<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.____)*
Crown Castle International Corp.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
228227-10-4
--------------------------------------------------------------
(CUSIP Number)
Joseph B. Wollard, Esq.
Citigroup Inc.
425 Park Avenue, 3rd Floor
New York, NY 10043
(212) 559-1000
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July 5, 2000
--------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
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CUSIP NO. 228227-10-4 SCHEDULE 13D PAGE 1 OF 71 PAGES
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Salomon Brothers International Limited ("SBIL")
------------- ------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /_/
(b) X
------------- ------------------------------------------------------------------
3 SEC USE ONLY
------------- ------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
------------- ------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) /_/
------------- ------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England
-------------------------- ----------- -----------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
----------- -----------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 17,713,536
----------- -----------------------------------------
EACH REPORTING 9 SOLE DISPOSITIVE POWER
0
PERSON
----------- -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
17,713,536
-------------------------- -----------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,713,536
------------- ------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /_/
------------- ------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
------------- ------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, BD
------------- ------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
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CUSIP NO. 228227-10-4 SCHEDULE 13D PAGE 2 OF 71 PAGES
----------- ----- ----
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Salomon Brothers Europe Limited ("SBEL")
------------- ------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /_/
(b) X
------------- ------------------------------------------------------------------
3 SEC USE ONLY
------------- ------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
------------- ------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) /_/
------------- ------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England
-------------------------- ----------- -----------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
----------- -----------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 17,713,536**
----------- -----------------------------------------
EACH REPORTING 9 SOLE DISPOSITIVE POWER
0
PERSON
----------- -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
17,713,536**
-------------------------- -----------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,713,536**
------------- ------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /_/
------------- ------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
------------- ------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, HC
------------- ------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
**Represents shares beneficially owned by SBIL.
<PAGE>
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CUSIP NO. 228227-10-4 SCHEDULE 13D PAGE 3 OF 71 PAGES
----------- ----- ----
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Salomon International LLC ("SI")
------------- ------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /_/
(b) X
------------- ------------------------------------------------------------------
3 SEC USE ONLY
------------- ------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
------------- ------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) /_/
------------- ------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------- ----------- -----------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
----------- -----------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 17,713,536
----------- -----------------------------------------
EACH REPORTING 9 SOLE DISPOSITIVE POWER
0
PERSON
----------- -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
17,713,536
-------------------------- -----------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,713,536
------------- ------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /_/
------------- ------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
------------- ------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, HC
------------- ------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
**Represents shares beneficially owned by SBIL.
<PAGE>
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CUSIP NO. 228227-10-4 SCHEDULE 13D PAGE 4 OF 71 PAGES
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Salomon Brothers Holding Company Inc ("SBHC")
------------- ------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /_/
(b) X
------------- ------------------------------------------------------------------
3 SEC USE ONLY
------------- ------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
------------- ------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) /_/
------------- ------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------- ----------- -----------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
----------- -----------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 17,812,327**
----------- -----------------------------------------
EACH REPORTING 9 SOLE DISPOSITIVE POWER
0
PERSON
----------- -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
17,812,327**
-------------------------- -----------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,812,327**
------------- ------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /_/
------------- ------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
------------- ------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, HC
------------- ------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
**Represents 17,713,536 shares beneficially owned by SBIL and 98,791 shares
beneficially owned by other subsidiaries of SBHC.
<PAGE>
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CUSIP NO. 228227-10-4 SCHEDULE 13D PAGE 5 OF 71 PAGES
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Salomon Smith Barney Holdings Inc. ("SSBH")
------------- ------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /_/
(b) X
------------- ------------------------------------------------------------------
3 SEC USE ONLY
------------- ------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
------------- ------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) /_/
------------- ------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
-------------------------- ----------- -----------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
----------- -----------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 17,869,069**
----------- -----------------------------------------
EACH REPORTING 9 SOLE DISPOSITIVE POWER
0
PERSON
----------- -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
17,869,069**
-------------------------- -----------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,869,069**
------------- ------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /_/
------------- ------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
------------- ------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, HC
------------- ------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
**Represents 17,713,536 shares beneficially owned by SBIL and 155,533 shares
beneficially owned by other subsidiaries of SSBH.
<PAGE>
---------------------- ----------------------------
CUSIP NO. 228227-10-4 SCHEDULE 13D PAGE 6 OF 71 PAGES
----------- ----- ----
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Citigroup Inc. ("Citigroup")
------------- ------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /_/
(b) X
------------- ------------------------------------------------------------------
3 SEC USE ONLY
------------- ------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
------------- ------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) /_/
------------- ------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------- ----------- -----------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
----------- -----------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 17,869,069**
----------- -----------------------------------------
EACH REPORTING 9 SOLE DISPOSITIVE POWER
0
PERSON
----------- -----------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
17,869,069**
-------------------------- -----------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,869,069**
------------- ------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /_/
------------- ------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
------------- ------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, HC
------------- ------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
** Represents 17,713,536 shares beneficially owned by SBIL and 155,533 shares
beneficially owned by other subsidiaries of Citigroup.
<PAGE>
SCHEDULE 13D
Item 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this
statement relates is Common Stock, par value $0.01 per share (the "Common
Stock"), of Crown Castle International Corp. (the "Company"). The
principal executive offices of the Company are located at 510 Bering
Drive, Suite 500, Houston, Texas 77057.
Item 2. IDENTITY AND BACKGROUND.
Pursuant to Rule 13d-1(k)(1) of Regulation 13D-G of the Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Act"), the undersigned hereby file this Schedule 13D Statement on behalf
of Salomon Brothers International Limited, an English corporation
("SBIL"), Salomon Brothers Europe Limited, an English corporation
("SBEL"), Salomon International LLC, a Delaware limited liability company
("SI"), Salomon Brothers Holding Company Inc, a Delaware corporation
("SBHC"), Salomon Smith Barney Holdings Inc., a New York corporation
("SSBH"), and Citigroup Inc., a Delaware corporation ("Citigroup") (each,
a "Reporting Person" and collectively, the "Reporting Persons").
SBIL
(a) Name: Salomon Brothers International Limited
(b) Address of Principal Place of Business and Office: Victoria Plaza, 111
Buckingham Palace Road, London, England SW1W OSB, United Kingdom
(c) Principal Business: Investment banking
(d) Criminal Proceedings: None
(e) Civil Proceedings: None
(f) Place of Organization: England
Officers and Directors: See Exhibit A attached hereto, which is
incorporated herein by reference with respect to each executive officer
and director of SBIL.
SBEL
(a) Name: Salomon Brothers Europe Limited
(b) Address of Principal Place of Business and Office: Victoria Plaza, 111
Buckingham Palace Road, London, England SW1W OSB, United Kingdom
(c) Principal Business: Financial services holding company
(d) Criminal Proceedings: None
(e) Civil Proceedings: None
(f) Place of Organization: England
Page 7 of 71 pages
<PAGE>
SI
(a) Name: Salomon International LLC
(b) Address of Principal Place of Business and Office: Victoria Plaza, 111
Buckingham Palace Road, London, England SW1W OSB, United Kingdom
(c) Principal Business: Financial services holding company
(d) Criminal Proceedings: None
(e) Civil Proceedings: None
(f) Place of Organization: Delaware
SBHC
(a) Name: Salomon Brothers Holding Company Inc
(b) Address of Principal Place of Business and Office: 388 Greenwich
Street, New York, New York 10013
(c) Principal Business: Financial services holding company
(d) Criminal Proceedings: None
(e) Civil Proceedings: None
(f) Place of Organization: Delaware
SSBH
(a) Name: Salomon Smith Barney Holdings Inc.
(b) Address of Principal Place of Business and Office: 388 Greenwich
Street, New York, New York, 10013
(c) Principal Business: Financial services holding company
(d) Criminal Proceedings: None
(e) Civil Proceedings: None
(f) Place of Organization: New York
CITIGROUP
(a) Name: Citigroup Inc.
(b) Address of Principal Place of Business and Office: 153 East 53rd
Street, New York, New York, 10043
(c) Principal Business: Financial services holding company
(d) Criminal Proceedings: None
(e) Civil Proceedings: None
(f) Place of Organization: Delaware
Page 8 of 71 pages
<PAGE>
Officers and Directors: See Exhibit B attached hereto, which is
incorporated herein by reference with respect to each executive officer
and director of Citigroup.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On July 5, 2000, SBIL purchased 17,713,536 shares of Common Stock (the
"Covered Shares") from Transmission Future Networks B.V. ("TFN") for a
total purchase price of $504,835,776. All interests, direct and indirect,
in the Common Stock reported in this Schedule 13D were acquired with the
working capital of SBIL and other subsidiaries of Citigroup.
Item 4. PURPOSE OF TRANSACTION.
SBIL acquired the Covered Shares in the ordinary course of its business in
connection with its investment banking activities. Citigroup and its
subsidiaries acquired the other shares of Common Stock covered by this
Schedule 13D in the ordinary course of their respective businesses. The
acquisition of the Covered Shares was made in connection with the
disposition by France Telecom S.A. ("FT") and its affiliates' (including
TFN's) interests in the Company and its affiliates, in accordance with a
letter of undertakings between FT and the United Kingdom Secretary of
State for Trade and Industry, which is an exhibit hereto and is
incorporated by reference herein.
Pursuant to a Disposition Agreement, dated as of May 17, 2000 and amended
as of June 5, 2000 (the "Disposition Agreement"), among the Company, Crown
Castle UK Holdings Limited, FT, TFN, Telediffusion de France International
S.A. and SBIL, SBIL has agreed not to dispose of the Covered Shares prior
to June 8, 2001, except (i) upon certain insolvency-related events with
respect to FT, (ii) with the consent of the Company or (iii) to affiliates
of SBIL or to certain other transferees that agree to be bound by certain
terms of the Disposition Agreement. Following such date, TFN is entitled,
pursuant to a Confirmation for Equity Swap Transaction, dated as of July
5, 2000 (the "Swap Agreement"), among TFN, FT and SBIL, to direct SBIL to
dispose of the Covered Shares in a manner specified by TFN. Upon the
occurrence of certain events of default with respect to FT or TFN or
certain other contingencies, however, SBIL may sell the Covered Shares
without TFN's direction. If the Covered Shares have not been disposed of
prior to June 8, 2002 (subject to extension under certain circumstances
set forth in the Disposition Agreement), the Company will be entitled to
direct SBIL to dispose of any remaining Covered Shares. The Disposition
Agreement and Swap Agreement are exhibits hereto and are incorporated by
reference herein.
In addition, depending on market conditions and other factors (including
evaluation of the Company's businesses and prospects, availability of
funds, alternative uses of funds and general economic conditions),
Citigroup and its subsidiaries may from time to time purchase additional
securities of the Company and dispose of all or a portion of such
securities.
Page 9 of 71 pages
<PAGE>
Except as described in this Item 4, none of the Reporting Persons or, to
the best knowledge of such persons, any of the persons named in Exhibits A
or B to this Schedule 13D, has formulated any plans or proposals which
relate to or would result in: (a) the acquisition by any person of
additional securities of the Company or the disposition of securities of
the Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries; (c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (d) any change in the present Board of
Directors or management of the Company, including any plans or proposals
to change the number or term of directors or to fill any existing
vacancies on the Board; (e) any material change in the present
capitalization or dividend policy of the Company; (f) any other material
change in the Company's business or corporate structure; (g) any changes
in the Company's charter or by-laws or other actions which may impede the
acquisition of control of the Company by any person; (h) causing a class
of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association; (i)
causing a class of equity securities of the Company to become eligible for
termination of registration pursuant to Section 12(g)(4) of the Act; or
(j) any action similar to those enumerated above.
Item 5. INTEREST IN SECURITIES OF THE COMPANY.
(a-b) The percentages calculated in this Item 5 are based upon 183,642,790
shares of Common Stock outstanding, as stated in a certificate provided by
the Company to SBIL on July 5, 2000.
SBIL
As of 4:00 p.m., New York time, on July 11, 2000, SBIL directly
beneficially owned 17,713,536 shares of the Company's Common Stock. The
following information is being provided as of such time with respect to
SBIL's beneficial ownership of the Company's Common Stock.
<TABLE>
<S> <C> <C>
(a) Amount Beneficially Owned: 17,713,536
(b) Percent of Class: 9.7%
(c) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote 0
(ii) shared power to vote or direct the vote 17,713,536
(iii) sole power to dispose or to direct the disposition of 0
(iv) shared power to dispose or to direct the disposition of 17,713,536
</TABLE>
SBEL
SBEL is the parent company of SBIL. The following information is being
provided as of 4:00 p.m., New York time, on July 11, 2000 with respect to
SBEL's beneficial ownership of the Company's Common Stock.
Page 10 of 71 pages
<PAGE>
<TABLE>
<S> <C> <C>
(a) Amount Beneficially Owned: 17,713,536
(b) Percent of Class: 9.7%
(c) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote 0
(ii) shared power to vote or direct the vote 17,713,536
(iii) sole power to dispose or to direct the disposition of 0
(iv) shared power to dispose or to direct the disposition of 17,713,536
</TABLE>
SI
SI is the parent company of SBEL. The following information is being
provided as of 4:00 p.m., New York time, on July 11, 2000 with respect to
SI's beneficial ownership of the Company's Common Stock.
<TABLE>
<S> <C> <C>
(a) Amount Beneficially Owned: 17,713,536
(b) Percent of Class: 9.7%
(c) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote 0
(ii) shared power to vote or direct the vote 17,713,536
(iii) sole power to dispose or to direct the disposition of 0
(iv) shared power to dispose or to direct the disposition of 17,713,536
</TABLE>
SBHC
SBHC is the parent company of SI. The following information is being
provided as of 4:00 p.m., New York time, on July 11, 2000 with respect to
SBHC's beneficial ownership of the Company's Common Stock.
<TABLE>
<S> <C> <C>
(a) Amount Beneficially Owned: 17,812,327
(b) Percent of Class: 9.7%
(c) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote 0
(ii) shared power to vote or direct the vote 17,812,327
(iii) sole power to dispose or to direct the disposition of 0
(iv) shared power to dispose or to direct the disposition of 17,812,327
</TABLE>
The shares beneficially owned by SBHC reflect the Covered Shares
beneficially owned by SBIL as well as 98,791 shares beneficially owned by
certain other subsidiaries of SBHC.
SSBH
SSBH is the parent company of SBHC. The following information is being
provided as of 4:00 p.m., New York time, on July 11, 2000 with respect to
SSBH's beneficial ownership of the Company's Common Stock.
<TABLE>
<S> <C> <C>
(a) Amount Beneficially Owned: 17,869,069
Page 11 of 71 pages
<PAGE>
(b) Percent of Class: 9.7%
(c) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote 0
(ii) shared power to vote or direct the vote 17,869,069
(iii) sole power to dispose or to direct the disposition of 0
(iv) shared power to dispose or to direct the disposition of 17,869,069
</TABLE>
The shares beneficially owned by SSBH reflect the Covered Shares
beneficially owned by SBIL as well as 155,533 shares beneficially owned by
certain other subsidiaries of SSBH.
CITIGROUP
Citigroup is the parent company of SSBH. The following information is
being provided as of 4:00 p.m., New York time on July 11, 2000 with
respect to Citigroup's beneficial ownership of the Company's Common Stock.
<TABLE>
<S> <C> <C>
(a) Amount Beneficially Owned: 17,869,069
(b) Percent of Class: 9.7%
(c) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote 0
(ii) shared power to vote or direct the vote 17,869,069
(iii) sole power to dispose or to direct the disposition of 0
(iv) shared power to dispose or to direct the disposition of 17,869,069
</TABLE>
The shares beneficially owned by SBIL reflect the Covered Shares
beneficially owned by SBIL as well as 155,533 shares beneficially owned by
certain other subsidiaries of Citigroup.
By reason of their relationship, Citigroup, SSBH, SBHC, SI and SBEL may be
deemed to share voting and dispositive power with respect to Common Stock
owned by SBIL. To the best knowledge of each Reporting Person, none of its
executive officers or directors owned any securities of the Company as of
4:00 p.m., New York time, on July 11, 2000.
In addition, by reason of certain provisions in the Disposition Agreement
and the Swap Agreement set forth below, the Company may be deemed to share
voting power with respect to the Covered Shares held by SBIL, and TFN, FT
and the Company may be deemed to share dispositive power with respect to
the Covered Shares held by SBIL.
