EXHIBIT 10.28
EXECUTION COPY
GOVERNANCE AGREEMENT (this "Agreement") dated as of the 21st
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day of August, 1998, among CROWN CASTLE INTERNATIONAL CORP.
(formerly named Castle Tower Holding Corp.), a Delaware
corporation (the "Company"), TELEDIFFUSION DE FRANCE
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INTERNATIONAL S.A. ("TDF"), a company incorporated in France, and
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DIGITAL FUTURE INVESTMENTS B.V., a wholly owned indirect
subsidiary of TeleDiffusion de France S.A. and a company
organized under the laws of the Netherlands ("DFI (BV)").
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W I T N E S S E T H :
WHEREAS the Company, Castle Transmission Services (Holdings) Ltd.
("CTSH"), DFI (BV), TDF, and certain other shareholders of CTSH are parties to a
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Share Exchange Agreement (the "Exchange Agreement") pursuant to which DFI (BV)
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and such other shareholders have agreed, subject to the terms and conditions of
the Exchange Agreement, to exchange (the "Exchange") their shares of capital
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stock of CTSH for shares of Common Stock (as defined) of the Company; and
WHEREAS, as an inducement to TDF to enter into the Exchange Agreement,
the Company and TDF desire to enter into this Agreement upon the Closing to
provide for certain rights and obligations of the Company and TDF with respect
to the governance of the Company following the consummation of the Exchange.
NOW, THEREFORE, the Company and TDF, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Certain Defined Terms. As used in this Agreement,
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capitalized terms shall have the meanings assigned to such terms as set forth
below:
"Affiliate" and "Associate", when used with reference to any person,
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shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
Exchange Act, as in effect on the date of this Agreement.
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"Anti-dilutive Rights" shall have the meaning set forth in Section
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2.01(a).
A person shall be deemed the "beneficial owner" of, and shall be
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deemed to "beneficially own", and shall be deemed to have "beneficial ownership"
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of:
(i) any securities that such person or any of such person's
Affiliates or Associates is deemed to "beneficially own" within the meaning
of Rule 13d-3 under the Exchange Act, as in effect on the date of this
Agreement; and
(ii) any securities (the "underlying securities") that such person or
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any of such person's Affiliates or Associates has the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (written or
oral), or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise (it being understood that such person
shall also be deemed to be the beneficial owner of the securities
convertible into or exchangeable for the underlying securities).
"Appraiser" shall have the meaning set forth in Section 5.01(b).
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"Asset Swap" shall mean the exchange of wholly owned assets for other
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wholly owned assets of a similar nature and tenure where the Fair Market Value
of the assets received is at least equal to the Fair Market Value of the assets
disposed of or, if less, the difference is received in cash and such cash
constitutes a "disposition" for purposes of Section 4.02(a)(iii) and Section
4.02(b)(v).
"BBC" shall mean The British Broadcasting Corporation.
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"BBC Analogue Transmission Contract" shall mean the BBC Analogue
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Transmission Contract among the BBC and Castle Transmission International Ltd.
("CTI"), dated as of February 28, 1997.
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"BBC Contracts" shall mean the BBC Analogue Transmission Contract
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among the BBC and Castle Transmission International Ltd., dated as of February
28, 1997, and the BBC Digital Transmission Contract among the BBC and CTI, dated
as of February 10, 1998.
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"BBC Digital Transmission Contract" shall mean the BBC Digital
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Transmission Contract among the BBC and CTI, dated as of February 10, 1998.
"Berkshire Group" shall have the meaning given to such term in the
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Stockholders Agreement.
"Board" shall mean the Board of Directors of the Company.
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"Board Agenda" shall mean the agenda to be supplied pursuant to
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Section 3.07(b) of the Stockholders Agreement to each director of the Company
prior to any meeting of the Board.
"Business Combination" shall mean any of the following: (i) the sale,
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lease, transfer, conveyance of other disposition (other than by way of merger or
consolidation), of all or substantially all of the assets of the Company and its
Subsidiaries, taken as whole, to any person or (ii) any transaction (including,
without limitation, any merger or consolidation) the consummation of which would
result in any person (other than any Newco) becoming, directly or indirectly,
the beneficial owner of more than 50% of the Voting Securities and/or Equity
Securities (other than Customary Preferred Stock) of the Company (measured in
the case of Voting Securities by Voting Power rather than number of shares).
"Business Day" shall mean any day that is not a Saturday, a Sunday, a
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bank holiday or any other day on which commercial banking institutions in New
York, New York, Paris, France, or London, England, are not generally open for
business.
"By-laws" shall mean the By-laws of the Company to be adopted with
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immediate effect upon the Closing, as amended from time to time in accordance
with the terms of this Agreement and applicable law.
"Candover-Berkshire Agreement" shall have the meaning set forth in the
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Exchange Agreement.
"Charter" shall mean the certificate of incorporation of the Company
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to be adopted with immediate effect upon the Closing, as amended from time to
time in accordance with the terms of this Agreement and applicable law.
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"Class A Stock" shall mean the Company's Class A Common Stock, $.01
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par value per share, as designated in the Charter.
"Closing" shall have the meaning given to such term in the Exchange
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Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Commission" shall mean the Securities and Exchange Commission, or any
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other Federal agency at the time administering the Securities Act and the
Exchange Act.
"Commitment Agreement" shall mean the Commitment Agreement, dated
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February 28, 1997, as amended, among the BBC, the Company, TDF and TeleDiffusion
de France, S.A.
"Common Stock" shall mean shares of the Company's common stock, par
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value $.01 per share, as designated in the Charter.
"Common Stock Call Price" shall mean the weighted average price per
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share of Common Stock over the five trading days immediately preceding the
second anniversary of the date of the Closing.
"Company Call Right" shall have the meaning set forth in Section 6.02.
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"Company CTSH Shares" shall mean the CTSH Shares beneficially owned by
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the Company.
"Company CTSH Warrants" shall mean the CTSH Warrants beneficially
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owned by the Company.
"Conditions Precedent" shall mean the conditions precedent set forth
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on Schedule B hereto.
"Conflicted Action" shall mean any Significant Action under Section
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4.01(b)(iii) or (iv) proposed to be entered into by the Board, which TDF has not
confirmed to the Company in writing prior to exercising its Veto right under
Section 4.01(b) that, to TDF's knowledge (after having made all reasonable
inquiries in the circumstances of appropriate management of the members of the
TDF Group), is not proposed to be entered into by any member of the TDF Group in
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competition with, or to the exclusion of, the Company or any Subsidiary of the
Company.
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"Consolidated Cash Flow" shall mean, with respect to any person for
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any period, the consolidated net income of such person for such period plus (i)
provision for taxes based on income or profits of such person and its
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such consolidated net income, plus (ii) consolidated
interest expense of such person and its Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, noncash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with capital lease
obligations, imputed interest with respect to attributable Indebtedness,
commissions, discounts and other fees and charges incurred in respect of letters
of credit or bankers acceptance financings, and net payments (if any) pursuant
to hedging obligations), to the extent that any such expense was deducted in
computing such consolidated net income, plus (iii) depreciation, amortization
(including amortization of goodwill and other intangibles and other noncash
expenses (excluding any such noncash expense to the extent that it represents an
accrual of or reserve for cash expenses in any future period) of such person and
its Subsidiaries for such period to the extent that such depreciation,
amortization and other noncash expenses were deducted in computing such
consolidated net income, minus (iv) noncash items increasing such consolidated
net income for such period (excluding any items that were accrued in the
ordinary course of business), in each case on a consolidated basis and
determined in accordance with U.S. generally accepted accounting principles.
"CTSH Credit Agreement" shall mean the credit agreement dated February
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28, 1997, as amended as of May 21, 1997, among CTI as borrower, CTSH as
guarantor, the lenders listed therein, Credit Suisse First Boston as agent and
arranger and X.X. Xxxxxx Securities Ltd. as coarranger, together with the
documents related thereto (including, without limitation, any guarantee
agreements and security documents).
"CTSH Option" shall have the meaning set forth in Section 5.01(a).
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"CTSH Ordinary Shares" shall mean the ordinary shares of 1p each of
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CTSH.
"CTSH Per Share Value" shall have the meaning set forth in Section
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5.01(a).
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"CTSH Preference Shares" shall mean the redeemable preference shares
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of 1p each of CTSH.
"CTSH Shares" shall mean the CTSH Ordinary Shares and the CTSH
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Preference Shares.
"CTSH Shareholders Agreement" shall have the meaning set forth in the
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Exchange Agreement.
"CTSH Warrants" shall mean the warrants dated February 28, 1997,
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entitling TDF to subscribe for 257,000 CTSH Ordinary Shares and 257,242,500 CTSH
Preference Shares and the Company to subscribe for 515,000 CTSH Ordinary Shares
and 514,485,000 CTSH Preference Shares.
"Customary Preferred Stock" shall mean cash settled, non-convertible,
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non-voting preferred stock of the Company, with no rights of governance, no
board representation rights (other than customary rights in connection with a
default), which is not a "tracking" stock and which carries a simple, pre-set
fixed percentage rate of yield dividend.
"Debt to Adjusted Consolidated Cash Flow Ratio" shall mean, as of any
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date of determination, the ratio of (a) the Indebtedness of the Company as of
such date to (b) the sum of (1) the Consolidated Cash Flow of the Company for
the four most recent full fiscal quarters ending immediately prior to such date
for which internal financial statements are available, less the Company's Tower
Cash Flow for such four-quarter period, plus (2) the product of four times the
Company's Tower Cash Flow for the most recent quarterly period (such sum being
referred to as "Adjusted Consolidated Cash Flow"), in each case determined on a
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pro forma basis after giving effect to all acquisitions or dispositions of
assets made by the Company and its Subsidiaries from the beginning of such four-
quarter period through and including such date of determination (including any
related financing transactions) as if such acquisitions and dispositions had
occurred at the beginning of such four-quarter period. For purposes of making
the computation referred to above, (i) acquisitions that have been made by the
Company or any of its Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the reference period or
subsequent to such reference period and on or prior to the calculation date
shall be deemed to have occurred on the first day of the reference period and
Consolidated Cash Flow for such reference period shall be calculated, and (ii)
the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with U.S. generally
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accepted accounting principles, and operations or businesses disposed of prior
to the calculation date, shall be excluded.
