Dated 28 June 2004
CROWN CASTLE INTERNATIONAL CORP.
and
NGG TELECOMS INVESTMENT LIMITED
and
NATIONAL GRID HOLDINGS ONE PLC
SHARE PURCHASE AGREEMENT
relating to the sale and purchase of the whole of the issued share capital
of Crown Castle UK Holdings Limited
[Linklaters Logo]
One Silk Street
London EC2Y 8HQ
Telephone (44-20) 7456 2000
Facsimile (44-20) 7456 2222
Ref Roger Barron/Joanna Healey
Table of Contents
Contents Page
1 Interpretation ....................................................... 1
2 Agreement to Sell the Shares ......................................... 15
3 Consideration ........................................................ 15
4 Conditions ........................................................... 16
5 Pre-Closing .......................................................... 18
6 Closing .............................................................. 21
7 Post-Closing Adjustments ............................................. 22
8 Warranties ........................................................... 25
9 Limitation of Liability .............................................. 27
10 Claims .............................................................. 32
11 Restrictions on the Seller .......................................... 32
12 Confidentiality ..................................................... 34
13 Other Provisions .................................................... 35
14 Tax Indemnity ....................................................... 45
15 Tax Returns etc. .................................................... 53
16 Environmental Indemnity ............................................. 55
17 Repayment of Intra-Group balances ................................... 60
18 Guarantee by the Guarantor .......................................... 60
Schedule 1 The Company and the Subsidiaries ............................... 64
Schedule 2 Retained Names and Marks (Clause 13.2) ......................... 69
Schedule 3 Closing Obligations (Clause 6) ................................. 74
Schedule 4 Determination of Closing Date Balance Sheet and
Completion Statements (Clause 7) Part 1 ................................. 77
i
Schedule 4 Part 2 March Balance Sheet (Clause 1.1) ........................ 79
Schedule 4 Part 3 Base Working Capital Amount (Clause 1.1) ............... 81
Schedule 4 Part 4 Estimated Cash Deferred Income Amount (Clause 1.1) ...... 84
Schedule 4 Part 5 Illustration of Post-Closing
Adjustment Mechanisms (Clause 7.5) ...................................... 85
Closing and Completion Adjustment Summary ................................. 85
Schedule 4 Part 6 Specific Accounting Policies ............................ 86
Schedule 5 Warranties given by the Seller ................................. 87
Schedule 6 Warranties given by the Purchaser ............................. 111
Schedule 7 Warranties given by the Guarantor ............................. 114
Schedule 8 Seller's Knowledge ............................................. 115
Schedule 9 Transitional Services Agreement ................................ 116
Table of Contents ......................................................... i
ii
Share Purchase Agreement
This Agreement is made on 28 June 2004
between:
(1) Crown Castle International Corp, a company incorporated under the laws
of Delaware whose registered office is at 510 Bering Drive, Suite 500,
Houston, Texas 77057 (the "Seller");
(2) NGG Telecoms Investment Limited, a company incorporated in England and
Wales with registered number 3696564 whose registered office is at 1-3
The Strand, London WC2N 5EH (the "Purchaser"); and
(3) National Grid Holdings One plc, a company incorporated in England and
Wales with registered number 2367004 whose registered office is at 1-3
The Strand, London WC2N 5EH (the "Guarantor").
Whereas:
(A) The Seller has agreed to sell or procure to be sold the Shares (as
defined below) and to assume the obligations imposed on the Seller
under this Agreement;
(B) The Purchaser has agreed to purchase the Shares and to assume the
obligations imposed on the Purchaser under this Agreement; and
(C) The Guarantor has agreed to guarantee the Purchaser's obligations under
this Agreement.
It is agreed as follows:
1 Interpretation
In this Agreement, unless the context otherwise requires, the
provisions in this Clause 1 apply:
1.1 Definitions
"Accounting Policies" means the accounting policies and procedures of
the Group Companies as set out in Part 1 of Schedule 4;
"Accounts" has the meaning given to it in paragraph 2.1 of Schedule 5;
"Accounting Firm" has the meaning given to it in paragraph 2.4 of Part
1 of Schedule 4;
"Accounts Date" means 31 March 2004;
"Actual Tax Written Down Value" means the Tax Written Down Value of the
assets of any Group Company which constitute Plant and Machinery which
are not Long Life Assets as of 31 December 2003 on the assumption that
an accounting period of each Group Company ends on Closing;
"ADR Notice" has the meaning given to it in Clause 13.21.2;
"Affiliate" means, with respect to any person, any other person
directly or indirectly, through one or more intermediaries,
controlling, controlled by or under common control with such first
person from time to time;
1
"Agreed Terms" means, in relation to a document, such document in the
terms agreed between the Seller and the Purchaser and signed for
identification by the Purchaser and the Seller with such alterations as
may be agreed in writing between the Seller and the Purchaser from time
to time;
"Agreement" means this Share Purchase Agreement;
"Ancillary Agreements" means any ancillary agreements with utility
providers (including providers of power and water), any agreements for
grazing or mowing affecting any undeveloped part or parts of any real
property described in paragraph 4.1 of Schedule 5 and any other similar
non-material agreements granting occasional rights, including rights of
way over any such undeveloped part or parts of the surface area of such
real property;
"appropriate representatives" has the meaning given to it in paragraph
7.1 of Schedule 5;
"Asbestos" means all or any of the following naturally occurring
minerals: chrysotile, crocidolite, amosite, anthophyllite, tremolite
and actinolite and includes materials containing any of those minerals;
"Asbestos Regulations" means the Control of Asbestos at Work
Regulations 2002 as in force as at the date of this Agreement;
"Base Working Capital Amount" means (pound)(7,434,000) (negative seven
million, four hundred and thirty four thousand pounds Sterling), being
the amount equal to (x) Base Working Capital Assets minus (y) Base
Working Capital Liabilities, as set out on the March Balance Sheet and
the Base Working Capital Schedule;
"Base Working Capital Assets" means the aggregate of receivables
(excluding receivables included within deferred income and VAT on such
receivables within deferred income), prepayments (excluding FASB Asset
and amounts corresponding to the line items "Other Debtors DLA" and
"Escrow Ac-Esat"), inventories and work-in-progress as set out on the
March Balance Sheet and the Base Working Capital Schedule (it being
understood that Base Working Capital Assets shall not include Cash
Balances or amounts included in Intra-Group Indebtedness);
"Base Working Capital Liabilities" means the aggregate of payables,
accrued liabilities (excluding FASB Liability), corporation tax and
provisions falling due within 12 months as set out on the March Balance
Sheet and the Base Working Capital Schedule (it being understood that
Base Working Capital Liabilities shall not include deferred income or
amounts included in Intra-Group Indebtedness);
"Base Working Capital Schedule" means the calculation of the Base
Working Capital Amount set out in Part 3 of Schedule 4;
"BBC" means The British Broadcasting Corporation, a corporation
incorporated by Royal Charter (Company No.: RC000057);
"BBC Analogue Transmission Agreement" means the agreement between the
Company and the BBC dated 27 February 1997;
"BBC DAB Service Agreement" means the agreement between the Company and
the BBC dated 24 March 2003;
2
"BBC Mux B DTT Transmission Agreement" means the agreement between the
Company and the BBC dated 23 August 2002;
"BBC Mux 1 DTT Transmission Agreement" means the agreement between the
Company and the BBC dated 10 February 1998;
"BBC Pension Scheme" means the BBC pension scheme established by a
trust deed dated 23 June 1949, as amended from time to time;
"Books and Records" means all books of account, ledgers, general,
financial, accounting, tax documentation and personnel records, files,
customers' and suppliers' lists, sales, advertising and promotional
literature and customer and supplier correspondence, whether held in
paper form or by electronic means, exclusively relating to the Group
Companies and portions of all such types of records that primarily
relate to the Group Companies but do not exclusively relate to the
Group Companies;
"Broadcasting Act" means the Broadcasting Act 1990 and the Broadcasting
Act 1996;
"British Isles" means the United Kingdom, the Republic of Ireland, the
Channel Islands and the Isle of Man;
"Budget" means the 2004 budget of the Group set out in Section 6.1 of
the Disclosure Letter;
"Business Day" means a day which is not a Saturday, Sunday or a public
holiday in England or New York City;
"Capital Allowances" means capital allowances as provided for by the
Capital Allowances Act;
"Capital Allowances Act" means the Capital Allowances Act 2001;
"Cash Amount Statement" has the meaning given to it in Clause 7.2;
"Cash Balances" means the aggregate of cash in hand or credited at a
financial institution (including deposits repayable on demand or within
three months of the applicable balance sheet date with any financial
institution) as recorded in the March Balance Sheet or the Closing Date
Balance Sheet, as applicable, less the aggregate of bank overdrafts or
amounts debited at a financial institution as recorded in the March
Balance Sheet or the Closing Date Balance Sheet, as applicable;
"Cash Deferred Income" means all amounts included in the Closing Date
Balance Sheet in respect of income which is deferred and in respect of
which cash has been banked and cleared prior to the Closing Date. For
the avoidance of doubt, reference is hereby made to the Cash Deferred
Income Schedule;
"Cash Deferred Income Amount Statement" has the meaning given to it in
Clause 7.2;
"Cash Deferred Income Schedule" means the hypothetical illustration of
the Estimated Cash Deferred Income Amount set out in Part 4 of Schedule
4;
"CEDR" means the Centre for Effective Dispute Resolution;
"CEDR Model Mediation Procedure" means the model mediation procedure
edition 9A as adopted by CEDR as of February 2004;
3
"Change in Tax Law" means the coming into force after the Closing Date
of, or any introduction or change after the Closing Date in, any Law
(or its judicial interpretation) or published practice of any Tax
Authority of general application (including any Inland Revenue
Statement of Practice or Extra-statutory Concession or the Inland
Revenue Tax Bulletin, and the Inland Revenue Manuals) or any change
after the Closing Date in the rates of Taxes;
"Claim" has the meaning given to it in paragraph 10.1 of Schedule 5;
"Clawback Provision" has the meaning given to it in paragraph 12 of
Schedule 5;
"Closing" means the completion of the sale of the Shares pursuant to
Clause 6;
"Closing Amount" has the meaning given to it in Clause 3.1;
"Closing Date" means the date on which Closing takes place;
"Closing Date Balance Sheet" has the meaning given to it in Clause 7.1;
"Closing Working Capital Amount" means the amount equal to (x) Closing
Working Capital Assets minus (y) Closing Working Capital Liabilities,
as set out on the Closing Date Balance Sheet. The Closing Working
Capital Amount shall be expressed in Sterling;
"Closing Working Capital Assets" means the aggregate of receivables
(excluding receivables included within deferred income and VAT on such
receivables within deferred income), prepayments (excluding FASB Asset
and amounts corresponding to the line items "Other Debtors DLA" and
"Escrow Ac-Esat"), inventories and work-in-progress as of the Closing
Date and as set out on the Closing Date Balance Sheet (it being
understood that Closing Working Capital Assets shall not include Cash
Balances or amounts included in Intra-Group Indebtedness). For the
avoidance of doubt, reference is hereby made to the Base Working
Capital Schedule;
"Closing Working Capital Liabilities" means the aggregate of payables,
accrued liabilities (excluding FASB Liability), corporation tax and
provisions falling due within 12 months as of the Closing Date and as
set out on the Closing Date Balance Sheet (it being understood that
Closing Working Capital Liabilities shall not include deferred income
or amounts included in Intra-Group Indebtedness (noting that the
accrued liabilities in respect of amounts paid to Powergen shall be
zero on the understanding that any liability due to Powergen shall be
settled in full on or prior to Closing)). For the avoidance of doubt,
reference is hereby made to the Base Working Capital Schedule;
"Communications Act" means the Communications Act 2003;
"Companies Act" means the Companies Act 1985;
"Company" means Crown Castle UK Holdings Limited, details of which are
set out in Schedule 1;
"Company Change of Control" means the direct or indirect acquisition by
a Direct Competitor (including an Affiliate) at any time after the
Closing Date, whether by sale, merger, operation of Law or otherwise,
of (i) control of the Group or (ii) a material portion of the assets of
the Group immediately prior to the Closing;
4
"Competition Commission" means the Competition Commission as
established by the Competition Act 1998;
"Competitive Activities" has the meaning given to it in Clause 11.1;
"Completion Statements" means the Cash Amount Statement, the Working
Capital Statement and the Cash Deferred Income Amount Statement;
"Confidentiality Agreement" means the confidentiality agreement dated
31 October 2003 between the Seller and an Affiliate of the Purchaser
pursuant to which the Seller made available to the Purchaser and its
Affiliates and their respective Representatives certain confidential
information relating to the Group;
"connected company" has the meaning given to it in Clause 13.9;
"control" means the power to direct the affairs of a person, directly
or indirectly, by reason of ownership of voting shares, by contract or
otherwise. "Controlled" and "controlling" shall have correlative
meanings;
"Crown Castle UK" means Crown Castle UK Limited a company incorporated
in England and Wales whose registered office is at Warwick Technology
Park, Gallows Hill, Heathcote Lane, Warwick CV34 6TN;
"Direct Competitor" means any person (including any of its Affiliates)
that at the time in question engages in Competitive Activities and
competes directly with the Seller and/or its Subsidiaries in any
jurisdiction (other than the British Isles) in which the Seller and/or
its Subsidiaries conduct business as of the date of this Agreement;
"Disclosure Letter" means the letter dated on the same date as this
Agreement from the Seller to the Purchaser disclosing information
constituting exceptions to the Seller's Warranties;
"Dollars", "$" or "US$" means the tender/currency of the United States;
"DTT" means Digital Terrestrial Television;
"employee representatives" has the meaning given to it in paragraph 7.1
of Schedule 5;
"Environmental Indemnity" means the indemnity set out in Clause 16;
"Environment" means air (including air within buildings or other
structures whether above or below ground), land (including land surface
or subsurface strata, soil, buildings and other structures), water
(including surface water, ground water, water within any structures,
coastal and inland water and water in drains) and any ecological
systems and living organisms supported by those media including man and
his property;
"Environmental Law" means any and all applicable Laws in any
jurisdiction in which the Company operates in force at the date of this
Agreement concerning: (i) the pollution or protection of, or
compensation of damage or harm to the Environment; or (ii) the
generation, transportation, storage, treatment, disposal or presence of
any Hazardous Substance;
"Environmental Licence" means any permit, licence, authorisation,
exemption, consent, notification or other approval held or required to
be held by any Group Company pursuant to any Environmental Law;
5
"Environmental Matters" means all or any matters arising from or
connected with any Relevant Property or the conduct of the business of
any Group Company in relation to pollutions or protection of the
Environment, harm to human health, compliance with, breach of or
liability under Environmental Law or Environmental Licences, including
but not limited to those matters relating to waste, nuisance,
discharges, emissions, deposits, disposals and releases to the
Environment and the emission, presence, storage, disposal or
remediation of Hazardous Substances;
"Estimated Closing Cash Amount" means the Seller's reasonable
estimation as of the Estimation Date of the Final Closing Cash Amount.
The Estimated Closing Cash Amount shall be expressed in Sterling;
"Estimated Cash Deferred Income Amount" means the Seller's reasonable
estimation as of the Estimation Date of the Final Cash Deferred Income
Amount. The Estimated Cash Deferred Income Amount shall be expressed in
Sterling;
"Estimated Working Capital Adjustment Amount" means the Seller's
reasonable estimation as of the Estimation Date of the total of the
Closing Working Capital Amount less the Base Working Capital Amount.
The Estimated Working Capital Amount shall be expressed in Sterling.
For example, if the Closing Working Capital Amount is estimated at
(pound)(3) negative and the Base Working Capital Amount is (pound)(5)
negative, the Estimated Working Capital Adjustment Amount would equal
(pound)2 positive;
"Estimated Tax Written Down Value" means, if Closing happens on or
prior to 31 August 2004, (pound)234,000,000 (two hundred and thirty
four million pounds Sterling) or, if Closing happens on or prior to 30
September 2004 (but after 31 August 2004), (pound)231,500,000 (two
hundred and thirty one million, five hundred thousand pounds Sterling);
"Estimation Date" means such date as the Seller estimates in good faith
to be the date two weeks prior to the Closing Date and which is
communicated by Notice to the Purchaser not less than two Business Days
in advance of such estimated date;
"ETC Status" means exempt telecommunications company status under
Section 34 of the United States Public Utility Holding Company Act of
1935;
"Event" means any event, occurrence, transaction, act or omission (or
any deemed event, occurrence, transaction, act or omission) including,
for the avoidance of doubt, the sale and purchase of the Shares
pursuant to this Agreement;
"Exchange Act" means the United States Securities Exchange Act of 1934;
"Expert" has the meaning given to it in Clause 16.7.1;
"FASB Asset" means the general ledger accounts reflecting the treatment
of certain cash and non-cash amounts having the reference 1.1821.FASB;
"FASB Liability" means the general ledger accounts reflecting the
treatment of certain cash and non-cash amounts having the reference
1.4299.FASBACCR;
"FCC" has the meaning given to it in Clause 4.1.2(i);
"Final Cash Deferred Income Amount" means Cash Deferred Income as set
out on the Closing Date Balance Sheet or, either (i) if Closing shall
occur on or prior to 31 August 2004, and the amount of such Cash
Deferred Income is less than (pound)27,900,000 (twenty seven million,
nine hundred thousand pounds Sterling), the amount of Cash Deferred
Income shall be deemed to be (pound)27,900,000 (twenty seven million,
nine hundred thousand
6
pounds Sterling); or (ii) if Closing shall occur on or prior to 30
September 2004 (but after 31 August 2004), and the amount of such Cash
Deferred Income is less than (pound)23,900,000 (twenty three million,
nine hundred thousand pounds Sterling), the amount of Cash Deferred
Income shall be deemed to be (pound)23,900,000 (twenty three million,
nine hundred thousand pounds Sterling). The Final Cash Deferred Income
Amount shall be expressed in Sterling;
"Final Cash Deferred Income Adjustment Amount" means the difference
(whether positive or negative) between the Estimated Cash Deferred
Income Amount and the Final Cash Deferred Income Amount. The Final Cash
Deferred Income Adjustment Amount shall be expressed in Sterling;
"Final Closing Cash Adjustment Amount" means the difference (whether
positive or negative) between the Estimated Closing Cash Amount and the
Final Closing Cash Amount. The Final Closing Cash Adjustment Amount
shall be expressed in Sterling;
"Final Closing Cash Amount" means the amount equal to the Cash Balances
reflected on the Closing Date Balance Sheet. The Final Closing Cash
Amount shall be expressed in Sterling;
"Final Working Capital Adjustment Amount" means the total of the
Closing Working Capital Amount less the Base Working Capital Amount.