Pursuant to the Disposition Agreement, SBIL has granted an irrevocable
proxy to each of the general counsel and associate general counsel of the
Company to vote the Covered Shares in the same proportion as the votes
cast by or on behalf of all other holders of Common Stock of the Company.
As described in Item 4 above, TFN and, in certain circumstances, the
Company will be entitled to direct SBIL to dispose of the Covered Shares
pursuant to the Swap Agreement and the Disposition Agreement. TFN is a
wholly owned indirect subsidiary of FT.
Page 12 of 71 pages
<PAGE>
FT is a French corporation with its principal place of business and office
at 6 place d'Alleray, 75505 Paris Cedex 15, France, and TFN is a
Netherlands corporation with its principal place of business and office at
Strawinskylaan 3501, 1077ZX Amsterdam, Netherlands.
(c) As noted in Item 3, on July 5, 2000, SBIL purchased 17,713,536 shares
of Common Stock from TFN at a price of $28.50 per share, for a total
purchase price of $504,835,776, pursuant to a Purchase Agreement, dated as
of July 5, 2000, among TFN, FT and SBIL. The Purchase Agreement is an
exhibit hereto and is incorporated by reference herein. In addition,
Salomon Smith Barney Inc., a subsidiary of Citigroup, acted as an
underwriter in the registered offering by TFN, which closed on June 8,
2000, of 24,942,360 shares of Common Stock at an offering price of $28.50
per share.
To the best knowledge of the Reporting Persons, and except as described in
the preceding paragraph and in Item 3, none of the Reporting Persons or,
to the best knowledge of such persons, any person named in Exhibit A or
Exhibit B of this Schedule 13D, has effected any transactions in the
Company's Common Stock during the period which commenced sixty (60) days
prior to the date of the event which triggered the filing of this Schedule
13D and ends on the date of the filing of this Schedule 13D.
(d) Pursuant to the Swap Agreement, TFN is entitled to receive dividends
with respect to the Covered Shares, is entitled to proceeds from the sale
of the Covered Shares in excess of a specified amount and is obligated to
pay to SBIL any deficiency in such proceeds.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to SECURITIES OF THE COMPANY.
Except as set forth above and in Items 3, 4, and 5 of this Schedule 13D,
to the best knowledge of the Reporting Persons, no contracts,
arrangements, understandings or relationships (legal or otherwise) exist
among the persons named in Item 2 or between such persons and any other
person with respect to the securities of the Company.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
<S> <C>
A Officers and Directors of SBIL.
B Officers and Directors of Citigroup.
C Consent to Joint Filing of Schedule 13D
pursuant to Rule 13d-1(k) of the Act.
D Letter of Undertakings between FT and the
United Kingdom Secretary of State for Trade
and Industry, published May 10,
Page 13 of 71 pages
<PAGE>
2000 (incorporated as an exhibit hereto by
reference to Exhibit 99.2 on Form 8-K filed
by the Company with the Securities and
Exchange Commission on May 18, 2000).
E Disposition Agreement, dated as of May 17,
2000, among the Company, Crown Castle UK
Holdings Limited, FT, TFN and Telediffusion
de France International S.A. (incorporated
as an exhibit hereto by reference to Exhibit
99.3 on Form 8-K filed by the Company with
the Securities and Exchange Commission on
May 18, 2000).
F Amendment No. 1 to Disposition Agreement,
dated as of June 5, 2000, among the Company,
Crown Castle UK Holdings Limited, FT, TFN
and Telediffusion de France International
S.A. (incorporated as an exhibit hereto by
reference to Exhibit 99.2 on Form 8-K filed
by the Company with the Securities and
Exchange Commission on June 6, 2000).
G Counterpart to Disposition Agreement, dated
as of July 5, 2000, among SBIL, FT and the
Company.
H Purchase Agreement, dated as of July 5,
2000, among TFN, FT and SBIL.
I Confirmation for Equity Swap Transaction,
dated as of July 5, 2000, among TFN, FT and
SBIL.
</TABLE>
Page 14 of 71 pages
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: July 17, 2000
SALOMON BROTHERS INTERNATIONAL LIMITED
By: /s/ Royce Miller
-----------------------------
Name: Royce Miller
Title: Joint Secretary
SALOMON BROTHERS EUROPE LIMITED
By: /s/ Royce Miller
----------------------------
Name: Royce Miller
Title: Joint Secretary
SALOMON INTERNATIONAL LLC
By: /s/ Royce Miller
----------------------------
Name: Royce Miller
Title: Secretary
SALOMON BROTHERS HOLDING COMPANY INC
By: /s/ Howard Darmstadter
----------------------------
Name: Howard Darmstadter
Title: Assistant Secretary
SALOMON SMITH BARNEY HOLDINGS INC.
By: /s/ Howard Darmstadter
----------------------------
Name: Howard Darmstadter
Title: Assistant Secretary
Page 15 of 71 pages
<PAGE>
CITIGROUP INC.
By: /s/ Joseph B. Wollard
----------------------------
Name: Joseph B. Wollard
Title: Assistant Secretary
Page 16 of 71 pages
<PAGE>
EXHIBIT A
EXECUTIVE OFFICERS AND DIRECTORS OF SALOMON BROTHERS INTERNATIONAL LIMITED
Set forth below are the names, titles, business addresses, principal
occupations and citizenship of the Executive Officers and Directors of
SBIL.
<TABLE>
<CAPTION>
NAME, TITLE AND CITIZENSHIP PRINCIPAL OCCUPATION AND BUSINESS ADDRESS
<S> <C>
James Stewart Boshart, III Co-Chief Executive
Executive Officer and Director Salomon Brothers International Limited
United States 336 Strand
London WC2R 1HB England
United Kingdom
Charles Senff McVeigh, III Chairman
Executive Officer and Director Salomon Brothers International Limited
United Kingdom 336 Strand
London WC2R 1HB England
United Kingdom
William Meredith Samuel Co-Chief Executive
Executive Officer and Director Salomon Brothers International Limited
United Kingdom 336 Strand
London WC2R 1HB England
United Kingdom
Andrew Martin Gaulter Joint Secretary
Executive Officer Salomon Brothers International Limited
United Kingdom 336 Strand
London WC2R 1HB England
United Kingdom
Royce William Miller Joint Secretary
Executive Officer Salomon Brothers International Limited
United States 336 Strand
London WC2R 1HB England
United Kingdom
</TABLE>
Page 17 of 71 pages
<PAGE>
EXHIBIT B
EXECUTIVE OFFICERS AND DIRECTORS OF CITIGROUP INC.
Set forth below are the names, titles, business addresses, principal
occupations and citizenship of the Executive Officers and Directors of
Citigroup.
<TABLE>
<CAPTION>
NAME, TITLE AND CITIZENSHIP PRINCIPAL OCCUPATION AND BUSINESS ADDRESS
<S> <C>
C. Michael Armstrong Chairman & Chief Executive Officer
Director AT&T Corporation
United States 295 North Maple Avenue, Room 4353L
Basking Ridge, NJ 07920
Alain J. P. Belda President & Chief Executive Officer
Director Alcoa Inc.
Brazil 201 Isabella Street, Floor 6J12
Pittsburgh, PA 15212-5858
Kenneth J. Bialkin Partner
Director Skadden, Arps, Slate, Meagher & Flom
United States 919 Third Avenue
New York, NY 10022
Kenneth T. Derr Chairman & Chief Executive Officer
Director Chevron Corporation
United States 575 Market Street, 40th fl
San Francisco, CA 94105
John M. Deutch Institute Professor
Director Massachusetts Institute of Technology
United States 77 Massachusetts Avenue, Room 6-208
Cambridge, MA 02139
The Honorable Gerald R. Ford Former President of the United States
Honorary Director 40365 Sand Dune Road
United States Rancho Mirage, CA 92270
Ann Dibble Jordan Consultant
Director 2940 Benton Place, N.W.
United States Washington, DC 20008-2718
Reuben Mark Chairman and Chief Executive Officer
Director Colgate-Palmolive Company
United States 300 Park Avenue
</TABLE>
Page 18 of 71 pages
<PAGE>
New York, NY 10022-7499
<TABLE>
<CAPTION>
NAME, TITLE AND CITIZENSHIP PRINCIPAL OCCUPATION AND BUSINESS ADDRESS
<S> <C>
Michael T. Masin Vice Chairman and President - International
Director GTE Corporation
United States 1255 Corporate Drive
Mail Code SVC06C30
Irving, TX 75038
Dudley C. Mecum Managing Director
Director Capricorn Management
United States 30 East Elm Street
Greenwich, CT 06830
Richard D. Parsons President
Director Time Warner Inc.
United States 75 Rockefeller Plaza, 29th fl
New York, NY 10019
Andrall E. Pearson Chairman & Chief Executive Officer
Director TRICON Global Restaurants, Inc.
United States 660 Steamboat Road
Greenwich, CT 06830
Robert E. Rubin Member of the Office of the Chairman
Director and Citigroup Inc.
Executive Officer 153 East 53rd Street, 4th fl
United States New York, NY 10043
Franklin A. Thomas Former President
Director The Ford Foundation
United States 595 Madison Avenue, 33rd fl
New York, NY 10022
Sanford I. Weill Chairman and Co-Chief Executive Officer
Director and Citigroup Inc.
Executive Officer 153 East 53rd Street, 4th fl
United States New York, NY 10043
Edgar S. Woolard, Jr. Former Chairman & Chief Executive Officer
Director E.I. du Pont de Nemours & Company
United States 1007 Market Street
Wilmington, DE 19898
</TABLE>
Page 19 of 71 pages
<PAGE>
<TABLE>
<CAPTION>
NAME, TITLE AND CITIZENSHIP PRINCIPAL OCCUPATION AND BUSINESS ADDRESS
<S> <C>
Arthur Zankel General Partner
Director High Rise Partners, LP
United States 535 Madison Avenue
New York, NY 10022
Michael A. Carpenter Co-Chief Executive Officer
Executive Officer Global Corporate and Investment Bank
United States Citigroup Inc.
399 Park Avenue, 2nd fl
New York, NY 10043
Paul J. Collins Vice Chairman
Executive Officer Citigroup Inc.
United States 153 East 53rd St., 4th fl
New York, NY 10043
Michael D'Ambrose Senior Human Resources Officer
Executive Officer Citigroup Inc.
United States 153 East 53rd St., 4th fl
New York, NY 10043
Jay S. Fishman President & CEO
Executive Officer Travelers Property Casualty Corp.
United States One Tower Square, 8GS
Hartford, CT 06183
Edward D. Horowitz Citigroup Inc.
Executive Officer 153 East 53rd St., 4th fl
United States New York, NY 10043
Thomas Wade Jones Co-Chairman & CEO
Executive Officer SSB Asset Management Group
United States 153 East 53rd St., 4th fl
New York, NY 10043
Robert I. Lipp Chairman & CEO
Executive Officer Global Consumer Business
United States Citigroup Inc.
153 East 53rd St., 4th fl
New York, NY 10043
</TABLE>
Page 20 of 71 pages
<PAGE>
<TABLE>
<CAPTION>
NAME, TITLE AND CITIZENSHIP PRINCIPAL OCCUPATION AND BUSINESS ADDRESS
<S> <C>
Deryck C. Maughan Vice Chairman
Executive Officer Citigroup Inc.
United Kingdom 153 East 53rd St., 4th fl
New York, NY 10043
Victor J. Menezes Co-Chief Executive Officer
Executive Officer Global Corporate and Investment Bank
India Citigroup Inc.
399 Park Avenue, 2nd fl
New York, NY 10043
Charles O. Prince, III General Counsel/Corporate Secretary
Executive Officer Citigroup Inc.
United States 153 East 53rd St., 4th fl
New York, NY 10043
William R. Rhodes Vice Chairman
Executive Officer Citigroup Inc.
United States 399 Park Avenue, 2nd fl
New York, NY 10043
Petros Sabatacakis Senior Risk Officer
Executive Officer Citigroup Inc.
United States 153 East 53rd Street
New York, NY 10043
Todd S. Thomson Chief Financial Officer
Executive Officer Citigroup Inc.
United States 153 East 53rd St., 4th fl
New York, NY 10043
Marc P. Weill Head of Citigroup Investments
Executive Officer Citigroup Inc.
United States 153 East 53rd St., 4th fl
New York, NY 10043
Robert B. Willumstad Chairman
Executive Officer CitiFinancial Credit Company
United States 153 East 53rd St., 5th fl
New York, NY 10043
</TABLE>
Page 21 of 71 pages
<PAGE>
EXHIBIT C
CONSENT TO JOINT FILING OF SCHEDULE 13D
Pursuant to Rule 13d-1(k)(1)(iii) of Regulation D of the Rules and
Regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, the undersigned agree that the attached
Schedule 13D is, and any future amendments thereto may be, filed on behalf
of each of us.
Dated: July 17, 2000
SALOMON BROTHERS INTERNATIONAL LIMITED
By: /s/ Royce Miller
-----------------------------
Name: Royce Miller
Title: Joint Secretary
SALOMON BROTHERS EUROPE LIMITED
By: /s/ Royce Miller
-----------------------------
Name: Royce Miller
Title: Joint Secretary
SALOMON INTERNATIONAL LLC
By: /s/ Royce Miller
-----------------------------
Name: Royce Miller
Title: Secretary
SALOMON BROTHERS HOLDING COMPANY INC
By: /s/ Howard Darmstadter
-----------------------------
Name: Howard Darmstadter
Title: Assistant Secretary
Page 22 of 71 pages
<PAGE>
SALOMON SMITH BARNEY HOLDINGS INC.
By: /s/ Howard Darmstadter
------------------------------
Name: Howard Darmstadter
Title: Assistant Secretary
CITIGROUP INC.
By: /s/ Joseph B. Wollard
------------------------------
Name: Joseph B. Wollard
Title: Assistant Secretary
Page 23 of 71 pages
<PAGE>
EXHIBIT G
COUNTERPART TO DISPOSITION AGREEMENT
Page 24 of 71 pages
<PAGE>
EXECUTION COPY
COUNTERPART TO DISPOSITION AGREEMENT
The undersigned hereby agrees to be bound, severally and not
jointly with any other Financial Institution, effective as of such time as this
Counterpart Signature Page is executed, as a "Financial Institution" to the
preamble, the recitals, Article I, Section 2.03, Section 4.01, Section 4.02,
Article VII, Article VIII and Annex I (the "FINANCIAL INSTITUTION PROVISIONS")
of the Disposition Agreement dated as of May 17, 2000 and as amended on June 5,
2000, among CROWN CASTLE INTERNATIONAL CORP., a Delaware corporation, CROWN
CASTLE UK HOLDINGS LIMITED, a company incorporated under the laws of England and
Wales, which was formerly known as Castle Transmission Services (Holdings) Ltd,
FRANCE TELECOM S.A., a company incorporated under the laws of France ("FT"),
TELEDIFFUSION DE FRANCE INTERNATIONAL S.A., a wholly owned indirect subsidiary
of FT and a company incorporated in France, and TRANSMISSION FUTURE NETWORKS
B.V., a wholly owned indirect subsidiary of FT and a company organized under the
laws of the Netherlands, with the rights of a Financial Institution party set
forth therein.
Salomon Brothers International
Limited
Dated: July 5, 2000 By: /s/ Thomas Petrone
------------- --------------------------
(signature)
Thomas Petrone
------------------------------
(name and title)
New York, NY 10013
------------------------------
(city/state/zip code)
212-723-7288
------------------------------
(phone)
212-723-8750
------------------------------
(facsimile)
Page 25 of 71 pages
<PAGE>
Acknowledged as of the date set forth above:
CROWN CASTLE INTERNATIONAL CORP.,
by /s/ E. Blake Hawk
----------------------------
Name: E. Blake Hawk
Title: Executive Vice President
FRANCE TELECOM, S.A.,
by /s/ Eric Bouvier
-----------------------------
Name: Eric Bouvier
Title: Senior Vice President
Page 26 of 71 pages
<PAGE>
EXHIBIT H
PURCHASE AGREEMENT
Page 27 of 71 pages
<PAGE>
EXECUTION VERSION 2
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of July 5, 2000 (this
"AGREEMENT"), among Transmission Future Networks B.V., a company incorporated
under the laws of the Netherlands ("COUNTERPARTY"), France Telecom S.A., a
company incorporated under the laws of France ("FT"), and Salomon Brothers
International Limited, a company incorporated under the laws of England and
Wales ("SALOMON").