"Equity Security" shall mean any security (whether or not a Voting
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Security) which is an ordinary share, a preferred share (other than a preferred
share which is mandatorily redeemable for cash or mandatorily exchangeable for
debt securities) or a common share or is classified as an equity security under
U.S. generally accepted accounting principles, or any securities convertible or
exchangeable for any such equity security.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended, or any similar Federal securities statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"Exchange Agreement" shall mean the Share Exchange Agreement dated as
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of April 24, 1998, among the Company, CTSH, TDF, and DFI (BV).
"Exchange Ratio" shall mean in the case of each CTSH Shareholder, 1.4
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shares of Common Stock, and in the case of DFI (BV) and TDF, 1.4 shares of Class
A Stock, for (a) 1 CTSH Ordinary Share, 1p per share, together with 999 CTSH
Preference Shares, 1p per share, as adjusted pursuant to Section 1.2 of the
Exchange Agreement or (b) in the event that the CTSH Preference Shares are
redesignated into CTSH Ordinary Shares on a "one for one" basis, 0000 XXXX
Xxxxxxxx Shares, 1p per share, as adjusted pursuant to Section 1.02 of the
Exchange Agreement.
"Exercise Price" shall have the meaning set forth in Section
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5.01(a)(i).
"Fair Market Value" shall mean, as to any property, the cash price at
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which a willing seller would sell and a willing buyer would buy such property in
an arms'-length negotiated transaction without time constraints.
"Indebtedness" shall mean all obligations, without duplication,
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(including without limitation hedging obligations), contingent and otherwise,
which should, in accordance with U.S. generally accepted accounting principles
consistently applied, be classified upon the obligor's consolidated balance
sheet as liabilities, including, without limitation, liabilities secured by any
mortgage on property owned or acquired subject to such mortgage, and also
including, without limitation, (i) all
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guaranties, endorsements and other contingent obligations, in respect of
Indebtedness of others, whether or not the same are or should be so reflected in
the said balance sheet, except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (ii) a preferred share which is mandatorily redeemable for
cash or exchangeable for debt securities and (iii) the present value of any
lease payments due under leases required to be capitalized in accordance with
applicable Statements of Financial Accounting Standards, determined in
accordance with applicable Statements of Financial Accounting Standards;
provided that the foregoing shall not include any such obligations with respect
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to trade payables under 90 days old.
"Independent Director" shall have the meaning given to such term in
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the Stockholders Agreement.
"Initial Investors" shall mean, in each case as defined in the
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Stockholders Agreement, the Berkshire Group, the Centennial Group and the Nassau
Group.
"IPO" shall have the meaning set forth in the Exchange Agreement.
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"Maintenance Securities" shall have the meaning set forth in Section
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2.01(a).
"Material Adverse Effect" shall mean, with respect to any person, a
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material adverse effect on the business, financial condition or results of
operations of such person.
"Newco" shall mean any person which becomes a holding company of the
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Company all the shares in which (other than shares not exceeding the Relevant
Percentage) are held by the same persons as were stockholders in the Company
prior to such person becoming a holding company of the Company.
"Option Exercise Period" shall have the meaning set forth in Section
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5.01(a).
"Option Notice" shall have the meaning set forth in Section 5.01(a).
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"Permitted Business Line" shall mean (i) the ownership, operation or
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management (for third party owners or otherwise) of terrestrial wireless
communication (including without limitation voice, data and video)
infrastructure (including equipment and facilities
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principally related thereto) and (ii) the provision of infrastructure services
principally relating thereto, including but not limited to network transmission
and services (it being understood for the avoidance of doubt that the
transmission of radio and television broadcasting shall be within the foregoing
definition).
"Permitted Indebtedness" shall mean any of the following items of
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Indebtedness of the Company or any of its Subsidiaries: (i) any Indebtedness
under the Senior Credit Facility up to an aggregate principal amount of $100
million outstanding at any one time; (ii) Indebtedness represented by the 10-
5/8% Senior Discount Notes due 2007 of the Company; (iii) Indebtedness under the
CTSH Credit Agreement up to an aggregate principal amount of (Pounds)85,000,000
outstanding at any one time; or (iv) Indebtedness represented by the 9%
Guaranteed Bonds due 2007 of CTSH.
"person" shall mean an individual, corporation, limited liability
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company, partnership, joint venture, trust or unincorporated organization, or a
government or any agency or political subdivision thereof and shall include any
"group" (which shall have the meaning given to such term in Section 13(d)(3) of
the Exchange Act).
"Preferred Security" shall mean any Equity Security of the Company
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which is designated as "preferred" in the Company's Charter.
"Public Offering" shall mean an underwritten public offering of Equity
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Securities pursuant to an effective registration statement filed by the Company
with the Commission in accordance with the Securities Act.
TDF will be "Qualified" for purposes of this Agreement if (i) during
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the period from the date of the Closing to (and including) the second
anniversary of such date, (A) the TDF Consolidated Group Interest is not at any
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time less than 10.5%,(B) a Business Combination has not at any time been
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consummated and (C) there has not occurred a TDF Change of Control and (ii)
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following the occurrence of such second anniversary without any loss of
Qualification by TDF under clauses (i)(A), (B) or (C) preceding, (A) the TDF Put
Right has been exercised by TDF on or prior to the second anniversary of the
Closing, or the Company Call Right has been exercised by the Company on such
second anniversary, (B) the TDF Group Interest is not at any time less than
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10.5%, (C) a Business Combination has not at any time been consummated and (D)
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there has not occurred a TDF Change of Control. Notwithstanding the foregoing,
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TDF shall also be deemed to be Qualified for purposes of this
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Agreement in the circumstances set forth in Section 6.01(b) and 6.02(b).
"Relevant Percentage" shall mean 25%, or if the Company elects by
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notice in writing to TDF, 30%.
"Restricted Party" shall mean any of the entities listed in Schedule A
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hereto, including any successor thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
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any similar Federal securities statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Senior Credit Facility" shall mean that certain Loan Agreement dated
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as of April 26, 1995, as amended by the First Amendment to the Loan Agreement
dated as of June 26, 1996, the Second Amendment to Loan Agreement dated as of
January 17, 1997, the Third Amendment to Loan Agreement dated as of April 3,
1997, the Fourth Amendment to Loan Agreement dated as of October 31, 1997, and
the Fifth Amendment to Loan Agreement dated as of November 24, 1997, by and
among Crown Communication Inc. (previously Castle Tower Corporation) and Crown
Castle International de Puerto Rico, as the borrowers, Key Bank National
Association, as agent, and PNC Bank, National Association, as arranger,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time.
"Senior Preferred Stock" shall mean the Company's Senior Convertible
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Preferred Stock, par value $.01 per share.
"Senior Preferred Warrants" shall mean the Company's Class B Common
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Stock Warrants granted in connection with the issuance of the Senior Preferred
Stock.
"Significant Action" shall have the meaning set forth in Section
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4.01(b).
"Simple Majority Event" shall mean any vote of the Board under the
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following circumstances: (i) following the second anniversary of the Closing,
six Independent Directors having been duly elected to, and qualified on, the
Board (which Board then contains no less than two Directors designated for
nomination by the Initial Investors) who are present, in person or by proxy, and
voting, provided, however, that one existing Independent Director (other than
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the Independent Director initially appointed by TDF pursuant to 3.02(a)(viii) of
the Stockholders Agreement) is replaced, (ii) seven Independent Directors having
been duly elected to, and qualified on, the Board who are present, in person or
by proxy, and voting, provided, however, that one existing Independent Director
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(other than the Independent Director initially appointed by TDF pursuant to
3.02(a)(viii) of the Stockholders Agreement) is replaced or (iii) any vote of
the Board after the fifth anniversary of the date of the Closing.
"Special Business Combination" shall mean the occurrence of any event
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or circumstance described in clause 13.5.1 of the Analogue Transmission Contract
(other than a breach by TDF of the Commitment Agreement) or clause 12.7.1 of the
Digital Transmission Contract in relation to any holding company (as defined in
Section 736 of the UK Companies Act 1985) of CTSH or a bona fide unsolicited
written offer to acquire a percentage of the Equity Securities of the Company
which, if it were to be consummated or otherwise allowed to occur without the
consent or approval of the BBC, would or might result in the BBC having the
right to terminate any BBC Contract in accordance with the terms of clauses
13.5.1 of the BBC Analogue Transmission Contract or clauses 12.7.1 of the BBC
Digital Transmission Contract.
"Special Majority Vote of the Board" shall mean (i) approval by two-
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thirds of the entire Board (it being understood that in the event that two-
thirds shall not be a whole number, such two-thirds number shall be rounded up
to the next integral number) or (ii) at such time as one existing Independent
Director (other than the Independent Director initially appointed by TDF
pursuant to 3.02(a)(viii) of the Stockholders Agreement) is replaced and five
Independent Directors shall have been duly elected and shall have qualified and
shall be present, in person or by proxy, and voting, approval by two-thirds of
the entire Board (it being understood that in the event that two-thirds number
shall not be a whole number, such two-thirds number shall be rounded down to the
next integral number); provided, however, that so long as the number of
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directors constituting the entire Board is twelve, (a) under the circumstances
in clause (i) above, "Special Majority Vote of the Board" shall mean the
approval of nine directors and (b) under the circumstances in clause (ii) above,
"Special Majority Vote of the Board" shall mean the approval of eight directors.
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"Statement of Financial Accounting Standards" shall mean statements
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and pronouncements of the U.S. Financial Accounting Standards Board.
"Stockholder" shall mean any Stockholder which is a party to the
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Stockholders Agreement.
"Stockholders Agreement" shall mean the Stockholders Agreement, dated
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as of August 21, 1998, among the Company, TDF and the other stockholders of the
Company named in Schedule I thereto.
"Strategic Alliance" shall mean any merger, consolidation, joint
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venture, cooperative agreement or arrangement or co-ownership with, or
investment by or in any person. Strategic Alliance shall not, however, include
any purchase, lease or disposition for cash to or from any such person of all
but not part of certain of the assets (other than securities or other interests
in any person) of such person. If such Strategic Alliance also constitutes a
Business Combination, such Strategic Alliance shall be deemed to be only a
Business Combination for all purposes of this Agreement.
