchase of property and equipment.......................... (147,413) (290,046)
----------- -----------
Net cash used in investing activities................ (144,613) (270,437)
----------- -----------
CASH FLOWS RELATED TO FINANCING ACTIVITIES
Proceeds from issuance of long-term debt and capital lease
obligations............................................... 8,000 123,620
Principal payments on long-term debt and capital lease
obligations............................................... (49,932) (60,481)
Proceeds from stockholder loans............................. -- 6,767
Principal payments on stockholder loans..................... (87,402) --
Net change in notes payable................................. 345,000 (110,000)
----------- -----------
Net cash from (used in) financing activities......... 215,666 (40,094)
----------- -----------
NET (DECREASE) INCREASE IN CASH............................. (885,784) 858,276
CASH AND CASH EQUIVALENTS, beginning of year................ 913,514 55,238
----------- -----------
CASH AND CASH EQUIVALENTS, end of year...................... $ 27,730 $ 913,514
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid............................................... $ 41,521 $ 100,982
=========== ===========
Interest received........................................... $ 4,221 $ 11,510
=========== ===========
Income taxes paid........................................... $ 575,188 $ 505
=========== ===========
</TABLE>

See accompanying notes.
F-77
<PAGE> 166

CORD COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

CORD Communications, Inc. was incorporated in July 1994 in the state of
California. The Company constructs cellular communication sites, underground and
overhead telephone and utility lines, and commercial tenant improvements. In
addition, they perform site acquisition and lease negotiations, and provide land
use planning services. The Company operates primarily in California, Washington,
and Oregon.

CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents. At June 30, 1997, cash and cash
equivalents that exceeded the FDIC insurance limits were $711,410.

ACCOUNTS RECEIVABLE

In the normal course of business, the Company extends credit to customers,
principally with customers located in California, Washington, and Oregon.
Collectibility of accounts receivable is periodically assessed by management.
This assessment provides the basis for any allowance for doubtful accounts and
related bad debt expense. An allowance of $83,000 was considered necessary by
management at June 30, 1998. No allowance for doubtful accounts was considered
necessary by management as of June 30, 1997. A concentration of credit risk
exists in connection with the Company's trade customers due to the proximity of
location and services provided. As of June 30, 1998 and 1997, the Company had
accounts receivable balances of $1,951,901 and $2,452,205, which were exposed to
the concentration of credit risk. Credit risk related to contract receivables is
minimized by the Company's rights under lien laws on contracts subject to those
laws.

REVENUE AND COST RECOGNITION

Revenues from fixed-price construction contracts are recognized on the
percentage of completion method, measured on the basis of cost incurred to date
to total estimated cost for each contract. Because of inherent uncertainties in
estimating cost to complete, it is at least reasonably possible that the
estimates used will change in the near term.

Contract costs include all direct material, equipment and labor costs,
subcontract costs and those indirect costs related to contract performance, such
as supplies, travel and per diem costs. General and administrative costs are
charged to expense as incurred. Provisions for estimated losses on uncompleted
contracts are made in the period in which such losses are determined. Changes in
job performance, job conditions, and estimated profitability, including those
arising from final contract settlements, may result in revisions to costs and
income and are recognized in the period in which the revisions are determined.
Claims are generally included in contract revenues when settled.

The asset, "Cost and estimated earnings in excess of billings on
uncompleted contracts," represents revenues recognized in advance of amounts
billed. The liability, "Billings in excess of costs and estimated earnings on
uncompleted contracts," represents billings in advance of revenues recognized.

F-78
<PAGE> 167
CORD COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

PROPERTY AND EQUIPMENT

Property and equipment is carried at cost and is depreciated on the
straight-line method over the estimated useful lives of the assets.

<TABLE>
<S> <C>
Vehicles................................................ 5 years
Office furniture and equipment.......................... 3 to 7 years
Construction equipment.................................. 5 to 7 years
Leasehold improvements.................................. 3 years
</TABLE>

Property and equipment consisted of the following at June 30, 1998 and
1997, respectively:

<TABLE>
<CAPTION>
JUNE 30,
----------------------
1998 1997
--------- ---------
<S> <C> <C>
Vehicles............................................. $ 342,782 $ 275,864
Office furniture and equipment....................... 183,760 137,735
Construction equipment............................... 119,028 112,648
Leasehold improvements............................... 19,361 19,361
--------- ---------
664,931 545,608
Less accumulated depreciation........................ (263,097) (146,390)
--------- ---------
$ 401,834 $ 399,218
========= =========
</TABLE>

The cost and related accumulated depreciation of assets sold or disposed
are removed from the accounts, and any resulting gain or loss is included in
operations. Repairs and maintenance expenditures are expensed as incurred.

INCOME TAXES

Income taxes are provided for the tax effects of transactions reported in
the financial statements, and consist of taxes currently due plus deferred taxes
related primarily to different methods of accounting for depreciation and the
use of the cash method for income tax purposes. The deferred taxes represent the
future tax return consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered or settled.

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Significant estimates used in preparing these financial statements include
estimated costs to complete which have a direct effect on gross profit.

VALUATION OF LONG LIVED ASSETS AND CHANGE IN ACCOUNTING POLICY

The Company periodically reviews long-lived assets and certain identifiable
intangibles whenever events of changes in circumstance indicate that the
carrying amount of an asset may not be recoverable. There will be no provisions
for impairment during 1998 or 1997.

F-79
<PAGE> 168
CORD COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

2. NOTE PAYABLE

The Company has a line of credit with South Umpqua State Bank, which bears
interest at the Wall Street Journal's published prime rate plus 1%. The Company
may borrow up to $1,000,000 under the terms of the line of credit. The note is
collateralized by equipment, intangible assets, chattel paper accounts,
equipment, and general intangibles. The note payable is also personally
guaranteed by the stockholders of the Company. Borrowing on the line is limited
to 70% of receivables less than 90 days old, less retainage receivables. The
line of credit was scheduled to expire on February 1, 1999, however, the note
was paid off on September 1, 1998 (see note 13).

3. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

<TABLE>
<CAPTION>
JUNE 30,
--------------------
1998 1997
-------- --------
<S> <C> <C>
Notes payable to Ford Motor Credit Corp. with interest from
9.75% to 10.25%, payable in monthly installments of
$1,149, including interest, maturing from 1999 through
2001, collateralized by vehicles.......................... $ 25,798 $ 36,431
Notes payable to South Umpqua State Bank with interest from
8.48% to 10.75%, payable in monthly installments of $1,950,
including interest, maturing from 1998 through 2001,
collateralized by vehicles.................................. 21,968 36,074
Note payable to Damerow Ford with interest at 8.65%, payable
in monthly installments of $646, including interest,
maturing in 2001, collateralized by a vehicle............. 21,349 26,950
Note payable on equipment with interest from 1.9%, to 11.5%
payable in monthly installments of $1,716, including
interest, maturing in 1998 through 2001, collateralized by
equipment................................................. 11,518 28,068
Capital lease obligations for equipment, payable in monthly
installments of $608, including interest, inputed from
15.29% to 20.92%, maturing in 1999 through 2001,
collateralized by equipment............................... 12,030 7,072
-------- --------
92,663 134,595
Less current portion........................................ (38,897) (48,474)
-------- --------
Long-term portion........................................... $ 53,766 $ 86,121
======== ========
</TABLE>

Future maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
AMOUNT
YEAR ENDING JUNE 30, MATURING
-------------------- --------
<S> <C>
1999...................................................... $38,897
2000................................................. 27,571
2001................................................. 22,396
2002................................................. 3,743
2003................................................. 56
-------
$92,663
=======
</TABLE>

4. OPERATING LEASE COMMITMENTS

The Company leases office and storage space, vehicles, and communication
analyzing equipment under non-cancelable operating leases expiring on various
dates through February 2000. Total rental payments amounted to $229,482 and
$109,964 for the years ended June 30, 1998 and 1997, respectively.

F-80
<PAGE> 169
CORD COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Future minimum rental commitments under non-cancelable leases payable over
the remaining lives of the leases are:

<TABLE>
<CAPTION>
MINIMUM
LEASE
YEAR ENDING JUNE 30, PAYMENTS
-------------------- --------
<S> <C>
1999................................................ $73,793
2000................................................ 7,098
-------
$80,891
=======
</TABLE>

5. COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS

The Company has recorded the following costs and estimated earnings on
contracts in progress:

<TABLE>
<CAPTION>
JUNE 30,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
Costs incurred on contracts in progress........... $ 1,506,191 $ 1,563,604
Estimated earnings................................ 402,937 807,434
----------- -----------
Revenue recognized to date...................... 1,909,128 2,371,038
Less billings to date........................... (2,200,496) (1,704,756)
----------- -----------
$ (291,368) $ 666,282
=========== ===========
</TABLE>

Included in the accompanying balance sheet under the following captions:

<TABLE>
<CAPTION>
JUNE 30,
---------------------
1998 1997
--------- --------
<S> <C> <C>
Costs and estimated earnings in excess of billings on
contracts in progress............................... $ 151,817 $735,634
Billings in excess of costs and estimated earnings on
contracts in progress................................. (443,185) (69,352)
--------- --------
$(291,368) $666,282
========= ========
</TABLE>

6. CONTRACT BACKLOG

The following schedule summarizes changes in backlog on contracts during
the year ended June 30, 1998 and 1997. Backlog represents the amount of gross
revenue the Company expects to realize from work to be performed on contracts in
progress at year-end.

<TABLE>
<CAPTION>
JUNE 30,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Backlog balance, beginning of year.............. $ 1,279,115 $ 2,568,957
New contracts during the year................... 10,571,539 14,612,926
------------ ------------
11,850,654 17,181,883
Less: contract revenue earned during the year... (11,010,207) (15,902,768)
------------ ------------
Backlog balance, end of year.................... $ 840,447 $ 1,279,115
============ ============
</TABLE>

F-81
<PAGE> 170
CORD COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

7. INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
JUNE 30,
-----------------------
1998 1997
--------- ----------
<S> <C> <C>
Current
Federal........................................... $(404,249) $ 426,013
State............................................. (7,883) 133,816
--------- ----------
(412,132) 559,829
--------- ----------
Deferred
Federal........................................... (308,781) 624,000
State............................................. (77,196) 156,000
--------- ----------
(385,977) 780,000
--------- ----------
$(798,109) $1,339,829
========= ==========
</TABLE>

The difference between the actual income tax provision (benefit) and the
tax provision (benefit) computed by applying the statutory federal rate to
income (loss) before taxes is attributable to the following:

<TABLE>
<CAPTION>
JUNE 30,
----------------------------------------
1998 1997
------------------ ------------------
AMOUNT % AMOUNT %
--------- ----- ---------- ----
<S> <C> <C> <C> <C>
Federal statutory income tax provision
(benefit)................................. $(847,062) (34.0)% $1,008,573 34.0%
State statutory income tax provision
(benefit)................................... (211,766) (8.5)% 252,143 8.5%
Carryback of net operating losses (NOL) in
years with rates different than statutory
rates..................................... 13,300 0.5% -- --
Change in valuation allowance for deferred
taxes..................................... 283,370 11.4% -- --
Other....................................... (35,951) (1.4)% 79,113 2.7%
--------- ----- ---------- ----
Actual income tax provision (benefit)....... $(798,109) (32.0)% $1,339,829 45.2%
========= ===== ========== ====
</TABLE>

F-82
<PAGE> 171
CORD COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The composition of the deferred income tax assets and liabilities at June
30, 1998 and 1997 are:

<TABLE>
<CAPTION>
JUNE 30,
------------------------
1998 1997
--------- -----------
<S> <C> <C>
Current deferred tax assets
Differences in basis in assets due to cash method
used for income taxes.............................. $ -- $ 751,789
Bad debts, vacation accrual and other............ 115,100 --
Tax benefit of net operating loss
carryforwards................................. 283,370 --
Valuation allowance.............................. (283,370) --
--------- -----------
115,100 751,789
--------- -----------
Current deferred tax liabilities
Differences in basis in liabilities due to cash
method used for income taxes.................. -- (1,593,267)
Difference in revenue recognized on uncompleted
contracts..................................... (171,300) --
Deferral of taxes from conversion from cash to
accrual completed contract.................... (134,500) --
Other............................................ (4,100) --
--------- -----------
(309,900) (1,593,267)
--------- -----------
Net current deferred tax liabilities............... $(194,800) $ (841,478)
========= ===========
Non-current deferred tax assets
Capitalization differences between financial and
tax accounting................................ $ 9,000 $ 1,266
Other............................................ 19,300 --
--------- -----------
28,300 1,266
--------- -----------
Non-current deferred tax liabilities
Deferral of taxes from conversion from cash to
accrual completed contract.................... (269,000) --
Depreciation differences between financial and
tax accounting................................ (20,000) (1,266)
--------- -----------
(289,000) (1,266)
--------- -----------
Net non-current deferred tax liabilities........... $(260,700) $ --
========= ===========
</TABLE>

The Company's net operating loss carryforward will expire in 2013.

F-83
<PAGE> 172
CORD COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

8. BOND GUARANTEES

Most of the Company's business activities are performed under contract
agreements with customers which require bond guarantees from an independent
surety company. As is customary in the construction industry, the Company has
pledged all of its assets in order to indemnify the surety company against
losses under these bond guarantees.

9. RELATED PARTY TRANSACTIONS

During the year ended June 30, 1996, the Company bought back 418 shares of
its stock which was owned by a principal stockholder. The buy-back of stock was
accomplished by providing an unsecured promissory note for $138,063 payable upon
demand, which accrued interest at the rate of 10% per annum. During the year
ended June 30, 1998, the Company paid the remaining principal balance
outstanding at June 30, 1997 of $87,402.

The Company leases equipment from a principal stockholder. Lease payments
for the years ended June 30, 1998 and 1997 were $57,600 and $78,920,
respectively. Amounts included in accounts payable that were due to the
stockholder for equipment rental were $0 and $22,200 at June 30, 1998 and 1997,
respectively.

On June 30, 1995, the Company had an outstanding unsecured note receivable
from a stockholder, which it had received in exchange for the issuance of common
stock. The note is payable upon demand and accrues interest at the rate of 10%
per annum. The Company received payments of principal and interest of $0 and
$30,820 at June 30, 1998 and 1997, respectively. The remaining principal balance
owed the Company at June 30, 1998 and 1997 was $60,598. The Company's accrued
interest balance at June 30, 1998 and 1997 was $14,410 and $7,744, respectively.