The Final Working Capital Adjustment Amount shall be expressed in
Sterling. For example, if the Closing Working Capital Amount is
(pound)(3) negative and the Base Working Capital Amount is (pound)(5)
negative, the Final Working Capital Adjustment Amount would equal
(pound)2 positive;
"Former Employees" has the meaning given to it in paragraph 7.1 of
Schedule 5;
"FRS 9" means Financial Reporting Standard 9 issued in November 1997 by
the Accounting Standards Board and relating to accounting standards for
associates and joint ventures;
"Governmental Entity" means any United Kingdom or European Union
governmental, regulatory or administrative authority, agency or
commission or any court, tribunal or judicial or arbitral body, or that
of any other country in which a Group Company operates;
"GPP" means the group personal pension arrangements in place for
Relevant Employees and operated by Scottish Widows and Friends
Provident;
"Group" means the Group Companies, taken as a whole;
"Group Companies" means the Company and the Subsidiaries and "Group
Company" means any one of them;
"Group Payment Arrangements" means those arrangements provided for in
Section 36 of the Finance Act 1998;
"Group Relief" means (i) any Relief surrendered or claimed pursuant to
Chapter IV of Part X of the Taxes Act, (ii) any advance corporation tax
surrendered or claimed pursuant to Section 240 of the Taxes Act (as
that section applies in respect of the accounting period in question)
and (iii) any refund of Tax surrendered or claimed pursuant to Section
102 of the Finance Act 1989;
7
"Guarantor's Warranties" means the warranties given by the Guarantor
pursuant to Clause 8.7 and Schedule 7 and "Guarantor's Warranty" means
any one of them;
"Hazardous Substance" means any natural or artificial substance
(whether in the form of a solid liquid, gas, vapour or any other form),
which is:
(i) capable (alone or in combination with any other
substance) of causing harm or damage to the
Environment, including but not limited to controlled,
special, hazardous, polluting, toxic or dangerous
substances and/or Asbestos and/or waste; and
(ii) regulated by or under Environmental Laws;
"ICNIRP" means the International Commission on Non-Ionizing Radiation
Protection;
"Indebtedness" of any person shall mean all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured
or unmatured, including (i) all obligations of such person for borrowed
money, (ii) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (iii) all capital lease
obligations of such person; and (iv) all guarantees of the obligations
described in (i), (ii) or (iii) above;
"Indemnified Party" has the meaning given to it in Clause 14.4;
"Indemnifying Party" has the meaning given to it in Clause 14.4;
"Industry Guidelines" means the Reference Levels set out in the
document, "Restrictions on Human Exposure to Static and Time-Varying
Electromagnetic Fields and Radiation" published by the National
Radiological Protection Board in 1993 and the relevant limits for
occupational and public exposure set out in the "Guidelines for
Limiting Exposure to Time-Varying Electric, Magnetic and
Electromagnetic Fields (up to 300 GHz)" published by ICNIRP in 1998;
"Initial Payment" has the meaning given to it in Clause 14.12;
"Intellectual Property" means trade marks, service marks, trade names,
domain names, logos, get-up, patents, inventions, registered and
unregistered design rights, copyrights, semi-conductor topography
rights, database rights and all other similar rights in any part of the
world including, where such rights are obtained or enhanced by
registration, any registration of such rights and applications and
rights to apply for such registrations;
"Intra-Group Indebtedness" means the aggregate amount of the
Intra-Group Payables minus the aggregate amount of the Intra-Group
Receivables;
"Intra-Group Payables" means all outstanding loans or other financing
Liabilities or obligations owed by any Group Company to a member of the
Seller's Group as at the close of business on the Closing Date, but
excluding any Third Party Indebtedness. The amount of such loans,
Liabilities or obligations shall be reduced for the purposes of this
definition by any Tax which is required to be withheld from any payment
in respect of such loan, Liability or obligation;
"Intra-Group Receivables" means all outstanding loans or other
financing Liabilities or obligations owed by a member of the Seller's
Group to any Group Company as at the close of business on the Closing
Date, but excluding any Third Party Indebtedness. The amount of such
loans, Liabilities or obligations shall be reduced for the purposes of
this
8
definition by any Tax which is required to be withheld from any receipt
in respect of such loan, Liability or obligation;
"Know-how" means confidential industrial and commercial information and
techniques in any form including (without limitation) drawings,
formulae, test results, reports, project reports and testing
procedures, instruction and training manuals, tables of operating
conditions, market forecasts, lists and particulars of customers and
suppliers;
"Law" means any English or European law, rule or regulation having
legal effect or any law of any other country in which a Group Company
operates;
"LCIA" has the meaning given to it in Clause 13.21.5;
"Leasehold/Licenced Property" has the meaning given to it in paragraph
4.1.1 of Schedule 5;
"Leasehold Property" has the meaning given to it in paragraph 4.1.1 of
Schedule 5;
"Liabilities" means any and all Indebtedness and other liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured
or unmatured;
"Licences" has the meaning given to it in paragraph 8.1.1 of
Schedule 5;
"Lien" means any claim, charge, mortgage, lien, pledge, option, equity,
power of sale, hypothecation, retention of title, right of pre-emption,
right of first refusal or other third party right or security interest
of any kind or an agreement, arrangement or obligation to create any of
the foregoing;
"Long Life Assets" means "long life assets" with the meaning of section
91 of the Capital Allowances Act;
"Long Life Asset Pool" means the Tax Written Down Value of the assets
which constitute Long Life Assets as of 31 December 2003 of any Group
Company on the assumption that the current accounting period of each
Group Company ends on Closing;
"Long Stop Date" means 30 September 2004;
"Losses" means all losses, Liabilities, costs (including without
limitation legal costs and experts' and consultants' fees), charges,
expenses, actions, proceedings, claims and demands;
"Major Customer" means any of the customers of the Group which, for the
financial year ended 31 December 2003, accounted for (pound)1,000,000
(one million pounds Sterling) or more of the gross revenue of the
Group;
"Major Supplier" means any of the suppliers to the Group which, for the
financial year ended 31 December 2003, accounted for (pound)1,000,000
(one million pounds Sterling) or more of the gross expenditure of the
Group;
"Managed Property" has the meaning given to it in paragraph 4.1.1 of
Schedule 5;
"Management Accounts" means the unaudited management accounts relating
to each Group Company and to the Group of the months ended 30 April
2004 and 31 May 2004, respectively (the "Relevant Management Accounts
Date");
"March Accounts" means the March Balance Sheet and the March Profit and
Loss Account;
9
"March Balance Sheet" means the unaudited consolidated balance sheet of
the Group as at the Accounts Date set out in Part 2 of Schedule 4;
"March Profit and Loss Account" means the unaudited consolidated profit
and loss account of the Group for the three month period ended 31 March
2004;
"Material Contract" has the meaning given to it in paragraph 6.6 of
Schedule 5;
"Mux" or "Multiplex" means any of the frequencies on which a multiplex
service licensed by Ofcom is provided or any other frequency allocated
to the BBC for the provision of a multiplex service;
"NGT Guarantee" has the meaning given to it in Clause 18.2;
"Non-compete Period" has the meaning given to it in Clause 11.1;
"Notice" has the meaning given to it in Clause 13.18.1;
"Notice of Disagreement" has the meaning given to it in paragraph 2.1
of Part 1 of Schedule 4;
"NTL Licenced Property" has the meaning given to it in paragraph 4.1.1
of Schedule 5;
"Ofcom" means The Office of Communications as established under the
Office of Communications Act 2002;
"Order" shall mean any order, writ, injunction, decree, judgment or
stipulation;
"Ordinary Course Construction" means any building, construction,
development or demolition works at any Property that are undertaken for
the purpose of any Group Company's continued or expanded operation of
substantially the same business undertaken on such Property on or prior
to Closing;
"Owned Mixed Property" has the meaning given to it in paragraph 4.1.1
of Schedule 5;
"Owned Real Property" has the meaning given to it in paragraph 4.1.1 of
Schedule 5;
"Permitted Liens" means (i) mechanics', carriers', worksmen's,
repairmen's or other similar Liens arising or incurred in the ordinary
course of the Group's business, (ii) conditional sales contracts and
equipment leases with third parties entered into in the ordinary course
of the Group's business, (iii) Liens for Taxes, assessments and other
governmental charges that are not due and payable or that may
thereafter be paid without penalty or that are being contested in good
faith; and (iv) other Liens and imperfections of title which do not, or
are not reasonably likely to impair in any material respect the
continued use and operation of the assets to which they relate in the
Group's business as currently conducted;
"Planning Acts" means the Town and Country Planning Act 1990, the
Planning (Listed Buildings and Conservation Areas) Act 1990, the
Planning (Hazardous Substances) Act 1990, the Planning (Consequential
Provisions) Act 1990 and the Planning and Compensation Act 1991;
"Plant and Machinery" means assets of the Group which are entitled to
Capital Allowances under Part 2 of the Capital Allowances Act;
"Post-Closing Relief" means any Relief which is not available before
the Closing Date and arises in respect of an Event occurring after the
Closing Date;
10
"Post-Closing Tax Period" means any taxable period beginning after the
Closing Date;
"PPA Interest Rate" means, as of any date of determination for any
applicable currency, the rate of interest from time to time announced
publicly by Barclays Bank plc, as its base rate, calculated on the
basis of the actual number of days elapsed divided by 365, from the
Closing Date to the date of payment;
"Pre-Closing Tax Period" means any taxable period ending on or before
the Closing Date;
"Projected Cost" means the projected cost of construction to practical
completion of such assets as are set out in the "Capital Expenditure
Evaluation" forms in respect of telecommunication assets under
construction and "Capital Expenditure Proposal" forms in respect of
other assets under construction;
"Properties" means Owned Real Property, Owned Mixed Property,
Leasehold/Licenced Property, NTL Licenced Property and Managed
Property, being the properties set out in Section 4.1.1 of Schedule 5
of the Disclosure Letter, and "Property" means any one of them;
"Purchaser Relief" means any Relief or right to repayment of Taxes or
right to any payment in respect of any surrender of Group Relief taken
into account as an asset in preparing the Working Capital Statement or
in reducing or eliminating any provision or reserve for taxation in the
Working Capital Statement;
"Purchaser's Group" means the Purchaser and its subsidiaries from time
to time;
"Purchaser's Nominated Account" means such account as the Purchaser
shall notify in writing to the Seller not less than two Business Days
prior to the Closing Date;
"Purchaser's Warranties" means the warranties given by the Purchaser
pursuant to Clause 8.5 and Schedule 6 and "Purchaser's Warranty" means
any one of them;
"Radiation" means any electric, magnetic or electromagnetic radiation,
frequencies or fields or radio waves;
"Relevant Employees" has the meaning given to it in paragraph 7.1 of
Schedule 5;
"Relevant Equipment" means any television and radio broadcasting mast
or television and radio transmitter equipment owned or operated by any
Group Company at any Property;
"Relevant Payment" has the meaning given to it in Clause 14.9;
"Relevant Period" means the 12 month period preceding the date of this
Agreement;
"Relevant Receipt" has the meaning given to it in Clause 14.9;
"Relevant Recipient" has the meaning given to it in Clause 14.9;
"Relief" means any loss, allowance, exemption, set-off, deduction,
refund, credit, or other relief relating to any Taxes or to the
computation of income, profits or chargeable gains for the purposes of
any Taxes (excluding, in any case, any Capital Allowances) including
any repayment or reapportionment under any Group Payment Arrangements;
"Remedial Action" means any measures reasonably necessary undertaken or
to be undertaken by the Purchaser (or the Seller for the purposes of
Clause 16.6) for
11
investigating, assessing, limiting, removing, remedying, cleaning up,
abating, containing, preventing, monitoring or ameliorating the
presence or effect of any Hazardous Substance or Radiation in
accordance with Environmental Law and Industry Guidelines;
"Representative" means, with respect to any person, such person's
employees, counsel, accountants and other representatives and
professional advisers;
"Representative Body" means any association, trade union, works council
or other body or persons representing any of the employees;
"Retained Names and Marks" has the meaning given to it in
Clause 13.2.1;
"Rules" has the meaning given to it in Clause 13.21.5;
"Sarbanes-Oxley" means the United States Sarbanes-Oxley Act 2002 and
the related rules and regulations promulgated under such act or the
Exchange Act;
"Saving" has the meaning given to it in Clause 14.20;
"SEC" means the Securities and Exchange Commission of the
United States;
"Secondary Adjustment" has the meaning given to it in Clause 14.12;
"Secondary Recovery Provision" has the meaning given to it in paragraph
12 of Schedule 5;
"Seller Change of Control" means any person or group (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) becoming, or
obtaining rights (whether by means of warrants, options or otherwise)
to become, the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of more than 40% of
the outstanding common stock of the Seller;
"Seller's Group" means the Seller and its subsidiaries, subsidiary
undertakings and Affiliates from time to time (excluding (for the
purposes of the definitions of Intra-Group Payables, Intra-Group
Receivables and Third Party Indebtedness) the Group Companies);
"Seller's Nominated Account" means such account as the Seller shall
notify in writing to the Purchaser not less than two Business Days
prior to the Closing Date;
"Seller's Pension Scheme" means the Crown Castle UK Pension Scheme;
"Seller's Relief" means any Relief or right to repayment of Taxes
(other than any Purchaser Relief) available to any Group Company that
arises as a result of an Event occurring or deemed to occur for Tax
purposes on or before the Closing Date;
"Seller's Warranties" means the warranties given by the Seller pursuant
to Clause 8.1 and Schedule 5 and "Seller's Warranty" means any one of
them;
"Senior Employee" has the meaning given to it in paragraph 7 of
Schedule 5;
"Settlement Amount" means US$147,200,000 (one hundred and forty seven
million, two hundred thousand Dollars);
"Shares" means 333,595,225 ordinary shares of (pound)1 each, being the
whole of the issued ordinary share capital of the Company;
"Share Option Relief" means any Relief other than a Purchaser's Relief
(or a Seller's Relief taken into account pursuant to Clause 14.11)
which the Purchaser or any Group
12
Company obtains after Closing (or which the Purchaser or a Group
Company would obtain but for an insufficiency of profits) pursuant to
Part 1 of Schedule 23 Finance Act 2003 in relation to any share
incentive, share option or other incentive granted before Closing to
any Relevant Employee or former employee of any Group Company;
"Site Sharing Agreements" has the meaning given to it in paragraph
4.1.2 of Schedule 5;
"Sterling" or "(pound)" means the legal tender/currency of the United
Kingdom;
"Straddle Period" means in relation to a Group Company, the accounting
period of that Group Company in which the Closing Date falls;
"Subsidiaries" means the subsidiaries of the Company listed in
paragraph 2 of Schedule 1 together with any other subsidiary
undertakings of the Company and "Subsidiary" means any one of them;
"Tax Authority" means any taxing or other authority competent to impose
any liability in respect of Taxation or responsible for the
administration and/or collection of Taxation or enforcement of any law
in relation to Taxation;
"Tax Controversy" has the meaning given to it in Clause 14.5;
"Tax Indemnity" means the indemnity in respect of Taxation set out in
Clause 14;
"Tax Return" means any return, filing, report, questionnaire,
information statement, self-assessment, computation or other document
required to be filed, including any amendments that may be filed, for
any taxable period with any Tax Authority (whether or not a payment is
required to be made with respect to such filing);
"Tax Warranties" has the meaning given to it in Clause 14.2 and "Tax
Warranty" means any one of them;
"Tax Written Down Value" means the unrelieved qualifying expenditure to
carry forward from the chargeable period which ends on the date in
question (as determined in accordance with section 59 of the Capital
Allowances Act);
"Taxation", "Taxes" or "Tax" means all forms of taxation whether direct
or indirect and whether levied by reference to income, profits, gains,
net wealth, asset values, turnover, added value or other reference and
statutory, governmental, state, provincial, local governmental or
municipal impositions, duties, contributions and levies (including
without limitation social security contributions and any other payroll
taxes), whenever and wherever imposed (whether imposed by way of a
withholding or deduction for or on account of tax or otherwise) and in
respect of any person and all penalties, charges, costs and interest
relating thereto;
"Taxes Act" means the Income and Corporation Taxes Act 1988;
"Third Party Indebtedness" means the aggregate amount as at the close
of business on the Closing Date of all outstanding Indebtedness owed by
any Group Company to any third party or owed by any third party to any
Group Company;
"TM Licence Agreement" means the agreement on the Agreed Terms between
the Seller and the Purchaser or their respective Affiliates in relation
to the licence of the Retained Names and Marks, to be entered into on
the Closing Date;
"TM Termination Date" shall have the meaning set out in Clause 13.2.4;
13
"Total Construction Cost" means the cost of construction to practical
completion of such individual assets under construction, calculated by
reference to the Group's existing accounting policies, practices and
methodologies used for the capitalisation of such costs;
"Transfer Regulations" has the meaning given to it in paragraph 7.1 of
Schedule 5;
"Transitional Services Agreement" means the agreement between the
Seller and the Purchaser or their respective Affiliates in relation to
Mobile Media to be entered into on the Closing Date substantially on
the basis of the provisions set out in Schedule 9;
"UK GAAP" means United Kingdom generally accepted accounting practice
in effect as of the date of this Agreement;
"United Kingdom" means the United Kingdom of Great Britain and Northern
Ireland;
"VAT" means United Kingdom Value Added Tax;
"Warranty" means any Seller's Warranty, any Purchaser's Warranty and
any Guarantor's Warranty;
"Wireless Telegraphy Act" means the Wireless Telegraphy Act 1949 to
1998; and
"Working Capital Statement" has the meaning given to it in Clause 7.2.
1.2 Modification etc. of Statutes
References to a statute or statutory provision include:
1.2.1 that statute or provision as from time to time modified,
re-enacted or consolidated whether before or after the date of
this Agreement;
1.2.2 any past statute or statutory provision (as from time to time
modified, re-enacted or consolidated) which that statute or
provision has directly or indirectly replaced; and
1.2.3 any subordinate legislation made from time to time under that
statute or statutory provision,
provided that such references shall not include such modifications,
re-enactments, consolidations, direct or indirect replacements, or
subordinate legislation arising after the date of this Agreement to the
extent that the Liability of any party would be increased or extended
by the inclusion thereof.
1.3 Singular, plural, gender
References to one gender include all genders and references to the
singular include the plural and vice versa.
1.4 References to persons and companies
References to:
1.4.1 a person shall include any natural person, corporation,
company, partnership firm, joint venture, trust, business
association, Governmental Entity or other entity (whether or
not having separate legal personality); and
1.4.2 a company shall include any company, corporation or any body
corporate, wherever incorporated.
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1.5 References to subsidiaries and holding companies
The words "holding company", "subsidiary" and "subsidiary undertaking"
shall have the same meaning in this Agreement as their respective
definitions in the Companies Act.
1.6 Connected Persons
A person shall be deemed to be connected with another if that person is
connected with such other within the meaning of Section 839 of the
Taxes Act.
1.7 Recitals and Schedules etc.
References to this Agreement shall include any Recitals and Schedules
to it and references to Clauses and Schedules are to Clauses of, and
Schedules to, this Agreement. References to paragraphs and Parts are to
paragraphs and Parts of the Schedules.
1.8 Headings
Headings shall be ignored in interpreting this Agreement.