"Subsidiary" or "Subsidiaries" when used with respect to any person
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shall mean (i) any other person, whether incorporated or unincorporated, which
is either required to be consolidated with such person under U.S. generally
accepted accounting principles or (ii) is an affiliate controlled by such
person, directly or indirectly, through one or more intermediaries within the
meaning of Rule 1.02(x) of Regulation S-X under the Exchange Act.
"TDF Change of Control" shall occur if (i) TeleDiffusion de France
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S.A. ("TDF Parent") does not own, directly or indirectly, at least 30% of TDF,
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and any other person owns, directly or indirectly, 30% or more of TDF or (ii)
France Telecom does not own, directly or indirectly, at least 30% of TDF Parent,
and any other person owns, directly or indirectly, 30% or more of TDF Parent and
in each case, such other person conducts a core business in the Company's
Permitted Business Line in a geographic area in which the Company conducts more
than de-minimis business in its Permitted Business Line at the time of the
occurrence of the circumstances described in the preceding clauses (i) or (ii).
"TDF Consolidated Group Interest" shall mean the percentage of Voting
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Power that is controlled directly or indirectly by the TDF Group or would be
controlled directly
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or indirectly by the TDF Group on the exercise of the TDF Put Right (assuming
the exercise of the TDF CTSH Warrants).
"TDF CCIC Warrants" shall mean the warrants issued to TDF upon the
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exercise of the TDF Put Right in exchange for, and on substantially the same
terms (except with respect to the conversion ratio in respect thereof) as, the
TDF CTSH Warrants.
"TDF CTSH Shares" shall mean the CTSH Shares beneficially owned by the
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TDF Group.
"TDF CTSH Warrants" shall mean the CTSH Warrants beneficially owned by
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TDF.
"TDF Designees" shall have the meaning set forth in the Stockholders
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Agreement.
"TDF Group" shall mean TDF and its Affiliates (other than the Company
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and its Subsidiaries).
"TDF Group Interest" shall mean the percentage of Voting Power that is
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controlled, directly or indirectly, by the TDF Group or would be controlled,
directly or indirectly, by the TDF Group (assuming the exercise of the TDF CCIC
Warrants).
"TDF Non-Voting Equity Interest" shall have the meaning set forth in
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Section 2.01(a).
"TDF Put Notice" shall have the meaning set forth in Section 6.01(a).
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"TDF Put Right" shall have the meaning set forth in Section 6.01(a).
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"TDF Put Shares" shall have the meaning set forth in Section 6.01(a).
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"TDF Rollup" shall mean the earlier to occur of (i) the closing of the
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TDF Put Right pursuant to Section 6.01(b) and (ii) the closing of the Company
Call Right pursuant to Section 6.02(b).
"Total Enterprise Value" of any person shall mean, as of any date of
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determination, the sum (without duplication) of (i) the Total Equity Market
Capitalization of such person and (ii) the Indebtedness of such person.
"Total Equity Market Capitalization" of any person shall mean, as of
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any day of determination, the sum of
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(i) the product of (A) the aggregate number of outstanding shares of Equity
Securities of such person on such day (which shall include any options or
warrants on, or securities convertible or exchangeable into, shares of Equity
Securities of such person) multiplied by (B) the average closing price of such
common stock listed on the New York Stock Exchange, the American Stock Exchange
or Nasdaq over the 20 consecutive Business Days immediately preceding such day,
plus (ii) the liquidation value of any outstanding shares of preferred stock of
such Person on such day, which preferred stock does not constitute Indebtedness
for purposes hereof.
"Tower Cash Flow" shall mean, for any period, the Consolidated Cash
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Flow of the Company and its Subsidiaries for such period that is directly
attributable to site rental revenue or license fees paid to lease or sublease
space on communication sites owned or leased by the Company, all determined on a
consolidated basis and in accordance with U.S. generally accepted accounting
principles. Tower Cash Flow shall not include revenue or expenses attributable
to non-site rental services provided by the Company or any of its Subsidiaries
to lessees of communication sites or revenues derived from the sale of assets.
"Transaction Documents" shall have the meaning set forth in the
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Exchange Agreement.
"Unsolicited Offer" shall mean (i) a bona fide unsolicited written
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offer by any person to acquire Voting Securities and/or Equity Securities (other
than Customary Preferred Stock) of the Company (measured in the case of Voting
Securities by Voting Power rather than number of shares), which, if consummated,
or (ii) any acquisition by any person of any such Securities which, when
consummated, results in such person beneficially owning, directly or indirectly,
more than the Relevant Percentage of the Voting Securities and/or Equity
Securities (other than Customary Preferred Stock) of the Company.
"Voting Power", when used with reference to any class or series of
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securities of the Company, or any classes or series of securities of the Company
entitled to vote together as a single class or series, shall mean the power of
such class or series (or such classes or series) to vote for the election of
directors. For purposes of determining the percentage of Voting Power of any
class or series (or classes or series) beneficially owned by any person, any
securities not outstanding which are subject to conversion rights, exchange
rights, rights, warrants, options or similar securities held by such person
shall be deemed to be
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outstanding for the purpose of computing the percentage of outstanding
securities of the class or series (or classes or series) beneficially owned by
such person, but shall not be deemed to be outstanding for the purpose of
computing the percentage of the class or series (or classes or series)
beneficially owned by any other person.
"Voting Securities", when used with reference to any person, shall
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mean any securities of such person having Voting Power or any securities
convertible into or exchangeable for any securities having Voting Power.
SECTION 1.02. Securities Outstanding. In determining the number or
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other amount outstanding of any securities of the Company or the percentage of
Voting Power of any class or series beneficially owned by such person,
securities owned by the Company or any of its Subsidiaries shall be deemed to be
not outstanding.
ARTICLE II
Anti-dilution
-------------
SECTION 2.01. Anti-dilutive Rights. (a) Except as provided in
---------------------
Section 2.01(c) below, so long as TDF is Qualified, the Company shall not issue,
sell or transfer any Equity Securities to any person (other than in connection
with the IPO but only to the extent that the TDF Consolidated Group Interest is
not thereby reduced to less than 20%) unless TDF is offered in writing the right
to purchase, at the same price in cash for which such Equity Security is being
offered to such other person(s) (provided that if such Equity Security is being
--------
offered to such other person(s) for consideration other than cash or cash
equivalents, the price in cash for which such Equity Security is being offered
shall be deemed to be the Fair Market Value (as determined in good faith by the
Board) of such consideration as of the date of issuance of such Equity
Security), and on the same other terms proposed to be issued and sold (it being
understood that TDF shall have the benefit of any underwriting or similar
discount), an amount of such Equity Securities (the "Maintenance Securities") as
----------------------
is necessary for the TDF Group to maintain the TDF Consolidated Group Interest,
the TDF Group Interest and the TDF Non-Voting Equity Interest (as defined), as
applicable, as would exist immediately prior to such issuance (the "Anti-
----
dilutive Rights"); provided that, with respect to the initial issuance by the
--------------- --------
Company following the date of this Agreement of Equity Securities which are not
Voting Securities, the TDF Non-Voting Equity Interest shall be
16
deemed to be equal to the TDF Consolidated Group Interest or the TDF Group
Interest, as applicable, and thereafter "TDF Non-Voting Equity Interest" shall
------------------------------
mean the percentage of non-voting Equity Securities owned, directly or
indirectly, by the TDF Group. TDF shall have the right, during the period
specified in Section 2.01(b), to accept the offer for any or all of the
Maintenance Securities.
(b) If TDF does not deliver to the Company written notice of
acceptance of any offer made pursuant to Section 2.01(a) within 20 Business Days
after TDF's receipt of such offer, TDF shall be deemed to have waived its right
to purchase all or any part of the Maintenance Securities as set forth in such
offer but TDF shall retain its rights under this Article II with respect to
future offers.
(c) The Anti-dilutive Rights set forth above shall not apply to (i)
the grant or exercise of options to purchase Common Stock to employees,
directors or consultants of the Company or any of its Subsidiaries prior to the
date of the Exchange Agreement and listed on Schedule 6.32 to the Exchange
Agreement or otherwise pursuant to a stock option or similar executive employee
benefit plan in existence on the date hereof; (ii) the grant or exercise of
options to purchase Common Stock or the issuance of shares of Common Stock as
compensation in the ordinary course of business consistent with practice for
public companies of a size and nature (e.g., high growth companies), as
----
determined by approval of a Special Majority Vote of the Board with a statement
to such effect, as the Company to employees or directors of the Company or any
of its Subsidiaries or otherwise pursuant to a stock option or similar executive
or employee benefit plan adopted by the Board after the Closing in the ordinary
course of business consistent with such practice; (iii) the grant or exercise of
options to purchase or the issuance of Common Stock of the Company as
compensation in the ordinary course of business consistent with past practice to
consultants of the Company or any of its Subsidiaries representing not more than
1% of the aggregate amount of the Common Stock outstanding at the time of such
grant or issuance; (iv) the issuance of shares of Common Stock issuable upon
conversion of, or in respect of dividends on, the Senior Preferred Stock, or
upon exercise of the Senior Preferred Warrants; (v) securities issued pursuant
to any stock split, stock dividend, rights offering, recapitalization,
reclassification or similar transaction, which securities are issued pro rata
among, and pro rata within, all classes of stock which are subject to such stock
split, stock dividend, rights offering, recapitalization, reclassification or
similar transaction; (vi) securities issued upon conversion or exchange of any
17
Equity Security in connection with which TDF had been granted Anti-dilutive
Rights upon the issuance thereof in accordance with Section 2.01(a); and (vii)
Voting Securities issued upon exercise of the Rights (as defined in the Exchange
Agreement) pursuant to the Rights Plan (as defined in the Exchange Agreement);
provided that the action referred to in clauses (ii), (iii) or (v) of this
--------
Section 2.01(c), as the case may be, shall have been approved (to the extent
required) in accordance with the provisions of this Agreement.
(d) A closing for the purchase of Maintenance Securities pursuant to
Section 2.01(a) shall occur on the later of (i) the date on which such public or
private issuance occurs and (ii) such date as may be agreed to by TDF and the
Company, at a time and place specified by TDF in a notice provided to the
Company at least 10 days prior to such closing date. In connection with such
closing, the Company and TDF shall provide such customary closing certificates
and opinions as TDF or the Company, as appropriate, shall reasonably request.