WHEREAS, Counterparty has agreed, pursuant to the Disposition
Agreement (as defined below), to sell certain shares of the common stock, par
value $0.01 per share (the "COMMON SHARES"), of Crown Castle International
Corp., a Delaware corporation ("CROWN CASTLE"), to one or more financial
institutions; and
WHEREAS, Counterparty wishes to sell such securities to
Salomon, and Salomon is willing to purchase such securities, in each case on the
terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. DEFINITIONS; INTERPRETATION.
(a) As used herein, the following terms shall have the
indicated meanings:
"AFFILIATE" means, with respect to a person, a person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such person. For this purpose,
"control" means, with respect to a person, the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities, by contract or
otherwise.
"AGGREGATE PURCHASE PRICE" means $504,835,776.
"BUSINESS DAY" means a day (other than a Saturday or a Sunday)
on which commercial banks generally are open for business in London and New
York.
"COMMON SHARES" has the meaning set forth in the first Whereas
clause.
"CROWN CASTLE" has the meaning set forth in the first Whereas
clause.
"DISPOSITION AGREEMENT" means the Disposition Agreement, dated
as of May 17, 2000, between Crown Castle, Crown Castle UK Holdings Limited, FT,
Telediffusion de France International S.A., Counterparty, and the financial
institutions party thereto, as amended and supplemented on June 5, 2000 and from
time to time.
"ENCUMBRANCE" means any pledge, hypothecation, assignment,
lien, restriction (other than a Transfer Restriction), charge, claim, security
interest, option, preference, priority or other preferential arrangement of any
kind or nature whatsoever.
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934,
as amended.
Page 28 of 71 pages
<PAGE>
"FT GROUP" means FT and its Affiliates (including, without
limitation, Counterparty).
"GOVERNMENTAL ENTITY" means any U.S., state or local
government or any court, tribunal, administrative agency or commission or other
governmental or regulatory authority or agency, domestic, foreign or
supranational.
"LETTER OF UNDERTAKINGS" means the letter agreement, published
May 10, 2000, between FT and the United Kingdom Secretary of State for Trade and
Industry, with respect to the disposal of FT's interests in Crown Castle and its
Affiliates.
"PERMITTED LEGENDS" has the meaning set forth in Section 3(v).
"PERMITTED TRANSFER RESTRICTIONS" has the meaning set forth in
Section 3(v).
"PURCHASED SECURITIES" means the Common Shares specified on
Schedule I hereto.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as
amended.
"SWAP AGREEMENT" means the Confirmation for Equity Swap
Transaction between Counterparty and Salomon, dated as of July 5, 2000, as
amended and supplemented from time to time.
"TRANSFER RESTRICTION" means, with respect to any security,
any condition to or restriction on the ability of the holder thereof to sell,
assign or otherwise transfer such security or to enforce the provisions thereof
or of any document related thereto, whether set forth in such security itself or
in any document related thereto or arising by operation of law, including,
without limitation, such conditions or restrictions arising under U.S. federal
or state securities laws or securities laws of other jurisdictions.
"SETTLEMENT DATE" means the date hereof.
"$" means the lawful currency of the United States of America.
(b) The terms "herein," "hereof" and "hereunder" and other
words of similar import appearing in this Agreement refer to this Agreement as a
whole and not to any particular section, paragraph or subsection. References in
this Agreement to a section, paragraph or subsection shall be to a section,
paragraph or subsection, as the case may be, of this Agreement unless otherwise
indicated. The section titles and headings in this Agreement appear as a matter
of convenience only and shall not affect the interpretation of this Agreement.
Section 2. PURCHASE AND SALE.
Subject to the terms and conditions of this Agreement,
Counterparty hereby agrees to sell, and Salomon hereby agrees to purchase, the
Purchased Securities on the Settlement Date for a purchase price equal to the
Aggregate Purchase Price.
Section 3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF COUNTERPARTY.
Each of FT and Counterparty hereby represents, warrants and
agrees as of the Settlement Date that:
Page 29 of 71 pages
<PAGE>
(i) It has been duly organized and is validly
existing as a company organized under the laws of its jurisdiction of
incorporation, with full power and authority to conduct its business
and perform its obligations under this Agreement. Counterparty is
wholly owned, directly or indirectly, by FT.
(ii) The execution and delivery of this Agreement
have been duly authorized by all necessary corporate or other action by
it, and this Agreement has been duly executed and delivered by it and
constitutes its valid, binding and enforceable agreement, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general principles of equity.
(iii) Other than filings required under applicable
securities laws and the consent of the United Kingdom Office of Fair
Trading, neither the execution, delivery or performance of this
Agreement by it nor the consummation by it of the transactions
contemplated hereby will (i) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity or any
other person, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default under,
or give rise to any right of termination, amendment, cancellation or
acceleration under, or result in the creation of any Encumbrance upon
any of its properties or assets under, any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture, lease,
contract, agreement or other instrument or obligation to which it is a
party or by which it or any of its properties or assets may be bound
the result of which would have a material adverse effect on the
business, operations or financial condition of the FT Group taken as a
whole or its ability to fulfill its obligations under, or consummate
the transactions contemplated by, this Agreement or (iii) violate any
judgment, order, writ, preliminary or permanent injunction or decree or
any statute, law, ordinance, rule or regulation of any Governmental
Entity applicable to it or any of its properties or assets the
violation of which would have a material adverse effect on the
business, operations or financial condition of the FT Group taken as a
whole or its ability to fulfill its obligations under, or consummate
the transactions contemplated by, this Agreement.
(iv) Neither it nor any of its Affiliates is (A) an
"affiliate" of Crown Castle within the meaning of the Securities Act or
(B) an officer, director or, individually or in the aggregate, a
beneficial owner of more than 10% of any class of equity securities of
Crown Castle required to file reports pursuant to Section 16(a) of the
Exchange Act.
(v) (A) Counterparty is the record and beneficial
owner of the Purchased Securities, free and clear of any Encumbrances,
(B) the Purchased Securities are not subject to any Transfer
Restrictions, other than the Transfer Restrictions described in the
legends provided for in Section 4.02(g) of the Disposition Agreement
(the "PERMITTED TRANSFER RESTRICTIONS", and such legends, the
"PERMITTED LEGENDS"), and (C) upon the transfer of the Purchased
Securities to Salomon as provided herein, Salomon will be the record
owner of the Purchased Securities, free and clear of any Encumbrances
or Transfer Restrictions, other than the Permitted Transfer
Restrictions.
(vi) Neither it nor any of its Affiliates is in
possession of any material nonpublic information concerning Crown
Castle or its Affiliates.
Page 30 of 71 pages
<PAGE>
(vii) Salomon's holding period(s) for the Common
Shares purchased hereunder, determined in accordance with Rule 144
under the Securities Act, commenced on the dates specified in Schedule
I.
(viii) It is in compliance with all of its
obligations under the Disposition Agreement, the Disposition Agreement
(including, without limitation, the registration rights provided
thereunder) is in full force and effect, and upon the transfer of the
Purchased Securities to Salomon hereunder and Salomon's executing a
counterpart to the Disposition Agreement, Salomon shall be entitled to
the benefit of the provisions of the Disposition Agreement applicable
to a "Financial Institution" (as defined in the Disposition Agreement)
with respect to the Purchased Securities.
(ix) No part of the amounts received by Counterparty
under this Agreement or the Swap Agreement will be used for the
purpose, whether immediate, incidental or ultimate, of purchasing or
carrying margin stock (as such terms are used in Regulations U or X of
the Board of Governors of the Federal Reserve System).
(x) It has sufficient knowledge and expertise to
enter into this Agreement and is entering into this Agreement in
reliance upon such tax, accounting, regulatory, legal, and financial
advice as it deems necessary and not upon any view expressed by Salomon
or Salomon's affiliates. It has made its own independent decision to
enter into this Agreement, is acting at arm's length and is not relying
on any communication (written or oral) of Salomon or Salomon's
affiliates as a recommendation or investment advice regarding this
Agreement. It has the capability to evaluate and understand (on its own
behalf or through independent professional advice), and does
understand, the terms, conditions and risks of this Agreement and is
willing to accept those terms and conditions and to assume (financially
and otherwise) those risks. Counterparty acknowledges and agrees that
neither Salomon nor any of Salomon's affiliates is acting as a
fiduciary or advisor to it in connection with this Agreement.
(xi) It has provided Salomon with copies of all
information or documents relating to the Purchased Securities
reasonably requested by Salomon.
Section 4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF SALOMON.
Salomon hereby represents, warrants and agrees as of the
Settlement Date that:
(i) Salomon has been duly organized and is validly
existing as a company incorporated under the laws of England and Wales,
with full power and authority to conduct its business and perform its
obligations under this Agreement.
(ii) The execution and delivery of this Agreement
have been duly authorized by all necessary corporate or other action by
Salomon, and this Agreement has been duly executed and delivered by
Salomon and constitutes the valid, binding and enforceable agreement of
Salomon, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of
equity.
(iii) Salomon is an "accredited investor" within the
meaning of Regulation D under the Securities Act and a "qualified
institutional buyer" within the meaning of Rule 144A under the
Securities Act. Salomon is acquiring the Purchased Securities for its
own account (or
Page 31 of 71 pages
<PAGE>
the account of an affiliate) and not with a view to the distribution
thereof within the meaning of the Securities Act, it being understood
that the foregoing representation shall not limit the right of Salomon
to resell the Purchased Securities as contemplated in the Swap
Agreement. Salomon acknowledges that the Purchased Securities cannot be
resold (A) unless registered under the Securities Act or in a
transaction exempt from or not subject to the registration requirements
of the Securities Act and (B) in compliance with the applicable
provisions of the Disposition Agreement.
Section 5. CONDITIONS PRECEDENT.
(a) The obligations of Salomon hereunder are subject to the
satisfaction or waiver of the following conditions precedent:
(i) The representations and warranties of FT and
Counterparty hereunder shall be true and correct as of the Settlement
Date.
(ii) Each of FT and Counterparty shall have complied
with all of its covenants and agreements hereunder to be performed by
it on or prior to the Settlement Date.
(iii) FT and Counterparty shall have obtained all
required approvals of the United Kingdom Director General of Fair
Trading under the terms of the Letter of Undertakings for the sale of
the Purchased Securities to Salomon hereunder and the entry of
Counterparty and Salomon into the Swap Agreement.
(iv) Counterparty shall have executed and delivered
the Swap Agreement.
(v) Crown Castle shall have delivered to Salomon a
certificate satisfactory to Salomon stating the number of outstanding
Common Shares as of the Settlement Date, and the number of Purchased
Securities shall represent less than 10% of such number.
(vi) FT and Counterparty shall have delivered to
Salomon (A) an opinion of counsel satisfactory to Salomon to the effect
that Counterparty is not, as of the Settlement Date, an "affiliate" of
Crown Castle within the meaning of the Securities Act and covering such
other matters concerning this Agreement and the Swap Agreement as
Salomon shall reasonably request, and (B) such other certificates and
documents as Salomon shall have reasonably requested.
(b) The obligations of Counterparty hereunder are subject to
the satisfaction or waiver of the following conditions precedent:
(i) The representations and warranties of Salomon
hereunder shall be true and correct as of the Settlement Date.
(ii) Salomon shall have complied with all of
Salomon's covenants and agreements hereunder to be performed by Salomon
on or prior to the Settlement Date.
(iii) Salomon shall have executed a counterpart to
the Disposition Agreement in its capacity as a Financial Institution,
as provided under the terms of the Disposition Agreement.
Page 32 of 71 pages
<PAGE>
(iv) Salomon shall have executed and delivered the
Swap Agreement.
Section 6. SETTLEMENT.
(a) Subject to Section 5 of this Agreement, no later than 10
a.m., New York time, (or such other time agreed by the parties) on the
Settlement Date, Counterparty shall deliver the Purchased Securities to Salomon
and Salomon shall pay to Counterparty the Aggregate Purchase Price, as further
provided in subsections (b) and (c) below.
(b) Counterparty shall deliver or cause the delivery to or at
the direction of Salomon of certificates representing the Purchased Securities
registered in such names as Salomon shall request, with all necessary stock
issuance or transfer tax stamps affixed thereto, free and clear of all
Encumbrances and Transfer Restrictions (other than the Permitted Transfer
Restrictions) and without any legends thereon (other than the Permitted
Legends). Counterparty shall use reasonable efforts to cause the transfer of the
Purchased Securities to be registered on the books of Crown Castle and any
applicable transfer agent.
(c) The Aggregate Purchase Price shall be paid by wire
transfer of immediately available funds to the account of Counterparty
designated in writing to Salomon prior to the Settlement Date; PROVIDED that
Salomon shall be entitled to delay payment of the Aggregate Purchase Price until
such time as Salomon or its designee shall have received one or more
certificates, registered in its name, representing all the Purchased Securities.
Section 7. INDEMNIFICATION; CONTRIBUTION; EXPENSES.
(a) Counterparty and FT agree, jointly and severally (each, in
such capacity, an "INDEMNIFYING PARTY"), to indemnify and hold harmless Salomon,
its affiliates, their respective directors, officers and employees and each
person who controls Salomon or its affiliates within the meaning of either the
Securities Act or the Exchange Act (each, an "INDEMNIFIED PARTY") against, and
each Indemnifying Party agrees that no Indemnified Party shall have any
liability to the Indemnifying Parties or any of their affiliates, officers,
directors, or employees for, any liability (whether direct or indirect, in
contract, tort or otherwise) for, any losses, claims, damages, liabilities or
expenses, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions, claims, investigations or
proceedings in respect thereof, whether commenced or threatened) (A) arise out
of or relate to the breach by an Indemnifying Party of any provision hereunder
or the failure of any representation by an Indemnifying Party to have been true
and correct when made, or from an allegation by a third party (other than an
Indemnified Party) that an Indemnifying Party acted or failed to act in a manner
that, as alleged, would have constituted such a breach or failure, (B) arise out
of or relate to actions or failures to act by an Indemnified Party with the
consent of, at the direction of or in reliance on an Indemnifying Party, or (C)
otherwise arise out of or relate to this Agreement or the purchase and sale of
the Purchased Securities hereunder; PROVIDED that clause (A) shall not apply to
the extent, but only to the extent, that a false allegation regarding the breach
or failure by an Indemnifying Party resulted primarily from the gross negligence
or willful misconduct of an Indemnified Party; PROVIDED, FURTHER, that clauses
(B) and (C) shall not apply to the extent, but only to the extent, that any
losses, claims, damages, liabilities or expenses of an Indemnified Party have
resulted from the gross negligence or willful misconduct of an Indemnified
Party. Each Indemnifying Party jointly and severally agrees, promptly on demand,
to reimburse each such Indemnified Party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such
Page 33 of 71 pages
<PAGE>
loss, claim, damage, liability, expense or action. This indemnity agreement will
be in addition to any liability which the Indemnifying Parties may otherwise
have and will survive the delivery of the Purchased Securities and the
termination of this Agreement.
(b) Promptly after receipt by an Indemnified Party of notice
of the commencement of any action, such Indemnified Party will, if a claim in
respect thereof is to be made against an Indemnifying Party under subsection (a)
above, notify such Indemnifying Party in writing of the commencement thereof,
but the omission so to notify an Indemnifying Party will not relieve such
Indemnifying Party from any liability which it may have to any Indemnified Party
otherwise than under subsection (a) or, in respect of subsection (a), to the
extent that such Indemnifying Party was not materially prejudiced by such
failure to notify. In case any such action is brought against any Indemnified
Party, and it notifies an Indemnifying Party of the commencement thereof, such
Indemnifying Party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the Indemnified Party promptly
after receiving the aforesaid notice from such Indemnified Party to assume the
defense thereof, with counsel satisfactory to such Indemnified Party; PROVIDED
that if the defendants in any such action include both the Indemnified Party and
an Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be legal defenses available to it and/or other Indemnified
Parties which are different from or additional to those available to such
Indemnifying Party, the Indemnified Party or Parties shall have the right to
select separate counsel to represent such Indemnified Party or parties. Upon
receipt of notice from an Indemnifying Party to such Indemnified Party of its
election so to assume the defense of such action and approval by the Indemnified
Party of counsel, such Indemnifying Party will not be liable to such Indemnified
Party under subsection (a) above for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof unless
(A) the Indemnified Party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the Indemnifying Parties shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel), representing the
Indemnified Parties who are parties to such action), (B) an Indemnifying Party
shall not have employed counsel satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after notice of
commencement of the action or (C) an Indemnifying Party has authorized the
employment of counsel for the Indemnified Party at the expense of such
Indemnifying Party; and except that, if clause (A) or (C) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (A)
or (C). An 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 shall be a final judgment for the plaintiff, the
Indemnifying Parties agree, jointly and severally, to indemnify the Indemnified
Party from and against any loss or liability by reason of such settlement or
judgment. An Indemnifying Party shall not, 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 arising from such proceeding.