1.9 Legal Terms
References to any English legal term shall, in respect of any
jurisdiction other than England, be construed as references to the term
or concept which most nearly corresponds to it in that jurisdiction.
2 Agreement to Sell the Shares
2.1.1 On and subject to the terms of this Agreement, the Seller
agrees to sell or procure to be sold and the Purchaser agrees
to purchase, the Shares.
2.1.2 The Shares shall be sold or procured to be sold by the Seller
with full title guarantee free from Liens and together with
all rights and advantages attaching to them as at Closing
(including, without limitation, the right to receive all
dividends or distributions declared, made or paid on or after
Closing).
2.1.3 The Seller shall procure that on or prior to Closing any and
all rights of pre-emption over the Shares are waived
irrevocably by the persons entitled thereto.
2.1.4 Subject to the parties agreeing in writing, in the event that
the Seller has, prior to Closing and in accordance with such
agreement, transferred or procured the transfer of the Shares
to another company or other entity, the Seller shall sell or
procure to be sold to the Purchaser that company or entity on
and subject to the terms of this Agreement and references to
the "Company", "Group Companies", "Group" and "Shares" shall
be construed accordingly.
3 Consideration
3.1 Amount
The consideration for the purchase of the Shares under this Agreement
shall be an amount in cash equal to US$1,887,800,000 (one billion,
eight hundred and eighty seven million, eight hundred thousand Dollars)
(the "Closing Amount") subject to adjustment as set out in Clause 7.
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3.2 Reduction of Consideration
If any payment is made by the Seller to the Purchaser or by the
Purchaser to the Seller in respect of any claim for any breach of this
Agreement or pursuant to an indemnity, compensation or reimbursement
provision (including, for the avoidance of doubt, any payment under any
Warranty or any payment under Clause 14 (Tax Indemnity)) under this
Agreement (or any agreement entered into under this Agreement), the
payment shall be made by way of adjustment of the consideration paid by
the Purchaser for the Shares under this Agreement and the consideration
shall be reduced (in the case of a payment by the Seller to the
Purchaser) or increased (in the case of a payment by the Purchaser to
the Seller) by the amount of such payment.
4 Conditions
4.1 Conditions Precedent
The agreement to sell and purchase the Shares contained in Clause 2 is
conditional upon satisfaction of the conditions set out in Clauses
4.1.1 to 4.1.4, or their satisfaction subject only to Closing:
4.1.1
(i) the Office of Fair Trading having indicated on terms
reasonably satisfactory to the Purchaser that it will
not make a reference to the Competition Commission in
relation to the purchase of the Shares as
contemplated by this Agreement; or
(ii) the time provided for under the Enterprise Act 2002
during which the Office of Fair Trading may make a
reference to the Competition Commission having
expired, without the Office of Fair Trading having
made such a reference or having indicated that it
will not make such a reference;
4.1.2
(i) the Company, having received an order from the United
States Federal Communications Commission ("FCC"), on
terms reasonably satisfactory to the Purchaser,
granting the Company's application for ETC Status; or
(ii) in the alternative, 60 days having passed from the
date of the filing with the FCC of the Company's
application for a determination of ETC Status, and
the application being deemed granted as a matter of
law under Title 47 of the United States Code of
Federal Regulations Section 1.5004;
4.1.3 The BBC's right to terminate under any of: (a) the BBC
Analogue Transmission Agreement; (b) the BBC Mux 1 DTT
Transmission Agreement; (c) the BBC DAB Transmission
Agreement; and (d) the BBC Mux B DTT Transmission Agreement
having elapsed by effluxion of time without the BBC having
terminated or having given and not withdrawn notice to
terminate, each such agreement or the BBC having provided
comfort, on terms reasonably satisfactory to the Purchaser,
that it will not exercise any termination rights for Change of
Control (as defined in the relevant agreement) under any such
agreements as a consequence of the purchase of the Shares as
contemplated by this Agreement; and
16
4.1.4 Ofcom having provided comfort, on terms reasonably
satisfactory to the Purchaser, that it will not exercise its
revocation rights in relation to: (a) the Multiplex C and D
licences granted to the Company under the Broadcasting Act; or
(b) any licences under the Wireless Telegraphy Act (to the
extent that such licences may be revoked in such
circumstances); as a consequence of the purchase of the Shares
as contemplated by this Agreement.
4.1.5 For the purposes of Clause 4.1.1 and for the avoidance of
doubt, terms shall not be reasonably satisfactory to the
Purchaser if they would require the Purchaser to commit to
divest (or not to acquire) assets with a value in excess of
(pound)20 million or, in the case of behavioural commitments,
would amount to a more than immaterial change in the terms
upon which either the Purchaser's Group or the Group Companies
do business.
4.1.6 For the purposes of Clauses 4.1.3 and 4.1.4, if a letter is
received from the BBC or Ofcom, in each case, on substantially
the Agreed Terms, then such letter shall be deemed to be
reasonably satisfactory to the Purchaser.
4.2 Responsibility for Satisfaction
4.2.1 The Purchaser shall use reasonable endeavours to ensure the
satisfaction of the conditions set out in Clauses 4.1.1, 4.1.3
and 4.1.4 as soon as possible after the date of this Agreement
and in any event no later than the Long Stop Date.
4.2.2 The Seller shall use reasonable endeavours to ensure the
satisfaction of the conditions set out in Clauses 4.1.2, 4.1.3
and 4.1.4 as soon as possible after the date of this Agreement
and in any event no later than the Long Stop Date.
4.2.3 Without prejudice to Clauses 4.2.1 and 4.2.2, the Seller and
the Purchaser agree that, to the extent permitted by law, all
requests and enquiries from any governmental entity, after the
date of this Agreement, in relation to the satisfaction of the
conditions set out in Clause 4.1 shall be dealt with:
(i) in the case of Clauses 4.1.1, 4.1.3 and 4.1.4 by the
Purchaser in consultation with the Seller; (1) that
the Purchaser shall promptly notify the Seller of all
its contacts and discussions with any Governmental
Entity or the BBC and of any request by any
Governmental Entity or the BBC in relation to the
satisfaction of such conditions, (2) that the
Purchaser shall promptly supply the Seller with
copies of all written communications including
notifications, submissions and correspondence and
written or oral summaries of all material oral
comments between the Purchaser or any of its
Representatives, on the one hand, and any
Governmental Entity or the BBC on the other hand; and
(3) that the Seller shall co-operate with and provide
all necessary information and assistance reasonably
required by such Governmental Entity or the BBC upon
being requested to do so by the Purchaser. The
Purchaser shall co-operate and promptly provide the
Seller with drafts of all written correspondence
intended to be sent to any Governmental Entity or the
BBC and, to the extent practicable, allow the Seller
the opportunity to comment thereon prior to delivery
to any Governmental Entity or the BBC; and
(ii) in the case of Clauses 4.1.2, 4.1.3 and 4.1.4 by the
Seller in consultation with the Purchaser; (1) that
the Seller shall promptly notify the Purchaser of
17
all its contacts and discussions with the FCC, the
BBC or any Governmental Entity in relation to the
satisfaction of such conditions; (2) that the Seller
shall promptly supply the Purchaser with copies of
all written communications including notifications,
submissions and correspondence and written or oral
summaries of all material oral comments between the
Seller or any of its representatives, on the one
hand, and the FCC, the BBC or any Governmental Entity
on the other hand; and (3) that the Purchaser shall
co-operate with and provide all necessary information
and assistance reasonably required by the FCC, the
BBC or any Governmental Entity upon being requested
to do so by the Seller. The Seller shall co-operate
and promptly provide the Purchaser with drafts of all
written correspondence intended to be sent to the
FCC, the BBC or any Governmental Entity and, to the
extent practicable, allow the Purchaser the
opportunity to comment thereon prior to delivery to
the FCC, the BBC or any Governmental Entity.
4.3 Non-Satisfaction/Waiver
4.3.1 The party responsible for satisfaction of each condition, as
set out in Clause 4.2, shall give Notice to the other party of
the satisfaction of the relevant condition within two Business
Days of becoming aware of the same.
4.3.2 The Purchaser may at any time waive in whole or in part and
conditionally or unconditionally the conditions set out in
Clause 4.1 by Notice to the Seller.
4.3.3 If the conditions in Clause 4.1 are not satisfied or waived on
or before the Long Stop Date save as expressly provided, this
Agreement (other than Clauses 1, 12 and 13.6 to 13.22) shall
lapse and neither the Seller nor the Purchaser shall have any
claim against the other under it, save for any claim arising
from breach of any obligation contained in Clause 4.2.
5 Pre-Closing
5.1 The Seller's Obligations in Relation to the Conduct of Business
Except as otherwise contemplated or permitted by this Agreement, from
the date of this Agreement to the Closing, unless the Purchaser
otherwise consents (which consent shall not be unreasonably withheld or
delayed), the Seller (i) shall procure that each of the Group Companies
conducts its business in all material respects in the ordinary course
as carried on prior to the date of this Agreement; and (ii) shall or
shall procure that the relevant members of the Seller's Group shall
maintain in force all existing insurance policies in all material
respects on the same terms and similar level of cover prevailing at the
date of this Agreement for the benefit of the Group Companies and,
immediately following the signing of this Agreement, procure the
interest of the Purchaser to be noted on such insurance policies. In
addition, during such period, except as otherwise contemplated or
permitted by this Agreement or set out in Section 5.1 of the Disclosure
Letter, unless the Purchaser otherwise consents in writing (which
consent shall not be unreasonably withheld or delayed), the Seller
shall not, and shall not permit any Group Company to, do any of the
following:
5.1.1 resolve to alter its memorandum or articles of association (or
comparable constitutive documents), save as required by Law;
18
5.1.2 save as set out in the Budget, enter into any agreement or
incur any commitment involving any capital expenditure in
excess of, or consideration equivalent to, (pound)350,000
(three hundred and fifty thousand pounds Sterling) per item or
(pound)3,500,000 (three million, five hundred thousand pounds
Sterling) in aggregate, in each case exclusive of VAT;
5.1.3 make any material amendment to the terms and conditions of
employment (including remuneration, pension entitlements and
other benefits) of any Relevant Employee or dismiss any Senior
Employee;
5.1.4 except in the ordinary course of business and consistent with
past practice, amend in any material respect or enter into any
agreement of a type required to be disclosed pursuant to
paragraph 6.2 of Schedule 5;
5.1.5 incur any additional borrowings or incur any other
Indebtedness otherwise than in the ordinary and usual course
of business;
5.1.6 create a Lien over the Shares or the shares or material assets
of any Group Company except Permitted Liens in the case of
assets of any Group Company;
5.1.7 create, allot, issue, repay, redeem or repurchase any share
capital or loan capital of any Group Company;
5.1.8 acquire or agree to acquire or lease any material assets
(including real property) outside the ordinary course of
business;
5.1.9 declare, make or pay any dividend in kind or other
distribution in kind to shareholders, or otherwise make or pay
any dividend or other distribution to shareholders, other than
out of such Group Company's ordinary income and cash flows;
5.1.10 sell, lease or otherwise dispose of any of the material assets
(including real property) of the Group outside the ordinary
course of business;
5.1.11 discontinue or amend the Seller's Pension Scheme to any
material extent or commence to wind it up or terminate it or
cause it to cease to admit new members;
5.1.12 repay any material Indebtedness (other than in accordance with
or to fulfil the terms and conditions of this Agreement);
5.1.13 make or pay any management charge outside the ordinary course
of business consistent with past practice; or
5.1.14 agree, in writing or otherwise, to do any of the foregoing.
5.2 Notification
Without prejudice to the provisions of Clause 5.4.1(iv), if, after the
signing of this Agreement, the Seller becomes aware of any breach in
any material respect of the obligations set out in Clause 5.1, the
Seller shall promptly notify the Purchaser in writing and shall take
all reasonable steps to remedy such breach.
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5.3 Other Seller's Obligations Prior to Closing
Without prejudice to the generality of Clause 5.1, and to the extent
permitted under applicable laws (anti-trust or otherwise) prior to
Closing the Seller shall:
5.3.1 procure that the Group Companies shall consult with the
Purchaser in relation to all material matters concerning the
running of the Group;
5.3.2 procure that the Group Companies shall provide to the
Purchaser and its Representatives such information as they may
reasonably request for the purpose of monitoring the status of
the business in this period and preparing a post-Closing
integration plan; and
5.3.3 use reasonable endeavours to procure that Crown Castle UK and
Crown Castle UK Pension Trust Limited execute a deed as soon
as reasonably practicable following the date of this Agreement
in relation to the Seller's Pension Scheme which is
substantially in the form of the draft Second Definitive Deed
and Rules disclosed to the Purchaser pursuant to Section 6.7
of the Disclosure Letter.
5.4 Termination
5.4.1 Notwithstanding anything in this Agreement to the contrary,
this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing
Date:
(i) by mutual agreement of the Seller and the Purchaser;
(ii) by the Seller upon Notice to the Purchaser if any of
the conditions to the Closing set out in Clause 4.1
shall have become incapable of fulfilment;
(iii) by either the Seller or the Purchaser upon Notice to
the other party if the Closing does not occur on or
prior to the Long Stop Date and the party seeking
termination is not then in fundamental breach of its
warranties referred to in Clause 5.4.2 or Clause
5.4.3, as the case may be, or any of its material
covenants or agreements set forth in this Agreement;
(iv) by the Purchaser upon Notice to the Seller if the
Seller shall have failed to comply in any material
respect with its obligations as set out in Clause
5.1, except for non-compliance not resulting in a
material and adverse effect on the business of the
Group; and
(v) by either the Purchaser or the Seller in accordance
with Clause 6.5.
5.4.2 Subject to Clause 5.4.1, the Purchaser shall not be entitled
to rescind or terminate this Agreement, or any part of it, at
any time prior to or after the Closing Date, for any reason,
save in the case of a fundamental breach of the Seller's
Warranties set out in paragraphs 1.1.1 to 1.1.3, 1.1.5, 1.1.6
or 15 of Schedule 5.
5.4.3 Subject to Clause 5.4.1, the Seller shall not be entitled to
rescind or terminate this Agreement, or any part of it, at any
time prior to or after the Closing Date, for any reason, save
in the case of a fundamental breach of (i) the Purchaser's
Warranties set out in paragraphs 1 and 6 of Schedule 6; or
(ii) the Guarantor's Warranties set out in Schedule 7.
20
5.4.4 The termination of this Agreement pursuant to Clauses 5.4.1,
5.4.2 and 5.4.3 shall not operate to terminate Clauses 1, 12
and 13.6 to 13.22 which shall remain in full force and effect.
5.4.5 Any failure by a party to exercise its right to terminate this
Agreement under Clauses 5.4.1, 5.4.2 or 5.4.3 shall not
constitute a waiver of any other rights of such party.
5.5 Material to be Returned
5.5.1 In the event that this Agreement is terminated by the Seller
or the Purchaser pursuant to Clause 5.4, Notice thereof shall
forthwith be given to the other party, and the transactions
contemplated by this Agreement shall be terminated, without
further action by any party hereto.
5.5.2 Furthermore, in the event that this Agreement is terminated as
provided herein:
(i) the Purchaser shall return all documents and other
material received from the Seller or its Affiliates
or any of their Representatives relating to any Group
Company or the transactions contemplated by this
Agreement, whether obtained before or after the
execution of this Agreement, to the Seller;
(ii) the Purchaser agrees that all confidential
information received by the Purchaser or its
Affiliates or any of their Representatives with
respect to any Group Company, this Agreement or the
transactions contemplated hereby shall be treated in
accordance with Clause 12, which shall remain in full
force and effect notwithstanding the termination of
this Agreement;
(iii) the Seller shall return all documents and other
material received from the Purchaser or its
Affiliates or any of their Representatives relating
to the Purchaser or the transactions contemplated by
this Agreement, whether obtained before or after the
execution of this Agreement, to the Purchaser; and
(iv) the Seller agrees that all confidential information
received by the Seller or its Affiliates or any of
their Representatives with respect to the Purchaser,
this Agreement or the transactions contemplated
hereby shall be treated as confidential and otherwise
in accordance with Clause 12, which shall remain in
full force and effect notwithstanding the termination
of this Agreement.
6 Closing
6.1 Pre-Closing Notifications
On the Estimation Date, the Seller shall notify the Purchaser in
writing of the Estimated Working Capital Adjustment Amount, the
Estimated Closing Cash Amount and the Estimated Cash Deferred Income
Amount, together with adequate details of how such amounts have been
calculated.
6.2 Date and Place
Subject to Clause 4, Closing shall take place at 10 a.m. (London time)
at the offices of Cravath, Swaine & Moore LLP, City Point, One
Ropemaker Street, London EC2Y 9HR on
21
the last day of the calendar month in which the condition(s) set out in
Clause 4.1 are either satisfied or waived, or if such day is not a
Business Day, the first Business Day thereafter or at such other
location, time or date as may be agreed between the Purchaser and the
Seller, when all (but not part only unless the parties so agree) of the
business set out in Schedule 3 shall be transacted.
6.3 Closing Events
On Closing, the Seller and the Purchaser shall comply with their
respective obligations specified in Schedule 3.
6.4 Payment on Closing
On the Closing Date, the Purchaser shall pay the Closing Amount plus
the Estimated Working Capital Adjustment Amount (if a positive number)
or less the Estimated Working Capital Adjustment Amount (if a negative
number) plus the Estimated Closing Cash Amount (if a positive number)
or less the Estimated Closing Cash Amount (if a negative number) and
less the Estimated Cash Deferred Income Amount by wire transfer of
immediately available funds to the Seller's Nominated Account.
6.5 Breach of Closing Obligations
If the Seller or the Purchaser fails to comply with any material
obligation in Clauses 6.3 and 6.4 and Schedule 3, the Purchaser, in the
case of non-compliance by the Seller, or the Seller, in the case of
non-compliance by the Purchaser, shall be entitled (in addition to and
without prejudice to all other rights or remedies available, including
the right to claim damages) by Notice to the other:
6.5.1 to terminate this Agreement (other than Clauses 1, 12, 13.6 to
13.22) without liability on its part;
6.5.2 to effect Closing so far as practicable having regard to the
defaults which have occurred; or
6.5.3 to fix a new date for Closing (not being more than 10 Business
Days after the agreed date for Closing) in which case the
provisions of Schedule 3 shall apply to Closing as so deferred
but provided such deferral may only occur once.
7 Post-Closing Adjustments
7.1 Closing Date Balance Sheet
As soon as reasonably practicable and no later than 30 Business Days
after the Closing Date, the Purchaser shall prepare and deliver to the
Seller a consolidated balance sheet of the Group as of the close of
business on the Closing Date (the "Closing Date Balance Sheet"). The
Closing Date Balance Sheet shall be prepared in accordance with the
Accounting Policies.