ARTICLE III
Standstill
----------
SECTION 3.01. Standstill. Subject to Section 3.04, no member of the
-----------
TDF Group shall, without the prior written consent of the Board (not to be
unreasonably withheld or delayed):
(a) except as permitted under the Transaction Documents, acquire,
offer to acquire, or agree to acquire, by purchase, gift or otherwise, the
beneficial ownership of any Voting Securities of the Company if the TDF Group
Interest upon the consummation thereof would be greater than the Relevant
Percentage, except pursuant to a stock split, stock dividend, rights offering,
recapitalization, reclassification or similar transaction;
(b) except as contemplated by the Transaction Documents, publicly
propose that TDF or any member of the TDF Group enter into, directly or
indirectly, any Business Combination involving the Company or propose to
purchase, directly or indirectly, a material portion of the assets of the
Company or any Subsidiary of the Company, or make any such proposal privately
(other than any such proposal with respect to CTSH and its assets) if it would
reasonably be expected to require the Company to make a public announcement
regarding such proposal;
18
(c) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms used in Regulation 14A promulgated
under the Exchange Act) to vote or consent with respect to any Voting Securities
of the Company in opposition to the recommendation of a Special Majority Vote
of the Board or become a "participant" in any "election contest" (as such terms
are defined or used in Rule 14a-11 under the Exchange Act) in opposition to the
recommendation of a Special Majority Vote of the Board;
(d) act in concert with any person for the purposes prohibited by
subparagraph (a) or (b) above;
(e) except in accordance with the terms of the Stockholders Agreement,
seek election to or seek to place a representative on the Board or seek the
removal of any member of the Board;
(f) (i) solicit, seek to effect, negotiate with or provide nonpublic
information to any other person with respect to or (ii) otherwise make any
public announcement or proposal whatsoever with respect to, any form of business
combination (with any person) involving a change of control of the Company or
the acquisition of a substantial portion of the Voting Securities and/or Equity
Securities or assets of the Company or any Subsidiary of the Company (except, in
the case of CTSH and its Subsidiaries, as permitted under Section 5.01 or the
CTSH Shareholders Agreement), including a merger, consolidation, tender offer,
exchange offer or liquidation of the Company assets, or any restructuring,
recapitalization or similar transaction with respect to the Company or any
Subsidiary of the Company; or
(g) publicly disclose any intention, plan or arrangement, or provide
advice or assistance to any person, inconsistent with the foregoing.
If TDF or any member of the TDF Group owns or acquires any Voting
Securities in violation of this Agreement, such Voting Securities shall
immediately be disposed of to persons who are not members of the TDF Group in
compliance with the provisions of this Agreement (but, for the avoidance of
doubt, if at any time the TDF Consolidated Group Interest or the TDF Group
Interest, as applicable, is increased to more than the Relevant Percentage as a
result of a repurchase of Voting Securities by the Company or any other change
in the Company's capitalization no Voting Securities shall be required to be
disposed of by any member of the TDF Group); provided that
--------
19
the Company may also pursue any other available remedy to which it may be
entitled as a result of such violation.
SECTION 3.02. Transfer Restrictions. Subject to Section 3.04, TDF
----------------------
shall not, without the prior written consent of the Company, sell, or otherwise
dispose of, or agree to dispose of, any Voting Securities of the Company, or any
rights or options to acquire such Voting Securities, except pursuant to a
transaction contemplated by the Transaction Documents or otherwise in a
transaction, subject to Section 3.05, complying with any of the following
clauses:
(a) an underwritten public offering of shares of such Voting
Securities in a manner intended to effect a broad distribution;
(b) to any person (other than an underwriter which intends to effect a
broad distribution of such Securities) in a transaction that complies with
the volume and manner of sale provisions contained in Rules 144(e) and Rule
144(f) as in effect on the date hereof under the Securities Act (whether or
not Rule 144 is in effect on the date of such transaction);
(c) subject to Section 7.08, to any Affiliate of TDF; provided,
--------
however, that such transferee becomes a party to this Agreement;
-------
(d) to any person in a transaction which complies with the Securities
Act that TDF knows or, after commercially reasonable inquiry believes,
after giving effect to such sale, will beneficially own not more than the
greater of (x) 15% of the aggregate Voting Power of the Voting Securities
of the Company and (y) the percentage of Common Stock of the Company which
would result in any person (other than any member of the TDF Group or the
Berkshire Group (as defined in the Stockholders Agreement)), upon the
acquisition of the beneficial ownership of such percentage, constituting an
"Acquiring Person" under the Rights Plan (as defined in the Stockholders
Agreement), or any successor plan to such Rights Plan;
(e) in a bona fide pledge of shares of Voting Securities of the
Company to a financial institution to secure borrowings as permitted by
applicable laws, rules and regulations; or
(f) upon five Business Days' prior notice to the Company, pursuant to
the terms of any tender or
20
exchange offer for Voting Securities of the Company made pursuant to the
applicable provisions of the Exchange Act or pursuant to any business
combination (provided that such tender or exchange offer is not materially
--------
related to any past noncompliance of Sections 3.01 and 3.03(a) by TDF).
SECTION 3.03. Voting. (a) Whenever (i) TDF shall have the right to
-------
vote any Voting Securities of the Company and (ii) any person shall have
initiated, proposed or otherwise solicited stockholders of the Company in a
"proxy-contest" or with respect to any proposal for the election of any member
to the Board, which in either case, the Board has recommended by a Special
Majority Vote receives a negative vote, TDF shall (a) be present, in person or
represented by proxy, at any stockholder meeting of the Company relating to such
contest or proposal for the purpose of determining the presence of a quorum at
such meeting or for such consent, and (B) vote or consent with respect to all
Voting Securities of the Company beneficially owned by it in the manner
recommended by a Special Majority Vote of the Board or, if so requested by a
Special Majority Vote of the Board, vote or cause to be voted all Voting
Securities of the Company beneficially owned by it in the same proportion as the
votes cast by or on behalf of the other holders of Voting Securities of the
Company.
(b) Subject only to Section 3.03(a), TDF shall have the right at any
time to vote any Voting Securities of the Company in its sole discretion.
SECTION 3.04. Time Limit. (a) Prior to any cessation of the
-----------
provisions of Sections 3.01, 3.02 and 3.03(a) pursuant to Section 3.04(b), the
provisions of Section 3.01 and Section 3.03 shall be suspended during any period
from the date of the commencement by any person (other than TDF or any member of
the TDF Group) of an Unsolicited Offer or a Special Business Combination to the
date of closing, abandonment or termination of all such Offers (including any
such Offer commenced by TDF or any member of the TDF Group following any
suspension of Sections 3.01 and 3.03 pursuant to this Section 3.04(a)) and shall
thereafter, subject to such Section 3.04(b), be reinstated as in effect prior to
the commencement of any such Unsolicited Offer or Special Business Combination,
as applicable.
21
(b) The provisions of Sections 3.01, 3.02 and 3.03(a) shall cease
to apply after the fifth anniversary of the Closing or the earlier of:
(i) any person (other than any person who is a member of the
Berkshire Group who holds, in person or as a group, less than the amount
permitted to be held by the Berkshire Group without such person
constituting an "Acquiring Person" under the Rights Plan), beneficially
owns or controls 15% or more of the Voting Securities and/or 15% or more of
the outstanding Equity Securities (other than Customary Preferred Stock) of
the Company without a standstill agreement (which includes customary
standstill provisions, voting restrictions and transfer restrictions, on no
more favorable terms than those to which TDF is subject under this
Agreement and with governance rights and, taken as a whole, other rights
which are no more favorable than those granted to TDF in this Agreement and
the Stockholders Agreement) being entered into between the Company and such
person;
(ii) a business combination or other change in control of the
Company has occurred or has been agreed to or acquiesced in by the Board or
any Unsolicited Offer or Special Business Combination has been consummated;
(iii) TDF shall no longer be Qualified;
(iv) no Voting Security of the Company is publicly traded; or
(v) the Company has redeemed the Rights (as defined in the
Stockholders Agreement) under the Rights Agreement (as defined Stockholders
Agreement).
SECTION 3.05. Right of First Refusal. (a) If TDF or any member of
-----------------------
the TDF Group desires to transfer to any person 5% or more of the Voting
Securities of the Company pursuant to Section 3.02(d) (other than a transfer to
an underwriter which intends to effect a broad distribution of such Voting
Securities), TDF, or such member of the TDF Group, as applicable, shall give
prompt written notice (the "Transfer Notice") to the Company of such intention,
---------------
specifying the number of Voting Securities proposed to be transferred (the
"Offered Securities") and the price at which they are to be transferred (the
-------------------
"Offer Price"). The Transfer Notice shall constitute an irrevocable offer (the
------------
"Offer") by TDF to sell to the Company the Offered Securities at the Offer
-----
Price. The
22
Company shall have the right, exercisable by written notice given by the Company
to TDF within twenty Business Days after receipt of such Transfer Notice, to
purchase (or to cause a person or group designated by the Company to purchase)
all, or any part in excess of 5% of the Voting Securities of the Company, of
such Offered Securities specified in such Transfer Notice for cash at the Offer
Price by delivery of a notice (the "Exercise Notice") to TDF stating the
---------------
Company's irrevocable acceptance of the Offer.
(b) If the Company elects to purchase the Offered Securities, the
closing of the purchase of the Offered Securities shall take place on a mutually
acceptable closing date which shall be not more than 30 days after delivery of
the Exercise Notice. The closing shall be held at 10:00 a.m., time, at the
principal office of the Company or at such other time or place as the parties
mutually agree.
(c) On the closing date, TDF shall deliver (or cause to be delivered)
(i) certificates representing the Offered Securities to be purchased by the
Company, free and clear of any lien, claim or encumbrance, and (ii) such other
documents, including evidence of ownership and authority, as the Company may
reasonably request. The Offer Price shall be paid by wire transfer of
immediately available funds no later than 2:00 p.m., local time, on such closing
date and the Company shall on such closing date issue to TDF (or to its order)
certificates for any balance of the Offered Securities which are not purchased
by the Company.