(c) If for any reason the indemnification pursuant to
subsection (a) above is unavailable to any Indemnified Party or insufficient to
hold it harmless, then the Indemnifying Parties shall contribute, jointly and
severally, to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative benefits received by Counterparty, on the
one hand, and such Indemnified Party, on the other, pursuant to this Agreement
or any related transactions or, to the extent such allocation is unavailable for
any reason, in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Indemnifying Parties and
such Indemnified Party with respect to such losses, claims,
Page 34 of 71 pages
<PAGE>
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by Counterparty, on the one hand,
and such Indemnified Party, on the other, shall be in the same proportion as the
Aggregate Purchase Price bears to the market value of the Swap Agreement to
Salomon on the date hereof (as reasonably determined by Salomon).
(d) FT and Counterparty agree, jointly and severally, (i) to
bear all transfer and issuance taxes, if any, imposed on the purchase and sale
of the Purchased Securities hereunder and (ii) to reimburse, promptly upon
demand, the reasonable expenses of Salomon and its affiliates incurred in the
negotiation and documentation of this Agreement and the Swap Agreement
(including, without limitation, the reasonable fees, expenses and disbursements
of Salomon's and such affiliates' counsel).
Section 8. TAX MATTERS.
(a) Counterparty, FT and Salomon each agree to treat the
transactions contemplated by this Agreement and the Swap Agreement for U.S.
federal, state and local income tax purposes only as a single integrated
transaction (the "TRANSACTION") constituting a loan by Salomon to Counterparty
secured by the Purchased Securities (but for all other purposes as a sale and an
equity swap and not, for the avoidance of doubt, as a transaction by which
beneficial ownership of the Purchased Securities shall rest in Counterparty or
FT). Counterparty, FT and Salomon each agree to report the Transaction as a loan
on any U.S. federal, state and local tax return or filing it may submit, and
agree not to take any position on such return or filing, or take any other U.S.
federal, state or local tax reporting position, inconsistent with the treatment
of the Transaction as a loan.
(b) Counterparty and FT agree, jointly and severally, to
satisfy any and all tax payment obligations that may arise in connection with
the sale of the Purchased Securities and will make all of the required tax
payments directly to the relevant tax authorities.
(c) Counterparty and FT agree, jointly and severally, to
indemnify and save Salomon harmless from any and all taxes, however denominated,
including any interest or penalties that may become payable in respect thereof,
imposed on Salomon, and any costs or expenses that Salomon may incur, in respect
of U.S. withholding taxes due on any payments from Salomon to Counterparty under
this Agreement.
(d) Upon receipt by Salomon of notice of any claim by or
dispute with the U.S. taxing authority relating to taxes covered by this Section
8, Salomon will notify Counterparty of such notice or claim promptly but in any
event within fifteen (15) days; PROVIDED, HOWEVER, that Salomon's failure to
notify Counterparty of such notice or claim shall not relieve Counterparty or FT
from any liability under this Section 8 except to the extent Counterparty or FT,
as the case may be, has been materially prejudiced by such failure.
(e) Salomon will have the right to determine, in its sole
discretion but in consultation with Counterparty, whether to contest any claim
for which it would be indemnified pursuant to this Section 8; PROVIDED that
Salomon will not unreasonably reject a request by Counterparty to contest such
claim or dispute. Salomon retains the right to conduct in its sole discretion
the defense of any claim or dispute for which it would be indemnified pursuant
to this Section 8, although Salomon hereby agrees to consult with Counterparty
in connection therewith while making Salomon's best efforts to take into account
both the interest of Citigroup Inc. and the interest of Counterparty in such
contest (although, as described above, any decisions relating to the conduct of
the defense will be made by Salomon in its sole discretion). Salomon and
Counterparty hereby stipulate
Page 35 of 71 pages
<PAGE>
that a decision not to contest a claim would be unreasonable if the specific
issue to be contested is whether the Common Shares are "regularly traded" within
the meaning of Regulation Section 1.897- 9T(d), and, Salomon will consult with
Counterparty in all material aspects of the planning of the defense strategy and
in all material decisions relating to the conduct of the defense while making
Salomon's best efforts to take into account both the interest of Citigroup Inc.
and the interest of Counterparty in such contest (although, as described above,
any decisions relating to the conduct of the defense will be made by Salomon in
its sole discretion).
(f) Upon a reasonable request by the other, Salomon, on the
one hand, and Counterparty and FT, on the other hand, will make available to the
other and to any U.S. federal tax authority, all information, records or
documents relating to any taxes covered by this Section 8. Each of Salomon,
Counterparty and FT will preserve such information, records or documents until
the expiration of any applicable statute of limitations or extensions thereof.
(g) Notwithstanding anything to the contrary in this
Agreement, all obligations under this Section 8 shall survive and continue until
30 days following the expiration of the applicable statute of limitations or
extensions thereof.
Section 9. NOTICES.
All communications hereunder will be in writing and effective
only upon receipt and, if sent to Salomon, will be mailed, delivered or
telefaxed to Salomon Brothers International Limited, Victoria Plaza, 111
Buckingham Palace Road, London SW1W 0SB, England, Attention: Jason Shrednick,
Facsimile: 44-20-7721-4363; if sent to Counterparty, will be mailed, delivered
or telefaxed to Transmission Future Networks B.V., Strawinskylaan 3501, 1077ZX
Amsterdam, Netherlands, Attention: Gregory Richardson, Facsimile:
31-2-07-10-50-01, with a copy to FT; and if sent to FT, will be mailed,
delivered or telefaxed to France Telecom, Direction Juridique et Fiscale, 6
place d'Alleray, 75505 Paris Cedex 15, France, Attention: Jean-Philippe Roulet,
Facsimile: 33-1-44-44-03-67, with a copy to France Telecom, Direction des
Operations de Fusions et Acquisitions, 6 place d'Alleray, 75505 Paris Cedex 15,
France, Attention: Olivier Froissart, Facsimile: 33-1-44-44-11-61.
Section 10. MISCELLANEOUS.
(a) COUNTERPARTS. This Agreement may be executed in any number
of counterparts (including by facsimile transmission), each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.
(b) APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
(c) SUBMISSION TO JURISDICTION. The parties hereby irrevocably
submit to the exclusive jurisdiction of the courts of the State of New York in
the Borough of Manhattan in New York City and the United States District Court
for the Southern District of New York in connection with all matters relating
hereto and waive any objection to the laying of venue in, and any claim of
inconvenient forum with respect to, these courts.
(D) WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES
(ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
Page 36 of 71 pages
<PAGE>
ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SALOMON OR ITS
AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.
(e) WAIVER OF IMMUNITIES. Each party irrevocably waives, to
the fullest extent permitted by applicable law, with respect to itself and its
revenues and assets (irrespective of their use or intended use), all immunity on
the grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for specific
performance or for recovery of property, (iv) attachment of its assets (whether
before or after judgment) and (v) execution or enforcement of any judgment to
which it or its revenues or assets might otherwise be entitled in any action,
suit or proceedings relating to this Agreement ("PROCEEDINGS") in the courts of
any jurisdiction and irrevocably agrees, to the extent permitted by applicable
law, that it will not claim any such immunity in any Proceedings; PROVIDED that
such waiver shall not apply to the assets of FT that are allocated to its public
service mission, in accordance with the provisions of Article 23-1 of Act No.
90-568, dated July 2, 1990, as amended by Act No. 96-660, dated July 26, 1996,
to the extent required by such provisions.
(f) SERVICE OF PROCESS. Each of Counterparty and FT shall
irrevocably appoint and maintain so long as it has any obligation under this
Agreement an agent in New York City to receive, for it and on its behalf,
service of process in any Proceedings, and shall promptly notify Salomon of the
name and address of such agent and of any change thereof. In addition, each of
Counterparty and FT consents to service of process given in the manner provided
for notices in Section 9. Nothing in this Agreement will affect the right of
Salomon to serve process in any other manner permitted by law.
(g) ENTIRE AGREEMENT. This Agreement together with the Swap
Agreement, the Disposition Agreement and the Guaranty, dated as of the date
hereof, by FT in favor of Salomon, constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and supersede all oral
communication and prior writings with respect thereto.
(h) SEVERABILITY. If any provision of this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the other provisions hereof shall not be affected thereby.
(i) AMENDMENT. No amendment or modification in respect of this
Agreement will be effective unless in writing and executed by each of the
parties.
(j) WAIVERS. No waiver of any provision hereunder shall be
effective unless in writing and signed by the party against whom it is to be
effective. No failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
provided herein shall be cumulative and not exclusive of any rights and remedies
provided by law.
(k) SPECIFIC PERFORMANCE. The parties acknowledge that money
damages will not be a sufficient remedy for breach of this Agreement and that
the parties hereto may obtain specific performance or other injunctive relief,
without the necessity of posting a bond or security therefor.
Page 37 of 71 pages
<PAGE>
(l) ASSIGNMENTS. This Agreement shall be binding on and inure
to the benefit of the parties and their successors and permitted assigns.
Neither party may assign or transfer its rights or obligations hereunder without
the prior written consent of the other; PROVIDED that Salomon may assign its
right to receive delivery of the Purchased Securities to one or more of its
Affiliates.
Page 38 of 71 pages
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
TRANSMISSION FUTURE NETWORKS B.V.
By: /s/ G.J. van der Ploeg
----------------------------
Name: G.J. van der Ploeg
Title: Director
FRANCE TELECOM S.A.
By: /s/ Eric Bouvier
----------------------------
Name: Eric Bouvier
Title: Senior Vice President
SALOMON BROTHERS INTERNATIONAL LIMITED
By: /s/ Thomas Petrone
----------------------------
Name: Thomas Petrone
Title: Managing Director
Page 39 of 71 pages
<PAGE>
SCHEDULE I
Purchased Securities
<TABLE>
<CAPTION>
------------------------------------- ----------------------------------- -----------------------------------
Date of Commencement of HOLDING
Security Number Period
------------------------------------- ----------------------------------- -----------------------------------
<S> <C> <C>
Common Shares 270,036 shares August 21, 1998
------------------------------------- ----------------------------------- -----------------------------------
Common Shares 17,443,500 shares Settlement Date
------------------------------------- ----------------------------------- -----------------------------------
</TABLE>
Page 40 of 71 Pages
<PAGE>
EXHIBIT I
CONFIRMATION FOR EQUITY SWAP TRANSACTION
Page 41 of 71 pages
<PAGE>
EXECUTION VERSION 3
CONFIRMATION FOR EQUITY SWAP TRANSACTION
AMONG TRANSMISSION FUTURE NETWORKS B.V. , FRANCE TELECOM S.A.
AND SALOMON BROTHERS INTERNATIONAL LIMITED
The purpose of this confirmation, dated as of July 5, 2000
(this "CONFIRMATION"), is to set forth the terms and conditions of the equity
swap transaction (the "TRANSACTION") that Transmission Future Networks B.V.
("COUNTERPARTY") and France Telecom S.A. ("FT", and FT together with
Counterparty, the "FT Parties") entered into with Salomon Brothers International
Limited ("SALOMON") on the Trade Date specified below. This Confirmation
evidences a complete binding agreement between the FT Parties and Salomon as to
the terms of the Transaction to which this Confirmation relates.
This Confirmation will be governed by and construed in
accordance with the laws of the State of New York (without reference to choice
of law doctrine). The parties hereby irrevocably submit to the exclusive
jurisdiction of the courts of the State of New York in the Borough of Manhattan
in New York City and the United States District Court for the Southern District
of New York in connection with all matters relating hereto and waive any
objection to the laying of venue in, and any claim of inconvenient forum with
respect to, these courts.
1. Each party will make each payment specified in this
Confirmation as being payable by it, not later than the due date for value on
that date in the place of the account specified below or otherwise specified in
writing. This Confirmation shall constitute the written agreement between the FT
Parties and Salomon with respect to this Transaction.
2. Each obligation of the FT Parties, on the one hand,
and Salomon, on the other hand, under Sections 5, 6, 7 and 11(h) of this
Confirmation is subject to (i) the condition precedent that no Event of Default
or Potential Event of Default with respect to the other has occurred and is
continuing, (ii) the condition precedent that no Early Termination Date has
occurred or been effectively designated and (iii) each other applicable
condition precedent specified in this Confirmation.
3. The Transaction to which this Confirmation relates is
an equity swap transaction, the terms of which are as follows:
4. CERTAIN DEFINITIONS:
Business Day: means a day (other than a Saturday or a
Sunday) on which commercial banks
generally are open for business in
London and New York.
Calculation Period: means the period from and including each
Floating Amount Payment Date (or, in the
case of the first Calculation Period,
June 5, 2001) to but excluding the next
succeeding Floating Amount Payment Date.
Cash Dividends: means the amount of all cash dividends or
other cash distributions (net of any
withholding taxes that are required to
be withheld from such dividends or
distributions) received by or on behalf
of Salomon with respect to the Covered
Securities with an "ex-dividend" date
after the Trade Date and on or prior to
the final Sale Date (other than
dividends
Page 42 of 71 pages
<PAGE>
resulting in an adjustment pursuant to
Section 8).
Commission: means (i) if the Covered Securities are
sold in an Underwritten Offering (as
defined in Section 7), 3% of the
aggregate offering price of such Covered
Securities; (ii) if the Covered
Securities are sold in a Gradual Market
Distribution or Block Sale, $0.03125 per
Common Share; and (iii) if the Covered
Securities are sold in an Alternative
Distribution, an amount to be agreed by
the parties.
Common Shares: means shares of the common stock of Crown
Castle, par value $0.01 per share.
Covered Securities: means the 17,713,536 Common Shares
constituting "Residual Shares" (as
defined in the Disposition Agreement)
acquired by Salomon pursuant to the
Purchase Agreement.
Credit Event: shall occur if (i) an "FT Credit Event"
(as defined in the Disposition
Agreement) has occurred or (ii) on or
following the Unwind Start Date, (A)
FT's unsecured and unsubordinated
long-term debt rating is at or below
BBB- by Standard and Poor's Ratings
Services (or its successor) and Baa3 by
Moody's Investors Service, Inc. (or its
successor) (or either such rating is
suspended or withdrawn) and (B) the
government of France shall cease to own,
directly or indirectly, at least 51% of
the outstanding equity securities of FT.
Crown Castle: means Crown Castle International Corp.
Disposition Agreement: means the Disposition Agreement, dated
as of May 17, 2000, among Crown Castle,
Crown Castle UK Holdings Limited, FT,
Telediffusion de France International
S.A., Counterparty, and the financial
institutions party thereto, as amended
and supplemented on June 5, 2000 and
from time to time.
Exchange Act: means the U.S. Securities Exchange Act of
1934, as amended.
Floating Amount: means, for any Calculation Period, the
product of (i) the Outstanding Notional
Amount as of the end of such Calculation
Period, (ii) the applicable Floating
Rate for such Calculation Period, (iii)
the number of days in such Calculation
Period and (iv) 1/360.
Floating Amount Payment Date: means March 5, June 5, September 5 and
December 5 in each year commencing with
September 5, 2001 (or, if any such date
is not a Business Day, the next Business
Day).
Floating Rate: means, for any relevant period, LIBOR for
such period plus the Spread.
Initial Notional Amount: means $504,835,776.
Initial Price: means $28.50 per Covered Security.
