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EXHIBIT 10.10
FINANCIAL ADVISORY AGREEMENT
THIS FINANCIAL ADVISORY AGREEMENT (this "Agreement") is made
and entered into effective as of April 23, 1998, among Specialty
Teleconstructors, Inc., a Nevada corporation ("Holdings"), OmniAmerica Holdings
Corporation, a Delaware corporation ("OmniAmerica"), OmniAmerica, Inc., a
Delaware corporation ("OAI"), Xxxxx & Xxxxxx Construction Co., Inc., an Oklahoma
corporation ("Xxxxx"), Specialty Management, Inc., a Nevada corporation ("SMI"),
Microwave Tower Services, Inc., an Oregon corporation ("MTS"), Specialty
Constructors, Inc., a New Mexico corporation ("SCI"), Specialty Constructors
Coatings, Inc., a Nevada corporation ("SCCI"), Specialty Capital Services, Inc.,
a Nevada corporation ("SCS"), Specialty Combined Resources, Inc., a Texas
corporation ("SCR"), Specialty Fortress, Inc., a Nevada corporation ("SFI"),
Specialty Training Centers, Inc., a Nevada corporation ("STC"), South Atlantic
Tower Corporation, a Delaware corporation ("SATC"), and OmniTower, Ltd., a
Florida limited partnership ("OmniTower" and, together with Holdings,
OmniAmerica, OAI, Xxxxx, SMI, MTS, SCI, SCCI, SCS, SCR, SFI, STC and SATC, the
"Clients") and Xxxxx, Muse & Co. Partners, L.P., a Texas limited partnership
(together with its successors, "HMCo").
WHEREAS, HMTF/Omni Partners, L.P., a Delaware limited
partnership controlled by an affiliate of HMCo ("OmniPartners"), owns as of the
date hereof and prior to the Merger (as defined in the Merger Agreement) all of
the issued and outstanding shares of capital stock of OmniAmerica, which in turn
owns, directly or indirectly, all of the issued and outstanding shares of
capital stock and partnership interests, as applicable, of OAI, SATC and
OmniTower; and
WHEREAS, OmniPartners simultaneously herewith is acquiring
approximately 45.8% of the issued and outstanding shares of common stock, par
value $.01 per share, of Holdings ("Holdings Common Stock") pursuant to that
certain Amended and Restated Agreement and Plan of Merger (the "Merger
Agreement"), dated as of April 22, 1998, among Holdings, OAI Acquisition Corp.,
a Delaware corporation and wholly-owned
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS
IN PARAGRAPH 5 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES
THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR
PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HMCO OR ANY
OTHER INDEMNIFIED PERSON IDENTIFIED THEREIN.
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subsidiary of Holdings, OmniAmerica, OAI, OmniPartners and Omni/HSW Acquisition,
Inc., a Delaware corporation (the "Merger Transaction"); and
WHEREAS, the Clients have requested that HMCo render, and HMCo
has rendered, financial advisory services to them in connection with the
negotiation of the Merger Transaction; and
WHEREAS, the Clients have requested that HMCo render financial
advisory, investment banking, and other similar services to them with respect to
any future proposals for a tender offer, acquisition, sale, merger, exchange
offer, recapitalization, restructuring, or other similar transaction directly or
indirectly involving the Clients or any of their respective subsidiaries, and
any other person or entity (collectively, "Subsequent Transactions").
NOW, THEREFORE, in consideration of the services rendered and
to be rendered by HMCo to the Clients, and to evidence the obligations of the
Clients to HMCo and the mutual covenants herein contained, the Clients hereby
jointly and severally agree as follows:
1. Retention.
(a) Each of the Clients hereby acknowledges that it has
retained HMCo, and HMCo acknowledges that it has acted, as financial advisor to
the Clients in connection with the Merger Transaction.
(b) Each of the Clients acknowledges that it has retained HMCo
as its exclusive financial advisor in connection with any Subsequent
Transactions that may be consummated during the term of this Agreement, and that
the Clients will not retain any other person or entity to provide such services
in connection with any such Subsequent Transaction without the prior written
consent of HMCo. HMCo agrees that it shall provide such financial advisory,
investment banking, and other similar services in connection with any such
Subsequent Transaction as may be requested from time to time by the Board of
Directors of Holdings.