ARTICLE IV
Governance
----------
SECTION 4.01. Approval Required for Certain Actions. (a) Without
--------------------------------------
prejudice to TDF's rights under clauses three and six of the CTSH Shareholders
Agreement, in the case of a Simple Majority Event, the Company or any Subsidiary
of the Company may take any action set forth in clauses (i) through (ix) below
without the approval of a Special Majority Vote of the Board. In the absence of
a Simple Majority Event, without prejudice to TDF's rights under clauses three
and six of the CTSH Shareholders Agreement, so long as TDF is Qualified, no
action by the Company or any Subsidiary of the Company (including but not
limited to any action by their respective boards of directors or any committee
thereof) shall be taken with respect to any of the following matters without the
approval
23
of the Board, which approval shall be by a Special Majority Vote of the Board:
(i) the amendment of the Charter or By-laws;
(ii) any acquisition of any assets, business, operations or
securities (other than with respect to any redemption of the Senior
Preferred Stock in accordance with its terms) by the Company or any
Subsidiary thereof by merger, joint venture or otherwise (whether in one
transaction or a series of related transactions, including without
limitation any enforceable right of any other person to require the
deferred acquisition thereof) other than any such acquisition by the
Company or any of its Subsidiaries if the Company's and/or any such
Subsidiary's pro rata Total Enterprise Value in respect of such
acquisition, prior to giving effect thereto, is less than or equal to the
greater of $20 million and 2% of the Total Enterprise Value of the Company
and its Subsidiaries taken as a whole (it being understood that at the time
of any subsequent optional purchase relating to such acquisition, the value
of the Company's and/or any such Subsidiary's pro rata Total Enterprise
Value shall be the pro forma value of the entire interest);
(iii) any disposition (other than with respect to Asset Swaps) of any
assets, business, operations or securities by the Company or any Subsidiary
thereof (whether in one transaction or a series of related transactions,
including without limitation any enforceable right any other person to
require the deferred disposition thereof) other than a disposition by the
Company or any of its Subsidiaries where the Company's and/or any such
Subsidiary's pro rata Total Enterprise Value in the consideration received
in respect of such disposition, prior to giving effect thereto, (including
the assumption of any Indebtedness of the Company in connection therewith)
is less than or equal to whichever is the greater of $20 million and 2% of
the Total Enterprise Value of the Company and its Subsidiaries taken as a
whole;
(iv) any Strategic Alliance which is material to the Company and its
Subsidiaries, taken as a whole;
(v) any incurrence, assumption or issuance by the Company or any of
its Subsidiaries of Indebtedness other than (A) Indebtedness existing on
the date hereof and any Permitted Indebtedness (including in each case any
refinancings which do not increase the principal
24
amount thereof), (B) any other Indebtedness if the Company's Debt to
Adjusted Consolidated Cash Flow Ratio at the time of incurrence of such
Indebtedness, after giving pro forma effect to such incurrence or issuance
as of such date and to the use of proceeds therefrom as if the same had
occurred at the beginning of the most recently ended four full fiscal
quarterly periods of the Company for which internal financial statements
are available, would have been no greater than 5.5 to 1 and (C) any
refinancing of any Indebtedness the incurrence of which was approved by the
Board in accordance with this Section 4.01(a), which refinancing does not
increase the principal amount of such Indebtedness;
(vi) any transaction between (A) the Company or any of its
Subsidiaries, on the one hand, and (B) any Stockholder or Affiliate of the
Company (other than any Subsidiary of the Company and other than TDF and
its Affiliates), on the other hand (other than as contem plated by the
Transaction Documents);
(vii) the issuance of any Equity Security of the Company or any
Subsidiaries of the Company (other than (i) the grant or exercise of
options to purchase Common Stock to employees, directors or consultants of
the Company or any of its Subsidiaries prior to the date of the Exchange
Agreement and listed on Schedule 6.32 to the Exchange Agreement or
otherwise pursuant to a stock option or similar executive employee benefit
plan in existence on the date hereof; (ii) the grant or exercise of options
to purchase Common Stock or the issuance of shares of Common Stock as
compensation in the ordinary course of business consistent with practice
for public companies of a similar size and nature (e.g., high growth
----
companies), as determined by approval of a Special Majority Vote of the
Board with a statement to such effect, as the Company to employees or
directors of the Company or any of its Subsidiaries or otherwise pursuant
to a stock option or similar executive or employee benefit plan adopted by
the Board after the Closing in the ordinary course of business consistent
with such practice; (iii) the grant or exercise of options to purchase or
issuance of Common Stock of the Company as compensation in the ordinary
course of business consistent with past practice to consultants of the
Company or any of its Subsidiaries representing not more than 1% of the
aggregate amount of the Common Stock outstanding at the time of such grant
or issuance; (iv) the issuance of shares of Common Stock issuable upon
conversion of, or in respect of dividends on, the Senior Preferred Stock,
or upon
25
exercise of the Senior Preferred Warrants; (v) securities issued pursuant
to any stock split, stock dividend, rights offering, recapitalization,
reclassification or similar transaction, which securities are issued pro
rata among and pro rata within all classes of stock which are subject to
such stock split, stock dividend, rights offering, recapitalization,
reclassification or similar transaction; (vi) securities issued upon
conversion or exchange of any Equity Security in connection with which TDF
had been granted Anti-dilutive Rights upon the issuance thereof in
accordance with Section 2.01(a); (vii) Voting Securities issued upon
exercise of the Rights (as defined in the Stockholders Agreement) pursuant
to the Rights Plan (as defined in the Stockholders Agreement); (viii) the
issuance of shares of Common Stock issuable upon conversion of, or in
respect of dividends on, the Senior Preferred Stock, the exercise of the
Senior Preferred Warrants, or upon the conversion or exercise of Equity
Securities the issuance of which was approved in accordance with this
Section 4.01(a)(vii); provided that the actions referred to in clauses
--------
(ii), (iii) or (v) of this Section 4.01(a)(vii), as the case may be, shall
have been approved (to the extent required) in accordance with the
provisions of this Agreement).
(viii) any Business Combination entered into by the Company;
(ix) the dissolution of the Company, the adoption of a plan of
liquidation of the Company or any action by the Company to commence any
suit, case, proceeding or other action (i) under any existing or future law
of any jurisdiction relating to bankruptcy, insolvency, reorganization or
relief of debtors seeking to have an order for relief entered with respect
to the Company, or seeking to adjudicate the Company bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, winding up,
liquidation, dissolution, composition or other relief with respect to the
Company or (ii) seeking appointment of a receiver, trustee, custodian or
other similar official for the Company, or making a general assignment for
the benefit of the creditors of the Company; or
(x) any amendment to the Rights Plan (as defined in the
Stockholders Agreement) other than any such amendment (A) for the purpose
of permitting any transaction (and only to the extent necessary to permit
such transaction) which is permitted under the terms of
26
this Agreement or (B) required by applicable law or any ruling or order of
any court or governmental body.
(b) Without prejudice to TDF's rights under clauses three and six of
the CTSH Shareholders' Agreement, following the fifth anniversary of the
Closing, the Company or any of its Subsidiaries may take any of the actions set
forth in clauses (ii), (iii), (iv) and (v) below without the prior written
consent of TDF, and following the tenth anniversary of the Closing, the Company
or any of its Subsidiaries may take the action set forth in clauses (i), (vi)
and (vii) below without the prior written consent of TDF. Prior to such fifth
or tenth anniversary, as applicable, so long as TDF is Qualified, no action by
the Company or any Subsidiary (including but not limited to any action by their
respective boards of directors or any committee thereof), other than, in the
case of clauses (iii) and (iv) below, any Conflicted Action, shall be taken with
respect to any of the following matters (each such matter, a "Significant
-----------
Action") without the approval by a majority of the entire Board and the prior
------
written consent of TDF (any written notice refusing to provide such consent
being hereinafter referred to as a "Veto"):
----
(i) (A) the creation or issuance of any new class of security of the
Company or any class of security of a Subsidiary of the Company (other than
where all such Subsidiary's securities are issued to the Company), or any
right to acquire such security, (B) the issuance of any Class A Stock to
any person other than TDF or any member of the TDF Group or (C) any
amendment to the Charter or By-laws (other than any amendment required by
applicable law or any ruling or order of any court or governmental body)
(including without limitation any such amendment to increase the number of
directors constituting the entire Board), with, in the case of clauses (A)
or (B), the intent or effect of materially adversely affecting the legal
rights of TDF under this Agreement or the Stockholders Agreement;
(ii) the acquisition in one or a series of related transactions,
including without limitation any enforceable right of any other person to
require any deferred acquisition (whether by merger, consolidation, joint
venture, the purchase of stock or assets or otherwise) of a business,
operations, securities or assets not in a Permitted Business Line, which
acquisition by the Company or any of its Subsidiaries if the Company's
and/or any such Subsidiary's pro rata Total Enterprise Value in respect of
such acquisition,
27
immediately prior to giving effect thereto, would constitute more than 10%
of the Total Enterprise Value of the Company and its Subsidiaries taken as
a whole (it being understood that at the time of any subsequent optional
purchase relating to such acquisition the value of the Company's and/or any
such Subsidiary's pro rata Total Enterprise Value shall be the pro forma
value of the entire interest);
(iii) the acquisition in one or a series of related transactions,
including without limitation any enforceable right of any other person to
require any deferred acquisition (whether by merger, consolidation, joint
venture, the purchase of stock or assets or otherwise) of a business,
operations, securities or assets which is (or are) in a Permitted Business
Line (other than any part thereof which is not material in relation to the
whole of such business, operations, securities or assets), which
acquisition, by the Company or any of its Subsidiaries if the value of the
Company's and/or any such Subsidiary's pro rata Total Enterprise Value in
respect of such acquisition, immediately prior to giving effect thereto,
would constitute, (A) prior to December 31, 1999, the greater of $750
million and more than 25% of the Total Enterprise Value of the Company and
its Subsidiaries taken as a whole and (B) following December 31, 1999, more
than 25% of the Total Enterprise Value of the Company and its Subsidiaries
taken as a whole (it being understood that at the time of any subsequent
optional purchase relating to such acquisition the value of the Company's
and/or any such Subsidiary's pro rata Total Enterprise Value shall be the
pro forma value of the entire interest);
(iv) any Strategic Alliance with any Restricted Party;
(v) the disposition (other than with respect to Asset Swaps) in one
or a series of related transactions, including without limitation any
enforceable right of any other person to require any deferred disposition
(whether by merger, consolidation, the sale or distribution of stock or
assets or otherwise) of a business or assets, if the value of the Company's
and/or any such Subsidiary's pro rata Total Enterprise Value in the
consideration received in respect of such disposition, immediately prior to
giving effect thereto, (including the assumption of any Indebtedness of the
Company in connection therewith) exceeds 10% of the Total Enterprise Value
of the
28
Company and its Subsidiaries taken as a whole; provided, however, that
-------- -------
there shall be excluded from the foregoing any disposition by the Company
or any of its Subsidiaries of any specific interest of the Company and/or
any of its Subsidiaries in any acquisition permitted under the terms of
this Agreement, which interest the Board, as evidenced by resolution duly
adopted by the Board prior to such acquisition, firmly intended to dispose
of following such acquisition, and which is disposed of by the Company or
any Subsidiary of the Company within twelve months of such acquisition;
(vi) any Business Combination, except as permitted pursuant to
Section 5.01(a);
(vii) the issuance by the Company to any person in one or more
transactions of Equity Securities or the right to purchase Equity
Securities (other than with respect to the Rights (as defined in the
Stockholders Agreement) issued under the Rights Plan (as defined in the
Stockholders Agreement)) representing the Relevant Percentage or more of
the aggregate amount of the outstanding Equity Securities of the Company
(it being understood that any such issuance the consummation of which would
result in a Business Combination shall be treated solely under the
foregoing clause (vi)).