10. DEFINED CONTRIBUTION PENSION PLAN

Effective January 1997, the Company adopted a 401(k) retirement plan that
covers all employees who have completed one year of service and are at least 21
years of age. The Company's contributions, which are discretionary, are
allocated to participants based on a percentage of wages. Participants may also
make elective contributions. Employer pension expense for the year ended June
30, 1998 and 1997 totaled $28,409 and $0, respectively.

11. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:

Cash, accounts receivable, accounts payable, and other current
liabilities--At June 30, 1998, carrying amounts of these financial instruments
approximate fair value because of their short maturities.

Long term debt and capital lease obligations--At June 30, 1998, estimated
fair value of long-term debt approximates the carrying amount of $92,663, based
on current rates offered for similar debt.

12. YEAR 2000 COMPLIANCE

The Company is conducting a review of its computer and other systems to
identify those areas that could be affected by the "Year 2000" issue and is
developing an implementation plan to resolve the issue. The Company is currently
working with consultants who believe, with modifications to existing software
and converting to new software and hardware, the Year 2000 problem will not pose
significant operational problems and is not anticipated to be material to its
financial position or results of operations in any given year.

F-84
<PAGE> 173
CORD COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

13. SUBSEQUENT EVENTS

On September 1, 1998, the Company's line of credit was paid in full and
canceled.

On August 31, 1998, the stockholders of CORD Communications sold all of the
outstanding shares of stock to Westower Corporation in exchange for $5,000,000
in cash and 217,389 shares of Westower stock. The stockholders can receive
347,826 additional shares contingent on the performance of CORD Communications
during the twelve months following the purchase. The purchase agreement also
provides that Westower will support CORD's need for additional working capital
during the twelve months following the purchase. Westower is a larger cellular
tower contractor and operator, and is planning to bring its additional
marketing, operational and capital resources to CORD Communications in order to
grow and enhance the Company's business activities.

F-85
<PAGE> 174

REPORT OF INDEPENDENT ACCOUNTANTS

To the Members of
Summit Communications, LLC

In our opinion, the accompanying balance sheet and the related statements
of income, members' equity and cash flows present fairly, in all material
respects, the financial position of Summit Communications, LLC at September 30,
1998, and the results of its operations and its cash flows for the nine months
ended September 30, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion expressed
above. The financial statements of Summit Communications, LLC for the Period of
Inception (May 24, 1997) to December 31, 1997 were audited by other independent
accountants whose report dated March 5, 1998 expressed an unqualified opinion on
those statements.

/S/ PRICEWATERHOUSECOOPERS LLP

Seattle, Washington
May 21, 1999

F-86
<PAGE> 175

REPORT OF INDEPENDENT ACCOUNTANTS

To the Members of
Summit Communications, LLC
Ridgeland, Mississippi

We have audited the accompanying balance sheet of Summit Communications,
LLC, as of December 31, 1997 and the related statements of income, members'
equity and cash flows for the Period of Inception (May 24, 1997) to December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.

In our opinion the financial statements referred to above present fairly,
in all material respects, the financial position of Summit Communications, LLC
as of December 31, 1997, the results of its operations and its cash flows for
the Period of Inception (May 24, 1997) to December 31, 1997, in conformity with
generally accepted accounting principles.

/S/ SHEARER, TAYLOR & CO., P.A.

March 5, 1998
Jackson, Mississippi

F-87
<PAGE> 176

SUMMIT COMMUNICATIONS, LLC

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
<S> <C> <C>
ASSETS
Current assets
Cash...................................................... $ 541,850
Accounts receivable....................................... $1,142,771 2,791,203
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. 117,648 411,766
Note receivable from member............................... 155,000
Other current assets...................................... 60,949 98,088
---------- ----------
Total current assets........................................ 1,321,368 3,997,907
---------- ----------
Property and equipment
Machinery and equipment................................... 479,459 568,336
Vehicles.................................................. 398,916 529,734
Furniture and fixtures.................................... 17,292 24,104
---------- ----------
895,667 1,122,174
Less: Accumulated depreciation............................ (196,346) (384,547)
---------- ----------
Property and equipment, net............................ 699,321 737,627
---------- ----------
Other assets................................................ 19,671 18,421
---------- ----------
$2,040,360 $4,753,955
========== ==========
LIABILITIES AND MEMBERS' EQUITY
Liabilities
Current liabilities
Book overdraft......................................... $ 118,249
Accounts payable....................................... 183,876 $1,361,357
Billings in excess of costs and estimated earnings on
uncompleted contracts................................ 265,520 532,608
Accrued expenses and other liabilities................. 84,266 225,356
Line of credit......................................... 116,537 442,144
Note payable to member................................. 388,938
Current portion of capital lease obligations........... 14,917 65,630
Current portion of long-term debt...................... 52,041 125,802
---------- ----------
Total current liabilities................................... 1,224,344 2,752,897
Capital lease obligations, less current portion............. 18,881 126,697
Long-term debt, less current portion........................ 231,053 469,989
---------- ----------
Total liabilities........................................... 1,474,278 3,349,583
---------- ----------
Commitments and contingencies
Members' equity............................................. 566,082 1,404,372
---------- ----------
$2,040,360 $4,753,955
========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-88
<PAGE> 177

SUMMIT COMMUNICATIONS, LLC

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
PERIOD
OF INCEPTION
(MAY 24, 1997) NINE MONTHS
TO ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
-------------- -------------
<S> <C> <C>
Contract revenues earned.................................... $5,477,770 $8,334,650
---------- ----------
Cost of contract revenues (exclusive of depreciation and
amortization shown below)
Materials, supplies and contract services................. 2,519,761 3,992,685
Direct labor.............................................. 867,387 1,261,849
Other direct costs........................................ 726,241 1,031,938
---------- ----------
Total cost of contract revenues............................. 4,113,389 6,286,472
---------- ----------
Gross margin................................................ 1,364,381 2,048,178
---------- ----------
Selling, general and administrative expenses................ 645,953 922,198
Depreciation and amortization............................... 197,061 196,616
---------- ----------
Income from operations...................................... 521,367 929,364
Other income (expense)
Other income, net......................................... 1,533
Interest expense.......................................... (45,285) (92,607)
---------- ----------
Net income.................................................. $ 476,082 $ 838,290
========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-89
<PAGE> 178

SUMMIT COMMUNICATIONS, LLC

STATEMENT OF MEMBERS' EQUITY

<TABLE>
<S> <C>
Capital contributions (May 24, 1997)........................ $ 100,000
Net income.................................................. 476,082
Distributions to members.................................... (10,000)
----------
December 31, 1997........................................... 566,082
Net income.................................................. 838,290
September 30, 1998.......................................... $1,404,372
==========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-90
<PAGE> 179

SUMMIT COMMUNICATIONS, LLC

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD
OF INCEPTION
(MAY 24, 1997) NINE MONTHS
TO ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
-------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................. $ 476,082 $ 838,290
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FLOWS FROM
OPERATING ACTIVITIES:
Depreciation and amortization............................. 197,061 196,616
Loss on disposal of assets................................ 15,520
CHANGES IN OPERATING ASSETS AND LIABILITIES, NET OF EFFECT
OF ACQUISITION:
Accounts receivable.................................... (1,142,771) (1,648,432)
Cost and estimated earnings in excess of billings on
uncompleted contracts................................ (117,648) (294,118)
Other current assets................................... (37,189) (37,139)
Accounts payable....................................... 183,876 1,177,481
Billings in excess of costs and estimated earnings on
uncompleted contracts................................ 265,520 267,088
Accrued expenses and other liabilities................. 6,253 141,090
----------- -----------
Net cash (used in) provided by operating activities......... (168,816) 656,396
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition................................. (512,207)
Purchases of property and equipment....................... (13,865) (577,476)
Proceeds from disposals of property and equipment......... 501,670
----------- -----------
Net cash used in investing activities....................... (526,072) (75,806)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances to member........................................ (155,000)
Proceeds from line of credit, net......................... 116,537 325,607
Proceeds from note payable to member...................... 400,000
Repayments of note payable to member...................... (11,062) (10,741)
Repayments of capital lease obligations................... (301,930) (14,857)
Proceeds from long-term debt.............................. 300,174 500,000
Repayments of long-term debt.............................. (17,080) (565,500)
Increase (decrease) in book overdraft..................... 118,249 (118,249)
Capital contributions..................................... 100,000
Distributions to members.................................. (10,000)
----------- -----------
Net cash provided by (used in) financing activities......... 694,888 (38,740)
----------- -----------
Net increase in cash........................................ 541,850
Cash at beginning of period.................................
----------- -----------
Cash at end of period....................................... $ -- $ 541,850
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-91
<PAGE> 180

SUMMIT COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD OF INCEPTION (MAY 24, 1997) TO DECEMBER 31, 1997
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Summit Communications LLC (the "Company") is incorporated under the laws of
the state of Mississippi as a limited liability company (LLC). The Company
constructs communications towers for use by the radio, television, telephone and
other industries in the continental United States.

Accounting Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Examples of estimates subject to possible revision based upon
the outcome of future events include costs and estimated earnings on uncompleted
contracts and depreciation on property and equipment. Actual results could
differ from those estimates.

Revenue and Cost Recognition

Revenues from fixed-priced and modified fixed-price construction contracts
are recognized on the percentage-of-completion method, measured by the
percentage of costs incurred to date to total estimated costs to complete each
contract. Most of the Company's contracts are short-term and are completed in
two to three months.

Contract costs include all direct material and labor costs and those direct
costs related to contract performance, such as supplies, tools and repairs.
Selling, general and administrative costs, including indirect costs on
contracts, are charged to expense as incurred. Provisions for estimated losses
on uncompleted contracts are made in the period in which such losses are
determined.

Property and Equipment

Property and equipment is recorded at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets.
Estimated useful lives by major asset category are as follows: machinery and
equipment--2 to 10 years; vehicles--3 to 5 years; furniture and fixtures--3 to 7
years. Gains or losses on the dispositions of assets are recorded at the time of
disposition and are included in other income. The costs of normal repairs and
maintenance are charged to expense as incurred.

Income Taxes

Income of the Company is taxed directly to its members for Federal income
tax purposes. As a result, no provision for Federal income taxes has been
reflected in the accompanying financial statements.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform
with current year presentation. These reclassifications had no effect on
previously reported results of operations, net assets, cash flows or members'
equity.

F-92
<PAGE> 181
SUMMIT COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

2. UNCOMPLETED CONTRACTS

The following is a summary of costs, estimated earnings and billings on
uncompleted contracts:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
<S> <C> <C>
Costs incurred on uncompleted contracts....... $1,143,511 $2,471,585
Estimated earnings............................ 495,683 888,087
---------- ----------
1,639,194 3,359,672
Less: Billings to date........................ 1,787,066 3,480,514
---------- ----------
$ (147,872) $ (120,842)
========== ==========
Presentation in the accompanying balance
sheet:
Cost and estimated earnings in excess of
billings on uncompleted contracts........ $ 117,648 $ 411,766
Billings in excess of costs and estimated
earnings on uncompleted contracts........ (265,520) (532,608)
========== ==========
$ (147,872) $ (120,842)
========== ==========
</TABLE>

3. LINE OF CREDIT

Line of credit consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
<S> <C> <C>
Line of credit for $600,000 payable to
commercial bank; interest at the lender's
prime rate (8.5% at December 31, 1997) plus
0.5%; principal and interest payable January
1, 1998; collateralized by inventory,
property and equipment, and accounts
receivable.................................. $ 57,593
Line of credit for $750,000 payable to
commercial bank; interest at the lender's
prime rate, (8.5% at December 31, 1997) plus
0.5%; principal and interest payable July 1,
1998; collateralized by inventory, property
and equipment, and accounts receivable........ 58,944
Line of credit for $750,000 payable to
commercial bank; interest at the lender's
prime rate (8.25% at September 30, 1998)
plus 0.25%; principal payable April 30,
1999, interest payable monthly;
collateralized by inventory, property and
equipment and accounts receivable; amended
on October 16, 1998 increasing the line of
credit available to $1,000,000 and interest
to the 90 day LIBOR rate plus 2.25%......... $442,144
-------- --------
$116,537 $442,144
======== ========
</TABLE>

F-93
<PAGE> 182
SUMMIT COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

4. NOTE PAYABLE TO MEMBER

Note payable to member consists of the following at December 31, 1997:

<TABLE>
<S> <C>
Note payable to member; interest at a specified commercial
bank's prime rate, 8.5% at December 31, 1997; principal
payable on July 18, 1998 and interest payable
quarterly............................................... $388,938
========
</TABLE>

The net proceeds of the note were used to acquire the net assets in Note
11. In April 1998, the Company refinanced the note with a note payable to a
commercial bank (see Note 5).

Interest paid to the member was approximately $17,000 and $11,000 for the
Period of Inception (May 24, 1997) to December 31, 1997 and the nine months
ended September 30, 1998, respectively.

5. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
<S> <C> <C>
Note payable to commercial bank at an interest
rate of 8.5%; payable in monthly
installments of $6,176, including interest,
through September 25, 2002; collateralized
by property and equipment and accounts
receivable.................................. $283,094 $249,221
Note payable to commercial bank at an interest
rate of 8.75%; payable in monthly installments
of $8,207, including interest, through April
5, 2003; collateralized by property and
equipment and accounts receivable............. 346,570
-------- --------
283,094 595,791
Less: Current portion......................... (52,041) (125,802)
-------- --------
Long-term debt, less current portion.......... $231,053 $469,989
======== ========
</TABLE>

The following is a summary of the future aggregate amounts of principal
payments for long-term debt at September 30, 1998:

<TABLE>
<S> <C>
Three months ending December 31, 1998.................... $ 30,443
1999..................................................... 128,542
2000..................................................... 140,099
2001..................................................... 152,696
2002..................................................... 144,011
---------
595,791
Less: Current portion.................................... (125,802)
---------
$ 469,989
=========
</TABLE>

F-94
<PAGE> 183
SUMMIT COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

6. CAPITAL LEASE OBLIGATIONS

The following is a summary of future minimum lease payments under capital
lease agreements at September 30, 1998:

<TABLE>
<S> <C>
Three months ending December 31, 1998..................... $ 22,933
1999...................................................... 70,699
2000...................................................... 65,529
2001...................................................... 62,712
--------
Total minimum lease payments.................... 221,873
Less: Amount representing interest........................ (29,546)
--------
$192,327
========
</TABLE>

The following is a summary of assets and accumulated depreciation of assets
under capital lease agreements as of:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
<S> <C> <C>
Vehicles...................................... $54,397 $138,697
Machinery..................................... 92,473
------- --------
54,397 231,170
Less: Accumulated depreciation................ (6,802) (21,463)
------- --------
$47,595 $209,707
======= ========
</TABLE>

Depreciation expense includes amortization of assets under capital leases
of $6,802 and $18,811 for the Period of Inception (May 24, 1997) to December 31,
1997 and for the nine months ended September 30, 1998, respectively.