Page 43 of 71 pages
<PAGE>
LIBOR: means, for any relevant period, the rate
per annum for U.S. dollar LIBOR for the
appropriate designated maturity, as
determined by Salomon, appearing (except
as provided in the following sentence)
on Telerate Page 3750 or any replacement
of that page at 11:00 a.m., London time,
two London business days prior to the
start of such period, PROVIDED that if
the rate does not appear on such page at
that time, it shall be determined as if
USD-LIBOR-Reference Banks (as defined in
the 1991 ISDA Definitions (with
appropriate modifications)) had been
specified for purposes of determining
the rate. If the relevant period is one
week or less, the designated maturity
shall be one week, and the rate shall be
determined as if USD-LIBOR-LIBO (as
defined in the 1991 ISDA Definitions
(with appropriate modifications)) had
been specified for purposes of
determining the rate. LIBOR shall
otherwise be determined by linear
interpolation if the relevant period
does not correspond exactly to a
designated maturity for which rates
appear on Telerate Page 3750 or its
replacement. Except as otherwise
provided herein or unless the parties
otherwise agree, the designated maturity
for determining LIBOR shall be three
months.
Maturity Date: means the "Final Disposition Date" (as
defined in the Disposition Agreement)
(or, if such date is not a Trading Day,
the next Trading Day).
Net Settlement Amount: means, for any Settlement Date,
(i) the Sale Proceeds for such
Settlement Date MINUS (ii) the aggregate
Commission for the sale of all Covered
Securities on the related Sale Date
MINUS (iii) the aggregate Initial Price
for the Covered Securities sold on the
related Sale Date.
Outstanding Notional Amount: means, as of any date, the Initial
Notional Amount MINUS the aggregate
Initial Price of all Covered Securities
sold pursuant to Section 7 with
Settlement Dates on or prior to such
date.
Principal Market: means the NASDAQ National Market
System or the principal national
securities exchange or quotation system
on which the Common Shares may be listed
or otherwise included in the future
should they cease to be quoted on such
exchange or quotation system.
Purchase Agreement: means the Purchase Agreement, dated as of
July 5, 2000, among Counterparty, FT and
Salomon.
Remaining Securities: means, as of any Trading Day, all Covered
Securities other than those Covered
Securities sold or caused to be sold by
Salomon hereunder on or prior to such
Trading Day.
Sale Date: means each date in the Unwind Period (as
defined in Section 7) on which Covered
Securities are sold pursuant to Section
7.
Sale Proceeds: means, for any Settlement Date, the
aggregate proceeds from the sale of
Covered Securities (net of any
withholding taxes that are required to be
Page 44 of 71 pages
<PAGE>
withheld from such sales proceeds)
pursuant to Section 7 on the related Sale
Date.
Securities Act: means the U.S. Securities Act of 1933, as
amended.
Settlement Floating Amount: means, for any Settlement Date, an amount
equal to the product of (i) the
aggregate Initial Price for all Covered
Securities sold on the related Sale
Date, (ii) the Floating Rate for the
Calculation Period in which such
Settlement Date occurs, (iii) the number
of days in the period from and including
the immediately preceding Floating
Amount Payment Date (or, prior to the
first Floating Amount Payment Date, from
and including June 5, 2001) to but
excluding such Settlement Date, and (iv)
1/360.
Settlement Date: means, in respect of a Sale Date, the day
on which Salomon receives the aggregate
proceeds from the sale of Covered
Securities pursuant to Section 7 on such
Sale Date.
Spread: means 0.40% per annum.
Trade Date: means July 5, 2000.
Trading Day: means each day on which the Principal
Market is open for trading.
Unwind Start Date: means June 5, 2001 (or, if such date is
not a Trading Day, the next Trading
Day) or such earlier date as may be
agreed by the parties.
5. FLOATING AMOUNT PAYMENTS:
(a) On the Trade Date, Counterparty shall pay to Salomon
$32,277,072.14.
(b) On the Trade Date, Counterparty shall pay to Salomon a
non-refundable prepaid spread of $1,766,925.22, and on June 5, 2001 (or, if such
date is not a Business Day, the next Business Day), Counterparty shall pay to
Salomon a non-refundable prepaid spread of 0.10% MULTIPLIED BY the Outstanding
Notional Amount on such date.
(c) On each Floating Amount Payment Date, Counterparty shall pay
to Salomon an amount equal to (i) the Floating Amount for the Calculation Period
ending on such Floating Amount Payment Date MINUS (ii) an amount equal to the
amount of all Cash Dividends received in respect of the Covered Securities
during such Calculation Period.
(d) On each Settlement Date, Counterparty shall pay to Salomon the
Settlement Floating Amount for such Settlement Date.
(e) If the parties agree to an Unwind Start Date that is prior to
June 5, 2001, Salomon will refund a portion of the payment made pursuant to
Section 5(a), which portion shall be determined based on (i) the period
remaining until June 5, 2001 as compared to the period from the Trade Date until
June 5, 2001, (ii) the pace at which the Remaining Securities are sold, and
(iii) the number of Remaining
Page 45 of 71 pages
<PAGE>
Securities so sold as compared to the total number of Covered Securities.
Counterparty shall, on the same date as such refund is made, pay to Salomon an
amount equal to the breakage costs incurred by Salomon as a result of such early
Unwind Start Date, calculated in a manner consistent with Section 11(d).
6. SETTLEMENT OBLIGATIONS; DIVIDENDS; FEES:
(a) SETTLEMENT OBLIGATIONS. On each Settlement Date, (i) if the
Net Settlement Amount for such Settlement Date is positive, Salomon shall pay to
Counterparty an amount equal to such Net Settlement Amount or (ii) if such Net
Settlement Amount is negative, Counterparty shall pay to Salomon an amount equal
to the absolute value of such Net Settlement Amount.
(b) DIVIDENDS. Salomon shall transfer or cause the transfer to
Counterparty of any non-cash dividend or other non-cash distribution with
respect to the Covered Securities with an "ex-dividend date" after the Trade
Date and on or prior to the final Sale Date (other than dividends resulting in
an adjustment pursuant to Section 8), in the same form in which such dividend or
distribution was made, promptly following receipt by Salomon of such dividend or
distribution.
(c) FEES. In addition to any amounts to which Salomon or its
affiliates are entitled as Commissions, the FT Parties shall, jointly and
severally, fund or reimburse Salomon, promptly upon demand, for, all fees and
expenses required to be paid by Salomon and its affiliates pursuant to the terms
of the Disposition Agreement in connection with the disposition of the Covered
Securities.
7. UNWIND PERIOD:
(a) UNWIND PERIOD. The "UNWIND PERIOD" shall be the period
commencing on and including the Unwind Start Date and ending on and including
the Trading Day as of which Salomon has sold or caused to be sold all of the
Remaining Securities.
(b) COUNTERPARTY-DIRECTED UNWIND. Counterparty shall be entitled
to direct Salomon to sell or cause to be sold the Covered Securities on any
Trading Day or Trading Days in the Unwind Period and to designate the Manner of
Sale (as defined below) in connection with each such sale; PROVIDED that
Counterparty shall direct Covered Securities to be sold such that the Unwind
Period ends no later than the Maturity Date. If Counterparty elects a Gradual
Market Distribution or a Block Sale in respect of a Trading Day in the Unwind
Period, Counterparty shall direct the amount, timing and other terms of the sale
of Covered Securities by or on behalf of Salomon on such Trading Day. Salomon
shall use reasonable efforts to follow such directions from Counterparty. If
Salomon does not sell or cause the sale of all the Covered Securities directed
by Counterparty in respect of any Trading Day, Salomon shall notify Counterparty
thereof and use reasonable efforts to follow Counterparty's direction with
respect to such unsold Covered Securities. Notwithstanding the foregoing,
Salomon and its affiliates shall not be required to follow any direction of
Counterparty pursuant to this subsection (b) if, in Salomon's reasonable
judgment, such direction would violate or be inconsistent with any law, treaty,
rule, regulation or determination of any governmental authority, court or
arbitrator (or any related internal policy of Salomon or its affiliates)
applicable to Salomon or any of its affiliates or Salomon's or its affiliates'
obligations under the Disposition Agreement. On any date in respect of which
Counterparty directs the sale of Covered Securities pursuant to this Section 7,
each of the FT Parties represents and warrants to Counterparty that neither it
nor any of its Affiliates is in possession of any material nonpublic information
concerning Crown Castle or its Affiliates.
Page 46 of 71 pages
<PAGE>
(c) REQUIRED DISPOSITIONS. Notwithstanding anything to the
contrary herein, (i) if Salomon receives a "Required Disposition Notice" from
Crown Castle pursuant to Section 4.02(d) of the Disposition Agreement or not all
Covered Securities have been sold by the Maturity Date, Salomon shall be
entitled to sell or cause the sale of all Remaining Securities on subsequent
Trading Days in such amounts, at such prices and at such times as it determines
in its sole discretion and to designate in its sole discretion the Manner of
Sale in connection therewith; and (ii) if Crown Castle appoints an investment
banking firm to conduct a sale of Covered Securities pursuant to Section 4.02(e)
of the Disposition Agreement, Salomon shall sell or cause the sale of the
Remaining Securities as provided in Section 4.02(e) of the Disposition
Agreement.
(d) MANNER OF SALE. "MANNER OF SALE" means, with respect to any
sale of Covered Securities on a Trading Day during the Unwind Period:
(i) an underwritten fixed price or "at the market"
marketed bookbuild public offering of the Covered Securities,
with respect to which Salomon shall be entitled to designate
Salomon Smith Barney Inc. ("SSB") or one or more other
affiliates of Salomon as the sole book running manager (an
"UNDERWRITTEN OFFERING");
(ii) a sale of Covered Securities into the existing
trading market for outstanding shares of the same class at
other than a fixed price on the Principal Market or to or
through a market maker or broker or dealer, with respect to
which Salomon shall be entitled to designate SSB or one or
more other affiliates of Salomon as the sole agent, executing
dealer or other intermediary (a "GRADUAL MARKET
DISTRIBUTION");
(iii) a privately negotiated agency sale (other than a
private placement) involving at least a block of the Covered
Securities, with respect to which Salomon shall be entitled to
designate SSB or one or more other affiliates of Salomon as
the sole agent, executing dealer or other intermediary (a
"BLOCK SALE"); or
(iv) a sale of Covered Securities other than pursuant to
clauses (i) through (iii) (including without limitation a sale
of Covered Securities on a private placement basis or a sale
otherwise covered by clause (i) but for which SSB or one or
more other affiliates of Salomon is not the sole book running
manager) in such manner and on such terms and conditions as
are agreed by the parties (an "ALTERNATIVE DISTRIBUTION").
Notwithstanding anything to the contrary herein, (A) Counterparty may
not designate an Underwritten Offering as the Manner of Sale for any sale of
Covered Securities hereunder unless the conditions set forth in Annex I hereto
with respect to such Covered Securities are satisfied or waived by Salomon, and
(B) Counterparty may not designate a Gradual Market Distribution or Block Sale
as the Manner of Sale for any sale of Covered Securities hereunder unless (i)
the conditions set forth in Annex I hereto with respect to such Covered
Securities are satisfied or waived by Salomon or (ii) such sale is entitled to
be made and is made in accordance with Rule 144 under the Securities Act and
Counterparty shall have furnished to Salomon and, if required, Crown Castle an
opinion of counsel reasonably satisfactory to Salomon to such effect and such
other certificates and documents required by Crown Castle or reasonably
requested by Salomon in connection therewith. If at any time during an
Underwritten Offering, Gradual Market Distribution or Block Sale any of the
applicable requirements specified in this paragraph or in Annex I hereto are not
satisfied, (x) Counterparty shall immediately notify Salomon upon obtaining
knowledge thereof and (y) Salomon shall be entitled to stop selling
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Covered Securities pursuant to such Underwritten Offering, Gradual Market
Distribution or Block Sale, in which case such unsold Covered Securities shall
be treated for all purposes as Remaining Securities.
8. ADJUSTMENT EVENTS:
In the event of (i) a subdivision, consolidation or reclassification of
any class of Covered Securities into a different number or kind of shares of
stock, (ii) a dividend on the Common Shares paid in Common Shares, (iii) a
merger or other transaction whereby the outstanding Common Shares are exchanged
for another class of securities, securities of another issuer and/or other
property, or (iv) any other similar event with respect to the Covered Securities
(an "ADJUSTMENT EVENT"), then in each case, Salomon shall make appropriate
adjustments to the terms of this Transaction such that the fundamental economic
terms of this Transaction are equivalent to those in effect immediately prior to
the Adjustment Event.
9. EVENTS OF DEFAULT AND TERMINATION EVENTS:
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to
a party or, if applicable, any Credit Support Provider of such party of any of
the following events constitutes an event of default (an "EVENT OF DEFAULT")
with respect to such party (PROVIDED that an Event of Default with respect to FT
shall be deemed an Event of Default with respect to Counterparty):
(i) FAILURE TO PAY OR DELIVER. Failure by the party to
make, when due, any payment or delivery under this
Confirmation required to be made by it if such failure is not
remedied on or before the third Business Day after notice of
such failure is given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply
with or perform any agreement or obligation (other than an
obligation to make any payment or delivery under this
Confirmation or to give notice of a Termination Event) to be
complied with or performed by the party in accordance with
this Confirmation if such failure is not remedied on or before
the thirtieth day after notice of such failure is given to the
party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider
of such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Confirmation prior to the satisfaction of all obligations
of such party under this Transaction without the written
consent of the beneficiary under such Credit Support Document;
or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
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(iv) MISREPRESENTATION. A representation made by the party
or any Credit Support Provider of such party in this
Confirmation or any Credit Support Document proves to have
been incorrect or misleading in any material respect when
made;
(v) BANKRUPTCY. The party or any Credit Support Provider
of such party (1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes insolvent
or is unable to pay its debts or fails or admits in writing
its inability generally to pay its debts as they become due;
(3) makes a general assignment, arrangement or composition
with or for the benefit of its creditors; (4) institutes or
has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such
proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its winding-up or liquidation or
(B) is not dismissed, discharged, stayed or restrained in each
case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8) causes
or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(vi) MERGER WITHOUT ASSUMPTION. The party or any Credit
Support Provider of such party consolidates or amalgamates
with, or merges with or into, or transfers all or
substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or transfer:
(1) the resulting, surviving or transferee
entity fails to assume all the obligations of such
party or such Credit Support Provider under this
Confirmation or any Credit Support Document to which
it or its predecessor was a party by operation of law
or pursuant to an agreement reasonably satisfactory
to Salomon, if such party is Counterparty or FT, or
Counterparty, if such party is Salomon; or
(2) the benefits of any Credit Support Document
fail to extend (without the consent of the
beneficiary thereof) to the performance by such
resulting, surviving or transferee entity of its
obligations under this Confirmation.
(b) TERMINATION EVENTS. The occurrence at any time with respect to
a party or, if applicable, any Credit Support Provider of such party of any
event specified below constitutes an Illegality if the event is specified in (i)
below, a Tax Event if the event is specified in (ii) below, a Tax Event Upon
Merger if the event is specified in (iii) below, or an Additional Termination
Event if the event is specified
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in (iv) below (PROVIDED that with respect to any Termination Event for which FT
would otherwise be deemed an Affected Party or Burdened Party, Counterparty
shall be deemed the Affected Party or Burdened Party for such Termination
Event):
(i) ILLEGALITY. Due to the adoption of, or any change in,
any applicable law after the date on which this Transaction is
entered into, or due to the promulgation of, or any change in,
the interpretation by any court, tribunal or regulatory
authority with competent jurisdiction of any applicable law
after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 11(k)) for such party
(which will be the Affected Party) (1) to perform any absolute
or contingent obligation to make a payment or delivery or to
receive a payment or delivery in respect of this Transaction
or to comply with any other material provision of this
Confirmation or (2) to perform, or for any Credit Support
Provider of such party to perform, any contingent or other
obligation which the party (or such Credit Support Provider)
has under any Credit Support Document relating to this
Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the Trade Date (regardless of whether such action is
taken or brought with respect to a party to this Confirmation)
or (y) a Change in Tax Law, the party (which will be the
Affected Party) will, or there is a substantial likelihood
that it will, on the next succeeding date on which a payment
is to be made under this Transaction (1) be required to pay to
Salomon or Counterparty, as the case may be, an additional
amount in respect of an Indemnifiable Tax under Section
13(b)(i)(4) (except in respect of interest under Section
10(d)(ii), 10(e) or 11(h)), or (2) receive a payment from
which an amount is required to be deducted or withheld for or
on account of a Tax (except in respect of interest under
Section 10(d)(ii), 10(e) or 11(h)) and no additional amount is
required to be paid in respect of such Tax under Section
13(b)(i)(4) (other than by reason of the last sentence
thereof); PROVIDED that the imposition of a U.S. withholding
tax on any payment from Salomon to Counterparty pursuant to
sections 882, 897, 1441 or 1445 of the Internal Revenue Code
of 1986, as amended (the "CODE"), or the Treasury regulations
thereunder, shall not constitute a Termination Event;
(iii) TAX EVENT UPON MERGER. The party (the "BURDENED
PARTY") on the next succeeding date on which a payment is to
be made under this Transaction will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax
under Section 13(b)(i)(4) (except in respect of interest under
Section 10(d)(ii), 10(e) or 11(h)) or (2) receive a payment
from which an amount has been deducted or withheld for or on
account of any Indemnifiable Tax in respect of which the
Salomon or an FT Party, as the case may be, is not required to
pay an additional amount (other than by reason of the last
sentence of Section 13(b)(i)(4)), in either case as a result
of a party consolidating or amalgamating with, or merging with
or into, or transferring all or substantially all its assets
to, another entity (which will be the Affected Party) where
such action does not constitute an event described in Section
9(a)(vi); or
(iv) ADDITIONAL TERMINATION EVENT. (1) A Credit Event
shall occur, (2) Counterparty shall cease to be wholly owned,
directly or indirectly, by FT or (3) Counterparty shall not
have posted collateral as required by Section 11(c) (in each
case, Counterparty will be the Affected Party).