(c) Prior to proposing to take any action set forth in Sections
4.01(a) or 4.01(b) at any meeting of the Board, the Secretary of the Company
shall cause (i) to be included in the Board Agenda a statement that such
proposed action is an action set forth in such Section 4.01(a) or 4.01(b), as
applicable, the vote required by the Board to approve such action in accordance
with this Agreement and the party or parties proposing such action, which party
or parties shall provide the Secretary of the Company with all relevant
information relating to such action to accompany such Board Agenda and the
Secretary of the Company shall cause such Board Agenda to be supplied to each
director at least five Business Days prior to such Board meeting and (ii) shall
cause a copy of such Board Agenda to be supplied to TDF in accordance with
Section 7.07 at least five Business Days prior to such Board Meeting, and TDF
shall deliver to the Company Secretary notice of its intent to consent to or
Veto such Significant Action prior to such Board Meeting (provided that the
--------
failure to deliver such notice shall not impair TDF's right to Veto such
Significant Action under Section 4.01(b)). Following the approval of such
Significant Action by the Board, the Company Secretary shall promptly deliver to
TDF notice of such approval in
29
accordance with Section 7.07 and TDF shall have three Business Days following
delivery of such notice to deliver to the Company Secretary its consent to, or
Veto of, such Significant Action; provided, however, that if TDF shall Veto any
-------- -------
proposed Business Combination which has been approved by the Board, the Company
may override such Veto pursuant to Section 5.01. If TDF shall fail to deliver to
the Company Secretary notice of its consent to, or Veto of, such Significant
Action prior to 5:00 p.m. U.S. Central time on the third Business Day following
the date of delivery by the Company Secretary to TDF of notice of the Board's
approval of such Significant Action in accordance with the preceding sentence,
TDF shall be deemed to have consented to such Significant Action and the Company
may thereafter consummate such Significant Action.
SECTION 4.02. Negative Covenants. (a) Notwithstanding any other
-------------------
provision of the Transaction Documents, neither the Company, any of its
Subsidiaries, TDF nor any member of the TDF Group shall take or approve any
action which would result in the BBC having the right to terminate a BBC
Contract in accordance with the terms of such BBC Contract.
(b) TDF agrees that neither TDF nor any member of the TDF Group shall
enter into any transaction falling within a Permitted Business Line which TDF
Vetoed in accordance with Section 4.01(b)(iii) and Section 4.01(b)(iv) within
six months after the relevant Veto.
SECTION 4.03. Successors to the Company. The Company shall procure
--------------------------
that TDF shall be granted by any Newco equivalent rights to the rights contained
in this Agreement as a condition to any transaction involving the creation of
any such Newco.
ARTICLE V
CTSH Option
-----------
SECTION 5.01. CTSH Option. (a) Notwithstanding any other provision
------------
of this Agreement, TDF shall have the right to the CTSH Option (as defined) if,
and only if, TDF is Qualified and (i)(A) the Board has approved a Business
Combination by a Special Majority Vote, (B) TDF thereafter gives a Veto in
respect of such Business Combination in accordance with Section 4.01(b) and
4.01(c) and (C) subsequent to the exercise of the Veto by TDF, a majority of the
entire Board (excluding the two TDF Designees) resolves that such Veto by TDF
shall be
30
overridden in accordance with this Section 5.01; (ii) the commencement or
occurrence of an Unsolicited Offer by any person (other than any member of the
TDF Group); or (iii) a Special Business Combination shall have been commenced by
any person (other than any member of the TDF Group), TDF shall have the option,
exercisable, subject to subparagraph (d) below, irrevocably by notice in writing
given to the Company within five days following agreement between the parties as
to, or (as the case may be), receipt of notice of the determination of the Fair
Market Value per share of the CTSH Shares and the CTSH Warrants (assuming the
payment of the exercise price of such Warrants) (the "CTSH Per Share Value") as
--------------------
set forth below, to (x) acquire for cash by itself or together with any other
person, all, but not less than all, the Company CTSH Shares at such CTSH Per
Share Value, (y) sell for cash to the Company the TDF CTSH Shares and the TDF
CTSH Warrants at such CTSH Per Share Value or (z) maintain the TDF CTSH Shares
and the TDF CTSH Warrants without regard to the event giving rise to the CTSH
Option (the "CTSH Option").
-----------
(b) The valuation procedures shall be as follows. Each of the Company
and TDF shall, commencing upon the date of the occurrence of any of the events
set forth in Section 5.01(a)(i)(C), Section 5.01(a)(ii) or Section 5.01(a)(iii),
negotiate in good faith to determine a CTSH Per Share Value of the CTSH Shares
within thirty days following the occurrence of any such event. If the parties do
not agree on a CTSH Per Share Value within such thirty-day period, they shall,
within three days, appoint an independent investment banker of international
stature with its principal office in New York City (the "Appraiser") and shall
---------
provide such Appraiser with their respective written determinations of the CTSH
Per Share Value. Such Appraiser shall then choose (taking into account all
relevant factors, but no discount shall be applied as a result of the
termination or potential termination of the BBC Contracts), as between the
written determinations of the CTSH Per Share Value provided by each party to the
Appraiser, the CTSH Per Share Value which most closely approximates, in the
expert opinion of the Appraiser, the Fair Market Value per share of the CTSH
Shares and the CTSH Warrants. If the parties are unable to agree on the
selection of such Appraiser within such three-day period, they shall on such
third day so notify the Chairman of the New York Stock Exchange, Inc., who
shall, within five days of such notification, (or if unwilling or unable to
serve in such capacity, the senior partner of one the following accounting
firms, in order of priority for selection, KPMG Peat Marwick LLP, Price
Waterhouse LLP, Ernst & Young LLP and Xxxxxx Xxxxxxxx LLP) appoint an investment
banker meeting the qualifications set
31
forth above to serve as the Appraiser. In any case, the Appraiser shall make its
decision with respect to the CTSH Per Share Value within ten days of the date of
its engagement and must choose a Value presented by either of the parties
pursuant to their respective written determinations (i.e., such Appraiser may
----
not select a different value). The fees and expenses of the Appraiser shall be
paid by the Company.
(c) If a Business Combination, Unsolicited Offer or Special Business
Combination is abandoned or terminated, the CTSH Option and any exercise thereof
by TDF pursuant to Section 5.01(a)(x) or (y) shall become null and void and
ownership in CTSH shall continue as if such CTSH Option had not come into
effect, unless the Company exercises its right to cause TDF to purchase the
Company CTSH Shares pursuant to subparagraph (d) below.
(d) Any closing of a sale and purchase of CTSH Shares pursuant to the
CTSH Option shall take place on the date of consummation of the Business
Combination and, subject as provided in the next following sentence, the
Unsolicited Offer or Special Business Combination which gave rise thereto,
subject to the satisfaction or waiver of the Conditions Precedent; provided that
--------
any such Business Combination may not be consummated by the Company other than
substantially simultaneously with (but not before) the consummation of the sale
and purchase of the CTSH Shares pursuant to such CTSH Option; provided further
----------------
that each of the Company and TDF shall continue to use its reasonable best
efforts to obtain the satisfaction or waiver of such Conditions Precedent so
long as such Business Combination, Unsolicited Offer a Special Business
Combination is outstanding. In the case of an Unsolicited Offer or a Special
Business Combination, if TDF has elected to exercise the CTSH Option pursuant to
Section 5.01(a)(x) and the Conditions Precedent to such CTSH Option are not
waived or satisfied on or before the third Business Day prior to the date of
consummation of the Unsolicited Offer or the Special Business Combination which
gave rise to such CTSH Option, TDF shall have the option by written notice (a
"Withdrawal Notice") to the Company to be given no later than the date of
-----------------
consummation of such Unsolicited Offer or Special Business Combination, as
applicable, to declare the exercise of the CTSH Option pursuant to Section
5.01(a)(x) to be null and void and to exercise the CTSH Option pursuant to
either Section 5.01(a)(y) or Section 5.01(a)(z) in lieu thereof. If TDF fails to
give a Withdrawal Notice prior to the date of consummation of the Unsolicited
Offer or the Special Business Combination, TDF shall be deemed to have affirmed
32
the exercise of the CTSH Option pursuant to Section 5.01(a)(x).