7. EMPLOYEE BENEFIT PLAN

The Company has a defined contribution employee benefit plan, which is the
401(k) Profit Sharing Plan and Trust. Employees become eligible for
participation in the plan after one year of service. Employees may contribute a
percentage of their gross compensation not to exceed certain limits.
Contributions by the Company are made at the discretion of the members. There
were no contributions made by the Company related to this plan for the Period of
Inception (May 24, 1997) to December 31, 1997 and for the nine months ended
September 30, 1998.

8. RELATED PARTY TRANSACTIONS

NOTE RECEIVABLE

At September 30, 1998, the Company had a note receivable for $155,000 from
one of its members. The note bears interest at the same rate as the line of
credit, is payable on demand, and is uncollateralized. The note was subsequently
repaid in full.

SALE OF BUILDINGS

In February 1998, the Company acquired a building from one of the members
for $500,000. In July 1998 the building was sold to the members resulting in a
loss of approximately $12,000.

F-95
<PAGE> 184
SUMMIT COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

FACILITY LEASES

The Company leases space in two buildings owned by the members of the
Company under a month to month operating lease. For the nine months ended
September 30, 1998, total rent paid to the members was approximately $9,300.

9. CONTINGENCIES

10. CREDIT RISK AND BUSINESS CONCENTRATIONS

Financial instruments that potentially subject the Company to
concentrations of credit consist primarily of cash and accounts receivable. The
Company deposits its cash with a major financial institution. At times, deposits
may exceed federally insured limits. The Company extends credit to customers
based on evaluation of the customer's financial condition and credit history.
Collateral is generally not required. Customers include large U.S. companies
concentrated in the telecommunications industry.

Contract revenues earned from three customers accounted for 54% of revenues
for the Period of Inception (May 24, 1997) to December 31, 1997. Accounts
receivable from these three customers comprise 53% of accounts receivable at
December 31, 1997. Contract revenues earned from two customers accounted for 58%
of revenues for the nine months ended September 30, 1998. Accounts receivable
from these two customers comprise 57% of accounts receivable at September 30,
1998.

Management expects that sales to relatively few customers will continue to
account for a high percentage of its revenues into the foreseeable future and
believes that financial results depend in significant part upon the success of
these customers. Although the composition of the group comprising the Company's
largest customers may vary from period to period, the loss of a significant
customer or reduction in orders by any significant customers, including
reductions due to market, economic or competitive conditions in the wireless
communications industry, may have an adverse effect on the Company's business,
financial condition and results of operations.

F-96
<PAGE> 185
SUMMIT COMMUNICATIONS, LLC

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

11. ACQUISITION

On May 24, 1997, the Company acquired certain assets and assumed certain
liabilities of Summit Communications, Inc. (SCI), an unrelated third party, in a
purchase transaction. The following is a summary of assets acquired and
liabilities assumed in the SCI transaction:

<TABLE>
<S> <C>
Assets acquired
Other current assets.................................... $ 23,760
Property and equipment.................................. 855,896
Other assets............................................ 20,386
--------
900,042
Liabilities assumed
Long-term debt.......................................... 293,634
Capital lease obligations............................... 16,188
Accrued expenses and other liabilities.................. 78,013
--------
387,835
--------
Cash paid............................................... $512,207
========
</TABLE>

12. SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
PERIOD
OF INCEPTION
(MAY 24, 1997) NINE MONTHS
TO ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
-------------- -------------
<S> <C> <C>
Interest paid............................... $42,644 $ 95,248
Non-cash investing and financing activities:
Vehicles and machinery acquired under
capital leases......................... $25,905 $173,386
Note payable to member refinanced with
commercial bank........................ $378,197
</TABLE>

13. SUBSEQUENT EVENTS

On November 10, 1998 the members sold all of their outstanding ownership
interest in the Company to Westower Corporation (Westower), a publicly traded
company, in exchange for approximately 200,000 shares of Westower and $4.4
million in cash. The members may also receive an additional 100,000 shares of
Westower common stock based upon certain performance criteria during the three
years subsequent to the date of acquisition. The purchase agreement also
provides that Westower will supply the Company's need for additional working
capital following the purchase.

On May 15, 1999, Westower entered into a definitive agreement with
SpectraSite Holdings, Inc. (SpectraSite), under which Westower will merge with a
subsidiary of SpectraSite. Under the terms of the agreement, Westower
shareholders will receive 1.81 shares of SpectraSite common stock for each
Westower share and Westower will become a wholly owned subsidiary of
SpectraSite. The merger is subject to the approval of Westower's shareholders
and the appropriate regulatory agencies as well as other customary closing
conditions. There can be no assurance that the merger will be consummated.

F-97
<PAGE> 186

(This page intentionally left blank)
<PAGE> 187

[SPECTRASITE LOGO]
<PAGE> 188

The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and we are not soliciting offers to
buy these securities in any jurisdiction where the offer or sale is not
permitted.

PROSPECTUS (Subject to Completion)

Issued January 31, 2000

22,300,000 Shares

[SpectraSite Logo]

SpectraSite Holdings, Inc.
COMMON STOCK
------------------------

SPECTRASITE HOLDINGS, INC. IS OFFERING 22,300,000 SHARES OF ITS COMMON STOCK.
------------------------

------------------------

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 7.
------------------------

PRICE $ A SHARE

------------------------

SpectraSite Holdings, Inc. has granted the underwriters the right to purchase up
to an additional 3,345,000 shares to cover over-allotments.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on
, 2000.
------------------------

MORGAN STANLEY DEAN WITTER GOLDMAN SACHS INTERNATIONAL

CIBC WORLD MARKETS
CREDIT SUISSE FIRST BOSTON
DEUTSCHE BANK
LEHMAN BROTHERS
SALOMON SMITH BARNEY INTERNATIONAL
, 2000
<PAGE> 189

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission registration fee and the NASD filing
fee. All of these fees are being paid by SpectraSite.

<TABLE>
<S> <C>
Registration Fee............................................ $ 91,080
NASD Filing Fee............................................. 30,500
Blue Sky Fees and Expenses.................................. 5,000
Legal Fees and Expenses..................................... 600,000
Accounting Fees and Expenses................................ 350,000
Printing and Engraving Fees................................. 500,000
Miscellaneous............................................... 223,420
----------
Total....................................................... $1,800,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102(b)(7) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation (in its original certificate of
incorporation or amendment thereto) may eliminate or limit the personal
liability of a director (or certain persons who, pursuant to the provisions of
the certificate of incorporation, exercise of perform duties conferred or
imposed upon directors by the DGCL) to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provisions shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions) or (iv) for any transaction from which
the director derived an improper personal benefit. The Registrant's Certificate
of Incorporation, as amended, limits the liability of directors thereof to the
extent permitted by Section 102(b)(7) of the DGCL.

Under Section 145 of the DGCL, in general, a corporation may indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties to which they may be made parties by reason of their being or
having been directors, officers, employees or agents and shall so indemnify such
persons if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

SpectraSite Holdings, Inc. ("Holdings") was formed in 1997 through the
combination of three existing companies: U.S. Towers, Inc., a Delaware
corporation ("UST"); TeleSite Services, LLC, an Arkansas limited liability
company ("TeleSite"); and MetroSite Management LLC, an Arkansas limited
liability company ("MetroSite").

(a) Prior to the date of this registration statement, Holdings has
issued and sold the following unregistered securities.

(1) Effective May 12, 1997, in connection with its formation,
Holdings issued (i) 850,000 shares of common stock and warrants to
purchase 150,000 shares of common stock to the original

II-1
<PAGE> 190

owners of UST and (ii) 490,517 shares of common stock to the original
owners of Telesite and MetroSite. Also in May 1997, Stephen H. Clark
agreed to invest additional personal funds into Holdings, and on April
20, 1999, Holdings sold Mr. Clark 210,000 shares of common stock for an
aggregate purchase price for $772,800.

(2) On May 12, 1997, Holdings sold 3,203,118 shares of its 8%
Series A Cumulative Convertible Redeemable Preferred Stock, $.001 par
value per share, which will automatically convert to common stock upon
the closing of this offering, to J.H. Whitney III, L.P. (the "JHWIII")
for an aggregate purchase price of $9.25 million and 259,712 shares of
its Series A preferred stock, to Kitty Hawk Capital Limited Partnership,
III for an aggregate purchase price of $750,000.

(3) On May 12, 1997, Holdings issued warrants to purchase 150,000
shares of common stock at a price of $ .001 per share in exchange for a
"corporate opportunity" in the tower business to PCX Corporation. These
warrants were later transferred and assigned to the shareholders of PCX.
On September 1, 1998, Holdings issued an aggregate of 150,000 shares of
common stock upon exercise of the warrants.

(4) In a series of transactions on March 23, August 27 and
September 21, 1998, Holdings sold an aggregate of 7,000,000 shares of
its Series B preferred stock, which will automatically convert to common
stock upon the closing of this offering, to Whitney Equity Partners,
L.P., J.H. Whitney III, L.P., Whitney Strategic Partners III, L.P.,
Waller-Sutton Media Partners, L.P., Kitty Hawk Capital Limited
Partnership, III, Kitty Hawk Capital Limited Partnership IV, Eagle Creek
Capital, L.L.C., The North Carolina Enterprise Fund, L.P., Finley Family
Limited Partnership, William R. Gupton, Jack W. Jackman and Alton D.
Eckert for an aggregate purchase price of $28 million to twelve
accredited investors.

(5) On June 26, 1998, Holdings sold $255.2 million in aggregate
principal amount at maturity of its 12% senior discount notes due 2008
to Credit Suisse First Boston Corporation, Lehman Brothers Inc. and CIBC
Oppenheimer Corp., as initial purchasers of the notes.

(6) On April 20, 1999, Holdings sold $586.8 million in aggregate
principal amount at maturity of its 11 1/4% senior discount notes due
2009 to CIBC Oppenheimer Corp., Credit Suisse First Boston Corporation,
Morgan Stanley & Co. Incorporated, BancBoston Robertson Stephens Inc.
and TD Securities (USA), Inc., as initial purchasers of the notes.

(7) On April 20, 1999, Holdings an aggregate of 46,286,795 shares
of its Series C preferred stock, which will automatically convert to
common stock upon the closing of this offering, to Welsh, Carson,
Anderson & Stowe VIII, L.P., WCAS Information Partners, L.P., Kenneth
Melkus, Patrick J. Welsh, Russell L. Carson, Bruce K. Anderson, Andrew
M. Paul, Thomas E. McInerney, Laura M. VanBuren, Robert A. Minicucci,
Anthony J. de Nicola, Paul B. Queally, Lawrence B. Sorrel, D. Scott
Mackesy, Priscilla A. Newman, Rudolph E. Rupert, Trust under an
agreement dated November 26, 1984 for the benefit of Eric Welsh, Trust
under an agreement dated November 26, 1984 for the benefit of Randall
Welsh, Trust under an agreement dated November 26, 1984 for the benefit
of Jennifer Welsh, J.H. Whitney III, L.P., Whitney Strategic Partners
III, L.P., CIBC WG Argosy Merchant Fund 2, L.L.C., Co-Investment
Merchant Fund 3, LLC, The North Carolina Enterprise Fund, L.P.,
Waller-Sutton Media Partners, L.P., Kitty Hawk Capital Limited
Partnership, IV, Finley Family Limited Partnership, Eagle Creek Capital,
L.L.C., David P. Tomick, Jack W. Jackman, Alton D. Eckert, William R.
Gupton, The Price Family Limited Partnership and Benake L.P. for an
aggregate purchase price of approximately $231.4 million.

(8) On April 20, 1999, Holdings issued 14,000,000 shares of its
Series C preferred stock, which will automatically convert to common
stock upon the closing of this offering, to Tower Parent Corp., a
subsidiary of Nextel Communications, Inc., as part of the consideration
paid for certain tower assets.

II-2
<PAGE> 191

(9) On April 20, 1999, Holdings issued two million shares of
common stock to certain stockholders for their commitment to provide
financing for the Nextel tower acquisition.

(10) On April 20, 1999, Holdings sold Michael Price 100,000 shares
of common stock.

(11) On December 30, 1999, Holdings issued 500,000 shares of
common stock to the stockholders of Doty-Moore Tower Services, Inc.,
Doty-Moore Equipment, Inc. and Doty Moore RF Services, Inc. in
connection with Holdings' acquisitions of Doty-Moore Tower Services,
Inc., Doty-Moore Equipment, Inc. and Doty Moore RF Services, Inc.

(12) On January 5, 2000, Holdings issued 225,000 shares of common
stock to the stockholders of Vertical Properties, Inc. in connection
with Holdings' acquisition of Vertical Properties, Inc.

(13) On January 5, 2000, Holdings issued 4,505,997 shares of
common stock to the stockholders of Apex Site Management Holdings, Inc.
and 1,501,999 shares of common stock into escrow in connection with
Holdings' acquisition of Apex Site Management Holdings, Inc.

(14) As of December 31, 1999, Holdings had issued 6,354,267
options to purchase shares of common stock to directors, employees and
consultants pursuant to Holdings' stock incentive plan, had cancelled
430,470 of such options, and had sold 200,006 shares of common stock
upon exercise of such options.

(b) Other than the initial purchasers identified in items 5 and 6,
there were no underwriters, brokers or finders employed in connection with
any of the transactions set forth above.