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(c) If an event or circumstance which would otherwise constitute
or give rise to an Event of Default also constitutes an Illegality, it will be
treated as an Illegality and will not constitute an Event of Default.
10. EARLY TERMINATION:
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time
an Event of Default with respect to Salomon or Counterparty (the "Defaulting
Party") has occurred and is then continuing, the other (the "Non-defaulting
Party") may, by not more than 20 days notice to the Defaulting Party specifying
the relevant Event of Default, designate a day not earlier than the day such
notice is effective as an Early Termination Date. Notwithstanding the foregoing,
an Early Termination Date will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section 9(a)(v)(l),
(3), (5), (6) or, to the extent analogous thereto, (8), and as of the time
immediately preceding the institution of the relevant proceeding or the
presentation of the relevant petition upon the occurrence with respect to such
party of an Event of Default specified in Section 9(a)(v)(4) or, to the extent
analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected
Party will, promptly upon becoming aware of it, notify Salomon
or Counterparty, as the case may be, specifying the nature of
that Termination Event and will also give such other
information about that Termination Event as such other party
may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an
Illegality under Section 9(b)(i)(l) or a Tax Event occurs and
there is only one Affected Party, or if a Tax Event Upon
Merger occurs and the Burdened Party is the Affected Party,
the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 10(b)(iv),
use all reasonable efforts (which will not require such party
to incur a loss, excluding immaterial, incidental expenses) to
transfer within 20 days after it gives notice under Section
10(b)(i) all its rights and obligations under this
Confirmation in respect of this Transaction to another of its
Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it
will give notice to whichever of Salomon or Counterparty is
not the Affected Party (the "NON-AFFECTED PARTY"), to that
effect within such 20 day period, whereupon the Non-Affected
Party may effect such a transfer within 30 days after the
notice is given under Section 10(b)(i). In addition, each
party will use all reasonable efforts to explore additional
alternatives to avoid the Termination Event.
Any such transfer by Salomon or Counterparty under this
Section 10(b)(ii) will be subject to and conditional upon the
prior written consent of the other, which consent will not be
withheld if such other party's policies in effect at such time
would permit it to enter into transactions with the transferee
on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under
Section 9(b)(i)(1) or a Tax Event occurs and there are two
Affected Parties, each party will use all reasonable efforts
to
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reach agreement within 30 days after notice thereof is given
under Section 10(b)(i) on action to avoid that Termination
Event.
(iv) RIGHT TO TERMINATE. If:
(1) a transfer under Section 10(b)(ii) or an
agreement under Section 10(b)(iii), as the case may
be, has not been effected with respect to this
Transaction within 30 days after an Affected Party
gives notice under Section 10(b)(i); or
(2) an Illegality under Section 9(b)(i)(2) or an
Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the
Affected Party,
either Salomon or Counterparty in the case of an Illegality,
the Burdened Party in the case of a Tax Event Upon Merger,
any Affected Party in the case of a Tax Event, or the
Non-Affected Party in the case of an Additional Termination
Event may, by not more than 20 days notice to Salomon or
Counterparty, as appropriate, and provided that the relevant
Termination Event is then continuing, designate a day not
earlier than the day such notice is effective as an Early
Termination Date in respect of this Transaction.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is
given under Section 10(a) or (b), the Early Termination Date
will occur on the date so designated, whether or not the
relevant Event of Default or Termination Event is then
continuing.
(ii) Upon the occurrence or effective designation of an
Early Termination Date, no further payments or deliveries
under Sections 5, 6 or 11(h) will be required to be made, but
without prejudice to the other provisions of this
Confirmation. The amount, if any, payable in respect of an
Early Termination Date shall be determined pursuant to Section
10(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable
following the occurrence of an Early Termination Date, each of
Salomon and Counterparty will make the calculations on its
part, if any, contemplated by Section 10(e) and will provide
to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations
and specifying any amount payable under Section 10(e)) and (2)
giving details of the relevant account to which any amount
payable to it is to be paid.
(ii) PAYMENT DATE. An amount calculated as being due in
respect of any Early Termination Date under Section 10(e) will
be payable on the day that notice of the amount payable is
effective (in the case of an Early Termination Date which is
designated or occurs as a result of an Event of Default) and
on the day which is two Business Days after the day on which
notice of the amount payable is effective (in the case of an
Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to
the extent permitted under applicable
Page 52 of 71 pages
<PAGE>
law) interest thereon (before as well as after judgment) in
the Termination Currency, from (and including) the relevant
Early Termination Date to (but excluding) the date such amount
is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual
number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date
occurs, the following provisions shall apply. The amount, if any, payable in
respect of an Early Termination Date and determined pursuant to this Section
will be subject to Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date
results from an Event of Default, an amount will be payable
equal to the Non-defaulting Party's Loss in respect of this
Confirmation. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date
results from a Termination Event:
(1) ONE AFFECTED PARTY. If there is one Affected
Party, the amount payable will be determined in
accordance with Section 10(e)(i), except that, in
either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be
references to the Affected Party and the Non-Affected
Party, respectively.
(2) TWO AFFECTED PARTIES. If there are two
Affected Parties, each of Salomon and Counterparty
will determine its Loss in respect of this
Confirmation and an amount will be payable equal to
one-half of the difference between the Loss of the
party with the higher Loss ("X") and the Loss of the
party with the lower Loss ("Y"). If the amount
payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute
value of that amount to Y.
(iii) ADJUSTMENTS FOR BANKRUPTCY. In circumstances where an
Early Termination Date occurs as a result of the second
sentence of Section 10(a), the amount determined under this
Section 10(e) will be subject to such adjustments as are
appropriate and permitted by law to reflect any payments or
deliveries made by one of Salomon or Counterparty to the other
under this Confirmation (and retained by such other party)
during the period from the relevant Early Termination Date to
the date for payment determined under Section 10(d)(ii).
(iv) DETERMINATION OF LOSS. The parties agree that for
purposes of calculating Salomon's Loss under Section 10(d) and
(e) in connection with this Transaction, (i) if the
disposition of the Covered Securities (other than to an
affiliate or to a Permitted Transferee (as defined in the
Disposition Agreement)) at the time of an Early Termination
Date would be permitted under the terms of the Disposition
Agreement, Salomon and its affiliates shall be entitled to
dispose of any such Covered Securities over any number of
Trading Days in a commercially reasonable manner as Salomon
may determine; and (ii) if such a disposition would not be
permitted under the terms of the Disposition Agreement, the
value of such Covered Securities shall be deemed to be zero.
In the case of clause (ii), provided that the FT Parties have
paid to Salomon all amounts
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owing in respect of this Transaction, Salomon will use
reasonable efforts to transfer the Covered Securities as
directed by Counterparty once such Covered Securities may be
transferred in accordance with the Disposition Agreement and
will promptly remit to Counterparty the proceeds of such
transfer (net of any withholding taxes that are required to be
withheld from such sales proceeds), if any, received by
Salomon.
(f) SET-OFF. In addition to any rights of Set-off a party may have
as a matter of law or otherwise, upon the occurrence of an Event of Default with
respect to Salomon or Counterparty (Counterparty being deemed for this purpose
to include FT) ("X"), the other party ("Y") will have the right (but will not be
obliged) without prior notice to X or any other person to set-off any obligation
of X owing to Y (whether or not arising under this Confirmation, whether or not
matured, whether or not contingent and regardless of the currency, place of
payment or booking office of the obligation) against any obligation of Y owing
to X (whether or not arising under this Confirmation, whether or not matured,
whether or not contingent and regardless of the currency, place of payment or
booking office of the obligation). For the purpose of cross-currency set-off, Y
may convert any obligation to another currency at a market rate reasonably
determined by Y. If an obligation is unascertained, Y may in good faith estimate
that obligation and set-off in respect of the estimate, subject to the relevant
party accounting to the other when the obligation is ascertained.
11. MISCELLANEOUS:
(a) NON-AFFILIATE STATUS. Each of the FT Parties represents and
warrants to Salomon that neither it nor any of its Affiliates is as of the Trade
Date, and agrees that none of them will during the term of this Transaction
become, (i) an "affiliate" of Crown Castle within the meaning of the Securities
Act or (ii) an officer, director or, individually or in the aggregate, a
beneficial owner of more than 10% of any class of equity securities of Crown
Castle required to file reports pursuant to Section 16(a) of the Exchange Act.
(b) CONDITIONS PRECEDENT. It shall be a condition precedent to the
obligations of the parties hereunder that (i) each of the FT Parties shall have
executed and delivered the Purchase Agreement and (ii) the purchase and sale of
the Covered Securities shall have occurred in accordance with the terms thereof.
It shall be a condition precedent to the obligations of Salomon hereunder that
FT (the "GUARANTOR") shall have executed on or prior to the Trade Date a
guaranty of Counterparty's obligations hereunder (together with any successor
guaranty issued pursuant to subsection (c) below, the "GUARANTY") in form and
substance satisfactory to Salomon.
(c) GUARANTY. (i) FT agrees to use its best efforts to request its
board of directors to approve no later than March 21, 2002 the extension of the
duration of the Guaranty during which claims must be filed to a term of three
years from the date hereof, subject to reinstatement as provided in the
Guaranty, and to increase the maximum amount authorized to be paid thereunder to
an amount (calculated, if necessary, using applicable U.S. dollar/French franc
spot exchange rates (or any replacement for such rates) prevailing at the time
of the board action) at least equal to 150% multiplied by the Initial Notional
Amount. Upon receipt of such authorization, FT shall within 3 Business Days
execute and deliver a substitute Guaranty in favor of Salomon reflecting such
new duration and maximum amount in form and substance satisfactory to Salomon
and shall deliver to Salomon an opinion of counsel satisfactory to Salomon
covering such matters relating to such substitute Guaranty as Salomon shall
reasonably request. If FT has not obtained such authorization and executed and
delivered such substitute Guaranty by March 21, 2002, unless otherwise agreed by
Salomon, Counterparty shall be required to post U.S. dollar cash collateral to
Salomon or Salomon's nominee within 3 Business Days in an amount equal to the
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Initial Notional Amount, pursuant to a pledge agreement satisfactory to Salomon,
which pledge agreement shall provide for the payment of interest by Salomon to
Counterparty on any such posted collateral at a market rate as agreed by the
parties.
(ii) If (A) at any time prior to March 21, 2002 or (B) at
any time on or following such date, if Counterparty has not
posted collateral in accordance with subparagraph (i) above,
the maximum amount payable by FT under the Guaranty is less
than 125% multiplied by the sum of (1) all accrued and unpaid
amounts payable by Counterparty pursuant to Section 5 and (2)
the greater of (x) one-half of the Outstanding Notional Amount
and (y) the difference between the Outstanding Notional Amount
and one-half of the value of the Remaining Securities as
determined by Salomon in a commercially reasonable manner
(calculated, if necessary, using applicable U.S. dollar/French
franc spot exchange rates (or any replacement for such rates)
prevailing at such time), unless otherwise agreed by Salomon,
Counterparty shall be required to post U.S. dollar cash
collateral to Salomon or Salomon's nominee within 4 Business
Days in an amount at least equal to the amount of such
shortfall, pursuant to a pledge agreement satisfactory to
Salomon, which pledge agreement shall provide for the payment
of interest by Salomon to Counterparty on any such posted
collateral at a market rate as agreed by the parties.
(d) FUNDING COST ADJUSTMENT. If a Settlement Date occurs on a date
that is not a Floating Amount Payment Date, and the Breakage Amount for such
Settlement Date is positive, Counterparty shall pay such amount to Salomon on
such Settlement Date. The "BREAKAGE AMOUNT" shall mean, for any Settlement Date,
an amount equal to the product of (i) (A) the LIBOR rate in effect for the
Calculation Period in which the Settlement Date occurs MINUS (B) LIBOR with a
designated maturity equal to the period from and including such Settlement Date
to but excluding the next Floating Amount Payment Date, calculated as of the
start of such period, (ii) the number of days in such period, (iii) the
aggregate Initial Price for all Covered Securities sold on the related Sale
Date, and (iv) 1/360.
(e) NETTING. The respective cash payment obligations on any day of
the FT Parties, on the one hand, and Salomon, on the other, with respect to this
Transaction and the Purchase Agreement (but no other transactions) shall be
netted. Salomon will provide Counterparty a schedule of payments being netted
with respect to any such day.
(f) INCREASED COSTS. If Salomon determines that from the Trade
Date (i) due to either (x) the introduction of or any change in or in the
interpretation of any law or regulation or (y) the compliance with any guideline
or request from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to Salomon or
its affiliates of engaging in this Transaction or related transactions, or (ii)
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) increases or would increase the amount of any capital required or expected
to be maintained by Salomon or any affiliate of Salomon as a direct or indirect
consequence of this Transaction ("INCREASED COSTS"), then the FT Parties,
jointly and severally, shall from time to time until this Transaction is no
longer outstanding, promptly upon demand by Salomon, convey to Salomon
additional amounts sufficient to compensate Salomon for such Increased Costs as
are incurred. A certificate as to the amount of Increased Costs, submitted to
the FT Parties by Salomon, shall be conclusive and binding for all purposes
absent manifest error.
(g) CREDIT SUPPORT DOCUMENT. The Guaranty shall be a "Credit
Support Document" with respect to Counterparty, and the Guarantor shall be a
"Credit Support Provider" with respect to Counterparty.
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(h) DEFAULT INTEREST. Prior to the occurrence or effective
designation of an Early Termination Date, a party that defaults in the
performance of any payment obligation will, to the extent permitted by law and
subject to Section 10(c), be required to pay interest (before as well as after
judgment) on the overdue amount to the party entitled to receive such defaulted
payment on demand in the same currency as such overdue amount, for the period
from (and including) the original due date for payment to (but excluding) the
date of actual payment, at the Default Rate. Such interest will be calculated on
the basis of daily compounding and the actual number of days elapsed.
(i) CALCULATION AGENT. Salomon shall make all calculations,
adjustments and determinations required pursuant to this Transaction. Salomon's
calculations, adjustments and determinations shall be made in good faith and
shall be binding absent manifest error; PROVIDED that if Counterparty disputes
any calculation of a Floating Amount, Settlement Floating Amount or Breakage
Amount (or any component thereof) or an adjustment pursuant to Section 8,
Counterparty and Salomon agree to jointly appoint an independent third party
equity derivatives dealer with experience in transactions similar to this
transaction to make such calculation or adjustment (or if Counterparty and
Salomon do not agree on such a third party, each of Counterparty and Salomon
shall choose such a third party, and such third parties shall appoint another
such third party to make such calculation or adjustment). The calculation or
adjustment by such third party shall be binding on the FT Parties and Salomon.
The expenses of such third party shall be borne equally by the FT Parties
(jointly and severally), on the one hand, and Salomon, on the other.