If such Business Combination is not consummated (or an Unsolicited
Offer or Special Business Combination is abandoned or terminated) by reason
primarily of the exercise by TDF of the CTSH Option pursuant to Section
5.01(a)(x), then the Company may nevertheless require TDF to proceed with the
purchase (the "Required Purchase") of the Company CTSH Shares at the CTSH Per
-----------------
Share Value, subject to the satisfaction or waiver of the Conditions Precedent
and the non-occurrence prior to the closing of the Required Purchase of (i) any
event or development of a state of circumstances or facts which has had or is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on CTSH and its Subsidiaries taken as a whole or (ii)(A) a suspension of
trading in the Company's Common Stock by the Commission or Nasdaq or the
establishment of limited or minimum prices in trading of securities generally on
the New York Stock Exchange, Inc., or Nasdaq or (B) banking moratoriums having
been declared either by Federal or New York State authorities. Such Required
Purchase by TDF of the Company CTSH Shares shall, subject to the satisfaction or
waiver of the Conditions Precedent and the nonoccurrence of any such event as
aforesaid, close thirty days after announcement of the abandonment or
termination of such Business Combination, Unsolicited Offer, or Special Business
Combination, as applicable (or, if later, the second Business Day following the
date of the satisfaction or waiver of the Conditions Precedent). If TDF shall
exercise the CTSH Option pursuant to Section 5.01(a)(x), TDF may pay all or any
part of the purchase price therefor by surrendering to the Company on the
closing of such exercise shares of Class A Stock (which shall be valued at the
offer price per share of Common Stock pursuant to the Business Combination,
Unsolicited Offer, or Special Business Combination, as applicable, giving rise
to the CTSH Option).
(e) If the price offered in any proposed Business Combination,
Unsolicited Offer or Special Business Combination is increased or decreased by
the offeror by more than 10% after the commencement or determination of the CTSH
Per Share Value pursuant to subparagraph (b), the Company shall promptly notify
the Appraiser of such increase or decrease and the Appraiser shall take into
account such increase or decrease (and any other relevant factor in connection
therewith), except that if the Appraiser has previously completed the appraisal
procedure set forth in such subparagraph (b) and selected the CTSH Per Share
Value, (i) such appraisal procedure shall recommence and the choice of the CTSH
Per Share Value by the Appraiser shall be made
33
within five days of the notice to the Appraiser by the Company of such increase
or decrease and (ii) any exercise by TDF of the CTSH Option by written notice to
the Company pursuant to Section 5.01(b) shall be null and void, and TDF may
thereafter exercise the CTSH Option by subsequent written notice to the Company
in accordance with such Section 5.01(b).
(f) Immediately prior to the consummation of any Business
Combination, Unsolicited Offer or Special Business Combination, TDF shall have
the right to require the Company to purchase one-half (1/2) of the shares of
Class A Stock held by the TDF Group, as applicable, for cash in an amount equal
to the product of (x) the offer price per share of Common Stock pursuant to the
Business Combination, Unsolicited Offer or Special Business Combination, as
applicable, and (y) one-half (1/2) of the number of such shares of Class A Stock
held by the TDF Group.
ARTICLE VI
Put and Call Rights
-------------------
SECTION 6.01. TDF Put Right. (a) The Company agrees that from the
-------------
date of this Agreement and continuing until the second anniversary of the
Closing, TDF shall have the right in its sole discretion (the "TDF Put Right"),
-------------
upon the delivery of a notice (the "TDF Put Notice") by TDF to the Company, to
--------------
require the Company, subject to the satisfaction of the Conditions Precedent
(A), subject to proviso (B) to clause (b) below, to purchase all, but not less
than all (except for one CTSH Ordinary Share), of the TDF CTSH Shares
beneficially owned by the TDF Group in exchange for that number of shares of
Class A Stock which is equal to the product of (x) the Exchange Ratio and (y)
the number of all (but one CTSH Ordinary Share) of such TDF CTSH Shares (the
"TDF Put Shares") and (B) to issue in exchange for the TDF CTSH Warrants (i) TDF
--------------
CCIC Warrants for a number of shares of Class A Stock which is equal to the
product of (x) the Exchange Ratio and (y) the number of TDF CTSH Shares
represented by the TDF CTSH Warrants and (ii) 100,000 shares of Class A Stock
(as adjusted from time to time after the date hereof in accordance with the
provisions contained in Section 1.02 of the Exchange Agreement).
(b) The closing of the TDF Put Right shall, subject to the
satisfaction of the Conditions Precedent, take place on the tenth Business Day
after the date on which the Company shall have received the TDF Put Notice (or
such date which is the second Business Day after the date on which such
conditions shall have been satisfied, not in any case to be later than the
fortieth Business Day following such date on
34
which the Company received the TDF Put Notice, at which time the TDF Put Right
shall, subject to the following provisos (A) and (B), terminate and be of no
further force or effect), at a time and place specified by TDF in such notice or
such other date, time and place as may be agreed to by TDF and the Company;
provided that, notwithstanding any other provision of this Agreement, if (A) (i)
--------
any statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered or enforced by any court or governmental body
or authority which prohibits consummation of the TDF Put Right substantially on
the terms contemplated hereby, each of the Company and TDF shall use its
reasonable best efforts to remove any such order, decree or injunction and TDF
shall be deemed to be Qualified for purposes of this Agreement for the lesser of
(x) the first anniversary of the date of the TDF Put Notice and (y) the closing
of the TDF Put Right following such removal or (ii) (A) the BBC shall not have
approved the exercise of the TDF Put Right or shall have approved the TDF Put
Right subject to conditions which are reasonably deemed by the Company or TDF to
be onerous, each of the Company and TDF shall use its reasonable best efforts to
obtain such BBC approval and TDF shall be deemed to be Qualified for purposes of
this Agreement for so long as (x) TDF continues to exercise its reasonable best
efforts to obtain such removal or approval and (y) the TDF Consolidated Group
Interest is not less than 10.5% or (B) if the BBC does not approve the exercise
of the TDF Put Right in whole or approves the TDF Put Right in whole subject to
conditions which are reasonably deemed by the Company or TDF to be onerous, TDF
shall be entitled to exercise the TDF Put Right in respect of so many of the TDF
CTSH Shares and TDF CTSH Warrants as do not require the consent of the BBC and
TDF shall be deemed to be Qualified for the purposes of this Agreement for so
long as (x) TDF continues to exercise its reasonable best efforts to obtain such
removal or approval and (y) the TDF Consolidated Group Interest is not less than
10.5%. The TDF Put Right shall expire and be of no further force or effect at
such time as TDF is no longer deemed to be Qualified under the preceding clause
(i) and/or clause (ii), as applicable. On the closing date of the TDF Put
Right, the Company shall deliver to TDF, against delivery of (i) duly executed
transfers in respect of (all but one of) the TDF CTSH Shares and the share
certificate(s) in respect thereof (which shares TDF undertakes to sell free and
clear of all liens, claims, charges or other encumbrances ("Liens")) and a duly
-----
executed deed of termination in respect of the TDF CTSH Warrants and (ii) such
other documents, including evidence of ownership
35
and authority, as the Company may reasonably request, the TDF Put Shares, the
TDF CCIC Warrants and 100,000 shares of Class A Stock (adjusted as aforesaid).
In connection with such closing, the Company and TDF shall also provide such
other customary closing certificates and opinions as TDF or the Company, as
appropriate, may reasonably request.
SECTION 6.02. Company Call Right. (a) TDF agrees that on the second
-------------------
anniversary of the Closing (or, if an Unsolicited Offer or Special Business
Combination is outstanding on such date, such date as is five days following the
termination or abandonment of such Unsolicited Offer or Special Business
Combination) unless (i) the TDF Rollup shall have previously been consummated,
(ii) the Common Stock Call Price shall be less than or equal to $60 (as adjusted
for any stock split, stock dividend, rights offering, recapitalization,
reclassification or other similar transaction), or (iii) a Business Combination
been consummated, or an Unsolicited Offer or a Special Business Combination is
outstanding or has been consummated and TDF has exercised the CTSH Option
pursuant to Section 5.01(a)(x) above, the Company shall have the right in its
sole discretion (the "Company Call Right"), upon the delivery of a notice (the
------------------
"Company Call Notice") by the Company to TDF on such date, to require, subject
--------------------
to the satisfaction of the Conditions Precedent, subject to proviso (B) to
clause (b) below, TDF to transfer and deliver to the Company all, but not less
than all (except for one CTSH Ordinary Share), of the TDF CTSH Shares and the
TDF CTSH Warrants beneficially owned by the TDF Group in exchange for the TDF
Put Shares, the TDF CCIC Warrants and 100,000 shares of Class A Stock (as
adjusted from time to time after the date hereof in accordance with the
provisions contained in Section 1.02 of the Exchange Agreement).
(b) The closing of the Company Call Right shall, subject to the
satisfaction of the Conditions Precedent, take place on the tenth Business Day
after the date on which TDF received the Company Call Notice (or such date which
is the second Business Day after the date on which such conditions shall have
been satisfied, not in any case to be later than the fortieth Business Day
following such date on which TDF received the Company Call Notice, at which time
the Company Call Right shall, subject to the following provisos (A) and (B),
terminate and be of no further force or effect), at a time and place specified
by the Company in such notice or such other date, time and place as may be
agreed to by TDF and the Company; provided that, notwithstanding any other
--------
provision of this Agreement, if (A) (i) any statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
36
entered or enforced by any court or governmental body or authority which
prohibits consummation of the Company Call Right substantially on the terms
contemplated hereby, each of the Company and TDF shall use its reasonable best
efforts to remove any such order, decree or injunction and TDF shall be deemed
to be Qualified for purposes of this Agreement for the lesser of (x) the first
anniversary of the date of the Company Call Notice and (y) the closing of the
Company Call Right following such removal or (ii) the BBC shall not have
approved the exercise of the Company Call Right or shall have approved the
Company Call Right subject to conditions which are reasonably deemed by the
Company or TDF to be onerous, each of the Company and TDF shall use its
reasonable best efforts to obtain such BBC approval and to permit the Company to
consummate the Company Call Right, and TDF shall be deemed to be Qualified for
purposes of this Agreement for so long as (x) TDF continues to exercise its
reasonable best efforts to obtain such removal or approval and (y) the TDF
Consolidated Group Interest is not less than 10.5% or (B) if the BBC does not
approve the exercise of the Company Call Right in whole or approves the Company
Call Right in whole subject to conditions which are reasonably deemed by the
Company or TDF to be onerous, the Company shall be entitled to exercise the
Company Call Right in respect of so many of the TDF CTSH Shares and TDF CTSH
Warrants as do not require the consent of the BBC and TDF shall be deemed to be
Qualified for the purposes of this Agreement for so long as (x) TDF continues to
exercise its reasonable best efforts to obtain such removal or approval and (y)
the TDF Consolidated Group Interest is not less than 10.5%. On the closing date
of the Company Call Right, the Company shall deliver to TDF, against delivery of
(i) duly executed transfers in respect of (all but one of) the TDF CTSH Shares
and the share certificate(s) in respect thereof (which shares TDF undertakes to
sell free and clear of all Liens) and a duly executed deed of termination in
respect of the TDF CTSH Warrants and (ii) such other documents, including
evidence of ownership and authority, as the Company may reasonably request, the
TDF Put Shares and the TDF CCIC Warrants and 100,000 shares of Class A Stock
(adjusted as aforesaid). In connection with such closing, the Company and TDF
shall also provide such other customary closing certificates and opinions as TDF
or the Company, as appropriate, may reasonably request.