(c) The sales of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, or Regulation D or Regulation S promulgated thereunder
(with respect to items 1 through 13), or Rule 701 promulgated under Section
3(b) of the Securities Act (with respect to item 14) as transactions by an
issuer not involving a public offering or transactions pursuant to
compensatory benefit plans and contracts relating to compensation as
provided under such Rule 701. Other than with respect to items 5 and 6, the
recipients of securities in each such transaction represented their
intentions to acquire the securities for investment only and not with a
view to or for sale in connection with any distribution thereof and
appropriate legends were affixed to the instruments representing such
securities issued in such transactions. All recipients had adequate access
to information about Holdings.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.
2.1 Agreement and Plan of Merger, dated as of February 10, 1999,
among Nextel Communications, Inc., Tower Parent Corp., Tower
Merger Vehicle, Inc., Tower Asset Sub Inc., SpectraSite
Holdings, Inc., SpectraSite Communications, Inc. and SHI.
Merger Sub, Inc. (the "Nextel Merger Agreement").
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
2.2 Amendment No. 1 to the Nextel Merger Agreement. Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67403.
2.3 Agreement and Plan of Merger among Westower Corporation,
SpectraSite Holdings, Inc. and W. Acquisition Corp., dated
as of May 15, 1999. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
*2.4 Merger Agreement and Plan of Reorganization, dated as of
November 24, 1999, among SpectraSite Holdings, Inc. Apex
Merger Sub, Inc. and Apex Site Management Holdings, Inc.
*2.5 Stock Purchase Agreement, dated as of December 30, 1999,
between Northwest Broadcasting, L.P. and SpectraSite
Holdings, Inc.
</TABLE>

II-3
<PAGE> 192

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
*2.6 Stock Purchase Agreement, dated as of December 30, 1999,
among Donald Doty, John Patrick Moore and SpectraSite
Holdings, Inc.
*2.7 Merger Agreement and Plan of Reorganization, dated as of
December 30, 1999, among SpectraSite Holdings, Inc., VPI
Merger Sub, Inc., Vertical Properties, Inc. and the
stockholders of Vertical Properties, Inc.
2.8 Asset Purchase Agreement, dated as of January 5, 2000, among
International Towers, Inc., S&W Communications, Inc., Tri-Ex
Tower, Inc., International Tower Industries and SpectraSite
Holdings, Inc. Incorporated by reference to the
corresponding exhibit to the Registrant's report on Form 8-K
filed on January 21, 2000.
3.1 Certificate of Incorporation of Integrated Site Development
("ISD"), dated and filed as of April 25, 1997. Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67403.
3.2 Certificate of Amendment of the Certificate of Incorporation
of ISD, dated as of May 11, 1997 (authorizing Series A
Preferred Stock) and filed May 12, 1997. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no. 333-67403.
3.3 Certificate of Amendment of the Certificate of Incorporation
of ISD, dated as of August 14, 1997 (changing name to
SpectraSite Communications, Inc. ("SCI")) and filed August
15, 1997. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403.
3.4 Certificate of Amendment of the Certificate of Incorporation
of SCI, dated and filed as of October 29, 1997 (changing
name to SpectraSite Holdings, Inc. (the "Registrant")).
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
3.5 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated and filed as of March 23, 1998
(authorizing Series B Preferred Stock). Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no. 333-67403.
3.6 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated as of May 29, 1998 and filed June
2, 1998. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403.
3.7 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated as of August 18, 1998 and filed
August 19, 1998. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
*3.8 Amended Bylaws of SpectraSite Holdings, Inc.
3.9 Amended and Restated Certificate of Incorporation of the
Registrant. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403.
3.10 Certificate of Amendment of the Amended and Restated
Certificate of Incorporation of the Registrant, dated August
31, 1999. Incorporated by reference to the corresponding
exhibit to the Form 8-K of the Registrant, dated September
2, 1999 and filed September 17, 1999.
4.1 Indenture, dated as of June 26, 1998, between the Registrant
and United States Trust Company of New York, as trustee.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
4.2 First Supplemental Indenture, dated as of March 25, 1999,
between the Registrant and United States Trust Company of
New York, as trustee. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
4.3 Indenture, dated as of April 20, 1999, between the
Registrant and United States Trust Company of New York, as
trustee. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403.
5.1 Opinion of Dow Lohnes & Albertson, PLLC.
10.1 Stock Purchase Agreement (Series A Preferred Stock), dated
as of May 12, 1997, by and among U.S. Towers, Inc. ("UST"),
Telesite Services, LLC ("Telesite"), Metrosite Management,
LLC ("Metrosite"), Whitney Equity Partners, L.P. ("Whitney
Equity"), Kitty Hawk Capital Limited Partnership, L.P., III
("Kitty Hawk III"), and ISD. Incorporated by reference to
the corresponding exhibit to the registration statement on
Form S-4 of the Registrant, file no. 333-67403.
</TABLE>

II-4
<PAGE> 193

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
10.2 Stock Purchase Agreement (Series B Preferred Stock), dated
as of March 23, 1998, by and among the Registrant, Whitney
Equity, J. H. Whitney, III, L.P. ("Whitney III"), Whitney
Strategic Partners III, L.P. ("Whitney Strategic"),
Waller-Sutton Media Partners, L.P. ("Waller-Sutton"), Kitty
Hawk III, Kitty Hawk Capital Limited Partnership, IV ("Kitty
Hawk IV"), Eagle Creek Capital, L.L.C. ("Eagle Creek"), The
North Carolina Enterprise Fund, L.P. ("NCEF"), Finley Family
Limited Partnership ("Finley LP"), William R. Gupton
("Gupton"), Jack W. Jackman ("Jackman") and Alton D. Eckert
("Eckert"). Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403.
10.3 First Amendment to Stock Purchase Agreement (Series B
Preferred Stock), dated as of May 29, 1998. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no. 333-67403.
10.4 Second Amendment to Stock Purchase Agreement (Series B
Preferred Stock), dated as of August 27, 1998. Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67403.
10.5 Second Amended and Restated Registration Rights Agreement,
dated as of April 20, 1999, by and among the Registrant,
Whitney Equity, Whitney III, Whitney Strategic,
Waller-Sutton, Kitty Hawk III, Kitty Hawk IV, Eagle Creek,
NCEF, Finley LP, certain affiliates of CIBC Oppenheimer
Corp. (the "CIBC Purchasers"), certain affiliates and
employees of Welsh Carson Anderson & Stowe (the "WCAS
Purchasers"), Tower Parent Corp., Gupton, Eckert, Stephen H.
Clark ("Clark") and David P. Tomick ("Tomick"). Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67403.
10.6 Third Amended and Restated Stockholders' Agreement, dated as
of April 20, 1999, by and among the Registrant, Whitney
Equity, Whitney III, Whitney Strategic, Waller-Sutton, Kitty
Hawk III, Kitty Hawk IV, Eagle Creek, Clark, Tomick, Finely
LP, NCEF, the CIBC Purchasers, the WCAS Purchasers, Tower
Parent Corp., Edward Lutkewich ("Lutkewich"), Jackman,
Eckert, and Gupton. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.7 Employment Agreement with Stephen H. Clark. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no. 333-67403.
10.8 Employment Agreement with David P. Tomick. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no. 333-67403.
10.9 Employment Agreement with Richard J. Byrne. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no. 333-67403.
10.10 Consulting Agreement with Finley & Co. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no. 333-67403.
10.11 Credit Agreement, dated as of April 20, 1999, by and among
the Registrant, SCI, CIBC Oppenheimer Corp., Credit Suisse
First Boston Corporation and the other parties thereto.
Incorporated by reference to exhibit 10.1 to the
registration statement on Form 8-A of the Registrant.
10.12 Membership Interests Purchase Agreement, dated as of
December 31, 1997, by and among SCI, Jeffrey Hawkins, Edwin
Keuck and H&K Investments LLC. Incorporated by reference to
the corresponding exhibit to the registration statement on
Form S-4 of SpectraSite Holdings, file no. 333-67403.
10.13 First Amendment to the Membership Interests Purchase
Agreement, dated May 29, 1998. Incorporated by reference to
the corresponding exhibit to the registration statement on
Form S-4 of the Registrant, file no. 333-67403.
10.14 Purchase and Sale Agreement, dated as of February 20, 1998,
by and among the Registrant, Metrosite and Apex Site
Management, L.P. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.15 Letter Agreement, dated as of February 6, 1998, by and
between SCI and Whalen. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.16 SpectraSite Holdings, Inc. Stock Incentive Plan.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
10.17 SpectraSite Holdings, Inc. Employee Stock Purchase Plan.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
</TABLE>

II-5
<PAGE> 194

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
10.18 Escrow Agreement, dated as of May 12, 1997, by and among.
ISD, Finley LP, and Morrison Cohen Singer & Weinstein, LLP
("Morrison Cohen"). Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.19 Option Escrow Agreement, dated as of May 12, 1997, by and
among Whitney LP, Kitty Hawk III and Morrison Cohen.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
10.20 Release and Settlement Agreement, dated as of May 12, 1997,
by and among PCX Corporation ("PCX"), NCEF, Kitty Hawk III,
Eckert, Gupton, Jackman, Lutkewich, UST, Long and Clark.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
10.21 Stock Restriction Agreement, dated as of May 12, 1997, by
and between ISD and Finley LP. Incorporated by reference to
the corresponding exhibit to the registration statement on
Form S-4 of the Registrant, file no. 333-67403.
10.22 Agreement, dated September 15, 1998, by and between Robert
M. Long and the Registrant. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.23 Asset Purchase Agreement, dated as of August 14, 1998 by and
among Airadigm Communications, Inc. ("Airadigm") and SCI.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
10.24 Form of Master Tower Attachment Lease Agreement by and
between Airadigm and SCI. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.25 Asset Purchase, dated as of August 20, 1998, by and among
Amica Wireless Phone Service, Inc. ("Amica") and SCI.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
10.26 Form of Master Design Build Lease Agreement by and between
Amica and SCI. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.27 Stock Contribution Agreement, dated as of May 12, 1997, by
and among ISD, Clark, Long and UST. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no. 333-67403.
10.28 Membership Interests Contribution Agreement, dated as of May
12, 1997, by and among ISD, Finley, Caroline Finley, Finley
LP, the Central Arkansas Opportunity Foundation, TeleSite
and MetroSite. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.29 Agreement and Plan of Merger, dated as of October 31, 1997,
by and between UST and SCI. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.30 Preferred Stock Purchase Agreement (Series C Preferred
Stock), dated as of February 10, 1999, by and among
SpectraSite Holdings, Inc., the WCAS Purchasers, the Whitney
Purchasers, the CIBC Purchasers and the Additional
Purchasers. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403.
10.31 First Amendment to Preferred Stock Purchase Agreement
(Series C Preferred Stock). Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403.
10.32 Security & Subordination Agreement, dated as of April
20,1999. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403.
10.33 Master Site Commitment Agreement, dated as of April 20,
1999. Incorporated by reference to the corresponding exhibit
to the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
10.34 Master Site Lease Agreement, dated as of April 20, 1999.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403.
10.35 Employment Agreement with Calvin J. Payne. Incorporated by
reference to Exhibit 10.1 to the Form 8-K of the Registrant,
dated September 2, 1999 and filed September 17, 1999.
10.36 Form of Joinder Agreement to SpectraSite Restated
Registration Rights Agreement.
</TABLE>

II-6
<PAGE> 195

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
21.1 Subsidiaries of the Registrant.
23.1 Consent of Dow, Lohnes & Albertson, PLLC (contained in
Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
23.4 Consent of Moss Adams LLP.
23.5 Consent of Lamn, Krielow, Dytrych & Co. (formerly, Lamn,
Krielow, Dytrych & Darling).
23.6 Consent of Shearer, Taylor & Co., P.A.
*24.1 Power of Attorney.
</TABLE>

- ------------
* Previously filed.

(b) Financial Statement Schedules.

None.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions, or otherwise, the Registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrants of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes that:

1. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1)or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

2. For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be anew registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-7
<PAGE> 196

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
SPECTRASITE HOLDINGS, INC. HAS DULY CAUSED THIS AMENDMENT NO. 2 TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF CARY, STATE OF NORTH CAROLINA, ON JANUARY 28,
2000.

SPECTRASITE HOLDINGS, INC.

By: /s/ STEPHEN H. CLARK
------------------------------------
Stephen H. Clark
President, Chief Executive Officer
and Director

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 2 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES
INDICATED.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ STEPHEN H. CLARK President, Chief Executive Officer and January 28, 2000
- ------------------------------------------ Director (Principal Executive Officer)
Stephen H. Clark

/s/ DAVID P. TOMICK Executive Vice President, Chief January 28, 2000
- ------------------------------------------ Financial Officer and Secretary
David P. Tomick (Principal Financial Officer)

* Executive Vice President--Design and January 28, 2000
- ------------------------------------------ Construction and Director
Calvin J. Payne

* Vice President--Finance and January 28, 2000
- ------------------------------------------ Administration (Principal Accounting
Daniel I. Hunt Officer)

* Chairman of the Board of Directors January 28, 2000
- ------------------------------------------
Lawrence B. Sorrel

* Director January 28, 2000
- ------------------------------------------
Timothy M. Donahue

* Director January 28, 2000
- ------------------------------------------
Andrew R. Heyer

* Director January 28, 2000
- ------------------------------------------
James R. Matthews

* Director January 28, 2000
- ------------------------------------------
Thomas E. McInerney
</TABLE>

II-8
<PAGE> 197

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director January 28, 2000
- ------------------------------------------
Michael J. Price

* Director January 28, 2000
- ------------------------------------------
Steven M. Shindler

* Director January 28, 2000
- ------------------------------------------
Michael R. Stone
</TABLE>

*POWER OF ATTORNEY

David P. Tomick, by signing his name hereto, does sign this document on
behalf of each of the persons indicated above for whom he is attorney-in-fact
pursuant to a power of attorney duly executed by such person and filed with the
Securities and Exchange Commission.