2. Term. The term of this Agreement shall continue until the
earlier to occur of (i) the tenth anniversary of the date hereof or (ii) the
date on which Hicks, Muse, Xxxx & Xxxxx Incorporated ("HMTF") or its successors
and their respective affiliates (including, without limitation, any equity fund
sponsored by HMTF or its successors including, without limitation, Hicks, Muse,
Xxxx & Xxxxx Equity Fund III, L.P., a Delaware limited partnership, and its
affiliates) shall cease to own beneficially, directly or indirectly, at
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least 33.33% of the number of shares of Holdings Common Stock issued to
OmniPartners on the Closing Date; provided, however, that notwithstanding the
foregoing, this Agreement shall continue for so long as HMTF and its affiliates
own beneficially, directly or indirectly, securities of Holdings or its
successors with a market value of at least $25 million. "Closing Date" shall
mean the date on which the transactions contemplated by the Merger Agreement are
consummated. For purposes of this Section 2, any calculation of the number of
securities owned beneficially, directly or indirectly, by HMTF and its
affiliates shall be determined in good faith by the Board of Directors of
Holdings, as follows: (i) "owned" shall mean beneficial ownership, determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and (ii) each calculation shall be adjusted for subsequent
stock splits, reverse stock splits, stock combinations, recapitalizations, stock
dividends and the like.
3. Compensation. As compensation for HMCo's financial
advisory, investment banking, and other similar services rendered in connection
with any Subsequent Transaction pursuant to Section 1(b) hereof, the applicable
Client shall, and the other Clients shall cause such Client to, pay to HMCo, at
the closing of any such Subsequent Transaction, a cash fee equal to 1.5% of the
Transaction Value of such Subsequent Transaction. As used herein, the term
"Transaction Value" means the total value of the Subsequent Transaction,
including, without limitation, the aggregate amount of the funds required to
complete the Subsequent Transaction (excluding any fees payable pursuant to this
Section 3) including the amount of any indebtedness, preferred stock or similar
items assumed (or remaining outstanding).
4. Reimbursement of Expenses. In addition to the compensation
to be paid pursuant to Section 3 hereof, the Clients agree, jointly and
severally, to reimburse HMCo, promptly following demand therefor, together with
invoices or reasonably detailed descriptions thereof, for all reasonable
disbursements and out-of-pocket expenses (including, without limitation, fees
and disbursements of counsel) incurred by HMCo (a) as financial advisor to the
Clients in connection with the Merger Transaction; provided, however, that such
reimbursable disbursements and expenses shall not exceed $50,000.00 or (b) in
connection with the performance by it of the services contemplated by Section
1(b) hereof.
5. Indemnification. The Clients jointly and severally shall
indemnify and hold harmless each of HMCo, its affiliates, and their respective
directors, officers, controlling persons (within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20(a) of the Exchange Act, if
any, agents and employees (HMCo, its affiliates, and such other specified
persons being collectively referred to as "Indemnified Persons" and individually
as an "Indemnified Person") from and against any and all claims, liabilities,
losses, damages and expenses incurred by any Indemnified Person (including,
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without limitation, those arising out of an Indemnified Person's negligence and
reasonable fees and disbursements of the respective Indemnified Person's
counsel) which (A) are related to or arise out of (i) actions taken or omitted
to be taken (including, without limitation, any untrue statements made or any
statements omitted to be made) by any Client or (ii) actions taken or omitted to
be taken by an Indemnified Person with any Client's consent or in conformity
with any Client's instructions or any Client's actions or omissions or (B) are
otherwise related to or arise out of HMCo's engagement hereunder, and will
reimburse each Indemnified Person for all costs and expenses, including, without
limitation, reasonable fees and disbursements of any Indemnified Person's
counsel, as they are incurred, in connection with investigating, preparing for,
defending, or appealing any action, formal or informal claim, investigation,
inquiry or other proceeding, whether or not in connection with pending or
threatened litigation, caused by or arising out of or in connection with HMCo's
acting pursuant to HMCo's engagement, whether or not any Indemnified Person is
named as a party thereto and whether or not any liability results therefrom.