37
ARTICLE VII
Miscellaneous
-------------
38
SECTION 7.01. Access to Information; Confidenti ality. The Company
----------------------------------------
shall, and shall cause each of its Subsidiaries to, afford to TDF reasonable
access prior to the termination of this Agreement to their respective corporate
books and records (including without limitation copies of the minutes of the
meetings of their respective boards of directors) and, without prejudice to
TDF's rights under the CTSH Shareholders Agreement, TDF shall have the right to
attend any meeting of the board of directors of the Company or any Subsidiary of
the Company as an observer upon reasonable prior notice to the Corporate
Secretary of each of the Company and any such Subsidiary. Except as required by
applicable law, TDF will hold, and will use its reasonable best efforts to cause
its officers, employees, accountants, counsel, financial advisors and other
representatives and controlled affiliates to hold, in confidence any and all
non-public information received from the Company or any of its Subsidiaries,
directly or indirectly, and to use such information solely for purposes of
effecting the transactions contemplated by this Agreement and the other
Transaction Documents.
SECTION 7.02. Survival of Warranties. The covenants, agreements,
-----------------------
representations and warranties of the parties contained herein or in any
certificate or other document delivered pursuant hereto or in connection
herewith shall survive the Closing and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any party hereto.
SECTION 7.03. Reasonable Efforts; Further Actions. The parties
------------------------------------
hereto each will use all reasonable efforts to take or cause to be taken all
action and to do or cause to be done all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
SECTION 7.04. Consents. The parties hereto will cooperate with each
---------
other in filing any necessary applica tions, reports or other documents with,
giving any notices to, and seeking any consents from, all regulatory bodies and
all governmental agencies and authorities and all third parties as may be
required in connection with the consum mation of the transactions contemplated
by this Agreement.
SECTION 7.05. Amendment and Waiver. This Agreement may not be
---------------------
amended, supplemented or discharged, and no provision hereof may be modified or
waived, except expressly by an instrument in writing signed by the parties
hereto. Any term or provision of this Agreement may be waived, but only in
writing by the party which is entitled
39
to the benefit thereof. No waiver of any provision hereof by any party shall
constitute a waiver thereof by any other party nor shall any such waiver
constitute a continuing waiver of any matter by such party.
SECTION 7.06. Counterparts. This Agreement may be executed in one or
-------------
more counterparts, each of which shall be deemed an original but which together
shall constitute but one instrument. It shall not be necessary for each party
to sign each counterpart so long as every party has signed at least one
counterpart.
SECTION 7.07. Notices. All notices, requests, demands, waivers and
--------
other communications required or permitted to be given under this Agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery service.
Notices shall be sent to the appropriate party at its address or facsimile
number given below (or at such other address or facsimile number for such party
as shall be specified by notice given hereunder):
If to the Company: Crown Castle International Corp.
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: President
with a copy to: Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
If to TDF: TeleDiffusion de France
International, S.A.
00 Xxx x'Xxxxxxx xxx Xxxxx
00000 Xxxxx 15
France
Fax: ###-##-####
Attn: Xxxxxx Xxxxxxx
with a copy to: Xxxxx & Overy
Xxx Xxx Xxxxxx
Xxxxxx XX0X 0XX
Fax: 00-000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
40
All such notices, requests, demands, waivers and communi cations shall be
deemed received upon (i) actual receipt thereof by the addressee, (ii) actual
delivery thereof to the appropriate address or (iii) in the case of a facsimile
transmission, upon transmission thereof by the sender and issuance by the
transmitting machine of a confirmation slip that the number of pages
constituting the notice have been transmitted without error. In the case of
notices sent by facsimile transmission, the sender shall contemporaneously mail
a copy of the notice to the addressee at the address provided for above.
However, such mailing shall in no way alter the time at which the facsimile
notice is deemed to be received or the validity of such facsimile notice.
SECTION 7.08. Binding Effect; Assignment. This Agreement and all of
---------------------------
the provisions hereof shall be binding upon and shall inure to the benefit of
the parties and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, directly or indirectly, including, without limitation, by operation of
law, by any party hereto without the prior written consent of the other parties
hereto (it being understood that TDF may not transfer to any person (other than
to any of its Affiliates which becomes a party to the Agreement and to whom
there is transferred any Voting Securities of the Company) by operation of law
or otherwise, any right of TDF hereunder which arises as a result of TDF being
Qualified without the prior written consent of the Company); provided, that TDF
shall be entitled to transfer any of its rights under this Agreement to any of
its Affiliates subject to any condition or obligation in connection with such
right provided hereunder, so long as such Affiliate agrees to become a party to
this Agreement and such Affiliate is a holder of the whole or any part of the
TDF Group Interest or the TDF Consolidated Group Interest, as applicable.
SECTION 7.09. Entire Agreement. This Agreement, the other
-----------------
Transaction Documents and the schedules, exhibits and other documents and
agreements referred to herein or therein or delivered pursuant hereto or thereto
which form a part hereof or thereof constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, between the parties or any
of them with respect to the subject matter hereof.
SECTION 7.10. No Third Party Beneficiaries. This Agreement shall be
-----------------------------
binding upon and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns, and nothing in this
41
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits, claims, liabilities, causes of action or remedies
of any nature whatsoever under or by reason of this Agreement.
SECTION 7.11. Expenses. Each of the parties hereto shall pay its own
---------
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including the fees and expenses of counsel,
irrespective of when incurred.
SECTION 7.12. Applicable Law and Jurisdiction; Service of Process.
----------------------------------------------------
(a) This Agreement shall be construed in accordance with and governed by the
law of the State of New York; provided, however, that to the extent that the
-------- -------
terms and conditions of this Agreement relate to the internal affairs of the
Company, such terms and conditions shall be construed in accordance with and
governed by the laws of the State of Delaware.
(b) Each of the parties to this Agreement hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(c) Each of the parties hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each of the parties to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.07. Nothing
in this
42
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 7.13. Waiver of Jury Trial. Each party hereto hereby waives,
---------------------
to the fullest extent permitted by applicable law, any right it may have to a
trial by jury in any legal proceeding directly or indirectly arising out of or
relating to this Agreement or the transactions contem plated hereby or thereby
(whether based on contract, tort or any other theory). Each party hereto (a)
certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this agree
ment by, among other things, the mutual waivers and certifications in this
Section.
SECTION 7.14. Article and Section Headings. The article, section and
-----------------------------
other headings contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.
SECTION 7.15. Termination. This Agreement may be terminated by the
------------
mutual consent of the parties hereto.
SECTION 7.16. Specific Enforcement. The parties hereto acknowledge
---------------------
and agree that irreparable damage would occur in the event any of the provisions
of this Agreement were not performed in accordance with their specific terms or
were otherwise breached for which money damages would not be an adequate remedy.
It is accordingly agreed that, so long as permitted by applicable law, the
parties shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof without the necessity of proving the inadequacy of money
damages as a remedy.
SECTION 7.17. Severability. Should any provision of this Agreement
-------------
for any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any of the other provisions of this
Agreement, which remaining provisions shall remain in full force and effect and
the application of such invalid or unenforceable provision to persons or
circumstances other
43
than those as to which it is held invalid or unenforceable shall be valid and
enforced to the fullest extent permitted by law.
IN WITNESS WHEREOF, each party hereto has executed this Agreement as
of the day and year first above written.
CROWN CASTLE INTERNATIONAL CORP.,
by
/s/ Xxxxx Xxxxxxxxx
-------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
TELEDIFFUSION DE FRANCE INTERNATIONAL S.A.,
by
/s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Executive of TdF
DIGITAL FUTURE INVESTMENTS B.V.
by
/s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxxx
Title: Acting on Behalf of
TdF, Managing
Director of DFI
Schedule A
Restricted Parties
------------------
British Telecom
Bouygues
Cegetel
Stet
Schedule B
1. The delivery of all notices required by law or regulation in relation to
the transaction and the expiration of all waiting or notice periods in
relation thereto;
2. The receipt of all governmental and other regulatory consents or
notifications required in relation to the transaction, including, without
limitation, where the grant or the exercise of any of the rights under
Articles V or VI of this Agreement requires a notification to be made to
the European Commission under the Merger Regulation (4064/89, as amended):
(a) the European Commission issuing a Phase I decision under Article
6(1)(a) or Article 6(1)(b) of the Merger Regulation and not making a
decision under Article 9(1) thereof; or
(b) in respect of the United Kingdom, as follows:
(a) the Office of Fair Trading indicating in terms satisfactory to
the parties, that it is not the intention of the Secretary of
State to refer the acquisition of the shares to the UK Monopolies
and Mergers Commission ("MMC") pursuant to the Fair Trading Act
---
1973; or
(b) the Secretary of State accepting undertakings from the buyer of
the shares in lieu of a reference of the said acquisition to the
MMC as aforesaid.
3. The prior written consent of the BBC to the extent required in relation to
the transaction under or otherwise necessary to prevent triggering a right
of the BBC to terminate any of the Analogue Transmission Contract, the
Digital Transmission Contract, the Commitment Agreement pursuant to the
terms thereof and any other agreement containing substantially similar
restrictions and any agreement amending or replacing the same; and
4. The receipt of any consent required under the Finance Documents (as defined
in the CTSH Shareholders Agreement) in relation to the transaction or any
agreement (whether or not with the same banks) amending, replacing or
refinancing (in whole or in part) the same or any other agreement providing
finance to the CTSH Group; and
5. Good and indefeasible title being transferred by the party transferring
such shares.