By: /s/ DAVID P. TOMICK
------------------------------------
David P. Tomick
Attorney-In-Fact

II-9
<PAGE> 198

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ----------- ----
<C> <S> <C>
1.1 Form of Underwriting Agreement..............................
2.1 Agreement and Plan of Merger, dated as of February 10, 1999,
among Nextel Communications, Inc., Tower Parent Corp., Tower
Merger Vehicle, Inc., Tower Asset Sub Inc., SpectraSite
Holdings, Inc., SpectraSite Communications, Inc. and SHI.
Merger Sub, Inc. (the "Nextel Merger Agreement").
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
2.2 Amendment No. 1 to the Nextel Merger Agreement. Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67403...............................................
2.3 Agreement and Plan of Merger among Westower Corporation,
SpectraSite Holdings, Inc. and W. Acquisition Corp., dated
as of May 15, 1999. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
*2.4 Merger Agreement and Plan of Reorganization, dated as of
November 24, 1999, among SpectraSite Holdings, Inc. Apex
Merger Sub, Inc. and Apex Site Management Holdings, Inc. ...
*2.5 Stock Purchase Agreement, dated as of December 30, 1999,
between Northwest Broadcasting, L.P. and SpectraSite
Holdings, Inc. .............................................
*2.6 Stock Purchase Agreement, dated as of December 30, 1999,
among Donald Doty, John Patrick Moore and SpectraSite
Holdings, Inc. .............................................
*2.7 Merger Agreement and Plan of Reorganization, dated as of
December 30, 1999, among SpectraSite Holdings, Inc., VPI
Merger Sub, Inc., Vertical Properties, Inc. and the
stockholders of Vertical Properties, Inc. ..................
2.8 Asset Purchase Agreement, dated as of January 5, 2000, among
International Towers, Inc., S&W Communications, Inc., Tri-Ex
Tower, Inc., International Tower Industries and SpectraSite
Holdings, Inc. Incorporated by reference to the
corresponding exhibit to the Registrant's report on Form 8-K
filed on January 21, 2000...................................
3.1 Certificate of Incorporation of Integrated Site Development
("ISD"), dated and filed as of April 25, 1997. Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67403...............................................
3.2 Certificate of Amendment of the Certificate of Incorporation
of ISD, dated as of May 11, 1997 (authorizing Series A
Preferred Stock) and filed May 12, 1997. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no.
333-67403...................................................
3.3 Certificate of Amendment of the Certificate of Incorporation
of ISD, dated as of August 14, 1997 (changing name to
SpectraSite Communications, Inc. ("SCI")) and filed August
15, 1997. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403..............................
3.4 Certificate of Amendment of the Certificate of Incorporation
of SCI, dated and filed as of October 29, 1997 (changing
name to SpectraSite Holdings, Inc. (the "Registrant")).
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
3.5 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated and filed as of March 23, 1998
(authorizing Series B Preferred Stock). Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no.
333-67403...................................................
3.6 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated as of May 29, 1998 and filed June
2, 1998. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403..............................
3.7 Certificate of Amendment of the Certificate of Incorporation
of the Registrant, dated as of August 18, 1998 and filed
August 19, 1998. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
*3.8 Amended Bylaws of SpectraSite Holdings, Inc. ...............
</TABLE>

<PAGE> 199

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ----------- ----
<C> <S> <C>
3.9 Amended and Restated Certificate of Incorporation of the
Registrant. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403..............................
3.10 Certificate of Amendment of the Amended and Restated
Certificate of Incorporation of the Registrant, dated August
31, 1999. Incorporated by reference to the corresponding
exhibit to the Form 8-K of the Registrant, dated September
2, 1999 and filed September 17, 1999........................
4.1 Indenture, dated as of June 26, 1998, between the Registrant
and United States Trust Company of New York, as trustee.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
4.2 First Supplemental Indenture, dated as of March 25, 1999,
between the Registrant and United States Trust Company of
New York, as trustee. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
4.3 Indenture, dated as of April 20, 1999, between the
Registrant and United States Trust Company of New York, as
trustee. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403..............................
5.1 Opinion of Dow Lohnes & Albertson, PLLC.....................
10.1 Stock Purchase Agreement (Series A Preferred Stock), dated
as of May 12, 1997, by and among U.S. Towers, Inc. ("UST"),
Telesite Services, LLC ("Telesite"), Metrosite Management,
LLC ("Metrosite"), Whitney Equity Partners, L.P. ("Whitney
Equity"), Kitty Hawk Capital Limited Partnership, L.P., III
("Kitty Hawk III"), and ISD. Incorporated by reference to
the corresponding exhibit to the registration statement on
Form S-4 of the Registrant, file no. 333-67403..............
10.2 Stock Purchase Agreement (Series B Preferred Stock), dated
as of March 23, 1998, by and among the Registrant, Whitney
Equity, J. H. Whitney, III, L.P. ("Whitney III"), Whitney
Strategic Partners III, L.P. ("Whitney Strategic"),
Waller-Sutton Media Partners, L.P. ("Waller-Sutton"), Kitty
Hawk III, Kitty Hawk Capital Limited Partnership, IV ("Kitty
Hawk IV"), Eagle Creek Capital, L.L.C. ("Eagle Creek"), The
North Carolina Enterprise Fund, L.P. ("NCEF"), Finley Family
Limited Partnership ("Finley LP"), William R. Gupton
("Gupton"), Jack W. Jackman ("Jackman") and Alton D. Eckert
("Eckert"). Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403..............................
10.3 First Amendment to Stock Purchase Agreement (Series B
Preferred Stock), dated as of May 29, 1998. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no.
333-67403...................................................
10.4 Second Amendment to Stock Purchase Agreement (Series B
Preferred Stock), dated as of August 27, 1998. Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67403...............................................
10.5 Second Amended and Restated Registration Rights Agreement,
dated as of April 20, 1999, by and among the Registrant,
Whitney Equity, Whitney III, Whitney Strategic,
Waller-Sutton, Kitty Hawk III, Kitty Hawk IV, Eagle Creek,
NCEF, Finley LP, certain affiliates of CIBC Oppenheimer
Corp. (the "CIBC Purchasers"), certain affiliates and
employees of Welsh Carson Anderson & Stowe (the "WCAS
Purchasers"), Tower Parent Corp., Gupton, Eckert, Stephen H.
Clark ("Clark") and David P. Tomick ("Tomick"). Incorporated
by reference to the corresponding exhibit to the
registration statement on Form S-4 of the Registrant, file
no. 333-67403...............................................
10.6 Third Amended and Restated Stockholders' Agreement, dated as
of April 20, 1999, by and among the Registrant, Whitney
Equity, Whitney III, Whitney Strategic, Waller-Sutton, Kitty
Hawk III, Kitty Hawk IV, Eagle Creek, Clark, Tomick, Finely
LP, NCEF, the CIBC Purchasers, the WCAS Purchasers, Tower
Parent Corp., Edward Lutkewich ("Lutkewich"), Jackman,
Eckert, and Gupton. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.7 Employment Agreement with Stephen H. Clark. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no.
333-67403...................................................
</TABLE>

<PAGE> 200

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ----------- ----
<C> <S> <C>
10.8 Employment Agreement with David P. Tomick. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no.
333-67403...................................................
10.9 Employment Agreement with Richard J. Byrne. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no.
333-67403...................................................
10.10 Consulting Agreement with Finley & Co. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no.
333-67403...................................................
10.11 Credit Agreement, dated as of April 20, 1999, by and among
the Registrant, SCI, CIBC Oppenheimer Corp., Credit Suisse
First Boston Corporation and the other parties thereto.
Incorporated by reference to exhibit 10.1 to the
registration statement on Form 8-A of the Registrant........
10.12 Membership Interests Purchase Agreement, dated as of
December 31, 1997, by and among SCI, Jeffrey Hawkins, Edwin
Keuck and H&K Investments LLC. Incorporated by reference to
the corresponding exhibit to the registration statement on
Form S-4 of SpectraSite Holdings, file no. 333-67403........
10.13 First Amendment to the Membership Interests Purchase
Agreement, dated May 29, 1998. Incorporated by reference to
the corresponding exhibit to the registration statement on
Form S-4 of the Registrant, file no. 333-67403..............
10.14 Purchase and Sale Agreement, dated as of February 20, 1998,
by and among the Registrant, Metrosite and Apex Site
Management, L.P. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.15 Letter Agreement, dated as of February 6, 1998, by and
between SCI and Whalen. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.16 SpectraSite Holdings, Inc. Stock Incentive Plan.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
10.17 SpectraSite Holdings, Inc. Employee Stock Purchase Plan.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
10.18 Escrow Agreement, dated as of May 12, 1997, by and among.
ISD, Finley LP, and Morrison Cohen Singer & Weinstein, LLP
("Morrison Cohen"). Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.19 Option Escrow Agreement, dated as of May 12, 1997, by and
among Whitney LP, Kitty Hawk III and Morrison Cohen.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
10.20 Release and Settlement Agreement, dated as of May 12, 1997,
by and among PCX Corporation ("PCX"), NCEF, Kitty Hawk III,
Eckert, Gupton, Jackman, Lutkewich, UST, Long and Clark.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
10.21 Stock Restriction Agreement, dated as of May 12, 1997, by
and between ISD and Finley LP. Incorporated by reference to
the corresponding exhibit to the registration statement on
Form S-4 of the Registrant, file no. 333-67403..............
10.22 Agreement, dated September 15, 1998, by and between Robert
M. Long and the Registrant. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.23 Asset Purchase Agreement, dated as of August 14, 1998 by and
among Airadigm Communications, Inc. ("Airadigm") and SCI.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
10.24 Form of Master Tower Attachment Lease Agreement by and
between Airadigm and SCI. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
</TABLE>

<PAGE> 201

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ----------- ----
<C> <S> <C>
10.25 Asset Purchase, dated as of August 20, 1998, by and among
Amica Wireless Phone Service, Inc. ("Amica") and SCI.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
10.26 Form of Master Design Build Lease Agreement by and between
Amica and SCI. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.27 Stock Contribution Agreement, dated as of May 12, 1997, by
and among ISD, Clark, Long and UST. Incorporated by
reference to the corresponding exhibit to the registration
statement on Form S-4 of the Registrant, file no.
333-67403...................................................
10.28 Membership Interests Contribution Agreement, dated as of May
12, 1997, by and among ISD, Finley, Caroline Finley, Finley
LP, the Central Arkansas Opportunity Foundation, TeleSite
and MetroSite. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.29 Agreement and Plan of Merger, dated as of October 31, 1997,
by and between UST and SCI. Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.30 Preferred Stock Purchase Agreement (Series C Preferred
Stock), dated as of February 10, 1999, by and among
SpectraSite Holdings, Inc., the WCAS Purchasers, the Whitney
Purchasers, the CIBC Purchasers and the Additional
Purchasers. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403..............................
10.31 First Amendment to Preferred Stock Purchase Agreement
(Series C Preferred Stock). Incorporated by reference to the
corresponding exhibit to the registration statement on Form
S-4 of the Registrant, file no. 333-67403...................
10.32 Security & Subordination Agreement, dated as of April
20,1999. Incorporated by reference to the corresponding
exhibit to the registration statement on Form S-4 of the
Registrant, file no. 333-67403..............................
10.33 Master Site Commitment Agreement, dated as of April 20,
1999. Incorporated by reference to the corresponding exhibit
to the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
10.34 Master Site Lease Agreement, dated as of April 20, 1999.
Incorporated by reference to the corresponding exhibit to
the registration statement on Form S-4 of the Registrant,
file no. 333-67403..........................................
10.35 Employment Agreement with Calvin J. Payne. Incorporated by
reference to Exhibit 10.1 to the Form 8-K of the Registrant,
dated September 2, 1999 and filed September 17, 1999........
10.36 Form of Joinder Agreement to SpectraSite Restated
Registration Rights Agreement...............................
21.1 Subsidiaries of the Registrant..............................
23.1 Consent of Dow, Lohnes & Albertson, PLLC (contained in
Exhibit 5.1)................................................
23.2 Consent of Ernst & Young LLP................................
23.3 Consent of PricewaterhouseCoopers LLP.......................
23.4 Consent of Moss Adams LLP...................................
23.5 Consent of Lamn, Krielow, Dytrych & Co. (formerly, Lamn,
Krielow, Dytrych & Darling).................................
23.6 Consent of Shearer, Taylor & Co., P.A. .....................
*24.1 Power of Attorney...........................................
</TABLE>

- ------------
* Previously filed.

<PAGE> 1
EXHIBIT 1.1

_______________ SHARES

SPECTRASITE HOLDINGS, INC.

COMMON STOCK $.001 PAR VALUE

UNDERWRITING AGREEMENT

________________, 2000

<PAGE> 2

_______________, 2000

Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
CIBC World Markets Corp.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Lehman Brothers Inc.
Salomon Smith Barney Inc.

c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Morgan Stanley & Co. International Limited
Goldman Sachs International
CIBC World Markets plc
Credit Suisse First Boston (Europe) Limited
Deutsche Bank AG London
Lehman Brothers International (Europe)
Salomon Brothers International Limited
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England

Dear Sirs and Mesdames:

SPECTRASITE HOLDINGS, INC., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters (as defined below)
________________ shares of its common stock, par value $.001 per share (the
"FIRM SHARES").

It is understood that, subject to the conditions hereinafter stated,
____________ Firm Shares (the "U.S. FIRM SHARES") will be sold to the several
U.S. Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS") in
connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and ___________ Firm Shares (the "INTERNATIONAL SHARES") will

<PAGE> 3

be sold to the several International Underwriters named in Schedule II hereto
(the "INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of
such International Shares outside the United States and Canada to persons other
than United States and Canadian Persons. Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co., CIBC World Markets Corp., Credit Suisse First Boston
Corporation, Deutsche Bank Securities Inc., Lehman Brothers Inc. and Salomon
Smith Barney Inc. shall act as representatives (the "U.S. REPRESENTATIVES") of
the several U.S. Underwriters, and Morgan Stanley & Co. International Limited,
Goldman Sachs International, CIBC World Markets plc, Credit Suisse First Boston
(Europe) Limited, Deutsche Bank AG London, Lehman Brothers International
(Europe) and Salomon Brothers International Limited shall act as representatives
(the "INTERNATIONAL REPRESENTATIVES") of the several International Underwriters.
The U.S. Underwriters and the International Underwriters are hereinafter
collectively referred to as the Underwriters.

The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional __________ shares of its common stock,
par value $.001 per share (the "ADDITIONAL SHARES"), if and to the extent that
the U.S. Representatives shall have determined to exercise, on behalf of the
U.S. Underwriters the right to purchase such shares of common stock granted to
the U.S. Underwriters in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "SHARES." The shares of
common stock, par value $.001 per share, of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "COMMON STOCK."

The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "PROSPECTUS." If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION

2
<PAGE> 4

STATEMENT"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement.

Morgan Stanley & Co. Incorporated ("MORGAN STANLEY") has agreed to
reserve a portion of the Shares to be purchased by it under this Agreement for
sale to the Company's directors, officers, employees and business associates and
other parties related to the Company (collectively, "PARTICIPANTS"), as set
forth in the Prospectus under the heading "Underwriters" (the "DIRECTED SHARE
PROGRAM"). The Shares to be sold by Morgan Stanley or its affiliates pursuant to
the Directed Share Program are hereinafter referred to as the "DIRECTED SHARES."
Any Directed Shares not orally confirmed for purchase by any Participants by the
end of the business day on which this Agreement is executed will be offered to
the public by the Underwriters as set forth in the Prospectus.

1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:

(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the
Company's knowledge, threatened by the Commission.

(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.

(c) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction

3
<PAGE> 5

in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect").

(d) Each Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X promulgated under the Securities Act) of the
Company has been duly incorporated or organized, is validly existing in
good standing under the laws of the jurisdiction of its incorporation or
organization, has the corporate or other organizational power and
authority to own its property and to conduct its business as described in
the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect; all of the issued shares of
capital stock or other equity interests of each Significant Subsidiary
(as such term is defined in Rule 1-01(w) of Regulation S-X promulgated
under the Securities Act) of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable (in the case of
shares of capital stock only) and are owned directly by the Company or
one or more of its subsidiaries, free and clear of all liens,
encumbrances, equities or claims.

(e) This Agreement has been duly authorized, executed and
delivered by the Company.

(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.

(g) The shares of Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully
paid and non-assessable.