(j) EXPENSES. A Defaulting Party will, on demand, indemnify and
hold harmless the Non-defaulting Party for and against all reasonable
out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such
other party by reason of the enforcement and protection of its rights under this
Confirmation or any Credit Support Document to which the Defaulting Party is a
party or by reason of the early termination of this Transaction, including, but
not limited to, costs of collection; provided that if Counterparty is the
Defaulting Party, FT shall be jointly and severally liable for its obligations
under this subsection.
(k) MAINTAIN AUTHORIZATIONS. Each party agrees that it will use
all reasonable efforts to maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained by it with
respect to this Confirmation and will use all reasonable efforts to obtain any
that may become necessary in the future.
(l) COMPLY WITH LAWS. Each party agrees that it will comply in all
material respects with all applicable laws and orders to which it may be subject
if failure so to comply would materially impair its ability to perform its
obligations under this Confirmation.
(m) PAYMENT OF STAMP TAX. Each party agrees that, subject to
subsection (j) above, it will pay any Stamp Tax levied or imposed upon it or in
respect of its execution or performance of this Confirmation by a jurisdiction
in which it is incorporated, organized, managed and controlled, or considered to
have its seat, or in which a branch or office through which it is acting for the
purpose of this Confirmation is located ("Stamp Tax Jurisdiction") and will
indemnify Salomon, if such party is FT or Counterparty, or Counterparty, if such
party is Salomon, against any Stamp Tax levied or imposed upon such other party
or in respect of such other party's execution or performance of this
Confirmation by any such Stamp Tax Jurisdiction which is not also a Stamp Tax
Jurisdiction with respect to the other party.
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(n) TRANSFER. Subject to Section 10(b)(ii), neither this
Confirmation nor any interest or obligation in or under this Confirmation may be
transferred (whether by way of security or otherwise) by either of the FT
Parties, on the one hand, or by Salomon, on the other, without the prior written
consent of the other, except that:
(i) a party may make such a transfer of this Confirmation
pursuant to a consolidation or amalgamation with, or merger
with or into, or transfer of all or substantially all its
assets to, another entity (but without prejudice to any other
right or remedy under this Confirmation); and
(ii) a party may make such a transfer of all or any part
of its interest in any amount payable to it from a Defaulting
Party under Section 10(e).
Any purported transfer that is not in compliance with this subsection
will be void.
(o) ENTIRE AGREEMENT. This Confirmation, together with the
Purchase Agreement, Disposition Agreement and Guaranty, constitutes the entire
agreement and understanding of the parties with respect to its subject matter
and supersedes all oral communication and prior writings with respect thereto.
(p) AMENDMENTS. No amendment, modification or waiver in respect of
this Confirmation will be effective unless in writing (including a writing
evidenced by a facsimile transmission) and executed by each of the parties or
confirmed by an exchange of telexes or electronic messages on an electronic
messaging system.
(q) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2 and
10(c)(ii), the obligations of the parties under this Confirmation will survive
the termination of this Transaction.
(r) REMEDIES CUMULATIVE. Except as provided in this Confirmation,
the rights, powers, remedies and privileges provided in this Confirmation are
cumulative and not exclusive of any rights, powers, remedies and privileges
provided by law. A failure or delay in exercising any right, power or privilege
in respect of this Confirmation will not be presumed to operate as a waiver, and
a single or partial exercise of any right, power or privilege will not be
presumed to preclude any subsequent or further exercise, of that right, power or
privilege or the exercise of any other right, power or privilege.
(s) COUNTERPARTS. This Confirmation (and each amendment,
modification and waiver in respect of it) may be executed and delivered in
counterparts (including by facsimile transmission), each of which will be deemed
an original.
(t) SERVICE OF PROCESS. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 17. In addition,
each of FT and Counterparty shall irrevocably appoint and maintain so long as it
has any obligation under this Agreement an agent in New York City to receive,
for it and on its behalf, service of process in any action, suit or proceedings
relating to this Confirmation ("Proceedings"), and shall promptly notify Salomon
of the name and address of such agent and of any change thereof. Nothing in this
Confirmation will affect the right of a party to serve process in any other
manner permitted by law.
(u) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the
fullest extent permitted by applicable law, with respect to itself and its
revenues and assets (irrespective of their use or intended use),
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all immunity on the grounds of sovereignty or other similar grounds from (i)
suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order
for specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to
the extent permitted by applicable law, that it will not claim any such immunity
in any Proceedings; PROVIDED that such waiver shall not apply to the assets of
FT that are allocated to its public service mission, in accordance with the
provisions of Article 23-1 of Act No. 90-568, dated July 2, 1990, as amended by
Act No. 96-660, dated July 26, 1996, to the extent required by such provisions.
(v) CONSENT TO RECORDING. Each party (i) consents to the recording
of the telephone conversations of trading and marketing personnel of the parties
and their affiliates in connection with this Transaction and (ii) agrees to
obtain any necessary consent of, and give notice of such recording to, such
personnel of it and its affiliates.
(w) SEVERABILITY; ILLEGALITY. If compliance by a party with any
provision of this Transaction would be unenforceable or illegal, (i) the parties
shall negotiate in good faith to resolve such unenforceability or illegality in
a manner that preserves the economic benefits of the transactions contemplated
hereby and (ii) the other provisions of this Transaction shall not be
invalidated, but shall remain in full force and effect.
(x) CASH PAYMENTS. All references herein to "dollars" or "$" are
to U.S. dollars. All amounts payable in cash shall be payable in dollars in
immediately available funds.
(y) WAIVER OF TRIAL BY JURY. Each PARTY hereby irrevocably waives
(on its own behalf and, to the extent permitted by applicable law, on behalf of
its stockholders) all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Transaction or the actions of Salomon or its affiliates in the
negotiation, performance or enforcement hereof.
(z) TRADING ACTIVITY. Each of the FT Parties acknowledges that the
proprietary trading and other activities and transactions of Salomon and its
affiliates may adversely affect the price at which Covered Securities are sold
pursuant to Section 7.
(aa) DELIVERY OF OPINION. On the date hereof, Counterparty and FT
will provide to Salomon opinions of counsel regarding this Transaction in form
and substance reasonably satisfactory to Salomon.
12. INDEMNIFICATION BY FT PARTIES AND CONTRIBUTION:
(a) Each of the FT Parties agrees, jointly and severally (each, in
such capacity, an "INDEMNIFYING PARTY"), to indemnify and hold harmless Salomon,
its affiliates, their respective directors, officers and employees and each
person who controls Salomon or its affiliates within the meaning of either the
Securities Act or the Exchange Act (each, an "INDEMNIFIED PARTY") against, and
each Indemnifying Party agrees that no Indemnified Party shall have any
liability to the Indemnifying Parties or any of their affiliates, officers,
directors, or employees for, any liability (whether direct or indirect, in
contract, tort or otherwise) for, any losses, claims, damages, liabilities or
expenses, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
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damages, liabilities or expenses (or actions, claims, investigations or
proceedings in respect thereof, whether commenced or threatened) (A) arise out
of or relate to the breach by an Indemnifying Party of any provision hereunder
or the failure of any representation by an Indemnifying Party to have been true
and correct when made, or from an allegation by a third party (other than an
Indemnified Party) that an Indemnifying Party acted or failed to act in a manner
that, as alleged, would have constituted such a breach or failure, (B) arise out
of or relate to actions or failures to act by an Indemnified Party with the
consent of, at the direction of or in reliance on an Indemnifying Party, or (C)
otherwise arise out of or relate to this Transaction, the Purchase Agreement or
any related transactions; PROVIDED that clause (A) shall not apply to the
extent, but only to the extent, that a false allegation regarding the breach or
failure by an Indemnifying Party resulted primarily from the gross negligence or
willful misconduct of an Indemnified Party; PROVIDED, FURTHER, that clauses (B)
and (C) shall not apply to the extent, but only to the extent, that any losses,
claims, damages, liabilities or expenses of an Indemnified Party have resulted
from the gross negligence or willful misconduct of an Indemnified Party. Each
Indemnifying Party jointly and severally agrees, promptly on demand, to
reimburse each such Indemnified Party for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, expense or action. This indemnity agreement shall be
in addition to any liability which the Indemnifying Parties may otherwise have.
(b) Promptly after receipt by an Indemnified Party of notice of
the commencement of any action, such Indemnified Party will, if a claim in
respect thereof is to be made against an Indemnifying Party under subsection (a)
above, notify such Indemnifying Party in writing of the commencement thereof,
but the omission so to notify an Indemnifying Party will not relieve such
Indemnifying Party from any liability which it may have to any Indemnified Party
otherwise than under subsection (a) or, in respect of subsection (a), to the
extent that such Indemnifying Party was not materially prejudiced by such
failure to notify. In case any such action is brought against any Indemnified
Party, and it notifies an Indemnifying Party of the commencement thereof, such
Indemnifying Party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the Indemnified Party promptly
after receiving the aforesaid notice from such Indemnified Party to assume the
defense thereof, with counsel satisfactory to such Indemnified Party; PROVIDED
that if the defendants in any such action include both the Indemnified Party and
an Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be legal defenses available to it and/or other Indemnified
Parties which are different from or additional to those available to such
Indemnifying Party, the Indemnified Party or Parties shall have the right to
select separate counsel to represent such Indemnified Party or parties. Upon
receipt of notice from an Indemnifying Party to such Indemnified Party of its
election so to assume the defense of such action and approval by the Indemnified
Party of counsel, such Indemnifying Party will not be liable to such Indemnified
Party under subsection (a) above for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof unless
(A) the Indemnified Party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the Indemnifying Parties shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel), representing the
Indemnified Parties who are parties to such action), (B) an Indemnifying Party
shall not have employed counsel satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after notice of
commencement of the action or (C) an Indemnifying Party has authorized the
employment of counsel for the Indemnified Party at the expense of such
Indemnifying Party; and except that, if clause (A) or (C) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (A)
or (C). An 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 shall be a final judgment for the plaintiff, the
Indemnifying Parties agree, jointly and severally, to indemnify the Indemnified
Party from and against any loss or liability by
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reason of such settlement or judgment. An Indemnifying Party shall not, 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 arising from such proceeding.
(c) If for any reason the indemnification pursuant to subsection
(a) above is unavailable to any Indemnified Party or insufficient to hold it
harmless, then the Indemnifying Parties shall contribute, jointly and severally,
to the amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative benefits received by Counterparty, on the
one hand, and such Indemnified Party, on the other, pursuant to this Transaction
or any related transactions or, to the extent such allocation is unavailable for
any reason, in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Indemnifying Parties and
such Indemnified Party with respect to such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations. The
relative benefits received by Counterparty, on the one hand, and such
Indemnified Party, on the other, shall be in the same proportion as the
aggregate Initial Price for all Covered Securities bears to the market value of
the Transaction to Salomon on the date hereof (as reasonably determined by the
Calculation Agent).
13. TAX MATTERS.
(a) CERTAIN INFORMATION. Each of the FT Parties, on the one hand,
and Salomon, on the other, agrees that, so long as it has or may have any
obligation under this Confirmation, it will, upon reasonable demand by the
other, deliver to the other, or to such government or taxing authority as the
other reasonably directs, any form or document that may be required or
reasonably requested in writing in order to allow such party or its Credit
Support Provider to make a payment under this Confirmation or any applicable
Credit Support Document without any deduction or withholding for or on account
of any Tax or with such deduction or withholding at a reduced rate (so long as
the completion, execution or submission of such form or document would not
materially prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification as soon as reasonably
practicable following such demand.
(b) DEDUCTION OR WITHHOLDING OF TAX. Except as otherwise provided
in subsection (c) below:
(i) All payments under this Confirmation will be made
without any deduction or withholding for or on account of any
Tax unless such deduction or withholding is required by any
applicable law, as modified by the practice of any relevant
governmental revenue authority, then in effect; PROVIDED that
this Section 13(b)(i) shall not apply to any amounts required
to be withheld with respect to dividends paid on or the
proceeds of the sale of Covered Securities pursuant to
sections 882, 897, 1441 or 1445 of the Code or the Treasury
regulations thereunder. If a party is so required to deduct or
withhold, then that party ("X") will:
(1) promptly notify the party entitled to receive
such payment ("Y") of such requirement;
(2) pay to the relevant authorities the full
amount required to be deducted or withheld
(including the full amount required to be deducted
or withheld from any
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additional amount paid by X to Y under this Section
13(b)) promptly upon the earlier of determining that
such deduction or withholding is required or
receiving notice that such amount has been assessed
against Y;
(3) promptly forward to Y an official receipt
(or a certified copy), or other documentation
reasonably acceptable to Y, evidencing such payment
to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to
Y, in addition to the payment to which Y is
otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the
net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or
Y) will equal the full amount Y would have received
had no such deduction or withholding been required.
However, X will not be required to pay any
additional amount to Y to the extent that it would
not be required to be paid but for the failure by Y
to comply with or perform its obligations under
subsection (a) above.
(ii) If:
(1) X is required by any applicable law, as
modified by the practice of any relevant
governmental revenue authority, to make any
deduction or withholding in respect of which X would
not be required to pay an additional amount to Y
under Section 13(b)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is
assessed directly against X,
then, except to the extent Y has satisfied or then satisfies
the liability resulting from such Tax, Y will promptly
pay to X the amount of such liability (including any related
liability for interest, but including any related liability
for penalties only if Y has failed to comply with or perform
its obligations under subsection (a)).
(c) Notwithstanding anything to the contrary herein:
(i) CHARACTERIZATION OF THE TRANSACTION. Counterparty, FT
and Salomon each agree to treat the transactions contemplated
by this Transaction and the Purchase Agreement for U.S.
federal, state and local income tax purposes only as a single
integrated transaction (the "INTEGRATED TRANSACTION")
constituting a loan by Salomon to Counterparty secured by the
Covered Securities (but for all other purposes as a sale and
an equity swap and not, for the avoidance of doubt, as a
transaction by which beneficial ownership of the Covered
Securities shall rest in Counterparty or FT). Counterparty, FT
and Salomon each agree to report the Integrated Transaction as
a loan on any U.S. federal, state and local tax return or
filing it may submit, and agree not to take any position on
such return or filing, or take any other U.S. federal, state
or local tax reporting position, inconsistent with the
treatment of the Integrated Transaction as a loan.
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(ii) TAX PAYMENTS. The FT Parties agree, jointly and
severally, to satisfy any and all of its tax payment
obligations that may arise in connection with the payments
made by Salomon to Counterparty under this Transaction and
will make all of the required tax payments directly to the
relevant tax authorities; PROVIDED, HOWEVER, that Salomon
shall withhold from any payment to Counterparty under this
Confirmation any U.S. federal tax that it may be required to
withhold pursuant to sections 881 and 1441 of the Code and the
Treasury regulations thereunder.
(iii) INDEMNITY FOR CERTAIN TAXES. The FT Parties agree,
jointly and severally, to indemnify and save Salomon harmless
from any and all taxes, however denominated, including any
interest or penalties that may become payable in respect
thereof, imposed on Salomon, and any costs or expenses that
Salomon may incur, in respect of U.S. taxes due on any
payments from Salomon to Counterparty under this Transaction,
other than any U.S. withholding tax payable by Salomon
pursuant to sections 881 and 1441 of the Code.
(iv) NOTICE OF CLAIMS. Upon receipt by Salomon of notice
of any claim by or dispute with the U.S. taxing authority
relating to taxes covered by this Section 13(c), Salomon will
notify Counterparty of such notice or claim promptly but in
any event within fifteen (15) days; PROVIDED, HOWEVER, that
Salomon's failure to notify Counterparty of such notice or
claim shall not relieve Counterparty or FT from any liability
under this Section 13(c) except to the extent Counterparty or
FT, as the case may be, has been materially prejudiced by such
failure.
(v) CONTESTS. Salomon will have the right to determine,
in its sole discretion but in consultation with Counterparty,
whether to contest any claim for which it would be indemnified
pursuant to this Section 13(c); PROVIDED that Salomon will not
unreasonably reject a request by Counterparty to contest such
claim or dispute. Salomon retains the right to conduct in its
sole discretion the defense of any claim or dispute for which
it would be indemnified pursuant to this Section 13(c),
although Salomon hereby agrees to consult with Counterparty in
connection therewith while making Salomon's best efforts to
take into account both the interest of Citigroup Inc. and the
interest of Counterparty in such contest (although, as
described above, any decisions relating to the conduct of the
defense will be made by Salomon in its sole discretion).