7.2 Working Capital Statement etc.
The Closing Date Balance Sheet shall be accompanied by (i) a statement
(the "Working Capital Statement") setting out the Purchaser's
reasonable determination of the Closing Working Capital Amount as at
the Closing Date; (ii) a statement setting out the Purchaser's
reasonable determination of the Cash Deferred Income Amount as at the
Closing Date (the "Cash Deferred Income Amount Statement"); and (iii) a
statement setting out the
22
Purchaser's reasonable determination of the Final Closing Cash Amount
as at the Closing Date (the "Cash Amount Statement"). The Working
Capital Statement, the Cash Deferred Income Amount Statement and the
Cash Amount Statement shall become binding on the Seller and the
Purchaser upon final agreement or determination in accordance with the
procedures set out in paragraph 2 of Part 1 of Schedule 4.
7.3 Adjustment to Consideration
7.3.1 The consideration payable for the Shares shall be increased by
the amount by which the Closing Working Capital Amount exceeds
the Base Working Capital Amount, and the consideration payable
for the Shares shall be decreased by the amount by which the
Closing Working Capital Amount is less than the Base Working
Capital Amount. Accordingly, within five Business Days after
the Working Capital Statement becomes binding pursuant to
paragraph 2 of Part 1 of Schedule 4:
(i) if the Final Working Capital Adjustment Amount is
greater than the Estimated Working Capital Adjustment
Amount, then the Purchaser shall pay to the Seller by
wire transfer of immediately available funds to the
Seller's Nominated Account an amount equal to the
difference between the Estimated Working Capital
Adjustment Amount and the Final Working Capital
Adjustment Amount, together with an amount thereon
calculated by reference to the PPA Interest Rate from
and including the Closing Date to but not including
the date of such payment; and
(ii) if the Estimated Working Capital Adjustment Amount is
greater than the Closing Working Capital Amount, then
the Seller shall pay to the Purchaser by wire
transfer of immediately available funds to the
Purchaser's Nominated Account an amount equal to the
difference between the Estimated Working Capital
Adjustment Amount and the Final Working Capital
Adjustment Amount, together with an amount thereon
calculated by reference to the PPA Interest Rate from
and including the Closing Date to but not including
the date of such payment.
7.3.2 The consideration paid pursuant to Clause 6.4 shall be
increased by the amount by which the Final Closing Cash Amount
exceeds the Estimated Closing Cash Amount, and the
consideration paid pursuant to Clause 6.4 shall be decreased
by the amount by which the Final Closing Cash Amount is less
than the Estimated Closing Cash Amount. Accordingly, within
five Business Days after the Cash Amount Statement becomes
binding pursuant to paragraph 2 of Part 1 of Schedule 4:
(i) if the Final Closing Cash Amount is greater than the
Estimated Closing Cash Amount, then the Purchaser
shall pay to the Seller by wire transfer of
immediately available funds to the Seller's Nominated
Account an amount equal to the Final Closing Cash
Adjustment Amount, together with an amount thereon
calculated by reference to the PPA Interest Rate from
and including the Closing Date to but not including
the date of such payment; and
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(ii) if the Final Closing Cash Amount is less than the
Estimated Closing Cash Amount, then the Seller shall
pay to the Purchaser by wire transfer of immediately
available funds to the Purchaser's Nominated Account
an amount, equal to the Final Closing Cash Adjustment
Amount, together with an amount thereon calculated by
reference to the PPA Interest Rate from and including
the Closing Date to but not including the date of
such payment
7.3.3 The consideration paid pursuant to Clause 6.4 shall be
increased by the amount by which the Estimated Cash Deferred
Income Amount exceeds the Final Cash Deferred Income Amount,
and the consideration paid pursuant to Clause 6.4 shall be
decreased by the amount by which the Estimated Cash Deferred
Income Amount is less than the Final Cash Deferred Income
Amount. Accordingly, within five Business Days after the Cash
Deferred Income Amount Statement becomes binding pursuant to
paragraph 2 of Part 1 of Schedule 4:
(i) if the Estimated Cash Deferred Income Amount is
greater than the Final Cash Deferred Income Amount,
then the Purchaser shall pay to the Seller by wire
transfer of immediately available funds to the
Seller's Nominated Account an amount equal to the
Final Cash Deferred Income Adjustment Amount,
together with an amount thereon calculated by
reference to the PPA Interest Rate from and including
the Closing Date to but not including the date of
such payment; and
(ii) if the Final Cash Deferred Income Amount is greater
than the Estimated Cash Deferred Income Amount, then
the Seller shall pay to the Purchaser by wire
transfer of immediately available funds to the
Purchaser's Nominated Account an amount equal to the
Final Cash Deferred Income Adjustment Amount,
together with an amount thereon calculated by
reference to the PPA Interest Rate from and including
the Closing Date to but not including the date of
such payment.
7.3.4 If the Final Cash Deferred Income Amount is less than either
(i)(pound)27,900,000 (twenty seven million, nine hundred
thousand pounds Sterling) (if Closing occurs on or prior to 31
August 2004, representing the forecast Cash Deferred Income at
such date); or (ii)(pound)23,900,000 (twenty three million,
nine hundred thousand pounds Sterling) (if Closing occurs on
or prior to 30 September 2004 but after 31 August 2004,
representing the forecast Cash Deferred Income at such date)
then the Final Working Capital Adjustment Amount shall be
increased by the difference between the Final Cash Deferred
Income Amount (at such date) and either (i)(pound)27,900,000
(twenty seven million, nine hundred thousand pounds Sterling)
(if Closing occurs on or prior to 31 August 2004); or
(ii)(pound)23,900,000 (twenty three million, nine hundred
thousand pounds Sterling) (if Closing occurs on or prior to 30
September 2004 but after 31 August 2004).
For the avoidance of doubt, if the Final Cash Deferred Income
Amount is either greater than (i) (pound)27,900,000 (twenty
seven million, nine hundred thousand pounds Sterling) (if
Closing occurs on or prior to 31 August 2004); or (ii)
(pound)23,900,000 (twenty three million, nine hundred thousand
pounds Sterling) (if Closing occurs on
24
or prior to 30 September 2004 but after 31 August 2004) then
there shall be no corresponding adjustment to the Final
Working Capital Adjustment Amount.
7.3.5 The Purchaser agrees that following the Closing and until the
Completion Statements become binding pursuant to paragraph 2
of Part 1 of Schedule 4, it shall not take any actions with
respect to the Books and Records with the result that the
Completion Statements cannot be calculated consistent with the
Accounting Policies.
7.3.6 The parties may agree to net the amounts payable pursuant to
the foregoing provisions of this Clause 7.3 against each
other, such that settlement of the adjustment amounts
described herein may be effected by one wire transfer in
respect of all such amounts.
7.4 Illustration of Post-Closing Adjustment Mechanisms
For the avoidance of doubt, set out in Part 5 of Schedule 4 is an
illustration of the application of the post-Closing adjustment
mechanisms set out in this Clause 7.
7.5 No Double Counting
For the avoidance of doubt, no item included in the determination of
the Completion Statements, shall be taken into account for the purposes
of the post-Closing adjustment in this Clause 7 in more than one of
either the Working Capital Statement, the Cash Deferred Income Amount
Statement or the Cash Amount Statement.
7.6 Fixed Assets Re-allocation
For the avoidance of doubt and solely for the purposes of this Clause
7, (i) accounts included in fixed assets in the March Balance Sheet
shall not be reallocated to balances included within the Closing
Working Capital Assets; and (ii) accounts included in Current Assets in
the March Balance Sheet shall not be reallocated to asset balances not
included within Closing Working Capital Assets.
7.7 Creditors Re-allocation
For the avoidance of doubt and solely for the purposes of this Clause
7, (i) any accounts due to creditors classified within the Base Working
Capital Liabilities in the March Balance Sheet shall not be
reclassified as creditors falling due after more than 12 months in the
Closing Date Balance Sheet; and (ii) accounts due to creditors falling
due after more than 12 months shall not be reclassified within Closing
Working Capital Liabilities.
8 Warranties
8.1 The Seller's Warranties
8.1.1 Subject to Clause 8.2, the Seller warrants to the Purchaser
that the statements set out in Schedule 5 are true and
accurate and not misleading as of the date of this Agreement.
8.1.2 The Seller acknowledges that the Purchaser has entered into
this Agreement in reliance upon the Seller's Warranties.
25
8.1.3 Each of the Seller's Warranties shall be separate and
independent and shall not be limited by reference to any other
paragraph of Schedule 5 or by anything in this Agreement.
8.1.4 Any Seller's Warranty qualified by the expression "the
Seller's knowledge", "the Seller becomes aware" or any similar
expression shall, unless otherwise stated, be deemed to refer
to the knowledge of the persons whose names are set out in
Schedule 8.
8.2 Seller's Disclosures
The Seller's Warranties are subject to and qualified by the matters
which are fairly disclosed in the Disclosure Letter and "fairly" means
disclosed in such sufficient detail to enable a reasonable purchaser to
assess the matter in question. For the avoidance of doubt, nothing
disclosed in the Disclosure Letter shall prevent the Purchaser from
making a claim under Clause 14 (Tax Indemnity) and Clause 16
(Environmental Indemnity).
8.3 Seller's Notification of Breach
8.3.1 If, after the signing of this Agreement, the Seller shall
become aware of any material breach of the Seller's
Warranties, the Seller shall promptly give Notice to the
Purchaser and in any event prior to Closing setting out full
details of the matter.
8.3.2 Any notification pursuant to Clause 8.3.1 shall not operate as
a disclosure pursuant to Clause 8.2 of this Agreement and the
Seller's Warranties shall not be subject to such notification.
8.3.3 For the avoidance of doubt, no breach of this Clause 8.3 shall
result in the Purchaser being entitled to rescind or terminate
this Agreement.
8.4 The Seller's Waiver of Rights against the Group
Save in the case of fraud, wilful misrepresentation, wilful misconduct
or wilful concealment, the Seller undertakes to the Purchaser for
itself and as trustee for the Group Companies and their respective
directors, officers and agents and to the Relevant Employees to waive
any rights, remedies or claims which it may have against any Relevant
Employee in respect of any misrepresentation, inaccuracy or omission in
or from any information or advice supplied or given by the Group
Companies or their respective directors, officers or agents or the
Relevant Employees in connection with assisting the Seller in the
giving of any Warranty, any indemnities or the preparation of the
Disclosure Letter.
8.5 Purchaser's Warranties
8.5.1 The Purchaser warrants to the Seller that the statements set
out in Schedule 6 are true and accurate and not misleading as
of the date of this Agreement.
8.5.2 The Purchaser acknowledges that the Seller has entered into
this Agreement in reliance upon the Purchaser's Warranties.
8.5.3 Each of the Purchaser's Warranties shall be separate and
independent and shall not be limited by reference to any other
paragraph of Schedule 6 or by anything in this Agreement.
26
8.6 Purchaser's Notification of Breach
8.6.1 If, after the signing of this Agreement, the Purchaser shall
become aware of any material breach of the Purchaser's
Warranties, the Purchaser shall promptly give Notice to the
Seller and in any event prior to Closing setting out full
details of the matter.
8.6.2 For the avoidance of doubt, no breach of this Clause 8.6 shall
result in the Seller being entitled to rescind or terminate
this Agreement.
8.7 Guarantor's Warranties
8.7.1 The Guarantor warrants to the Seller that the statements set
out in Schedule 7 are true, accurate and not misleading as of
the date of this Agreement.
8.7.2 The Guarantor acknowledges that the Seller has entered into
this Agreement in reliance upon the Guarantor's Warranties.
8.7.3 Each of the Guarantor's Warranties shall be separate and
independent and shall not be limited by reference to any other
paragraph of Schedule 7 or by anything in this Agreement.
8.8 Guarantor's Notification of Breach
8.8.1 If, after the signing of this Agreement, the Guarantor shall
become aware of any material breach of the Guarantor's
Warranties, the Guarantor shall promptly give Notice to the
Seller and in any event prior to Closing setting out full
details of the matter.
8.8.2 For the avoidance of doubt, no breach of this Clause 8.8 shall
result in the Seller being entitled to rescind or terminate
this Agreement.
8.9 Effect of Closing
The Seller's Warranties, the Purchaser's Warranties and the Guarantor's
Warranties and all other provisions of this Agreement, to the extent
that they have not been performed by Closing, shall not be extinguished
or affected by Closing or by any other event or matter (including,
without limitation, any satisfaction and/or waiver of any condition
contained in Clause 4.1), except by a specific and duly authorised
written waiver or release by the Purchaser or the Seller, as the case
may be.
9 Limitation of Liability
9.1 Time Limitation for Claims
9.1.1 The Seller shall not be liable for breach of any Seller's
Warranty or to make a payment under any indemnity or related
provision or a claim under Clause 14 (Tax Indemnity) unless a
notice of the claim is given by the Purchaser to the Seller:
(i) in the case of any claim under Clause 14 (Tax
Indemnity) or the Tax Warranties within seven years
following Closing;
(ii) in the case of any claim under Clause 16
(Environmental Indemnity) or paragraph 9 of Schedule
5 (environmental warranties), within four years
following Closing; and
(iii) in the case of any other claim, by 31 May 2006,
27
except that there shall be no time limitation for giving
notice of any claim under paragraphs 1.1.1 to 1.1.6 or 15 of
Schedule 5. Any claim notified by the Purchaser to the
Seller pursuant to this Clause shall specify the matters set
out in Clause 10.1.
9.1.2 The Purchaser shall not be liable for breach of any
Purchaser's Warranty or to make a payment under any indemnity
in respect of any claim unless a notice of the claim is given
by the Seller to the Purchaser:
(i) in the case of any claim under Clause 14 (Tax
Indemnity) or paragraph 5 of Schedule 6, within seven
years following Closing; and
(ii) in the case of any other claim, by 31 May 2006,
except that there shall be no time limitation for giving
notice of any claim under paragraph 1 of Schedule 6. Any claim
notified by the Purchaser to the Seller pursuant to this
Clause shall specify the matters set out in Clause 10.1.
9.2 Minimum Claims
9.2.1 Purchaser Claims
(i) The Seller shall not be liable for breach of any
Seller's Warranty nor to make a payment under Clause
16 (Environmental Indemnity) in respect of any
individual claim (or a series of claims arising from
substantially similar facts or circumstances) where
the liability agreed or determined (disregarding the
provisions of this Clause 9.2) in respect of any such
claim or series of claims does not exceed
(pound)100,000 (one hundred thousand pounds Sterling)
and such claims shall not be aggregated for the
purposes of Clause 9.3.1.
(ii) Where the Liability agreed or determined in respect
of any such claim or a series of claims arising from
substantially similar facts or circumstances exceeds
(pound)100,000 (one hundred thousand pounds
Sterling), subject as provided elsewhere in this
Clause 9, the Seller shall be liable for the amount
of the claim or series of claims as agreed or
determined.
9.2.2 Seller Claims
(i) The Purchaser shall not be liable for breach of any
Purchaser's Warranty in respect of any individual
claim (or a series of claims arising from
substantially similar facts or circumstances) where
the liability agreed or determined (disregarding the
provisions of this Clause 9.2) in respect of any such
claim or series of claims does not exceed
(pound)100,000 (one hundred thousand pounds Sterling)
and such claims shall not be aggregated for the
purposes of Clause 9.3.2.
(ii) Where the Liability agreed or determined in respect
of any such claim or a series of claims arising from
substantially similar facts or circumstances exceeds
(pound)100,000 (one hundred thousand pounds
Sterling), subject as provided elsewhere in this
Clause 9, the Purchaser shall be liable for the
amount of the claim or series of claims as agreed or
determined.
28
9.3 Aggregate Minimum Claims
9.3.1 Purchaser Claims
(i) The Seller shall not be liable for breach of any
Seller's Warranty in respect of any claim unless the
aggregate amount of all claims for which the Seller
would otherwise be liable for breach of any Seller's
Warranty (but not including any amounts recovered by
the Purchaser pursuant to a payment made either under
Clause 16 (Environmental Indemnity) or under Clause
14 (Tax Indemnity)) (disregarding the provisions of
this Clause 9.3) exceeds (pound)12,500,000 (twelve
million, five hundred thousand pounds Sterling).
(ii) Where the Liability agreed or determined in respect
of all claims referred to in Clause 9.3.1 exceeds
(pound)12,500,000 (twelve million, five hundred
thousand pounds Sterling) subject as provided
elsewhere in this Clause 9, the Seller shall be
liable for the aggregate amount of all claims as
agreed or determined.
9.3.2 Seller Claims
(i) The Purchaser shall not be liable for breach of any
Purchaser's Warranty in respect of any claim unless
the aggregate amount of all claims for which the
Purchaser would otherwise be liable for breach of any
Purchaser's Warranty (disregarding the provisions of
this Clause 9.3) exceeds (pound)12,500,000 (twelve
million, five hundred thousand pounds Sterling).
(ii) Where the Liability agreed or determined in respect
of all claims referred to in Clause 9.3.2 exceeds
(pound)12,500,000 (twelve million, five hundred
thousand pounds Sterling) subject as provided
elsewhere in this Clause 9, the Purchaser shall be
liable for the aggregate amount of all claims as
agreed or determined.
9.4 Maximum Liability
9.4.1 Purchaser Claims
(i) The aggregate liability of the Seller in respect of
all claims under the Seller's Warranties and Clause
14 (Tax Indemnity) shall not exceed an amount equal
to 80 (eighty) per cent. of the Closing Amount, after
adjustment thereto pursuant to Clause 7.
(ii) The aggregate liability of the Seller in respect of
all claims under Clause 16 (Environmental Indemnity)
shall not exceed an amount equal to (pound)55,000,000
(fifty five million pounds Sterling).
(iii) The foregoing provisions of this Clause 9.4.1 shall
not apply with respect to any losses arising out of
any breach of the Seller's Warranties set out under
paragraphs 1.1 and 15 of Schedule 5.
29
9.4.2 Seller Claims
(i) The aggregate liability of the Purchaser in respect
of all claims under the Purchaser's Warranties shall
not exceed an amount equal to 80 (eighty) per cent.
of the Closing Amount, after adjustment thereto
pursuant to Clause 7.
(ii) The foregoing provisions of this Clause 9.4.2 shall
not apply with respect to any losses arising out of
any breach of the Seller's Warranties set out under
paragraph 1 of Schedule 6.
9.4.3 For the avoidance of doubt, the aggregate liabilities set out
in Clauses 9.4.1 and 9.4.2 above shall not be subject to any
adjustment as a result of a reduction of consideration
pursuant to Clause 3.2.
9.5 Provisions
The Seller shall not be liable for breach of any Seller's Warranty in
respect of any claim pursuant thereto or pursuant to Clause 16
(Environmental Indemnity) if and to the extent that proper allowance,
provisions or reserve is specifically made in the Accounts or Working
Capital Statement for the matter giving rise to the claim.