(h) The shares of Common Stock to be issued upon the conversion of
3,462,830 shares of Series A convertible preferred stock, par value $.001
per share, 7,000,000 shares of Series B convertible preferred stock, par
value $.001 per share, and 60,286,795 shares of Series C convertible
preferred stock, par value $.001 per share (collectively, the
"Convertible Preferred Stock") have been duly authorized and, when issued
and delivered pursuant to the terms of the Amended and Restated
Certificate of Incorporation of the Company, as amended (the "Restated
Certificate"), will be validly issued, fully paid and non-assessable, and
the issuance of such shares will not be subject to any preemptive or
similar rights.

4
<PAGE> 6

(i) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.

(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states, the
rules and regulations of the National Association of Securities Dealers,
Inc. or the securities laws of any jurisdiction outside the United States
in connection with the offer and sale of the Shares.

(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).

(l) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its subsidiaries
is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not described or filed
as required.

(m) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.

5
<PAGE> 7

(n) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.

(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company
has not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary
course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (iii) there has not been any
material change in the capital stock, short-term debt (other than in the
ordinary course of business) or long-term debt of the Company.

(p) The Company has good and marketable title in fee simple to all
real property owned by it and good title to all personal property owned
by it which is material to the business of the Company, in each case free
and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to
be made of such property by the Company, except where failure to have
such title would not have a Material Adverse Effect; and any real
property, sites and buildings held under lease by the Company are held by
it under valid, subsisting and enforceable leases with such exceptions as
would not have a Material Adverse Effect, in each case except as
described in or contemplated by the Prospectus.

(q) The Company owns or possesses, or can acquire on reasonable
terms, all material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property") currently employed by it in connection with the
business now operated by it, except where failure to own, possess or
acquire such Intellectual Property would not have a Material Adverse
Effect; and the Company has not received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, would result in a Material
Adverse Effect.

(r) The Company possesses all certificates, licenses,
authorizations and permits (collectively, "GOVERNMENTAL LICENSES") issued
by the appropriate federal, state or foreign regulatory authorities
necessary to conduct its business, except for such Governmental Licenses
the absence of which would not have a Material Adverse Effect; the
Company has not received any notice of proceedings relating to the
revocation or modification of any Governmental Licenses which would have
a Material Adverse Effect.

6
<PAGE> 8

(s) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as it
believes are reasonable for the business in which it is engaged and the
Company believes it will be able to renew or replace its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from financially responsible insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the Company.

(t) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.

(u) The Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, have a Material
Adverse Effect.

(v) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third

7
<PAGE> 9

parties) which would, singly or in the aggregate, have a Material Adverse
Effect.

(w) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company, except as described or referred
to in the Registration Statement, and to require the Company to include
such securities with the Shares registered pursuant to the Registration
Statement.

(x) Except as described or referred to in the Registration
Statement (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement), the Company has not sold, issued or
distributed any shares of Common Stock during the six-month period
preceding the date hereof, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock option plans
or other employee compensation plans or pursuant to outstanding options,
rights or warrants.

(y) The Company has not offered, or caused Morgan Stanley or its
affiliates to offer, Shares to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (i) a customer
or supplier of the Company to alter the customer's or supplier's level or
type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the Company
or its products.

(z) The Registration Statement, the Prospectus and any preliminary
prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions
in which the Prospectus or any preliminary prospectus, as amended or
supplemented, if applicable, are distributed in connection with the
Directed Share Program; and no consent, approval, authorization, license,
registration or order of, or qualification with, any governmental body or
agency, other than those obtained or to be obtained prior to the Closing
Date, is required under the securities laws and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the United
States.

(aa) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations
of the Company or any of its subsidiaries will be affected by the Year
2000 Problem (that is, any significant risk that computer hardware or
software applications used by the Company and its subsidiaries will not,
in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time periods
occurring prior to

8
<PAGE> 10

January 1, 2000); as a result of such review, (i) the Company does not
believe, that (A) there are any issues related to the Company's
preparedness to address the Year 2000 Problem that are of a character
required to be described or referred to in the Registration Statement or
Prospectus which have not been accurately described in the Registration
Statement or Prospectus and (B) the Year 2000 Problem will have a
Material Adverse Effect; and (ii) the Company reasonably believes that
the suppliers, vendors, customers or other material third parties used or
served by the Company and such subsidiaries are addressing or will
address the Year 2000 Problem in a timely manner, except to the extent
that a failure to address the Year 2000 Problem by any supplier, vendor,
customer or material third party would not have a Material Adverse
Effect.

2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedules I and II
hereto opposite its names at U.S.$_____ a share ("PURCHASE PRICE").

On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to __________
Additional Shares at the Purchase Price. If the U.S. Representatives, on behalf
of the U.S. Underwriters, elect to exercise such option, the U.S.
Representatives shall so notify the Company in writing not later than 30 days
after the date of this Agreement, which notice shall specify the number of
Additional Shares to be

9
<PAGE> 11

purchased by the U.S. Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each U.S. Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as the U.S. Representatives may determine) that bears the same
proportion to the total number of Additional Shares to be purchased as the
number of U.S. Firm Shares set forth in Schedule I hereto opposite the name of
such U.S. Underwriter bears to the total number of U.S. Firm Shares.

The Company hereby agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof , (C) the granting of
any options, deferred shares or other equity awards under the Company's stock
incentive plan, so long as such options do not vest and become exercisable or
such deferred share or other awards do not vest, in each case, in the absence of
extraordinary events or occurrences beyond the control of the grantee or
recipient, until after the expiration of such 180-day period or (D) the issuance
of shares of Common Stock in connection with acquisitions of businesses or
portions thereof; provided that the parties to any such acquisition agree in
writing to be bound by the restrictions contained in this paragraph, in each
case, of which the Underwriters have been advised in writing.

Morgan Stanley & Co. Incorporated on behalf of the Underwriters hereby
consents to the issuance by the Company of shares of Common Stock pursuant to
the Asset Purchase Agreement dated as of January 5, 2000, among International
Towers, Inc., S & W Communications, Inc., Tri-Ex Tower, Inc., International
Tower Industries and the Company.

3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the

10
<PAGE> 12

Shares as soon after the Registration Statement and this Agreement have become
effective as in your judgment is advisable. The Company is further advised by
you that the Shares are to be offered to the public initially at U.S.$_____ a
share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by you at a
price that represents a concession not in excess of U.S.$____ a share under the
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of U.S.$____ a share, to any Underwriter or
to certain other dealers.

4. Payment and Delivery. Payment for the Firm Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on ____________, 2000, or at
such other time on the same or such other date, not later than _________, 2000,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."

Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the notice described in
Section 2 or at such other time on the same or on such other date, in any event
not later than _______, 2000, as shall be designated in writing by the U.S.
Representatives. The time and date of such payment are hereinafter referred to
as the "OPTION CLOSING DATE."

Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.

5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 5:30 p.m. (New York City time) on the date hereof.

The several obligations of the Underwriters are subject to the following
further conditions:

11
<PAGE> 13

(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:

(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and

(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement)
that, in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.

(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) above and to the
effect that the representations and warranties of the Company contained
in this Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.

The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.

(c) The Underwriters shall have received on the Closing Date an
opinion of Dow, Lohnes & Albertson PLLC, counsel for the Company, dated
the Closing Date, substantially to the effect that:

(i) the Company is an existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction identified on a schedule to such opinion;

12
<PAGE> 14

(ii) each subsidiary of the Company identified on a
schedule to such opinion is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction identified on a schedule to
such opinion;

(iii) the authorized capital stock of the Company conforms
in all material respects as to legal matters to the description
thereof contained under the caption "Ownership of Capital Stock"
in the Prospectus;

(iv) the shares of Common Stock issued in connection with
(A) the merger with Westower Corporation, (B) the credit facility
of the Company dated April 20, 1999, (C) the acquisition of
Doty-Moore Tower Services, Inc., Doty-Moore Equipment Company and
Doty-Moore RF Services, Inc., (D) the merger with Vertical
Properties, Inc., [(E) the acquisition of International Towers,
Inc.] and (F) the acquisition of Apex Site Management Holdings,
Inc., have been duly authorized and are validly issued, fully paid
and non-assessable and the shares of Common Stock to be issued on
the Closing Date upon the conversion of all of the Company's
outstanding Series A, Series B and Series C preferred stock have
been authorized and, when issued and delivered in accordance with
the terms of such preferred stock, will be validly issued, fully
paid and non-assessable;

(v) the Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any preemptive or similar
rights pursuant to the Delaware General Corporation Law or the
Restated Certificate or any agreement known to such counsel to
which the Company is a party;

(vi) this Agreement has been duly authorized, executed and
delivered by the Company;

(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or, to
such counsel's knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries that is

13
<PAGE> 15

material to the Company and its subsidiaries, taken as a whole,
or, to such counsel's knowledge, any judgment, order or decree of
any governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required under applicable law for the
performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states, the rules and regulations of
the National Association of Securities Dealers, Inc. or the
securities laws of any jurisdiction outside the United States in
connection with the offer and sale of the Shares by the U.S.
Underwriters;

(viii) the statements (A) in the Prospectus under the
captions "Risk Factors - Our operations require compliance with
and approval from federal and state regulatory authorities;" "Risk
Factors - We are subject to environmental laws that impose
liability without regard to fault;" "Business- Regulatory and
Environmental Matters;" "Management - Employment Agreements;"
"Management - Stock Incentive Plan;" "Management - Stock Incentive
Plan Tax Consequences;" "Management - SpectraSite's Employee Stock
Purchase Plan;" "Certain Transactions;" "Description of Certain
Indebtedness;" "Shares Eligible for Future Sale;" and "Certain
United States Federal Income Tax Consequences to Non-U.S.
Holders;" and (B) in the Registration Statement in Items 14 and
15, in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize
the matters referred to therein;

(ix) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;

(x) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds

14
<PAGE> 16

thereof as described in the Prospectus, will not be required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;

(xi) such counsel (A) does not believe that the
Registration Statement and Prospectus (except for financial
statements and schedules and other financial and statistical data
included therein as to which such counsel need not express any
belief) do not comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder, (B) does not believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
belief) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (C) does not
believe that (except for financial statements and schedules and
other financial and statistical data as to which such counsel need
not express any belief) the Prospectus contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

(d) The Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 5(c)(v),
5(c)(vi), 5(c)(viii) (but only as to the statements in the Prospectus
under "Description of Capital Stock" and "Underwriters") and 5(c)(xi)
above.

With respect to Section 5(c)(xi) above, Dow, Lohnes & Albertson
and Davis Polk & Wardwell may state that their belief is based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.

The opinion of Dow, Lohnes & Albertson described in Section 5(c)
above shall be rendered to the Underwriters at the request of the Company
and shall so state therein.

(e) The Underwriters shall have received, on each of the date
hereof and the Closing Date, letters dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the

15
<PAGE> 17

Underwriters, from Ernst & Young LLP and PricewaterhouseCoopers LLP,
independent public accountants for the Company and Westower,
respectively, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letters delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.

(f) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you
on or before the date hereof, shall be in full force and effect on the
Closing Date.

(g) The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company and
its Significant Subsidiaries, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the
Additional Shares.

6. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:

(a) To furnish to you, without charge, one signed copy of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City,
without charge, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of this Agreement and during the period
mentioned in Section 6(c) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statement as
you may reasonably request.

(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement
to which you reasonably object in writing within five (5) Business Days
of receipt, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule.

16
<PAGE> 18

(c) If, during such period after the first date of the public
offering of the Shares as in the written opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the written opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus
to comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements
to the Prospectus so that the statements in the Prospectus as so amended
or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.

(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided that such qualification does not require the Company to
qualify to do business, be subject to taxation or be subject to the
jurisdiction of the courts in such jurisdiction.

(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending March 31, 2001 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.

(f) To place stop transfer orders on any Directed Shares that have
been sold to Participants subject to the three month restriction on sale,
transfer, assignment, pledge or hypothecation imposed by NASD Regulation,
Inc. under its Interpretative Material 2110-1 on free-riding and
withholding to the extent necessary to ensure compliance with the three
month restrictions.

(g) To comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share
Program.

(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or

17
<PAGE> 19

cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel and the Company's accountants in
connection with the registration and delivery of the Shares under the
Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state securities
laws and all expenses in connection with the qualification of the Shares
for offer and sale under state securities laws as provided in Section
6(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection with
the review and qualification of the offering of the Shares by the
National Association of Securities Dealers, Inc., (v) all costs and
expenses incident to listing the Shares on the Nasdaq National Market,
(vi) the cost of printing certificates representing the Shares, (vii) the
costs and charges of any transfer agent, registrar or depositary, (viii)
all expenses in connection with any offer and sale of the Shares outside
of the United States, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with offers
and sales outside of the United States, (ix) the costs and expenses of
the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
50% of the cost of any aircraft chartered in connection with the road
show, and (x) all other costs and expenses incident to the performance of
the obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 7 entitled "Indemnity and
Contribution", and the last paragraph of Section 10 below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of
any of the Shares by them and any advertising expenses connected with any
offers they may make.

18
<PAGE> 20

7. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (in any such case, as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein;
provided that as to any preliminary prospectus this indemnity shall not inure to
the benefit of any Underwriter or any person controlling that Underwriter on
account of any loss, claim, damage, liability or action arising from the sale of
Shares to any person by that Underwriter if that Underwriter was legally
required to and failed to send or give a copy of the Prospectus, as the same may
be amended or supplemented, to that person and the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in such preliminary prospectus was corrected in such Prospectus,
as amended or supplemented.

(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.

(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing, and the indemnifying party, upon request of
the indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and

19
<PAGE> 21

disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred, subject to reasonable
verification. Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to Section 7(a), and
by the Company, in the case of parties indemnified pursuant to Section 7(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.

(d) To the extent the indemnification provided for in Section 7(a), or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 7(d)(i) above is not permitted by applicable

20
<PAGE> 22

law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 7(d)(i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the Company
on the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.

(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.

(f) The indemnity and contribution provisions contained in this Section 7
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect

21
<PAGE> 23

regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.

8. Directed Share Program Indemnification. (a) The Company agrees to
indemnify and hold harmless Morgan Stanley and its affiliates and each person,
if any, who controls Morgan Stanley or its affiliates within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
("Morgan Stanley Entities"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to Participants in connection with the
Directed Share Program, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement therein not misleading; (ii) caused by the failure of any Participant
to pay for and accept delivery of Directed Shares that the Participant agreed to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of Morgan Stanley Entities.