Salomon and Counterparty hereby stipulate that a decision not
to contest a claim would be unreasonable if the specific issue
to be contested is whether the Common Shares are "regularly
traded" within the meaning of Regulation Section 1.897- 9T(d),
and, Salomon will consult with Counterparty in all material
aspects of the planning of the defense strategy and in all
material decisions relating to the conduct of the defense
while making Salomon's best efforts to take into account both
the interest of Citigroup Inc. and the interest of
Counterparty in such contest (although, as described above,
any decisions relating to the conduct of the defense will be
made by Salomon in its sole discretion).
(vi) RECORDS AND INFORMATION. Upon a reasonable request by
the other, Salomon, on the one hand, and the FT Parties, on
the other, each will make available to the other and to any
U.S. federal tax authority, all information, records or
documents relating to any taxes covered by this Section 13(c).
Each of Salomon, Counterparty and FT will
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preserve such information, records or documents until the
expiration of any applicable statute of limitations or
extensions thereof.
(vii) SURVIVAL. Notwithstanding anything to the contrary in
this Confirmation, all obligations under this Section 13(c)
shall survive and continue until 30 days following the
expiration of the applicable statute of limitations or
extensions thereof.
14. CONTRACTUAL CURRENCY:
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this
Confirmation will be made in the relevant currency specified in this
Confirmation for that payment (the "Contractual Currency"). To the extent
permitted by applicable law, any obligation to make payments under this
Confirmation in the Contractual Currency will not be discharged or satisfied by
any tender in any currency other than the Contractual Currency, except to the
extent such tender results in the actual receipt by the party to which payment
is owed, acting in a reasonable manner and in good faith in converting the
currency so tendered into the Contractual Currency, of the full amount in the
Contractual Currency of all amounts payable in respect of this Confirmation. If
for any reason the amount in the Contractual Currency so received falls short of
the amount in the Contractual Currency payable in respect of this Confirmation,
the party required to make the payment will, to the extent permitted by
applicable law, immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall. If for any reason
the amount in the Contractual Currency so received exceeds the amount in the
Contractual Currency payable in respect of this Confirmation, the party
receiving the payment will refund promptly the amount of such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any
judgment or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this
Confirmation, (ii) for the payment of any amount relating to any early
termination in respect of this Confirmation or (iii) in respect of a judgment or
order of another court for the payment of any amount described in (i) or (ii)
above, the party seeking recovery, after recovery in full of the aggregate
amount to which such party is entitled pursuant to the judgment or order, will
be entitled to receive immediately from the payor the amount of any shortfall of
the Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the payor any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable
law, these indemnities constitute separate and independent obligations from the
other obligations in this Confirmation, will be enforceable as separate and
independent causes of action, will apply notwithstanding any indulgence granted
by the party to which any payment is owed and will not be affected by judgment
being obtained or claim or proof being made for any other sums payable in
respect of this Confirmation.
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(d) EVIDENCE OF LOSS. For the purpose of this Section 14, it will
be sufficient for a party to demonstrate that it would have suffered a loss had
an actual exchange or purchase been made.
15. REPRESENTATIONS:
(a) Each party represents to each other party as of the Trade Date
that:
(i) It is duly organized and validly existing under the
laws of the jurisdiction of its organization or incorporation
and, if relevant under such laws, in good standing;
(ii) It has the power to execute this Confirmation and any
other documentation relating to this Confirmation to which it
is a party, to deliver this Confirmation and any other
documentation relating to this Confirmation that it is
required by this Confirmation to deliver and to perform its
obligations under this Confirmation and has taken all
necessary action to authorize such execution, delivery and
performance;
(iii) Such execution, delivery and performance do not
violate or conflict with any law applicable to it, any
provision of its constitutional documents, any order or
judgment of any court or other agency of government applicable
to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;
(iv) All governmental and other consents that are required
to have been obtained by it with respect to this Confirmation
have been obtained and are in full force and effect and all
conditions of any such consents have been complied with; and
(v) Its obligations under this Confirmation constitute
its legal, valid and binding obligations, enforceable in
accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(vi) No Event of Default or Potential Event of Default or,
to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance
would occur as a result of its entering into or performing its
obligations under this Confirmation.
(vii) There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or
proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that
is likely to affect the legality, validity or enforceability
against it of this Confirmation or its ability to perform its
obligations under this Confirmation.
(viii) It is acting as principal for its own account and not
as agent when entering into this Transaction;
(ix) It has sufficient knowledge and expertise to enter
into this Transaction and it is entering into this Transaction
in reliance upon such tax, accounting, regulatory, legal, and
financial advice as its deems necessary and not upon any view
expressed by the other. It has made its own independent
decision to enter into this Transaction, is acting at arm's
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length and is not relying on any communication (written or
oral) of the other party as a recommendation or investment
advice regarding this Transaction. It has the capability to
evaluate and understand (on its own behalf or through
independent professional advice), and does understand, the
terms, conditions and risks of this Transaction and is willing
to accept those terms and conditions and to assume
(financially and otherwise) those risks. It acknowledges and
agrees that the other party is not acting as a fiduciary or
advisor to it in connection with this Transaction. It is
entering into this Transaction in connection with a line of
business and not for purposes of speculation; and
(x) It is an "accredited investor" as defined in
Section 2(a)(15)(ii) of the Securities Act and an "eligible
swap participant" as such term is defined in 17 C.F.R.
Section 35.1(b)(2).
(b) Each of the FT Parties represents as of the Trade Date to
Salomon that:
(i) It understands that no obligations of Salomon to it
hereunder will be entitled to the benefit of deposit insurance
and that such obligations will not be guaranteed by any
affiliate of Salomon or any governmental agency;
(ii) Its investments in and liabilities in respect of this
Transaction, which it understands is not readily marketable,
are not disproportionate to its net worth, and it is able to
bear any loss in connection with this Transaction, including
the loss of its entire investment in this Transaction;
(iii) It understands that this Transaction and, except as
provided in Section 7 and Annex I, the transactions
contemplated herein will not be registered under the
Securities Act or any state securities law or other applicable
federal securities law;
(iv) Counterparty is wholly owned, directly or indirectly,
by FT;
(v) No part of the amounts received by Counterparty under
this Transaction or the Purchase Agreement will be used for
the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying margin stock (as such terms are used in
Regulations U or X of the Board of Governors of the Federal
Reserve System); and
(vi) IT UNDERSTANDS THAT THIS TRANSACTION IS SUBJECT TO
COMPLEX RISKS WHICH MAY ARISE WITHOUT WARNING AND MAY AT TIMES
BE VOLATILE AND THAT LOSSES MAY OCCUR QUICKLY AND IN
UNANTICIPATED MAGNITUDE AND IS WILLING TO ACCEPT SUCH TERMS
AND CONDITIONS AND ASSUME (FINANCIALLY AND OTHERWISE) SUCH
RISKS.
16. ACCOUNTS FOR PAYMENT:
To Salomon: To be advised.
To Counterparty: To be advised.
Page 65 of 71 pages
<PAGE>
17. NOTICES:
(a) EFFECTIVENESS. Any notice or other communication in respect of
this Confirmation may be given in any manner set forth below (except that a
notice or other communication under Section 9 or 10 may not be given by
facsimile transmission or electronic messaging system) to the address or number
provided in subsection (b) and will be deemed effective as indicated:
(i) if in writing and delivered in person or by courier,
on the date it is delivered;
(ii) if sent by telex, on the date the recipient's
answerback is received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the
recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile
machine); or
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the
date that mail is delivered or its delivery is attempted,
unless the date of that delivery (or attempted delivery) or that
receipt, as applicable, is not a Business Day or that communication is delivered
(or attempted) or received, as applicable, after the close of business on a
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Business Day.
(b) ADDRESSES. All notices or communications to Counterparty, FT
or Salomon shall be delivered to the following addresses (or such other address
as such party shall specify by notice to the other):
To Salomon: Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London SW1W 0SB
England
Attention: Jason Shrednick
Facsimile: 44-20-7721-4363
Telephone: 44-20-7721-4292
with a copy to: Donald A. Bendernagel, Esq.
Salomon Brothers Holding Company Inc
388 Greenwich Street - 20th Floor
New York, New York 10013
Facsimile: (212) 816-4223
Telephone: (212) 816-2747
To FT: France Telecom S.A.
Direction Juridique et Fiscale
6 place d'Alleray
75505 Paris Cedex 15
Attention: Jean-Philippe Roulet
Page 66 of 71 pages
<PAGE>
Facsimile: 33-1-44-44-03-67
Telephone: 33-1-44-44-94-38
with a copy to: Olivier Froissart
Direction des Operations de Fusions
et Acquisitions
France Telecom S.A.
6 place d'Alleray
75505 Paris Cedex 15
Facsimile: 33-1-44-44-11-61
Telephone: 33-1-44-44-24-36
To Counterparty: Transmission Future Networks B.V.
Strawinskylaan 3501
1077ZX Amsterdam
Netherlands
Attention: Gregory Richardson
Facsimile: 31-2-07-10-50-01
Telephone: To be advised
with a copy to FT
18. ADDITIONAL DEFINITIONS:
As used in this Confirmation,
"AFFILIATE" means, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly or
indirectly, the person or any entity directly or indirectly under common control
with the person. For this purpose, "control" of any entity or person means
ownership of a majority of the voting power of the entity or person.
"APPLICABLE RATE" means (i) in respect of obligations payable or
deliverable (or which would have been but for Section 2) by a Defaulting Party,
the Default Rate, (ii) in respect of an obligation to pay an amount under
Section 10(e) of a party from and after the date (determined in accordance with
Section 10(d)(ii)) on which that amount is payable, the Default Rate, (iii) in
respect of all other obligations payable or deliverable (or which would have
been but for Section 2) by a Non-defaulting Party, the Non-default Rate; and
(iv) in all other cases, the Termination Rate.
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which this Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorization,
exemption, notice, filing, registration or exchange control consent.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof
or evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
Page 67 of 71 pages
<PAGE>
"EARLY TERMINATION DATE" means the date determined in accordance with
Section 10(a) or 10(b)(iv).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Confirmation but for a present or
former connection between the jurisdiction of the government or taxation
authority imposing such Tax and the recipient of such payment or a person
related to such recipient (including, without limitation, a connection arising
from such recipient or related person being or having been a citizen or resident
of such jurisdiction, or being or having been organized, present or engaged in a
trade or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having executed,
delivered, performed its obligations or received a payment under, or enforced,
this Confirmation).
"LAW" includes any treaty, law, rule or regulation (as modified, in the
case of tax matters, by the practice of any relevant governmental revenue
authority) and "LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOSS" means, with respect to this Confirmation and a party, the
Termination Currency Equivalent of an amount that party reasonably determines in
good faith to be its total losses and costs (or gain, in which case expressed as
a negative number) in connection with this Confirmation, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position (or any gain
resulting from any of them). Loss includes losses and costs (or gains) in
respect of any payment or delivery required to have been made (assuming
satisfaction of each applicable condition precedent) on or before the relevant
Early Termination Date and not made. Loss does not include a party's legal fees
and out-of-pocket expenses referred to under Section 11(j). A party will
determine its Loss as of the relevant Early Termination Date, or, if that is not
reasonably practicable, as of the earliest date thereafter as is reasonably
practicable. A party may (but need not) determine its Loss by reference to
quotations of relevant rates or prices from one or more leading dealers in the
relevant markets.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the Non-defaulting Party (as certified
by it) if it were to fund the relevant amount.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.
"SET-OFF" means set-off, offset, combination of accounts, right of
retention or withholding or similar right or requirement to which the payer of
an amount under Section 10 is entitled or subject (whether arising under this
Confirmation, another contract, applicable law or otherwise) that is exercised
by, or imposed on, such payer.
"STAMP TAX" means any stamp, registration, documentation or similar
tax.
"TAX" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Confirmation other than a stamp, registration,
documentation or similar tax.
"TERMINATION CURRENCY" meaning U.S. dollars.
Page 68 of 71 pages
<PAGE>
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount
denominated in the Termination Currency, such Termination Currency amount and,
in respect of any amount denominated in a currency other than the Termination
Currency (the "OTHER CURRENCY"), the amount in the Termination Currency
determined by the party making the relevant determination as being required to
purchase such amount of such Other Currency as at the relevant Early Termination
Date, or, if the relevant Loss is determined as of a later date, that later
date, with the Termination Currency at the rate equal to the spot exchange rate
of the foreign exchange agent (selected as provided below) for the purchase of
such Other Currency with the Termination Currency at or about 11:00 a.m. (in the
city in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later date.
The foreign exchange agent will, if only one party is obliged to make a
determination under Section 10(e), be selected in good faith by that party and
otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event, a Tax Event Upon
Merger or an Additional Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean
of the cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
Page 69 of 71 pages
<PAGE>
Yours sincerely,
SALOMON BROTHERS INTERNATIONAL LIMITED
By: /s/ Thomas Petrone
------------------------------
Authorized Representative
Confirmed as of the date first above written:
TRANSMISSION FUTURE NETWORKS B.V.
By: /s/ G.J. Van Der Ploeg
------------------------------
Name: G.J. van der Ploeg
Title: Director
FRANCE TELECOM S.A.
By: /s/ Eric Bouvier
------------------------------
Name: Eric Bouvier
Title: Senior Vice President
Page 70 of 71 pages
<PAGE>
ANNEX I
Conditions for Underwritten Offerings and
Certain Gradual Market Distributions and Block Sales
The following conditions shall apply to the sale of Covered Securities
pursuant to Underwritten Offerings, Gradual Market Distributions and Block Sales
to the extent set forth in Section 7(d) of the Confirmation of which this Annex
I forms a part.
1. The registration rights provided in the Disposition Agreement
(the "REGISTRATION PROVISIONS") shall be in full force and effect, and Salomon
(or its "Permitted Transferee" (as defined in the Disposition Agreement)) shall
be entitled to the benefit of such Registration Provisions in connection with
the sale of all such Covered Securities.
2. (i) Crown Castle shall have made available pursuant to the
Registration Provisions an effective registration statement and one or more
prospectuses as necessary to allow Salomon (or any such Permitted Transferee) to
comply with the applicable prospectus delivery requirements for the resale by
Salomon (or such Permitted Transferee) of all such Covered Securities; (ii) such
registration statement shall be effective and such prospectuses shall be current
on any Trading Day on which any Covered Securities are to be sold pursuant to an
Underwritten Offering, Gradual Market Distribution or Block Sale; (iii) Crown
Castle shall not have notified Counterparty, Salomon or any underwriter,
pursuant to Section 1.04(f) of the Registration Provisions or otherwise, of the
happening of any event as a result of which such prospectuses include an 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; and
(iv) Crown Castle shall not have exercised its rights under Section 1.09(a) of
the Registration Provisions to suspend its obligation to cause such registration
statement to become or remain effective in respect of any such Trading Day.
3. Crown Castle shall have provided to Salomon and its affiliates
and any underwriter (i) the opportunity to perform such due diligence as
requested by Salomon and its affiliates or the underwriter, including, without
limitation, the opportunity to review financial and other records and corporate
documents of Crown Castle and to make inquiries of officers of Crown Castle, as
provided in Section 1.04(h) of the Registration Provisions, and (ii) the
opinions of counsel and comfort letter described in Section 1.04(g) of the
Registration Provisions. The results of such due diligence and such opinion of
counsel and comfort letter shall be satisfactory to Salomon.
4. Crown Castle shall have caused all such Covered Securities to
be listed on the Principal Market and each other exchange or quotation system on
which the Covered Securities are then traded or quoted.
5. Crown Castle shall have complied with all of its other
obligations pursuant to the Registration Provisions.
6. In the case of an Underwritten Offering, all conditions
precedent to the underwriter's obligations under the underwriting agreement
shall have been satisfied or waived.
7. Counterparty and/or FT shall have paid all costs and expenses
(including, without limitation, fees, expenses and disbursements of counsel)
incurred by Salomon and its affiliates in connection with the Underwritten
Offering, Gradual Market Distribution or Block Sale, as the case may be.
I-1
Page 71 of 71 pages