9.6 Matters Arising Subsequent to this Agreement
Neither party shall be liable for breach of any Warranty or indemnity
other than a claim under Clause 14 (Tax Indemnity) in respect of any
matter to the extent that the same would not have occurred but for:
9.6.1 Agreed matters
any matter or thing done or omitted to be done pursuant to and
in compliance with this Agreement or otherwise at the request
in writing or with the approval in writing of the other party;
9.6.2 Changes in Law
(i) the passing of, or any change in, after Closing, any
Law or administrative practice of any Governmental
Entity, government, governmental department, agency
or regulatory body including (without prejudice to
the generality of the foregoing) any increase in the
rates of Taxation or any imposition of Taxation or
any withdrawal of relief from Taxation not actually
(or prospectively) in effect as at Closing; or
(ii) any change after Closing of any generally accepted
interpretation or application of any Law; or
9.6.3 Change in Accounting and Taxation Policies subsequent to this
Agreement
the breach of any Seller's Warranty (other than a Tax
Warranty) in respect of any matter to the extent that the same
would not have occurred but for any change in accounting or
Taxation policy, bases or practice of the Purchaser or any of
the Group Companies introduced or having effect after Closing.
9.7 Recovery from Third Parties
9.7.1 If the Seller has paid or the Purchaser requires payment of an
amount in discharge of any claim for breach of Warranty (other
than a Tax Warranty) or Clause 16 (Environmental Indemnity)
and the Purchaser or any Group Company is entitled to
30
recover (whether by payment, discount, credit, relief,
insurance or otherwise) from a third party a sum which
indemnifies or compensates the Purchaser or Group Company (in
whole or in part) in respect of the Loss or Liability which is
the subject matter of the claim, the Purchaser or relevant
Group Company shall take all reasonable steps to recover such
amount and where the Seller has paid an amount in discharge of
a claim, pay to the Seller as soon as practicable after
receipt an amount equal to (i) any sum recovered from the
third party less any costs and expenses incurred in obtaining
such recovery less any Taxation attributable to the recovery
after taking account of any Relief (other than a Purchaser's
Relief or a Post-Closing Relief) available in respect of any
matter giving rise to the claim or if less (ii) the amount
previously paid by the Seller to the Purchaser less any
Taxation attributable to it.
9.7.2 If the Purchaser or any Group Company has paid or the Seller
requires payment of an amount in discharge of any claim for
breach of Warranty and the Seller is entitled to recover
(whether by payment, discount, credit, relief, insurance or
otherwise) from a third party a sum which indemnifies or
compensates the Seller (in whole or in part) in respect of the
loss or liability which is the subject matter of the claim,
the Seller shall take all reasonable steps to recover such
amount and where the Purchaser or any Group Company has paid
an amount in discharge of a claim, pay to the Purchaser or the
relevant Group Company shall, as soon as practicable after
receipt an amount equal to (i) any sum recovered from the
third party less any costs and expenses incurred in obtaining
such recovery less any Taxation attributable to the recovery
after taking account of any Tax relief available in respect of
any matter giving rise to the claim or if less (ii) the amount
previously paid by the Purchaser or any Group Company to the
Seller less any Taxation attributable to it.
9.8 Mitigation of Losses, No Duplication of Liability and No Consequential
or Special Damages
9.8.1 The parties shall procure that all reasonable steps are taken
and all reasonable assistance is given to avoid or mitigate
any Losses which in the absence of mitigation might give rise
to a Liability in respect of any claim for breach of any
Seller's Warranty.
9.8.2 The Purchaser agrees for itself and on behalf of every Group
Company with the Seller in respect of any matter which may
give rise to a Liability under this Agreement:
(i) no such Liability shall be met more than once;
(ii) to the extent that such Liability is satisfied by way
of a claim under any Warranty, an amount payable
under Clause 14 (Tax Indemnity) or Clause 16
(Environmental Indemnity) in respect of the same
matter shall be reduced accordingly, and vice versa;
and
(iii) any Liability with respect to such matter to any
member of the Purchaser's Group or any Group Company
shall be deemed to be satisfied by the satisfaction
of the Liability in respect of such matter to any
other of them.
31
To the extent that a party shall have any Liability pursuant to a claim
hereunder, such Liability shall not include consequential, special,
punitive, incidental or indirect damages (and the injured party shall
not recover for such amounts).
9.9 No Right of Set-Off
The parties acknowledge and agree that neither the Seller nor the
Purchaser may set off or apply any portion of amounts claimed by it in
respect of any breach of warranty or indemnification obligation arising
pursuant to this Agreement against monies payable to the other pursuant
to Clause 6, Clause 7 or Clause 17.
9.10 Fraud
None of the limitations contained in this Clause 9 shall apply to any
claim which arises or is increased, or to the extent to which it arises
or is increased, as the consequence of, or which is delayed as a result
of, fraud, wilful misconduct, wilful concealment or gross negligence by
(i) the Seller or before Closing, any Group Company (including in each
case, any of their respective directors, officers, employees or agents)
in the case of a claim by the Purchaser, or (ii) by the Purchaser
(including any of its directors, officers, employees or agents) in the
case of a claim by the Seller.
10 Claims
10.1 Notification of Claims under this Agreement
Notices of claims for breach of any Warranty or any other claim under
this Agreement shall be promptly given by the claiming party to the
other party, subject to the time limits specified in Clause 9.1 within
60 days of the claiming party's determination of such claim and, in the
case of the Environmental Indemnity, within the time period specified
in Clause 16. Such notice shall state the amount of the Loss, if known,
and the method of the computation thereof and, specifying in reasonable
detail the legal and factual basis of the claim and the evidence on
which the claiming party relies.
10.2 Conduct of Third Party Claims
If the matter or circumstance that may give rise to a claim against a
party for breach of any Warranty is a result of or in connection with a
claim by or Liability to a third party then the Purchaser or other
member of the Purchaser's Group in the case of a potential claim
against the Seller or other member of the Seller's Group, or the
Seller, in the case of a potential claim against the Purchaser or other
member of the Purchaser's Group shall be required to take such action
as shall be reasonably necessary to avoid, dispute, deny, defend,
resist, appeal, compromise or contest such claim or Liability
(including, without limitation, making counterclaims or other claims
against third parties) and shall, so far as practicable, without
prejudice to the rights of its insurers, consult with the other party
before taking any such action.
11 Restrictions on the Seller
11.1 Non-competition
The Seller agrees that for a period of 36 months commencing on the
Closing Date (the "Non-compete Period"), the Seller shall not, and
shall not permit any of its controlled
32
subsidiaries (whilst they remain so) to, engage in any of the following
activities (the "Competitive Activities") within the British Isles:
11.1.1 owning, operating, providing, offering or managing television
and radio broadcast transmission and distribution networks or
services;
11.1.2 providing space and associated services on sites to
communication service providers for the installation of
wireless telecommunications equipment and associated
equipment;
11.1.3 providing or offering to provide site acquisition, site
development and antenna installation services; and
11.1.4 operating any services that use radio spectrum, where the
Seller or any of its Subsidiaries holds one or more radio
frequency licence(s) for such purposes.
11.2 Notwithstanding anything in Clause 11.1 to the contrary, the Purchaser
hereby agrees that the foregoing covenant shall not be deemed breached
either (i) as a result of the ownership by the Seller or any of its
controlled subsidiaries (whilst they remain so) of (A) less than an
aggregate of 5% of any class of stock of a person engaged in
Competitive Activities, (B) less than the lesser of (x) 20% or (y)
$100,000,000 (one hundred million Dollars) in value of any instrument
of Indebtedness of a person or business engaged in Competitive
Activities, (C) a person or business engaged in Competitive Activities
if the portion of the revenues of such person and its subsidiaries on a
consolidated basis or business for the financial year ending
immediately prior to the time of such acquisition that is attributable
to Competitive Activities accounts for less than the lesser of (x) 20%
or (y) $100,000,000 (one hundred million Dollars) of such person's or
business' consolidated annual revenues, or (D) a person or business
engaged in Competitive Activities if such Competitive Activities
account for greater than (x) 20% or (y) $100,000,000 (one hundred
million Dollars) of such person's or business' consolidated annual
revenues for the financial year immediately prior to the time of such
acquisition; provided that the Seller or such subsidiary, as the case
may be, uses its reasonable endeavours to sell, transfer or otherwise
dispose of a portion of the person or business that conducts
Competitive Activities within one year after the date on which the
acquisition of such person or business is consummated so that,
following such sale, transfer or disposition, the Seller or such
subsidiary is in compliance with Clause 11.2(C) (it being acknowledged
and agreed by (a) the Seller that, in marketing such business for sale,
the Seller shall ensure that the Purchaser is offered a reasonable
opportunity to purchase such business and (b) the Purchaser that, if
the Seller or such subsidiary is unable to divest the requisite portion
of the acquired person's or business' within such one year time period,
the Seller or such subsidiary may retain ownership of the person or
business conducting the Competitive Activities with no obligation to
the Purchaser); or (ii) as a result of any transaction announced, or
entered into, by the Seller or any of its controlled subsidiaries, with
a person engaged in Competitive Activities that results in a Seller
Change of Control which takes effect not less than 18 months after the
Closing Date.
11.3 Notwithstanding anything in Clause 11.1 to the contrary, the Seller and
its controlled subsidiaries shall have the right to engage in any
Competitive Activities at any time after a Company Change of Control.
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11.4 Non-solicitation
During the Non-compete Period, the Seller shall not, and shall not
permit any of its controlled subsidiaries (whilst they remain so) to,
(i) recruit, employ or solicit for hire any person employed by the
Company or any Group Company on the Closing Date or any executive
officer employed by the Company or any Group Company at any time during
the Non-compete Period; or (ii) encourage or participate in such
recruitment or solicitation; provided that nothing in this Clause 11.4
shall be interpreted as applying to such an employee who either
responds to a public advertisement or a general search for employees
(through media advertisements, employment firms or otherwise) which is
not focused at employees of the Group or who is no longer an employee
of a Group Company when either such individual first approached or was
first approached by the Seller or any of its controlled subsidiaries.
11.5 Reasonable Restrictions
The Seller agrees that the restrictions contained in this Clause 11 are
no greater than is reasonable and necessary for the protection of the
interests of the Purchaser and the Group Companies but if any such
restriction shall be held to be void but would be valid if deleted in
part or reduced in application, such restriction shall apply with such
deletion or modification as may be necessary to make it valid and
enforceable.
12 Confidentiality
12.1 Announcements
No public release, announcement or circular in connection with the
existence or the subject matter of this Agreement shall be made or
issued by or on behalf of the Seller or the Purchaser without the prior
written approval of the other party, such approval not to be
unreasonably withheld or delayed. This shall not affect any public
release announcement or circular to the extent required by applicable
law or any government entity or the rules of any recognised stock
exchange on which the shares of either party are listed but the party
with an obligation to make an announcement or issue a circular shall
allow the other party insofar as is reasonably practicable to comment
on such public release, announcement or circular before complying with
such an obligation.
12.2 Confidentiality
12.2.1 The Confidentiality Agreement shall cease to have any force or
effect from the date of this Agreement.
12.2.2 Subject to Clause 12.1 and Clause 12.2.3:
(i) each of the parties shall treat as strictly
confidential and not disclose or use any information
received or obtained as a result of entering into
this Agreement (or any agreement entered into
pursuant to this Agreement) which relates to:
(a) the provisions of this Agreement and any
agreement entered into pursuant to this
Agreement; or
34
(b) the negotiations relating to this Agreement
(and any such other agreements);
(ii) the Seller shall treat as strictly confidential and
not disclose or use any information relating to the
Group Companies following Closing and any other
information relating to the business, financial or
other affairs (including future plans and targets) of
the Purchaser's Group; and
(iii) the Purchaser and the Guarantor shall treat as
strictly confidential and not disclose or use any
information relating to the business, financial or
other affairs (including future plans and targets) of
the Seller's Group including, prior to Closing, the
Group Companies.
12.2.3 Clause 12.2.2 shall not prohibit disclosure or use of any
information if and to the extent:
(i) the disclosure or use is required by applicable law,
any governmental entity or any recognised stock
exchange;
(ii) the disclosure or use is required to vest the full
benefit of this Agreement in the Seller, the
Purchaser, or the Guarantor, as the case may be;
(iii) the disclosure or use is required for the purpose of
any judicial proceedings arising out of this
Agreement or any other agreement entered into under
or pursuant to this Agreement or the disclosure is
made to a Tax Authority in connection with the Tax
affairs of the disclosing party;
(iv) the disclosure is made to Representatives of the
Seller or the Purchaser on terms that such
Representatives undertake to comply with the
provisions of Clause 12.2.2 in respect of such
information as if they were a party to this
Agreement;
(v) the information is or becomes publicly available
(other than by breach of the Confidentiality
Agreement or of this Agreement);
(vi) the other parties have given prior written approval
for the disclosure or use; or
(vii) the information is independently developed after
Closing,
provided that prior to disclosure or use of any information
pursuant to Clause 12.2.3(i), (ii) or (iii), except in the
case of disclosure to a Tax Authority, the party concerned
shall promptly notify the other parties of such requirement
with a view to providing that other parties with the
opportunity to contest such disclosure or use or otherwise to
agree on the timing and content of such disclosure or use.
13 Other Provisions
13.1 Access
After Closing, the Purchaser will give the Seller and its
Representatives reasonable access, during normal business hours and
upon reasonable notice, to all relevant Books and Records, agreements,
documents, information, data and files to the extent relating to the
Seller's operation of the Group Companies prior to Closing, and to
furnish copies thereof at the cost of the Seller, which the Seller or
its Representatives reasonably request, in connection with claims,
proceedings, actions, investigations, audits, and other regulatory
35
or legal proceedings involving the Seller's operation of the Group
Companies prior to Closing, other than claims made pursuant to this
Agreement or in relation to matters, in the Purchaser's reasonable
opinion, likely to give rise to such claims, and the Purchaser shall
furnish reasonable assistance (including access to management and
employees of Crown Castle UK) to the Seller and its Representatives in
connection with assessing such claims and other proceedings; provided
that such access would not unreasonably disrupt the normal operations
of the Purchaser or the Group Companies or compromise any legal
privilege of the Purchaser or the Group. The Purchaser shall use
reasonable endeavours to ensure the preservation of any such records
(including Tax records) until the seventh anniversary of Closing;
provided, further, that the Purchaser will use reasonable endeavours to
prevent the destruction of any such records without first providing the
Seller with written notice detailing the contents of such records and
the opportunity to obtain such records, at least 30 days prior to the
destruction thereof.
13.2 Retained Names and Marks
13.2.1 Subject to the terms of this Clause 13.2, no interest in or
right to use the names "Crown", "Castle", "Crown Castle",
"CCIC" or "CCUK" or the Seller or Company logos set out in
Schedule 2 (collectively, but not including the name "UK" when
used other than in conjunction with "Crown", "Castle", "Crown
Castle", "CCIC" or "CCUK", (the "Retained Names and Marks"))
is being transferred to the Purchaser pursuant to the
transactions contemplated by this Agreement or will be
retained by the Group Companies after the Closing Date.
13.2.2 Pursuant to the TM Licence Agreement to be entered into by the
Seller and the Purchaser or their respective Affiliates on
Closing, for a period of 18 months after the Closing Date, the
Seller shall grant to the Group Companies the right to use
solely within the British Isles any Retained Name and Mark (i)
in the ordinary course of its business and consistent with
past practice provided that, in the use of the Retained Names
and Marks after the Closing Date, the Purchaser shall procure
that, to the extent reasonably practicable, the Group
Companies clearly state that such names and marks are used and
such business operated by the Purchaser's Group; and (ii) on
any business assets, signage, billboards, advertising
materials, telephone listings, internet sites, stationery,
purchase orders, invoices, sales orders, labels, letterheads,
shipping documents, and other items and materials in existence
at the Closing Date.
13.2.3 All goodwill resulting from the use by the Group Companies of
the Retained Names and Marks pursuant to this Clause 13.2
shall inure to the benefit of the Seller.
13.2.4 From the date 18 months following the Closing Date (the "TM
Termination Date"), all rights acquired by the Group Companies
pursuant to this Clause 13.2 shall terminate and the Purchaser
shall, or shall cause the Group Companies to, cease all use of
the Retained Names and Marks including removing by the TM
Termination Date the Retained Names and Marks from its signs,
billboards, advertising materials, telephone listings,
Internet sites, stationery, purchase orders, invoices, sales
orders, labels, letterheads, shipping documents, and other
similar items and materials.
13.2.5 From the TM Termination Date, neither the Purchaser nor any of
its Affiliates shall have a corporate name or conduct a
business with a name incorporating the Retained Names and
Marks or anything derived from or confusingly similar thereto.
36
13.2.6 The Purchaser agrees to use reasonable endeavours to do such
things as the Seller shall reasonably request to prevent
confusion in the marketplace or otherwise in connection with
the Purchaser's use of the Retained Names and Marks pursuant
to this Clause 13.2.
13.3 Intercompany Arrangements
13.3.1 The Seller covenants that, except as set out in Section 6.4 of
the Disclosure Letter and subject to Clause 17, (i) no
Intra-Group Payables and (ii) no Intra-Group Receivables shall
exist or be outstanding as at Closing. The Seller undertakes
to the Purchaser to be solely responsible for any penalties,
charges or fees (including any prepayment charges) in respect
of any such Intra-Group Receivables or Intra-Group Payables.
13.3.2 Except for agreements set out in Section 6.4 of the Disclosure
Letter and any agreements entered into pursuant to this
Agreement, as at Closing, all contracts between the Group
Companies, on the one hand, and the Seller or any of its
Subsidiaries (other than the Group Companies), on the other
hand, shall have been terminated and be of no further force or
effect, notwithstanding any terms thereof to the contrary.
13.4 Transitional Arrangements
On Closing, the parties or their respective Affiliates shall enter into
the Transitional Services Agreement.
13.5 Jersey Telecoms Licence
Promptly after the date of this Agreement, the Seller shall notify the
Jersey Competition Regulatory Authority (in accordance with condition
2.5 of the Class 1 telecommunications licence issued to the Company on
22 June 2004) that a Change of Control (as defined in such licence) is
proposed.
13.6 Further Assurances
13.6.1 Each of the Seller and the Purchaser shall, and shall use
reasonable endeavours to procure that any necessary third
party shall, from time to time execute such documents and
perform such acts and things as either of the Seller or the
Purchaser may reasonably require to transfer or procure the
transfer of the Shares to the Purchaser and to give each of
them the full benefit of this Agreement.
13.6.2 Pending registration of the Purchaser as owner of the Shares,
the Seller shall exercise all voting and other rights in
relation to such Shares in accordance with the Purchaser's
instructions.
13.6.3 Release of Guarantees
The Seller shall procure, by Closing or, to the extent not
done by Closing, within 10 Business Days thereafter, or, to
the extent not done within such period, as soon as reasonably
practicable thereafter, the release of each Group Company from
any securities, pledges, guaranties or indemnities given by or
binding upon the Group Company in respect of any Liability of
the Seller or any member of the Seller's Group. Pending such
release, the Seller shall indemnify the Group Companies
37
against all amounts paid by any of them pursuant to any such
securities, pledges, guarantees and indemnities in respect of
such Liability of the Seller.