(b) In case any proceeding (including any governmental investigation)
shall be instituted involving any Morgan Stanley Entity in respect of which
indemnity may be sought pursuant to Section 8(a), the Morgan Stanley Entity
seeking indemnity, shall promptly notify the Company in writing and the Company,
upon request of the Morgan Stanley Entity, shall retain counsel reasonably
satisfactory to the Morgan Stanley Entity to represent the Morgan Stanley Entity
and any others the Company may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any Morgan Stanley Entity shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Morgan Stanley Entity unless (i) the Company shall have agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the Morgan
Stanley Entity and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the Morgan Stanley
Entities in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Morgan Stanley Entities. Any such
separate firm for the Morgan Stanley Entities shall be designated in writing by
Morgan Stanley. The Company shall not be liable for any settlement of any
proceeding

22
<PAGE> 24

effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Company agrees to indemnify the
Morgan Stanley Entities from and against any loss or liability by reason of such
settlement or judgment. The Company shall not, without the prior written consent
of Morgan Stanley, effect any settlement of any pending or threatened proceeding
in respect of which any Morgan Stanley Entity is or could have been a party and
indemnity could have been sought hereunder by such Morgan Stanley Entity, unless
such settlement includes an unconditional release of the Morgan Stanley Entities
from all liability on claims that are the subject matter of such proceeding.

(c) To the extent the indemnification provided for in Section 8(a) is
unavailable to a Morgan Stanley Entity or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then the Company in lieu of
indemnifying the Morgan Stanley Entity thereunder, shall contribute to the
amount paid or payable by the Morgan Stanley Entity as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Morgan Stanley Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 8(c)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(c)(i) above but also the
relative fault of the Company on the one hand and of the Morgan Stanley Entities
on the other hand in connection with any statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Morgan Stanley Entities on the other hand in connection with
the offering of the Directed Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Directed Shares (before
deducting expenses) and the total underwriting discounts and commissions
received by the Morgan Stanley Entities for the Directed Shares, bear to the
aggregate Public Offering Price of the Directed Shares. If the loss, claim,
damage or liability is caused by an untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact, the
relative fault of the Company on the one hand and the Morgan Stanley Entities on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement or the omission or alleged omission
relates to information supplied by the Company or by the Morgan Stanley Entities
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

(d) The Company and the Morgan Stanley Entities agree that it would not
be just or equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the Morgan Stanley Entities were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 8(c). The amount
paid or payable by the Morgan Stanley Entities as a result of the losses,
claims,

23
<PAGE> 25

damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by the Morgan Stanley Entities in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Morgan Stanley Entity shall be required to
contribute any amount under this Section 8 in excess of the amount by which the
total price at which the Directed Shares distributed to the public were offered
to the public exceeds the amount of any damages that such Morgan Stanley Entity
has otherwise been required to pay. The remedies provided for in this Section 8
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.

(e) The indemnity and contribution provisions contained in this Section 8
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Morgan Stanley Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.

9. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.

10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.

If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be

24
<PAGE> 26

obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I or Schedule II bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.

If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.

11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

25
<PAGE> 27

12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.

26
<PAGE> 28

Very truly yours,

SPECTRASITE HOLDINGS, INC.

By:
-----------------------
Name:
Title:

Accepted as of the date hereof

MORGAN STANLEY & CO.
INCORPORATED
GOLDMAN, SACHS & CO.
CIBC WORLD MARKETS CORP.
CREDIT SUISSE FIRST BOSTON
CORPORATION
DEUTSCHE BANK SECURITIES INC.
LEHMAN BROTHERS INC.
SALOMON SMITH BARNEY INC.

Acting severally on behalf of themselves and the
several U.S. Underwriters named in Schedule
I hereto.

By: Morgan Stanley & Co. Incorporated

By:
-----------------------------------------
Name:
Title:

MORGAN STANLEY & CO.
INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
CIBC WORLD MARKETS PLC
CREDIT SUISSE FIRST BOSTON (EUROPE)
LIMITED
DEUTSCHE BANK AG LONDON
LEHMAN BROTHERS INTERNATIONAL
(EUROPE)

27
<PAGE> 29

SALOMON BROTHERS INTERNATIONAL
LIMITED

Acting severally on behalf of themselves and the
several International Underwriters named in
Schedule II hereto.

By: Morgan Stanley & Co. International Limited

By:
--------------------------------------------
Name:
Title:

28
<PAGE> 30

SCHEDULE I

U.S. UNDERWRITERS

<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
- ------------------------------------------------------- ---------------------
<S> <C>
Morgan Stanley & Co. Incorporated......................

Goldman, Sachs & Co....................................

CIBC World Markets Corp................................

Credit Suisse First Boston Corporation.................

Deutsche Bank Securities Inc...........................

Lehman Brothers Inc....................................

Salomon Smith Barney Inc...............................
---------------------
Total U.S. Firm Shares.....................
=====================
</TABLE>

<PAGE> 31

SCHEDULE II

INTERNATIONAL UNDERWRITERS

Goldman Sachs International............................

CIBC World Markets plc.................................

Credit Suisse First Boston (Europe) Limited............

Deutsche Bank AG London................................

Lehman Brothers International (Europe).................

Salomon Brothers International Limited.................
---------------------
Total International Firm Shares............
=====================
</TABLE>

<PAGE> 32

EXHIBIT A

[FORM OF LOCK-UP LETTER]

[Date]

Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
CIBC World Markets Corp.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Lehman Brothers, Inc.
Salomon Smith Barney Inc.
and
Morgan Stanley & Co. International Limited
Goldman Sachs International
CIBC World Markets plc
Credit Suisse First Boston (Europe) Limited
Deutsche Bank AG London
Lehman Brothers International (Europe)
Salomon Brothers International Limited
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Dear Sir and Madam:

The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Spectrasite Holdings, Inc., a Delaware
corporation (the "COMPANY"), providing for a public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Morgan Stanley (the
"UNDERWRITERS"), of shares (the "SHARES") of common stock, par value $.001 per
share, of the Company (the "COMMON STOCK").

To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Morgan Stanley on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any

<PAGE> 33

option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise.

The foregoing paragraph shall not apply to (a) the sale of any Shares to
the Underwriters pursuant to the Underwriting Agreement; (b) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering; (c) any pledge or
transfer of shares of the Company's capital stock contemplated by Sections 2(v),
3 or 4 of the Third Amended and Restated Stockholders' Agreement, dated as of
April 20, 1999, by and among the Company and certain of its stockholders; (d)
any pledge of shares of Common Stock to the Company by employees of the Company
to secure loans from the Company; or (e) bona fide gifts, sales or other
dispositions of shares of any class of the Company's capital stock, in each case
that are made exclusively between and among the undersigned or members of the
undersigned's family, or affiliates of the undersigned, provided that in the
case of the foregoing clause (e) it shall be a condition to any such transfer
that the transferee execute an agreement to the effect set forth herein in form
and substance reasonably satisfactory to Morgan Stanley, and provided further,
that if the donor or transferor is a reporting person subject to Section 16(a)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), any
gifts, sales or other dispositions made in accordance with this clause (e) shall
not require such person to file, and such person shall not voluntarily, file a
report of such transaction on Form 4 under the Exchange Act. In addition,
notwithstanding the foregoing, the undersigned may transfer Common Stock of the
Company solely to persons set forth in the following clauses if the undersigned
is (i) a corporation, to any of its wholly owned subsidiaries, (ii) a limited
liability company, to any of its members or managers, or (iii) a partnership or
limited partnership, to any of its partners; provided, however, that in any such
case, it shall be a condition to the transfer that the transferee execute an
agreement stating that the transferee so receiving and holding such Common Stock
is subject to the provisions of this Agreement and there shall be no further
transfer of such Common Stock except in accordance with this agreement. In
addition, the undersigned agrees that, without the prior written consent of
Morgan Stanley on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. Notwithstanding the foregoing, if
the Public Offering does not close on or before March 31, 2000 or if the Company
notifies the undersigned that it has determined not to proceed with the Public
Offering prior to that date, then this agreement will be null and void and

2
<PAGE> 34

have no further force or effect after March 31, 2000 or the date on which the
undesigned receives such notification.

The Company has requested that agreements containing substantially the
same terms as this agreement be entered into by all of the directors and
executive officers of the Company and by all holders of more than 1% of the
Company's outstanding capital stock prior to the commencement of the Public
Offering. Prior to the commencement of the Public Offering, the Company shall
have received such substantially similar agreements executed by all of the
directors and executive officers of the Company listed in the Management section
of the Prospectus. Any exceptions, waivers or consents made or given by Morgan
Stanley, on behalf of the Underwriters, to the provisions of any other similar
lock-up agreements entered into by such parties in connection with the Public
Offering shall be deemed to apply equally to the undersigned.

Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.

Very truly yours,

-----------------------------
(Name)

-----------------------------
(Address)

<PAGE> 1
EXHIBIT 5.1

[DOW, LOHNES & ALBERTSON, PLLC LETTERHEAD]

January 28, 2000

SpectraSite Holdings, Inc.
100 Regency Forest Drive, Suite 400
Cary, North Carolina 27511

Ladies and Gentlemen:

We refer to the Registration Statement (the "Registration Statement")
on Form S-1 (File No. 333-93873), filed by SpectraSite Holdings, Inc., a
Delaware corporation (the "Company"), with the Securities and Exchange
Commission (the "Commission"), for the purpose of registering under the
Securities Act of 1933, as amended (the "Securities Act"), shares of the
Company's Common Stock, par value $.001 per share (the "Common Stock"), to be
offered to the public pursuant to an Underwriting Agreement (the
"Underwriting Agreement") among the Company and Morgan Stanley & Co.
Incorporated, Goldman, Sachs & Co., CIBC World Markets Corp., Credit Suisse
First Boston Corporation, Deutsche Bank Securities Inc., Lehman Brothers Inc.
and Salomon Smith Barney Inc. as representatives of the U.S. underwriters,
and Morgan Stanley & Co. International Limited, Goldman Sachs International,
CIBC World Markets plc, Credit Suisse First Boston (Europe) Limited, Deutsche
Bank AG London, Lehman Brothers International (Europe) and Salomon Brothers
International Limited as representatives of the international underwriters.
Capitalized terms used herein that are not otherwise defined shall have the
same meanings given them in the Underwriting Agreement.

In connection with the foregoing registration, we have acted as
counsel for the Company and have examined originals or copies, certified or
otherwise identified to our satisfaction, of all such records of the Company
and all such agreements, certificates of public officials, certificates of
officers or representatives of the Company and others, and such other
documents, certificates and corporate or other records as we have deemed
necessary or appropriate as a basis for the opinion set forth herein. In our
examination we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of
the originals of such latter documents. As to any facts relevant to the
opinion expressed herein, we have relied upon statements and representations
of officers and other representatives of the Company and others (all of which
we assume to be true, complete and accurate in all respects).

We are members of the Bar of the District of Columbia and do not
purport to be experts on, or generally familiar with, or certified to express
legal conclusions based upon, the laws of any other jurisdiction, other than
the Delaware General Corporation Law and the laws of the United States to the
extent applicable hereto. Accordingly, as to matters of law set forth below,
our opinion is limited to matters of law under the laws of the District of
Columbia, the laws of the United States to the extent applicable hereto and
the Delaware General Corporation

<PAGE> 2

SpectraSite Holdings, Inc.
January 28, 2000
Page 2

Law, and we express no opinion as to conflicts of law rules or the laws of any
states or jurisdictions, including federal laws regulating securities or other
federal laws, or the rules and regulations of stock exchanges or any other
regulatory body, other than as specified above.

Based upon the foregoing and subject to the other qualifications
stated herein, we are of the opinion that the shares of Common Stock being
registered by the Company pursuant to the Registration Statement have been
duly authorized and, when issued and delivered in accordance with the terms
of the Underwriting Agreement, will be legally issued, fully paid and
non-assessable.

We assume no obligation to advise you of any changes to the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has
been prepared solely for your use in connection with the filing of the
Registration Statement on the date of this opinion letter and shall not be
quoted in whole or in part or otherwise referred to, nor filed with or
furnished to or relied upon by any governmental agency or other person or
other entity, without the prior written consent of this firm.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and any abbreviated registration statements relating
thereto that may be filed to register additional securities identical to
those covered by the Registration Statement (including a registration
statement filed pursuant to Rule 462(b) under the Securities Act), and to the
reference to this firm under the caption "Legal Matters" contained in the
prospectus filed as a part thereof. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act.

Very truly yours,

DOW, LOHNES & ALBERTSON, PLLC

By: /s/ Timothy J. Kelley
-------------------------------
Timothy J. Kelley
Member

<PAGE> 1
Exhibit 10.36

JOINDER AGREEMENT
TO SPECTRASITE
RESTATED REGISTRATION RIGHTS AGREEMENT

January 5, 2000

To the several persons listed as Apex Stockholders on the Signature pages
hereto:

Ladies and Gentlemen:

Reference is made to that certain Second Amended and Restated
Registration Rights Agreement dated April 20, 1999 among SpectraSite Holdings,
Inc. (the "Company"), the WCAS Purchasers, the Whitney Purchasers, the CIBC
Purchasers and the Additional Purchasers, including TPC, each as defined therein
(such agreement being referred to herein as the "Existing Registration Rights
Agreement" and the Purchasers thereunder being referred to as the "Existing
Holders"). Reference is also made to that certain Merger Agreement and Plan of
Reorganization, dated as of November 24, 1999, as amended (the "Merger
Agreement"), among the Company, Apex Site Management Holdings, Inc. ("Apex"),
and Apex Merger Sub, Inc., pursuant to which the stockholders of Apex listed on
the signature pages hereto (the "Apex Stockholders") will be entitled to become
stockholders of the Company. The Company and each of the Apex Stockholders who
executes and delivers this Joinder Agreement agree as follows:

1. By executing this Joinder Agreement, subject to the terms
and conditions set forth herein, (a) you will become a party to the Existing
Registration Rights Agreement as a holder of "Apex Restricted Stock" (as defined
below), (b) the Common Stock received by you pursuant to the Merger Agreement,
including the Buyer Shares, Holdback Shares, and Additional Buyer Shares (each
as defined in the Merger Agreement) received by you thereunder (the "Apex
Restricted Stock") shall be treated as "Restricted Stock" as that term is used
in the Existing Registration Rights Agreement for all purposes thereof, and (c)
you will be entitled to all of the benefits of and subject to all of the
obligations of a holder of "Restricted Stock" under the Existing Registration
Rights Agreement as if you had been an original party thereto.

2. Notwithstanding anything to the contrary in Paragraph 1
above, the Company and each of the Apex Stockholders acknowledge and agree that
neither the Apex Stockholders nor the Apex Restricted Stock are subject to,
limited by, or entitled to the benefits under, the Stockholders' Agreement
referred to in the Existing Registration Rights Agreement (the "Stockholders'
Agreement"). Without limiting the generality of the preceding sentence, the
Company acknowledges and agrees that the registration of shares of Apex
Restricted Stock pursuant to Section 4, 5 or 6 of the Existing Registration
Rights Agreement is not subject to the transfer restrictions and other
provisions of Section 2 of the Stockholders' Agreement.