None of the Clients will, however, be responsible for any claims, liabilities,
losses, damages or expenses pursuant to clause (B) of the preceding sentence
that have resulted primarily from HMCo's bad faith, gross negligence or willful
misconduct. The Clients also agree that neither HMCo nor any other Indemnified
Person shall have any liability to any Client for or in connection with such
engagement except for any such liability for claims, liabilities, losses,
damages or expenses incurred by any Client that have resulted primarily from
HMCo's bad faith, gross negligence or willful misconduct. Each of the Clients
further agrees that none of them will, without the prior written consent of
HMCo, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any Indemnified Person
is an actual or potential party to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of HMCo and each other Indemnified Person hereunder from all liability arising
out of such claim, action, suit or proceeding. EACH CLIENT HEREBY ACKNOWLEDGES
THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL CLAIMS, LIABILITIES,
LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE
RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY
NEGLIGENCE OF HMCO OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition to any
rights that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. Each of the Clients hereby consents to
personal jurisdiction and to service and venue in any court in which any claim
which is subject to this Agreement is brought against HMCo or any other
Indemnified Person.
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It is understood that, in connection with HMCo's engagement,
HMCo may also be engaged to act for any Client in one or more additional
capacities, and that the terms of this engagement or any such additional
engagement may be embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or oral)
and any modification of said engagement or such additional engagement(s) and
shall remain in full force and effect following the completion or termination of
said engagement or such additional engagement(s).
Each of the Clients further understands and agrees that if
HMCo is asked to furnish any Client a financial opinion letter or act for any
Client in any other formal capacity, such further action may be subject to a
separate agreement containing provisions and terms to be mutually agreed upon.
6. Confidential Information. In connection with the
performance of the services hereunder, HMCo agrees not to divulge any
confidential information, secret processes or trade secrets disclosed by any
Client or any of its direct or indirect subsidiaries to it solely in its
capacity as a financial advisor, unless the applicable Client consents to the
divulging thereof or such information, secret processes, or trade secrets are
publicly available or otherwise available to HMCo without restriction or breach
of any confidentiality agreement or unless required by any governmental
authority or in response to any valid legal process.
7. Governing Law. This Agreement shall be construed,
interpreted, and enforced in accordance with the laws of the State of Texas,
excluding any choice-of-law provisions thereof.
8. Assignment. This Agreement and all provisions contained
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns; provided, however, neither
this Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned (other than with respect to the rights and obligations of HMCo,
which may be assigned to any one or more of its principals or affiliates) by any
of the parties without the prior written consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.
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10. Other Understandings. All discussions, understandings, and
agreements heretofore made between any of the parties hereto with respect to the
subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the agreement of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
XXXXX, MUSE & CO. PARTNERS, L.P.
By: HM PARTNERS INC., its General
Partner
By: /s/ XXXXXXXX X. XXXXXX, XX.
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Name: Xxxxxxxx X. Xxxxxx, Xx.
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Title: Managing Director and Principal
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SPECIALTY TELECONSTRUCTORS, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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OMNIAMERICA HOLDINGS CORPORATION
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
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Title: Vice President and Secretary
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OMNIAMERICA, INC.
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
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Title: Vice President,Secretary
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and Treasurer
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XXXXX & XXXXXX CONSTRUCTION CO.,
INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Assistant Secretary
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SPECIALTY MANAGEMENT, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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MICROWAVE TOWER SERVICES, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Assistant Secretary
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SPECIALTY CONSTRUCTORS, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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SPECIALTY CONSTRUCTORS COATINGS,
INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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SPECIALTY CAPITAL SERVICES, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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SPECIALTY COMBINED RESOURCES, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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SPECIALTY FORTRESS, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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SPECIALTY TRAINING CENTERS, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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SOUTH ATLANTIC TOWER CORPORATION
By: /s/ F. XXXXXX XXXXXX
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Name: F. Xxxxxx Xxxxxx
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Title: Vice President and
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Assistant Secretary
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OMNITOWER, LTD.
By: South Atlantic Tower Corporation,
its general partner
By: /s/ F. XXXXXX XXXXXX
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Name: F. Xxxxxx Xxxxxx
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Title: Vice President and
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Assistant Secretary
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