13.7 Whole Agreement
13.7.1 This Agreement contains the whole agreement between the
Seller, the Purchaser and the Guarantor relating to the
subject matter of this Agreement at the date of this Agreement
to the exclusion of any terms implied by Law which may be
excluded by contract and supersedes any previous written or
oral agreement between the Seller, the Purchaser and the
Guarantor in relation to the matters dealt with in this
Agreement.
13.7.2 Each party acknowledges that it has not been induced to enter
this Agreement by any representation, warranty or undertaking
not expressly incorporated into it.
13.7.3 So far as is permitted by Law and except in the case of fraud,
each of the Seller, the Purchaser and the Guarantor agrees and
acknowledges that its only right and remedy in relation to any
representation, warranty or undertaking made or given in
connection with this Agreement shall be for breach of the
terms of this Agreement to the exclusion of all other rights
and remedies (including those in tort or arising under
statute).
13.7.4 In Clauses 13.7.1 to 13.7.3, "this Agreement" includes the
Disclosure Letter and all documents entered into pursuant to
this Agreement.
13.8 Reasonableness
Each of the Seller, the Purchaser and the Guarantor confirms it has
received independent legal advice relating to all the matters provided
for in this Agreement, including the terms of Clause 11 (Restrictions
on the Seller) and Clause 13.7 (Whole Agreement) and agrees that the
provisions of this Agreement (including the Disclosure Letter and all
documents entered into pursuant to this Agreement) are fair and
reasonable.
13.9 Assignment
13.9.1 Except as otherwise expressly provided in this Agreement,
neither the Seller, the Purchaser nor the Guarantor may
without the prior written consent of the others, assign, grant
any security interest over, hold on trust or otherwise
transfer the benefit of the whole or any part of this
Agreement.
13.9.2 Except as otherwise expressly provided in this Agreement, the
Seller or the Purchaser may, without the consent of the other,
assign to a connected company the benefit of the whole or any
part of this Agreement provided that:
(i) such assignment shall not be absolute but shall be
expressed to have effect only for so long as the
assignee remains a connected company of the party
concerned, with an obligation to re-assign to a
connected company of the assignor should any assignee
cease to be so; and
(ii) the assignee shall not be entitled to receive under
this Agreement any greater amount than that to which
the assignor would have been entitled.
For the purposes of this Clause, a "connected company" is a
company which is a subsidiary of the party concerned or which
is a holding company of such party or a subsidiary of such
holding company.
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13.10 Third Party Rights
13.10.1 A person who is not a party to this Agreement has no right
under the Contracts (Rights of Third Parties) Act 1999 to
enforce any term of, or enjoy any benefit under, this
Agreement, except to the extent set out in this Clause 13.10.
13.10.2 A Group Company (whilst the Group Company remains in the
Purchaser's Group) may enforce and rely on Clause 8.4 to the
same extent as if it were a party.
13.10.3 This Agreement may be terminated and any term may be amended
or waived without the consent of the person named in Clause
13.10.2.
13.11 Variation
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the Seller, the Purchaser and the
Guarantor.
13.12 Time of the Essence
Time shall be of the essence of this Agreement both as regards any
dates, times and periods mentioned and as regards any dates, times and
periods which may be substituted for them in accordance with this
Agreement or by agreement in writing between the Seller, the Purchaser
and the Guarantor.
13.13 Method of Payment
Wherever in this Agreement provision is made for the payment by one
party to another, such payment shall be effected by crediting for same
day value the Seller's Nominated Account or the Purchaser's Nominated
Account, as applicable, by wire transfer of immediately available
funds, on or before the due date for payment. Payment of such sum in
this manner shall be a good discharge to the payer of its obligation to
make such payment on or before the due date for payment.
13.14 Costs
13.14.1 The Seller shall bear all costs incurred by it and the
Seller's Group in connection with the preparation, negotiation
and entry into of this Agreement and the sale of the Shares.
13.14.2 The Purchaser shall bear all such costs incurred by it in
connection with the preparation, negotiation and entry into of
this Agreement and the purchase of the Shares.
13.14.3 The Guarantor shall bear all such costs incurred by it in
connection with the preparation, negotiation and entering into
of this Agreement.
13.15 Stamp Duty, Fees and Taxes
The Purchaser shall bear the cost of all stamp duty and all
registration and transfer taxes and duties or their equivalents in all
jurisdictions where such fees, Taxes and duties are payable as a result
of the transactions contemplated by this Agreement. The Purchaser shall
be responsible for arranging the payment of such stamp duty and all
other such fees, Taxes and duties, including fulfilling any
administrative or reporting obligation imposed by the jurisdiction in
question in connection with the payment of such Taxes and duties. The
Purchaser shall indemnify the Seller or any other member of the
Seller's Group against
39
any Losses suffered by the Seller or member of the Seller's Group as a
result of the Purchaser failing to comply with its obligations under
this Clause 13.15.
13.16 Interest
If the Seller, the Purchaser or the Guarantor defaults in the payment
when due of any sum payable under this Agreement its liability shall be
increased to include interest on such sum from the date when such
payment is due until the date of actual payment (after as well as
before judgment) at a rate per annum of 4 per cent. above the rate of
interest from time to time announced publicly by Barclays Bank plc as
its base rate. Such interest shall accrue from day to day and shall be
compounded monthly.
13.17 Grossing-up of Indemnity Payments, VAT
13.17.1 Any payment made under this Agreement pursuant to an
indemnity, compensation or reimbursement provision (including,
for the avoidance of doubt, any payments in respect of a
breach of any Warranty and any payment under Clause 14 (Tax
Indemnity)) shall be paid free and clear of all deductions
withholdings, set-offs or counterclaims whatsoever save only
as may be required by law. If any deductions or withholdings
are required by law the party making the payment shall be
obliged to pay to the other party such sum as will, after such
deduction or withholding has been made, leave the other party
with the same amount as it would have been entitled to receive
in the absence of any such requirement to make a deduction or
withholding.
13.17.2 If the recipient of a payment made under this Agreement
pursuant to an indemnity, compensation or reimbursement
provision (including, for the avoidance of doubt, any payments
in respect of a breach of any Warranty and any payment under
Clause 14 (Tax Indemnity)) receives a credit for or refund of
any Taxation payable by it or similar benefit by reason of any
deduction or withholding for or on account of Taxation then it
shall reimburse to the other party such part of such
additional amounts paid to it pursuant to Clause 13.17.1 as
will leave it (after such reimbursement) in no better and no
worse position than it would have been if the other party had
not been required to make such deduction or withholding.
13.17.3 Where any payment is made under this Agreement to the
Purchaser pursuant to an indemnity, compensation or
reimbursement provision (including, for the avoidance of
doubt, any payments in respect of a breach of any Warranty and
any payment under Clause 14 (Tax Indemnity)) and that sum is
subject to a charge to Taxation in the hands of the recipient
(other than Taxation attributable to a payment being properly
treated as an adjustment to the consideration paid by the
Purchaser for the Group) the sum payable shall be increased to
such sum as will ensure that after payment of such Taxation
(and after giving credit for any Taxation Relief available to
the recipient in respect of the matter giving rise to the
payment) the recipient shall be left with a sum equal to the
sum that it would have received in the absence of such a
charge to Taxation.
13.17.4 Where any payment is made under this Agreement pursuant to an
indemnity, compensation or reimbursement provision (including,
for the avoidance of doubt, any payments in respect of a
breach of any Warranty and any payment under Clause 14 (Tax
Indemnity)) and the matter giving rise to the payment results
in a Taxation Relief being available to any member of the
Purchaser's Group the
40
amount of that payment shall be reduced to take into account
the value of that Taxation Relief.
13.17.5 Where any sum constituting an indemnity, compensation or
reimbursement (including, for the avoidance of doubt, any
payments in respect of a breach of any Warranty and any
payment under Clause 14 (Tax Indemnity)) to any party to this
Agreement is paid to a person other than such party but is
treated as taxable in the hands of such party, the payer shall
promptly pay to such party such sum as shall reimburse such
party for all Taxation suffered by it in respect of the
payment (after giving credit for any Taxation Relief available
to such party in respect of the matter giving rise to the
payment).
13.17.6 Where under the terms of this Agreement one party is liable to
indemnify or reimburse another party in respect of any costs,
charges or expenses, the payment shall include an amount equal
to any VAT thereon not otherwise recoverable by the other
party, subject to that other party using all reasonable
endeavours to recover such amount of VAT as may be
practicable.
13.17.7 If any payment under this Agreement constitutes the
consideration for a taxable supply for VAT purposes, then in
addition to that payment, and against delivery of a valid VAT
invoice, the payer shall pay any VAT due.
13.18 Notices
13.18.1 Any notice or other communication in connection with this
Agreement (each, a "Notice") shall be:
(i) in writing; and
(ii) delivered by hand, pre-paid first class post or
courier using an internationally recognised courier
company.
13.18.2 A Notice to the Seller shall be sent to the following address,
or such other person or address as the Seller may notify to
the Purchaser and the Guarantor from time to time:
Crown Castle International Corp.
510 Bering Drive
Suite 500
Houston
Texas 77057
Attention: E. Blake Hawk, General Counsel
with a copy to:
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
Attention: Stephen L. Burns, Esq.
James C. Woolery, Esq.
with a copy to:
Norton Rose
Kempson House
41
Camomile Street
London EC3A 7AN
Attention: Jill Gauntlett
13.18.3 A Notice to the Purchaser shall be sent to the following
address, or such other person or address as the Purchaser may
notify to the Seller and the Guarantor from time to time:
NGG Telecoms Investment Limited
1-3 The Strand,
London WC2N 5EH
Attention: The Company Secretary
with a copy to:
Linklaters
One Silk Street
London EC2Y 8HQ
Attention: Roger Barron
13.18.4 A Notice to the Guarantor shall be sent to the following
address, or such other person or address as the Guarantor may
notify to the Purchaser and the Seller from time to time:
National Grid Holdings One plc
1-3 The Strand,
London WC2N 5EH
Attention: The Company Secretary
with a copy to:
Linklaters
One Silk Street
London EC2Y 8HQ
Attention: Roger Barron
13.18.5 A Notice shall be effective upon receipt and shall be deemed
to have been received:
(i) five Business Days after posting, if delivered by
pre-paid first class post; or
(ii) at the time of delivery, if delivered by hand or
courier.
13.19 Invalidity
13.19.1 If any provision in this Agreement shall be held to be
illegal, invalid or unenforceable, in whole or in part, the
provision shall apply with whatever deletion or modification
is necessary so that the provision is legal, valid and
enforceable and gives effect to the commercial intention of
the parties.
13.19.2 To the extent it is not possible to delete or modify the
provision, in whole or in part, under Clause 13.19.1, then
such provision or part of it shall, to the extent that it is
illegal, invalid or unenforceable, be deemed not to form part
of this Agreement and
42
the legality, validity and enforceability of the remainder of
this Agreement shall, subject to any deletion or modification
made under Clause 13.19.1, not be affected.
13.20 Counterparts
This Agreement may be entered into in any number of counterparts, all
of which taken together shall constitute one and the same instrument.
The Seller, the Purchaser and the Guarantor may enter into this
Agreement by executing any such counterpart.
13.21 Dispute Resolution
13.21.1 Subject to Clause 7 (Post-Closing Adjustments), if any dispute
arises in connection with this Agreement, the Seller, the
Purchaser and the Guarantor will attempt to settle it by
mediation in accordance with the CEDR Model Mediation
Procedure. Unless otherwise agreed by the Seller, the
Purchaser and the Guarantor, the mediator will be nominated by
CEDR.
13.21.2 To initiate the mediation, a party must give notice in writing
(an "ADR Notice") to the other parties requesting a mediation.
A copy of the request shall be sent to CEDR Solve. The
mediation will start not later than 20 days after the date of
the ADR Notice.
13.21.3 No party may commence any arbitration in relation to any
dispute arising out of this Agreement until it has attempted
to settle the dispute by mediation and either the mediation
has terminated or the other parties have failed to participate
in the mediation, provided that the right to issue proceedings
is not prejudiced by a delay.
13.21.4 If the dispute is not settled by mediation within ten days of
commencement of the mediation or within such further period as
the parties may agree in writing, the dispute shall be
referred to and finally resolved by arbitration as set out
below.
13.21.5 Subject to Clause 7 (Post-Closing Adjustments), any dispute
arising out of or in connection with this Agreement, including
any question regarding the validity, existence or termination
of this Agreement and/or this Clause 13.21, which has not been
settled by mediation in accordance with Clauses 13.21.1 to
13.21.4 above, shall be finally resolved by arbitration in
England, conducted in English, by three arbitrators pursuant
to the rules of the London Court of International Arbitration
(the "LCIA") (the "Rules") save that the Rules shall be
amended in relation to the appointment of arbitrators and the
disclosure of documents in any arbitration proceedings as set
out below.
13.21.6 One arbitrator shall be nominated by the Seller and one
arbitrator shall be nominated jointly by the Purchaser and the
Guarantor. If the Purchaser and the Guarantor are unable to
agree on the nomination of an arbitrator within 15 days of
notification of the Seller's nominated arbitrator, the LCIA
shall appoint an arbitrator on behalf of the Purchaser and the
Guarantor. The third arbitrator shall be selected
by the two so chosen within 15 days of the appointment of the
second arbitrator, failing which the LCIA shall appoint the
third arbitrator, who shall be the chairman of the arbitral
tribunal.
13.21.7 The parties agree that disclosure in any arbitration shall be
in accordance with the standard disclosure requirements of the
Civil Procedure Rules of the English court.
43
13.21.8 Documents to be sent under this provision shall be sent in
accordance with the Notice provisions set out in Clause 13.18.
13.22 Governing Law
This Agreement (and for the avoidance of doubt, Clause 13.21 in
particular) and the documents to be entered into pursuant to it, save
as expressly referred to therein, shall be governed by and construed in
accordance with English law.
13.23 Appointment of Process Agent
13.23.1 The Seller hereby irrevocably appoints Norose Services Limited
of Kempson House, Camomile Street, London EC3A 7AN as its
agent to accept service of process in England in any legal
action or proceedings arising out of this Agreement, service
upon whom shall be deemed completed whether or not forwarded
to or received by the Seller.
13.23.2 The Seller agrees to inform the Purchaser and the Guarantor in
writing of any change of address of such process agent within
28 days of such change.
13.23.3 If such process agent ceases to be able to act as such or to
have an address in England, the Seller irrevocably agrees to
appoint a new process agent in England acceptable to the
Purchaser and the Guarantor and to deliver to the Purchaser
and the Guarantor within 14 days a copy of a written
acceptance of appointment by the process agent.
13.23.4 Nothing in this Agreement shall affect the right to serve
process in any other manner permitted by law or the right to
bring proceedings in any other jurisdiction for the purposes
of the enforcement or execution of any judgment or other
settlement in any other courts.
13.24 Consents and Waivers
The Purchaser acknowledges that the consents and waivers with respect
to the transactions contemplated by this Agreement set out in Section
6.7 of the Disclosure Letter may be required from third parties. The
Purchaser agrees that the Seller shall not have any Liability
whatsoever to the Purchaser arising out of or relating to the failure
to obtain any consents or waivers set out in Section 6.7 of the
Disclosure Letter that may be required in connection with the
transactions contemplated by this Agreement or because of the
termination of any contract, licence or permit as a result thereof. The
Purchaser further agrees that no Seller Warranty or covenant contained
herein shall be breached or deemed breached as a result of (i) the
failure to obtain any such consent or waiver, (ii) any such termination
or (iii) any action, claim or proceeding commenced or threatened by or
on behalf of any person arising out of or relating to the failure to
obtain any such consent or waiver or as a result of any such
termination. With respect to any such consent or waiver not obtained
prior to Closing, the Seller shall continue at the Purchaser's request
to use reasonable endeavours to cooperate with the Purchaser in
attempting to obtain any such consent or waiver for 180 days after
Closing. For the purposes of this Clause 13.24, "reasonable endeavours"
shall not include any requirement of the Seller or any of its
Affiliates to expend money (other than nominal amounts), commence or
participate in any litigation or offer or grant any material
accommodation (financial or otherwise) to any third party.
44
14 Tax Indemnity
14.1 The Seller covenants to pay to the Purchaser an amount equal to:
14.1.1 all Liability for Taxes of the Group Companies which arises as
a consequence of an Event occurring or deemed (for Taxation
purposes) to have occurred, on or before the Closing Date, or
which arises by reference to profits earned, accrued or
received on or before the Closing Date;
14.1.2 all Liability for Taxes of any Group Company that would not
have arisen but for any Group Company being controlled or
connected for Tax purposes on or before Closing by any person
or entity other than another Group Company;
14.1.3 the amount of any additional Tax which is payable if any
Purchaser Relief is not available or is lost, reduced or
cancelled; and
14.1.4 all reasonable legal and other professional fees and expenses
properly attributable to any of the items in Clauses 14.1.1,
14.1.2 and 14.1.3. For the purposes of this Clause 14, a
Liability for Taxes shall be deemed to arise not only when an
actual payment of Taxes or payment in respect of Taxes is due,
but where a payment of Taxes or payment in respect of Taxes
would be due but for the availability of any Relief (other
than Seller's Relief which is not taken into account pursuant
to Clause 14.11).