<PAGE> 2

3. For purposes of Section 4 of the Existing Registration
Rights Agreement, it is understood that in measuring the 25% threshold, all
shares of Restricted Stock currently outstanding and subject to the Existing
Registration Rights Agreement (including the Preferred Stock as provided
therein) and all shares of Apex Restricted Stock shall be taken into account.

4. For purposes of Section 5 of the Existing Registration
Rights Agreement, the following Apex Stockholders shall be treated as
"Institutional Investors": Waller-Sutton Media Partners, L.P., Mellon Ventures,
Inc., and Spectrum Equity Investors, L.P.

5. The Company represents and warrants to the undersigned as
follows:

(a) The Company has full corporate power and
authority to execute and deliver this Joinder Agreement and to perform its
obligations hereunder. This Joinder Agreement constitutes the valid and
legally binding obligation of the Company, enforceable in accordance with its
terms and conditions, subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect affecting creditors'
rights generally. The Company does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any other
party in order to consummate the transactions contemplated by this Joinder
Agreement other than such notices, filings, authorizations, consents and
approvals as have been obtained.

(b) Neither the execution and the delivery of
this Joinder Agreement, nor the consummation of the transactions
contemplated hereby, (i) violate any injunction, judgment, order, decree,
ruling, charge, or other restriction of any governmental authority to which the
Company is subject or any provision of its charter or bylaws or (ii) other than
such notices, filings, authorizations, consents and approvals as have been
obtained and after giving effect to them, violate, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which the Company is a party or by which it is bound or to which any of its
assets is subject.

6. Consistent with the Lock-Up Agreement that you will be
required to execute in connection with the Company's "initial public offering"
(which Lock-Up Agreement will contain terms no less favorable to you than the
terms of the lock-up agreements signed by the other holders of the Company's
common stock in connection with the Company's "initial public offering"), your
incidental registration rights under Section 6 of the Existing Registration
Rights Agreement may not be exercised in connection with the Company's "initial
public offering" or at any time during the lock-up period.

7. Notices, requests, consents and other communications mailed
pursuant to Section 13(c) of the Existing Registration Rights Agreement, if
mailed to the Apex Stockholders, shall be mailed to them at

2
<PAGE> 3

Apex Site Management Holdings, Inc.
555 North Lane
Suite 6030
Conshohocken, Pennsylvania 19428
Attention: Alexander L. Gellman and
Bruce M. Hernandes, Shareholder Representatives

with a copy to:

Kleinbard Bell & Brecker LLP
1900 Market Street
Suite 700
Philadelphia, Pennsylvania 19103
Attention: Howard J. Davis, Esq.

8. This Joinder Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of law of such state.

9. This Joinder Agreement, together with the Existing
Registration Rights Agreement as modified hereby, constitutes the entire
agreement of the parties with respect to the subject matter hereof. Hereafter,
the Joinder Agreement shall be deemed part of and incorporated into the Existing
Registration Rights Agreement, and the Existing Registration Rights Agreement
(including this Joinder Agreement) may be modified or amended only in accordance
with Section 13(e) of the Existing Registration Rights Agreement, taking into
account the Apex Restricted Stock then outstanding in measuring the 60%
threshold provided therein, except that any modification or amendment that
adversely affects the rights or privileges of the Apex Stockholders and does not
affect the other holders of Restricted Stock and Management Stock in a
substantially similar manner shall require the consent of either the Stockholder
Representatives on behalf of the Apex Stockholders (if then authorized to act on
behalf of the Apex Stockholders) or not less than 50% of the voting power of the
Apex Restricted Stock then outstanding.

10. This Joinder Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

3
<PAGE> 4

Please indicate your acceptance of the foregoing by signing
and returning the enclosed counterpart of this letter, whereupon this letter
(herein sometimes called the "Joinder Agreement") shall be a binding agreement
between the Company and you.

Very truly yours,

SPECTRASITE HOLDINGS, INC.

By:/s/Stephen H. Clark
------------------------
Stephen H. Clark
President

[COUNTERSIGNATURES NEXT PAGE]
4

<PAGE> 5

[SIGNATURE PAGE TO APEX REGISTRATION RIGHTS JOINDER AGREEMENT]

AGREED TO AND ACCEPTED
as of January 4, 2000

- -----------------------------
William H. Ingram, JTWROS

- -----------------------------
Cathy M. Brienza, JTWROS

/s/Noel P. Rahn, Sr.
- -----------------------------
Noel P. Rahn, Sr.

/s/Mark C. Rahn
- -----------------------------
Mark C. Rahn

/s/Angeline P. Lawton
- -----------------------------
Angelina P. Lawton

/s/Noel P. Rahn, Jr.
- -----------------------------
Noel P. Rahn, Jr.

/s/Adriana I. Rahn
- -----------------------------
Adriana I. Rahn

/s/James L. Paterno
- -----------------------------
James L. Paterno

/s/Joseph Straus, Sr.
- -----------------------------
Joseph Straus, Sr.

/s/Gerald Broker
- -----------------------------
Gerald Broker

5
<PAGE> 6

/s/Alan Feldman
- -----------------------------
Alan Feldman

MELLON VENTURES, INC.

By: /s/Charles J. Billerbeck
-------------------------
Name: Charles J. Billerbeck
Title: Managing Director

G3 VENTURES, INC.

By: /s/Alexander L. Gellman
-------------------------
Name: Alexander L. Gellman
Title: President

WALLER-SUTTON MEDIA PARTNERS, L.P.

By: /s/Walter-Sutton Media, LLC
---------------------------
Its General Partner

By: /s/Bruce M. Hernandez
-----------------------------
Name: Bruce M. Hernandez
Title: Chief Executive Officer

SPECTRUM EQUITY INVESTORS, L.P.
By: Spectrum Equity Associates, L.P.,
Its General Partner

By: Brion B. Applegate
-------------------------
Brion B. Applegate
Its General Partner

6
<PAGE> 7

APEX SGP, Inc.

By: /s/Edward A. Glickman
-------------------------
Name: Edward A. Glickman
Title: President

/s/R. David Spreng
- -----------------------------
R. David Spreng

- -----------------------------
Rajendra Singh, JTWROS

- -----------------------------
Neera Singh, JTWROS

S.R.Y. CAPITAL CORPORATION

By: /s/Steven R. Yunis
-------------------------
Name: Steven R. Yunis
Title: President

/s/Susan Valentine
- -----------------------------
Susan Valentine

/s/David Bryant
- -----------------------------
David Bryant

/s/Judith R. Garfinkel
- -----------------------------
Judith R. Garfinkel

7
<PAGE> 8

/s/Eric M. Mallory
- -----------------------------
Eric M. Mallory

/s/Douglas S. Grayson
- -----------------------------
Douglas S. Grayson

/s/Edward A. Glickman
- -----------------------------
Edward A. Glickman

/s/Pat Berns
- -----------------------------
Pat Berns

/s/Lewis Stone
- -----------------------------
Lewis Stone

/s/Joseph F. Coradino
- -----------------------------
Joseph F. Coradino

/s/Leonard B. Shore
- -----------------------------
Leonard B. Shore

BEACH REALTY ASSOCIATES

By: /s/Marc L. Felgoise
--------------------------------
Name: Marc L. Felgoise
Title: Authorized Representative

/s/George Rubin
--------------------------------
George Rubin

/s/Ronald Rubin
--------------------------------
Ronald Rubin

<PAGE> 1

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT

1. SpectraSite Communications, Inc. ("SCI"), a Delaware corporation and wholly
owned subsidiary of the Registrant.

2. Tower Merger Vehicle, Inc. ("TMV"), a Delaware corporation and wholly owned
subsidiary of SCI.

3. Tower Asset Sub, Inc., a Delaware corporation and wholly owned subsidiary of
TMV.

4. Vertical Properties, Inc., a New York corporation and wholly owned
subsidiary of SCI.

5. Stainless, Inc., a Pennsylvania corporation and wholly owned subsidiary of
SCI.

6. Doty-Moore Tower Services, Inc., a Texas corporation and wholly owned
subsidiary of SCI.

7. Doty-Moore Equipment, Inc., a Texas corporation and wholly owned subsidiary
of SCI.

8. Doty Moore RF Services, Inc., a Texas corporation and wholly owned
subsidiary of SCI.

9. SpectraSite Broadcast Technical Services, Inc., a Delaware corporation and
wholly owned subsidiary of SCI.

10. SpectraSite Broadcast Fabrication, Inc., a Delaware corporation and wholly
owned subsidiary of SCI.

11. SpectraSite Broadcast Towers, Inc., a Delaware corporation and wholly owned
subsidiary of SCI.

12. SpectraSite Communications Limited, a corporation and wholly owned
subsidiary of SCI.

13. Apex Site Management Holdings, Inc. ("Apex Holdings"), a Delaware
corporation and wholly owned subsidiary of SCI.

14. Apex Site Management, Inc. ("Apex"), a Delaware corporation and wholly owned
subsidiary of Apex Holdings.

15. Metrosite Management, LLC, an Arkansas limited liability company and wholly
owned subsidiary of Apex.

16. Vertical Realty, LLC, a Delaware limited liability company and wholly owned
subsidiary of Apex.

<PAGE> 2

17. Apex Site Management - Canada, Inc., a Delaware corporation and wholly owned
subsidiary of Apex.

18. Westower Corporation ("Westower"), a Washington corporation and wholly owned
subsidiary of SCI.

19. SpectraSite Construction, Inc., a Delaware corporation and wholly owned
subsidiary of Westower.

20. CNG Communications, Inc., a Delaware corporation and wholly owned subsidiary
of Westower.

21. Westower Communications, Inc., a Texas corporation and wholly owned
subsidiary of Westower.

22. Cypress Real Estate Services, Inc., a Florida corporation and wholly owned
subsidiary of Westower.

23. Teletronics Management Services, Inc., a Washington corporation and wholly
owned subsidiary of Westower.

24. Teletronics Realty Services, Inc., a Washington corporation and wholly owned
subsidiary of Westower.

25. Westower Communications, Inc., a Washington corporation and wholly owned
subsidiary of Westower.

26. Westower Design, Inc., a Florida corporation and wholly owned subsidiary of
Westower.

27. Westower Leasing, Inc., a Wyoming corporation and wholly owned subsidiary of
Westower.

28. Westower Communications Ltd., a Canadian Federal corporation.

29. Westower Leasing Canada Inc., a Canadian Federal corporation and wholly
owned subsidiary of Westower.

30. Westower Acquisitions Canada, Inc. ("Acquisitions"), a Canadian Federal
corporation and wholly owned subsidiary of Westower.

31. Acier Filteau Inc., a Province Quebec corporation and wholly owned
subsidiary of Acquisitions.

32. Jovin Telecommunications, Inc., a Canadian Federal corporation and wholly
owned subsidiary of Acquisitions.

<PAGE> 3

33. Telecommunication R. David Inc., a Province Quebec corporation and wholly
owned subsidiary of Acquisitions.

<PAGE> 1
Exhibit 23.2

Consent of Independent Auditors

We consent to the reference to ourfirm under the caption "Experts" and to
the use of our report dated January 28, 2000 in Amendment No. 2 to the
Registration Statement on Form S-1 (No. 333-93873) and related Prospectus of
SpectraSite Holdings, Inc., for the registration of 25,734,265 shares of its
common stock, with respect to the consolidated financial statements of
SpectraSite Holdings, Inc. as of December 31, 1997, December 31, 1998 and
September 30, 1999 and for the period from inception (April 25, 1997) to
December 31, 1997, for the year ended December 31, 1998 and for the nine months
ended September 30, 1999 and our report dated March 27, 1998, with respect to
the consolidated financial statements of SpectraSite's predecessor, TeleSite
Services, LLC, as of December 31, 1996 and for the year ended December 31, 1996
and the period from January 1, 1997 to May 12, 1997.

/s/ Ernst & Young LLP

Raleigh, North Carolina
January 28, 2000

<PAGE> 1
Exhibit 23.3

Consent of Independent Accountants

We consent to the use in this Registration Statement on Form S-1 of
SpectraSite Holdings, Inc. of (i) our report dated February 4, 1999, except for
the fourth paragraph in Note 3, as to which the date is June 17, 1999, relating
to the consolidated financial statements of WesTower Corporation and its
subsidiaries as of September 30, 1998 and for the seven months ended September
30, 1998 and (ii) our report dated May 21, 1999 relating to the financial
statements of Summit Communications, LLC as of September 30, 1998 and for the
nine months ended September 30, 1998 which appear in such Registration
Statement. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.

/s/ PricewaterhouseCoopers LLP
Seattle, Washington
January 28, 2000

<PAGE> 1
Exhibit 23.4

Consent of Moss Adams LLP

We consent to (a) the inclusion in Amendment No. 2 to the Registration
Statement of SpectraSite Holdings, Inc. on Form S-1 (File 333-93873) of (i) our
report dated April 14, 1998, except for the third paragraph in Note 3, as to
which the date is May 31, 1998 and the fourth paragraph in Note 3, as to which
the date is June 14, 1999, relating to the consolidated financial statements of
Westower Corporation and Subsidiaries as of February 28, 1997 and 1998 and the
three years in the period ended February 28, 1998 and (ii) our report dated
October 21, 1998 on our audit of the financial statements of CORD
Communications, Inc. as of June 30, 1997 and 1998 and for the years then ended
and (b) the reference to our firm in the Registration Statement under the
caption "Experts".

/s/ Moss Adams LLP
Bellingham, Washington
January 27, 2000

<PAGE> 1
Exhibit 23.5

Consent of Lamn, Krielow, Dytrych & Co.

We consent to the inclusion in the Registration Statement of SpectraSite
Holdings, Inc., on Form S-1 of our report dated February 11, 1998, except for
Note 4, as to which the date is August 12, 1998, relating to the financial
statements of MJA Communications Corp. and to the references to our firm in the
Registration Statement.

/s/ LAMN, KRIELOW, DYTRYCH & CO.
Certified Public Accountants
January 25, 2000

<PAGE> 1
Exhibit 23.6

Consent of Shearer, Taylor & Co., P.A.

We consent to the inclusion in the Registration Statement of SpectraSite
Holdings, Inc. on Form S-1 of our report dated March 5, 1998, on our audit of
the financial statements of Summit Communications, LLC as of December 31, 1997
and the period from May 24, 1997 (inception) to December 31, 1997, and to the
reference to our firm in the Registration Statement under the caption "Experts."

/s/ Shearer, Taylor & Co., P.A.
January 27, 2000