14.2 The covenant in Clause 14.1 shall not apply, and the Seller shall have
no liability to make a payment under Clause 14.1 or for breach of the
warranties in paragraph 12 of Schedule 5 (the "Tax Warranties") in
respect of any Liability for Taxes of any person to the extent that:
14.2.1 such Liability for Taxes is a liability to United Kingdom
corporation tax which arises as a result of an Event
(including the earning of income, profits or gains) occurring
since 31 December 2003 in the ordinary course of business of
any of the Group Companies (as carried on at Closing);
14.2.2 provision or reserve for such a Liability for Taxes was made
or reflected in the Working Capital Statement or such
Liability for Taxes was otherwise taken into account as a
liability in the Working Capital Statement;
14.2.3 such Liability for Taxes was discharged prior to Closing;
14.2.4 such Liability for Taxes arises or is increased as a result of
a Change in Tax Law;
14.2.5 such Liability for Taxes would not have arisen but for a
change after the Closing Date in accounting policies or
practices in effect on the Closing Date save for any change
which is necessary to cause such accounting policies or
practices to comply with UK GAAP as at the Closing Date;
14.2.6 such Liability for Taxes would not have arisen but for any
voluntary act, omission or transaction by the Purchaser, any
Group Company or any of their respective directors, employees
or agents after the Closing Date, and the Purchaser or any
Group Company or any of their respective directors, employees
or agents knew that the voluntary act, omission or transaction
would have given rise to the Liability in question other than
any act, omission or transaction which was (A) required by Law
in effect on the date of this Agreement; (B) pursuant to a
legally binding commitment of the Group Company created on or
before the Closing Date; or (C)
45
in the ordinary course of business of the Group Company as
carried on immediately before the Closing Date;
14.2.7 such Liability for Taxes arises as a result of a failure by
the Purchaser or any Group Company after the Closing Date to
(A) submit the Tax Returns required to be made by or on behalf
of that person; (B) submit such Tax Returns within the
appropriate time limits or otherwise than on a proper basis;
or (C) make any payments assumed to be made for purposes of
the provision in the Working Capital Statement, except in each
case where any such failure arises as a result of a breach by
Seller of its obligations under Clause 15;
14.2.8 such Liability for Taxes arises as a result of the amendment,
disregard, withdrawal or disclaimer by the Purchaser or any
Group Company after the Closing Date of any claim, election,
surrender or disclaimer made on or before the Closing Date
except where the making of that amendment, disregard,
withdrawal or disclaimer is or has been, or the making of that
claim, election, surrender or disclaimer is not or has not
been, assumed in computing the provision for Taxes in the
Working Capital Statement;
14.2.9 such Liability for Taxes would not have arisen but for the
failure or omission to make any claim, election, surrender or
disclaimer, or to give any notice or consent or to take any
other action that is or has been assumed in computing the
provision for Taxes in the Working Capital Statement and full
particulars of which have been given by the Seller to the
Purchaser in good time to allow the Purchaser to procure the
making of the claim, election, surrender or disclaimer, the
giving of any notice or consent or the taking of any other
such action;
14.2.10 such Liability for Taxes is a Liability for interest or
penalties and would not have arisen but for the failure of any
Group Company to pay the relevant Tax Authority an amount of
Taxes equal to the payment made by the Seller to the Purchaser
hereunder in respect of such Taxes not later than the Business
Day following the date such payment is made hereunder;
14.2.11 such Liability for Taxes is a Liability for interest or
penalties attributable to an underpayment of Taxes payable in
instalments under the Corporation Tax (Instalment Payments)
Regulations 1998 for the accounting period commencing prior to
the Closing Date to the extent that the underpayment would not
have been an underpayment but for an Event occurring after the
Closing Date;
14.2.12 the Purchaser or that person has received from any other
person other than a Group Company a payment in respect of such
Liability for Taxes;
14.2.13 such Liability for Taxes was satisfied by the Seller and the
Liability of the Group Company was correspondingly
extinguished or reduced under any statutory provision imposing
Liability on the Seller or any member of the Purchaser's Group
(other than a Group Company) for Taxes primarily chargeable
against any Group Company;
14.2.14 such Liability for Taxes arises as a result of an Event
occurring after 31 December 2003 and as a result of that
Event, there is an increase in the assets of that person in
excess of their value as reflected in the Working Capital
Statement, but only to the extent such Liability for Taxes
does not exceed such increase in assets; or
14.2.15 such Liability for Taxes would not have arisen but for the
failure of the Purchaser to
46
comply with its obligations under Clauses 14.5, 14.7, 14.15 or
15.1.
14.3 The Purchaser covenants to pay to the Seller an amount equal to (i) any
Taxes for which the Seller or other person (other than a Group Company)
by virtue of that person being controlled by the Seller becomes liable
as a result of any Group Company failing to discharge any Liability for
Taxes when payable, (ii) any Liability for Taxes arising to the Seller,
or a person controlled by the Seller (other than a Group Company)
pursuant to: (A) Section 132 of the Finance Act 1988 if a Group Company
ceases to be resident in the United Kingdom after the Closing Date; (B)
Section 190 of the Taxation of Chargeable Gains Act 1992 if the unpaid
tax referred to in Section 190(1) is first assessed against any Group
Company; (C) paragraph 68 Schedule 29 Finance Act 2002 where the unpaid
tax referred to in paragraph 68(1) is first assessed on any Group
Company; (D) paragraph 75A Schedule 18 of the Finance Act 1998 where
the claimant company is a Group Company; or (E) Section 767A of the
Taxes Act or Schedule 28 of the Finance Act 2000 where the taxpayer
company is a Group Company or Section 767AA of the Taxes Act where the
transferred company is a Group Company, (iii) all reasonable legal fees
and expenses attributable to any item in Clause (i) or (ii); provided
that the Purchaser shall not be liable to make a payment to the Seller
under this Clause 14.3 in respect of any Taxes:
14.3.1 which are subject to a valid claim under Clause 14.1 by the
Purchaser which has not been satisfied or could be the subject
of any such valid claim, assuming that a claim was made in
respect of such Taxation (ignoring for these purposes Clause 9
of the Agreement);
14.3.2 which have been recovered under any relevant statutory
provision (and the Seller shall procure that no such recovery
is sought to the extent that payment is made under this Clause
14.3);
14.3.3 with respect to which the Purchaser would have a claim against
the Seller under Clause 14.1; or
14.3.4 for breach of the Tax Warranties and such claim has not been
satisfied by the Seller. The provisions of Clause 14.9 and
14.10 below shall apply to this Clause 14.3 with the necessary
changes.
14.4 Any payment to be made pursuant to Clause 14.1, 14.3, 14.16 or 14.17
shall be paid within ten Business Days after the person to whom the
payment is due to be made (the "Indemnified Party") makes written
demand upon the other party (the "Indemnifying Party"), but in no case
(except in the case of a payment under Clause 14.16 or 14.17) earlier
than five Business Days prior to the date on which the relevant Taxes
(including any estimated Tax payments) are required to be paid to the
relevant Tax Authority (or would be required to be paid but for the
availability of any Relief (other than a Seller's Relief which is not
taken into account pursuant to Clause 14.11)).
14.5 Reasonably promptly after a party becomes aware of the existence of a
Tax issue that may give rise to a claim under Clause 14.1, 14.3, 14.16
or 14.17 or for breach of the Tax Warranties (a "Tax Controversy") by
it against the other party, the Indemnified Party shall notify the
Indemnifying Party of the Tax issue and thereafter shall promptly
forward to the Indemnifying Party copies of notices and communications
with a Tax Authority relating to such Tax Controversy. Except as
provided in this Clause 14.5 and provided that the
47
Indemnifying Party agrees to indemnify the Indemnified Party against
any Liability which may be suffered by it (or where the Indemnified
Party is the Purchaser, a Group Company) in connection therewith, the
Indemnifying Party may, subject to Clauses 14.6 and 14.7 below, request
that the Indemnified Party takes such action as it may reasonably
request to deal with, settle or contest any audit inquiry, information
request, audit proceeding, suit, contest or any other action with
respect to a Tax Controversy for which it would be required to make a
payment under Clause 14.1, 14.16 or 14.17 for breach of the Tax
Warranties or (as the case may be) Clause 14.3. The Indemnified Party
shall not be required to take any action which is likely to increase
its liability to Taxation for accounting periods ending after Closing
(other than as a result of the reduction or utilisation of any Seller's
Relief). Any out of pocket expenses incurred by the Indemnified Party
in handling, settling or contesting a Tax Controversy at the request of
the Indemnifying Party under this Clause 14.5 shall be borne by the
Indemnifying Party.
14.6 The Indemnified Party (or where the Indemnified Party is the Purchaser,
the Group Company) shall be at liberty without reference to the
Indemnifying Party to deal with any matter which could give rise to a
Liability under this Clause 14 if the Indemnifying Party delays
unreasonably in giving any such request as is mentioned in Clause 14.5
above provided that Indemnified Party concerned has notified the
Indemnifying Party of its intention to so deal with the matter and has
afforded the Indemnifying Party a period of 15 Business Days to
respond.
14.7 Subject to Clause 14.6 and provided that the Indemnifying Party agrees
to indemnify the Indemnified Party against any Liability which may be
suffered by it (or where the Indemnified Party is the Purchaser, a
Group Company) in connection therewith and, provided that the
Indemnified Party shall not be required to take any action which is
likely to increase its liability to Taxation for accounting periods
ending after Closing (other than as a result of the reduction or
utilisation of any Seller's Relief), the Seller and the Purchaser shall
each have the right to participate in all activities and strategic
decisions relating to any litigation of the Tax Controversy in front of
any court or any other Tax proceedings for which each party would be
required to make a payment under Clause 14.1, 14.3, 14.16 or 14.17 or
for breach of the Tax Warranties with respect to one or more Tax
issues.
14.8 The Purchaser shall, to the extent possible, apply any Relief (other
than any Purchaser Relief or a Post-Closing Relief) to mitigate any
Liability for Taxes which is the subject of a claim under Clause 14.1
or for breach of the Tax Warranties, including apportioning or
reapportioning any amount pursuant to any Group Payment Arrangements to
which any Group Company is a party or making such claims or elections
in relation to such Seller Relief as the Seller reasonably requests.
14.9 If the Seller pays any amount to the Purchaser under Clause 14.1, 14.16
or 14.17 or for breach of the Tax Warranties in respect of any
Liability for Taxes (a "Relevant Payment") and the Purchaser or a Group
Company (the "Relevant Recipient") receives a rebate, refund, credit,
set off, other tax benefit or payment from any other person other than
a Group Company in respect of such Liability (the "Relevant Receipt"),
the Purchaser shall repay or cause to be repaid to the Seller an amount
equal to the lesser of (i) the amount of the Relevant Receipt less any
Liability for Taxes of the Relevant Recipient in respect of the
Relevant Receipt and reasonable costs incurred by the Purchaser or the
Relevant Recipient in obtaining it (to the extent that such costs have
not been reimbursed pursuant
48
to Clause 14.10) and (ii) the amount of the Relevant Payment less any
Liability for Taxes on the receipt thereof. If the Relevant Recipient
receives a rebate, refund, credit, set off or other tax benefit in
respect of which it is required by this Clause 14.9 to make a payment,
the Relevant Recipient shall not be obliged to make that payment until
such date upon which the Relevant Recipient's liability to make an
actual payment of Tax is reduced by reason of the rebate, refund,
credit, set off or other tax benefit.
14.10 The Purchaser shall notify the Seller of (i) any actual entitlement of
the Purchaser or any Group Company to any Relevant Receipt or, (ii) any
prospective entitlement to any Relevant Receipt which may become an
actual entitlement, as soon as is reasonably practicable after the
Purchaser becomes aware of such actual or prospective entitlement. The
Purchaser shall, if the Seller so requests and at the Seller's expense,
take or cause to be taken such action reasonably required to secure the
Relevant Receipt.
14.11 If the auditors for the time being of any Group Company certify in
writing (at the request and reasonable expense of the Seller) to the
Seller and the Purchaser that (i) the Working Capital Statement
includes an over provision for Taxes of any Group Company or (ii) if
the Liability for Taxes of any Group Company (other than a Liability
for Taxes in respect of which the Seller would have a claim under
Clause 14.1 or the Tax Warranties) is reduced as a result of the
utilisation of any Seller Relief after the Closing Date, an amount
equal to the over provision or reduction in Liability, as the case may
be, shall be set off against any payment then due from the Seller to
the Purchaser under this Agreement. To the extent that the
overprovision or reduction in Liability exceeds the amount of any
payment then due from the Seller, the balance shall be carried forward
and set off against any payment which becomes due from the Seller in
the future. For purposes of this Clause 14.11, none of the following
matters shall be considered to give rise to an over provision or
reduction in Liability: (i) the utilisation of any Purchaser Relief or
Post-Closing Relief and (ii) a Change in Tax Law.
14.12 If the Seller is required to make a payment to the Purchaser under
Clause 14.1 or for breach of the Tax Warranties in respect of a
Liability for Taxes (the "Initial Payment") and, had such Liability
been taken into account in the preparation of the Working Capital
Statement, another adjustment would have been required to be made (a
"Secondary Adjustment") that would have reduced the Liability for Taxes
or increased the Relief of any Group Company then, to the extent that
the Secondary Adjustment does not result in an over-provision being
taken into account within Clause 14.11, the liability of the Seller to
the Purchaser for such Liability shall be reduced by the amount of the
reduction in Liability or increase in Relief, as the case may be. If
the Secondary Adjustment results in the increase of a Relief, including
through an increase of a deferred tax asset or a reduction in deferred
tax Liability, then the liability of the Seller to the Purchaser shall
not be reduced in accordance with this Clause 14.12 but when such
reduction in deferred tax Liability or increase in deferred tax asset
reduces the liability of the Purchaser, any member of the Purchaser's
Group or any Group Company to make an actual payment of Tax by reason
of such increase in Relief the Purchaser shall (if such reduction
occurs within seven years of the date hereof) make a payment of an
amount to the Seller equal to the lower of (a) that reduction and (b)
the Initial Payment.
14.13 Share Options
14.13.1 The Seller will pay to the Purchaser on the due date for
payment an amount equal
49
to:
(i) any liability of any member of the Purchaser's Group
to pay secondary National Insurance contributions and
any liability to account for primary National
Insurance contributions and income tax due under PAYE
arising in respect of any share incentive, share
option or other incentive granted before Closing to
any Relevant Employee or any former employee of any
Group Company; and
(ii) any penalties or interest arising for any member of
the Purchaser's Group in connection with a failure of
the Seller to pay amounts due under Clause 14.13.1.
14.13.2 The due date for payment in relation to Clause 14.13.1:
(i) shall be ten Business Days before the latest date on
which the National Insurance contributions and PAYE
may be paid to the Inland Revenue without a liability
to interest and penalties arising; or
(ii) if payment has already been made or Clause 14.13.1
applies, five Business Days after service by a member
of the Purchaser's Group of a notice containing a
written demand.
14.13.3 The members of the Purchaser's Group appoint the Seller as
their agent to collect an amount equal to any employees'
National Insurance contribution and income tax liability under
PAYE arising in respect of any share incentive, share option
or other incentive granted before Closing to any Relevant
Employee or any former employee of any Group Company.
14.13.4 The Seller will provide the Purchaser with all information
reasonably required by the Purchaser relating to the
calculation of amounts payable under this Clause 14.13 within
ten Business Days of the liability arising or, if sooner, ten
Business Days before the date the liability is payable by the
Purchaser.
14.13.5 If the Purchaser becomes aware after Closing of any matter
which could give rise to a liability under this Clause 14.13
it shall give notice of that matter to the Seller within ten
Business Days of becoming so aware.
14.13.6 The Purchaser will after Closing provide such information
and/or assistance as the Seller may reasonably request in
writing for the purpose of making or calculating any
deduction, withholding or payment in respect of Tax or
National Insurance which the Seller is required to make, or
the making or giving of any return or notice to any Taxation
Authority, in connection with any share incentive, share
option or other incentive granted before Closing to any
Relevant Employee or any former employee of any Group Company
within ten Business Days of receiving such a request.
14.13.7 The Seller's liability to make a payment to the Purchaser
under Clause 14.13.1 above shall be reduced by an amount equal
to 30% of any Share Option Relief available to the Purchaser,
or the relevant Group Company in respect of the share
incentive, share option or other incentive in question.
14.13.8 For the purposes of Clause 14.13.7 above it shall be assumed
that the Purchaser, or the relevant Group Company, has
obtained a Share Option Relief in relation to each share
incentive, share option or other incentive giving rise to an
obligation to
50
make a payment pursuant to Clause 14.13.1 and such assumption
shall be rebutted only in the circumstances set out in Clause
14.13.9.
14.13.9 The assumption in Clause 14.13.8 shall be rebutted to the
extent that:
(i) the Purchaser demonstrates that the Share Option
Relief is not available as a consequence of an act or
omission by the Seller or any Group Company prior to
Closing, including the obtaining of a Relief in
relation to such share incentive, share option or
incentive prior to Closing; or
(ii) the Purchaser demonstrates that the Share Option
Relief is not available as a consequence of the
failure of any of the conditions set out in paragraph
4(3) of Schedule 23 Finance Act 2003.
14.14 If paragraph 12.6 of Schedule 5 is untrue with respect to any document
or transaction the Seller shall pay to the Purchaser by way of
liquidated damages an amount equal to any stamp duty or SDLT paid by a
Group Company under the Clawback Provision or Secondary Recovery
Provision (both as defined in paragraph 12.1 of Schedule 5) and any
interest or penalties payable in respect thereof (except to the extent
that any interest or penalties are due to the unreasonable delay or
default of the Purchaser or any member of the Purchaser's Group),
provided that the Seller shall not be liable under paragraph 12.6 of
Schedule 5 above to the extent that such stamp duty or SDLT is payable
as a result of a voluntary transaction effected after Closing otherwise
than pursuant to a legally binding obligation, whether or not
conditional, entered into on or before Closing.
14.15 The Purchaser:
14.15.1 shall (to the extent permitted by Law) procure that each Group
Company shall make such claims and elections in respect of
Capital Allowances and Group Relief as shall ensure that the
Actual Tax Written Down Value is neither more nor less than
the Estimated Tax Written Down Value. For the avoidance of
doubt, this Clause 14.15 shall not require the Purchaser or
any member of the Purchaser's Group (other than any Group
Company) to surrender Group Relief to or accept the surrender
of Group Relief from any Group Company;
14.15.2 shall not (except to the extent required by Law) and shall
procure that no Group Company shall (except to the extent
required by Law) alter or amend any claims and elections
either made pursuant to Clause 14.15.1 or (in respect of
Capital Allowances) made before Closing to ensure that the
Actual Tax Written Down Value is neither more nor less than
the Estimated Tax Written Down Value;
14.15.3 shall not (except to the extent required by Law or pursuant to
Clause 14.15.1) and shall procure that no Group Company shall
(except to the extent required by law or pursuant to Clause
14.15.1) alter or amend any claims or elections relating to
Capital Allowances the making of which was assumed in the
audited annual consolidated accounts of the Company or the
audited annual accounts of Crown Castle UK, in each case for
the financial year ended 31 December 2003; and
14.15.4 hereby agrees that if the Seller is or would otherwise be
liable to make a payment under Clause 14.1.1 hereof in respect
of a Liability for Taxes arising as a consequence of an Event
occurring (including the earning of income, profit or gains)
on or prior to 31 December 2003 the Purchaser shall use
reasonable endeavours to procure that such claims and
elections are made in respect of
51
Capital Allowances for the purpose of reducing or eliminating
that Liability for Taxes and the Purchaser shall instead make
a claim under Clause 14.16 in respect of the reduction of the
Actual Tax Written Down Value below the Estimated Tax Written
Down Value which results from the use of the Capital
Allowances to reduce or eliminate that Liability for Taxes.
14.16 Subject to Clause 14.19, the Seller covenants that if the Actual Tax
Written Down Value is less than the Estimated Tax Written Down Value
(including by virtue of the setting off of any Capital Allowances
against any income, profit or gains accrued, earned or received on or
before 31 December 2003), then the Seller shall pay to the Purchaser an
amount equal to 23.1% of the amount by which the Actual Tax Written
Down Value is less than the Estimated Tax Written Down Value; provided
always that the amount payable by the Seller shall be reduced by an
amount equal to 10% of any corresponding increase in the Long Life
Asset Pool (for example, any increase which results from an asset which
was not treated as a Long Life Asset for the purposes of the
calculation referred to in paragraph 12.5 of Schedule 5 being or
subsequently being treated as a Long Life Asset).
14.17 The Seller covenants to pay to the Purchaser an amount equal to 30% of
the amount by which the profits of the Group Companies which would be
chargeable to United Kingdom corporation tax (on the assumption that
the Group Companies were not to claim any Capital Allowances)
(including any trading losses resulting from claims and elections made
to reduce the Actual Tax Written Down Value to the Estimated Tax
Written Down Value) or any Group Relief from any company which is not a
Group Company and were not entitled to any Purchaser Relief) in respect
of the accounting period which would end on Closing if an accounting
period of each Group Company were to end on Closing exceeds (a)
(pound)64,014,773 (sixty four million, fourteen thousand, and seven
hundred and seventy three pounds Sterling), if Closing occurs on or
prior to 31 August 2004; or (b) (pound)72,016,620 (seventy two million,
sixteen thousand and six hundred and twenty pounds Sterling), if
Closing occurs on or prior to 30 September 2004 (but after 31 August
2004). Notwithstanding Clause 14.4, the Seller shall not be obliged to
make a payment under this Clause 14.17 earlier than 30 June 2005. The
amount payable under this Clause 14.17 shall be reduced by an amount
equal to any corporation tax included in the Base Working Capital
Liabilities.
14.18 The Purchaser shall not make any claim under any provision of this
Agreement other than under Clause 14.16 or 14.17 (and the Seller shall
not be liable to make a payment under any provision of this Agreement
other than under Clause 14.16 or 14.17) in respect of any matter or
matters which comprise or involve paragraph 12.3 of Schedule 5 (or, if
Closing shall occur on 30 September 2004, paragraph 12.4 of Schedule 5)
being untrue or ceasing to be true.
14.19 The covenant in Clause 14.16 shall not apply, and the Seller shall have
no liability to make a payment under Clause 14.16 to the extent that
the Actual Tax Written Down Value is less than the Estimated Tax
Written Down Value as a result of :
14.19.1 the making of any claim or election which results in any Group
Company having a correspondingly increased amount of trading
losses available to carry forward from the accounting period
which ends on 31 December 2003;
14.19.2 any voluntary act, omission or transaction by the Purchaser,
any Group Company or any of their respective directors,
employees or agents after the Closing Date
52
(including any change in accounting policies or practices in
effect on the Closing Date save for any change which is
necessary to cause such accounting policies or practices to
comply with UK GAAP as at the Closing Date) and the Purchaser
or any Group Company or any of their respective directors,
employees or agents knew that the voluntary act, omission or
transaction would result in the Actual Tax Written Down Value
being less than the Estimated Tax Written Down Value, other
than any act, omission or transaction which was (a) required
by Law in effect at the date of this Agreement; (b) is
pursuant to a legal binding commitment of the Group Company
created on or before the Closing Date; or (c) carried out in
compliance with the Purchaser's obligations under Clause 14.15
or 15.5; or
14.19.3 the failure by the Purchaser to comply with its obligations
under Clauses 14.5, 14.7, 14.15 or 15.1.
14.20 If (i) the Seller has made or is liable to make a payment pursuant to
Clause 14.16; and (ii) the liability to make that payment would not
have arisen but for either (a) the disallowance, postponement or
restriction of any deduction in computing the profits of any Group
Company (for the purposes of corporation tax) of a Pre-Closing Tax
Period; or (b) any expenditure incurred by any Group Company on or
before 31 December 2003 not qualifying for Capital Allowances; and
(iii) the auditors for the time being of any Group Company certify in
writing (at the request and reasonable expense of the Seller) to the
Seller and the Purchaser that the liability of any Group Company or any
member of the Purchaser's Group to make an actual payment of Taxes or
payment in respect of Taxes is lower than it would have been as a
result of the matters referred to in (ii) above (for example, as a
result of a deduction being available in a later accounting period
rather than an earlier accounting period) (the "Saving"); then the
amount of the Saving shall be set off against any payment due from the
Seller under this Clause 14 or (to the extent that it is not so set
off) shall be carried forward and set off against any future payments
which become due from the Seller under this Clause 14.
15 Tax Returns etc.
15.1 The Seller shall at its cost timely prepare, file, or cause to be
prepared and filed, consistent with past practice and (subject to
Clauses 14.5 to 14.7) have conduct of all Tax Returns and all matters
relating to the Tax Returns of the Group Companies for any Pre-Closing
Tax Period including all claims, elections, surrenders, disclaimers,
notices and consents and shall present Tax Returns and any
communication with any Tax Authority in draft to the Purchaser for
review in the case of corporation tax Tax Returns at least 30 days
before the date on which the such Tax Returns are required to be filed
and in the case of all other Tax Returns within a reasonable period
before the expiration of any applicable statutory time limit for the
filing of such Tax Returns are required to be filed or, in the case of
any communications, before the intended date of submission. With
respect to Tax Returns for any Pre-Closing Tax Period, the Purchaser
shall procure that the relevant Group Company (i) notifies the Seller
of any intended written communication with the relevant Tax Authority,
(ii) signs and submits any properly and accurately prepared Tax Return,
(iii) makes any proper and accurate claims, disclaimers, notices or
elections; and (iv) gives any proper and accurate consents, in each
case as may be reasonably required by the Seller. The Purchaser shall
timely prepare, file or procure to be prepared and filed, on a basis
which is (to the extent permitted by Law) consistent with the past
practice and, subject to Clauses 14.5 to 14.7, shall have conduct of
all Tax Returns and all matters relating to the Tax
53
Returns of the Group Companies for the Straddle Period and shall
present such Tax Returns and any communication with any Tax Authority
in draft to the Seller for review, in the case of corporation tax, Tax
Returns, at least 30 Business Days before the date on which such Tax
Returns are required to be filed and, in the case of all other Tax
Returns, within a reasonable period before the expiration of any
applicable statutory time limit by the end of which such Tax Returns
are required to be filed or, in the case of any communications, before
the intended date of submission and shall take into account such
reasonable comments in relation thereto as the Seller makes. The Seller
shall co operate with the Purchaser in providing such information and
assistance as the Purchaser may reasonably request in relation to the
Tax Return for the Straddle Period and all Tax Returns with respect to
any Group Companies for any Post-Closing Tax Period.
15.2 The amount or economic benefit of (i) any Seller Relief with respect to
Taxes of the Group Companies, or of any affiliated, consolidated,
combined or unitary group of which any Group Company is or has been a
member for any Pre-Closing Tax Period in any audit, examination, suit,
contest or other Tax proceeding of the Seller or any member of the
Seller's Group in a Pre-Closing Tax Period shall be for the account of
the Seller; or (ii) any Relief realised by the Purchaser or any member
of the Purchaser's Group in a Post-Closing Tax Period as a result in
any corresponding offsetting adjustment in any audit, examination,
suit, contest or other Tax proceeding of the Seller or any member of
the Seller's Group in a Pre-Closing Tax Period shall be for the account
of the Seller provided that this shall not apply to any Purchaser
Relief. Except as described in the preceding sentence, the amount or
economic benefit of any Relief with respect to Taxes of any Group
Company for any Post-Closing Tax Period shall be for the account of the
Purchaser. Each party shall forward, and shall cause the members of its
group to forward, to the party entitled pursuant to this Clause 15.2 to
receive the amount or economic benefit of a Relief, the amount or
economic benefit of the Relief within 10 days after the Relief is
received or applied against another Liability for Taxes, as the case
may be.
15.3 The Purchaser shall not make any election under Section 338 of the
United States Internal Revenue Code of 1986 (as amended) with respect
to any UK Group Company without the Seller's prior written consent,
which consent may be provided or withheld in the sole discretion of the
Seller.
15.4 The Purchaser and the Seller agree that they shall each take such
action within their control to ensure that they shall not alter or
amend, and that no Group Company shall alter or amend, any Group Relief
claims or any other arrangements for the allocation of Relief (or the
terms thereof) made by the Seller or any Group Company relating to any
Pre-Closing Tax Period and the making of which was assumed in the
Working Capital Statement or is specified in the Disclosure Letter,
except where (i) the Group Relief is not available; and (ii) if an
amendment or alteration were not made a claim could be made pursuant to
Clause 14.1.
15.5 The Seller may retain any Tax Returns, reports or forms, and the
Purchaser shall be provided with copies of such returns, reports or
forms.
54
16 Environmental Indemnity
16.1 Radiation
Subject to Clause 16.3, the Seller shall indemnify and hold harmless
and keep indemnified the Purchaser (for itself and for any member of
the Purchaser's Group) from and against any and all Losses which are
suffered or incurred by the Purchaser or any member of the Purchaser's
Group arising out of or in relation to:
16.1.1 any Radiation emitted in breach of Environmental Law or
Industry Guidelines in force on the date of this Agreement
from any Relevant Equipment (i) on or prior to Closing and
(ii) after Closing until such time as the Purchaser has
concluded Remedial Action in relation thereto; and
16.1.2 any Remedial Action which is reasonably necessary, in relation
to the existence, emission or effect of any Radiation emitted
from any Relevant Equipment in breach of such Environmental
Law in force at the time of this Agreement or Industry
Guidelines, to procure compliance with Environmental Law and
Industry Guidelines, or, if reasonably practicable and cheaper
than undertaking such Remedial Action, the reasonable cost of
purchasing any land on which the Seller and the Purchaser
agree that Radiation levels are in breach of Environmental Law
in force at the time of this Agreement or Industry Guidelines.
16.2 Asbestos
Subject to Clause 16.3, the Seller shall indemnify and hold harmless
and keep indemnified the Purchaser (for itself and for any member of
the Purchaser's Group) from and against any and all Losses which are
suffered or incurred by the Purchaser or any member of the Purchaser's
Group in connection with the presence of Asbestos at any Property and
arising out of or in relation to:
16.2.1 the failure of any Group Company to be in compliance with the
Asbestos Regulations on or prior to Closing;
16.2.2 the reasonable costs of any Remedial Action necessary to
procure the compliance as soon as reasonably practicable after
Closing of the Group Companies with the Asbestos Regulations;
and
16.2.3 the exposure prior to Closing of any person to Asbestos or
Asbestos-containing materials in the fabric of any building or
man-made structure owned, occupied or used by any Group
Company (i) for any period prior to Closing; and (ii) until
such time as the Purchaser has taken such measures as are
necessary for any applicable Group Company to comply with the
Asbestos Regulations.
16.3 Limitation of the Seller's Liability
16.3.1 The Seller shall not be liable to indemnify the Purchaser
under Clause 16.1 or Clause 16.2:
(i) in relation to the carrying out of Remedial Action
other than Remedial Action required to achieve
compliance with Environmental Law, Industry
Guidelines or the Asbestos Regulations;
(ii) in relation to the cost of Remedial Action, to the
extent that such Remedial Action has been
specifically budgeted for in the Accounts or the
55
Management Accounts or the Capital Plan in the
Strategic Review being the following:
(a) (pound)4,750,000 (four million, seven
hundred and fifty thousand pounds Sterling)
for ICNIRP occupational compliance; and
(b) (pound)100,000 (one hundred thousand pounds
Sterling) for asbestos surveys;
(iii) if and to the extent that the relevant Losses are
recovered by the Purchaser under the terms of any
insurance policy for the time being in force the
Purchaser agreeing to take all reasonable steps as
far as practicable to retain the levels and type of
insurance that Crown Castle UK has in place at the
time of Closing (provided such insurance cover is
available in the market on commercially reasonable
terms);
(iv) if and to the extent that any claim results from or
is increased as a result of the Purchaser or any of
its Representatives, disclosing information to any
Governmental Entity or any other person except where:
(a) such disclosure is required by Environmental
Law or by court order;
(b) required in writing by any Governmental
Entity;
(c) such disclosure is agreed or determined to
facilitate Remedial Action; or
(d) prior notice has been given to the Seller
and the Purchaser has taken all such steps
as may be reasonable and practicable in the
circumstances to agree the contents of such
disclosure with the Seller before making
such disclosure (the Seller not to
unreasonably withhold or delay any such
agreement);
(v) if and to the extent that any claim results from or
is increased by any Environmental Law which comes
into force or is amended after the date of this
Agreement; or
(vi) if and to the extent that any claim directly or
indirectly results from or is increased by:
(a) any act or omission on the part of the
Purchaser or any member of the Purchaser's
Group or any of their respective
Representatives after Closing which any
reasonable or prudent operator of the
Company's business immediately prior to the
date of this Agreement ought reasonably to
have been aware of; or
(b) any negligent act or omission on the part of
the Purchaser or any member of the
Purchaser's Group or any of their respective
Representatives, after Closing; or
(c) any material change of use or development by
any Group Company of all or part of any
Property or land adjoining any Property
after the date of this Agreement but
excluding any Ordinary Course Construction.
56
16.3.2 The Purchaser shall reimburse to the Seller any amount
subsequently recovered by or paid to the Purchaser from or by
any third party in respect of any matter or Liability in
respect of which the Seller has paid any sum to the Purchaser
under Clause 16.1 or 16.2.
16.4 Conduct of Claims
16.4.1 Without prejudice to Clause 16.5, if any claim is received by
or any matter or circumstance comes to the attention of the
Purchaser which could reasonably be anticipated to give rise
to a Liability for which the Seller may be liable under Clause
16.1 or 16.2:
(i) the Purchaser shall give Notice to the Seller as soon
as reasonably practicable and in any event within 20
Business Days of becoming aware of it;
(ii) the Purchaser shall give to the Seller reasonable
access to all information relevant to any claim
pursuant to Clause 16.1 and/or Clause 16.2 to enable
the Seller to investigate thoroughly such claim and
its potential Liability in respect of such claim or
matter other than such access as would compromise any
legal privilege or evidence of the Purchaser;
(iii) as regards any such claim the Purchaser shall take
such action as the Seller may reasonably request in
writing to appeal, avoid, compromise, defend, dispute
or resist the claim and any adjudication in respect
thereof; and
(iv) the Purchaser shall not admit, discharge, pay or
settle any such claim without the prior written
consent of the Seller (such consent not to be
unreasonably withheld or delayed).
16.4.2 The action which the Seller may reasonably request under
Clause 16.4.1(iii) shall include (without limitation) allowing
the Seller in the name of the Purchaser to take complete
control of the conduct, handling and settlement of any such
claim, including the cost of litigation and of any appeal or
any negotiations and the appointment of and the giving of
instructions to legal representatives for that purpose,
provided that the Seller shall:
(i) keep the Purchaser informed of all material steps
proposed by it;
(ii) consult as fully as is reasonably practicable with
the Purchaser and take account of the Purchaser's
reasonable representations;
(iii) not take any action in the name of the Purchaser as
may adversely affect the goodwill or good name of the
Purchaser or the value of the Purchaser's business;
and
(iv) not admit, discharge, pay or settle any such claim
without the prior written consent of the Purchaser
(such consent not to be unreasonably withheld or
delayed).
16.4.3 The provisions of this Clause 16.4 shall not apply to any
claim insofar as it relates to the carrying out of any
Remedial Action. The procedure for dealing with any such claim
is set out in Clause 16.5.
57
16.5 Remedial Action by Purchaser after Closing
16.5.1 Within six months of Closing the Purchaser shall identify any
Remedial Action it considers necessary:
(a) to procure the compliance of the Group Companies with
Environmental Law and Industry Guidelines in respect
of Radiation emitted from any Relevant Equipment;
and/or
(b) to procure the compliance of the Group Companies with
the Asbestos Regulations in respect of any Property.
16.5.2 The Purchaser shall notify the Seller within six months of
Closing of any Remedial Action identified under Clause 16.5.1
and shall provide the Seller with reasonable details of the
identified Remedial Action and any correspondence received
from a Governmental Entity that relates thereto; provided (a)
that the provision of such notification shall not prevent the
Purchaser from pursuing further Remedial Action as a result of
any claim for Losses made within four years following Closing
under Clauses 16.1 and 16.2 in addition to that set out in the
notification; and (b) that the parties agree that the
procedure set out in this Clause 16.5 to agree the cost nature
and extent of Remedial Action shall apply to such further
Remedial Action.
16.5.3 The Seller shall notify the Purchaser within 20 Business Days
of receipt of the Purchaser's notice under Clause 16.5.2
whether it agrees with the cost, nature and extent of the
Remedial Action identified by the Purchaser.
16.5.4 If the Seller notifies the Purchaser that it agrees with the
Remedial Action identified by the Purchaser then the Purchaser
shall, at the cost of the Seller, (subject always to Clause
9.4.1(ii)) carry out the Remedial Action identified by it and
agreed by the Seller and the provisions of Clause 16.5.5 shall
apply; save that if the Seller notifies the Purchaser that it
does not agree with the cost, nature or extent of the Remedial
Action proposed by the Purchaser, then the provisions of
Clause 16.7 shall apply, provided that if the Seller does not
respond to the Purchaser's notice under Clause 16.5.2 the
Seller shall be deemed to have agreed to the terms of the
notice.
16.5.5 The Purchaser shall carry out any Remedial Action identified
by it under Clause 16.5.2 to procure compliance with
Environmental Law and Industry Guidelines and the Asbestos
Regulations as soon as reasonably practicable, having regard
to the nature and extent of the works following the earlier
of:
(i) the date the Seller notifies the Purchaser or is
deemed to have notified the Purchaser that it agrees
with the Remedial Action identified by the Purchaser;
or
(ii) the date the Expert's decision is notified to the
parties (if any dispute is referred to an Expert
under Clause 16.7).
16.5.6 Any Remedial Action in respect of which this Clause 16 is to
apply shall be performed in a commercially reasonable,
cost-effective manner using the most sound materials available
for the purpose.
16.5.7 The Purchaser shall afford to the Seller and its
Representatives all such reasonable access to Relevant
Equipment or the Properties as is required to
58
enable the Seller to confirm to its reasonable satisfaction
that any Remedial Action is or has been undertaken in
compliance with Clauses 16.5.5 and 16.5.6 above.
16.6 Seller's Right to carry out Remedial Action prior to Closing
16.6.1 Without prejudice to Clause 5.1, the Seller and the Purchaser
agree that between the date of this Agreement and Closing the
Seller shall have the right to carry out or procure that Crown
Castle UK shall carry out any Remedial Action it considers
reasonably necessary to reduce or mitigate its liability under
Clauses 16.1 and 16.2, provided always that:
(i) the Seller shall provide the Purchaser promptly with
details of all such works and full access to and
information regarding the said works; and
(ii) the Seller shall consult during the course of such
works as fully as is reasonably practicable with the
Purchaser in relation to such works and take account
of the Purchaser's reasonable representations.
16.6.2 Following completion of any such works carried out under this
Clause the Purchaser shall have full right of reasonable
access and inspection and shall either confirm in writing that
the works have been carried out to its reasonable satisfaction
or in the alternative require the Seller to carry out such
further works as it considers reasonably necessary to secure
compliance with Environmental Law, Industry Guidelines and the
Asbestos Regulations and any dispute in connection thereto
shall be referred to an Expert under Clause 16.7.
16.7 Disputes
16.7.1 The Seller and the Purchaser shall negotiate in good faith
with a view to resolving any dispute between them as to the
cost, extent or nature of any Remedial Action to be carried
out. If they are unable to resolve any such dispute within 20
Business Days after the date of notification of any objection
pursuant to Clause 16.5.4 above, the matter in dispute shall
be referred for decision by the Seller or the Purchaser to an
appropriate independent expert (the "Expert") for resolution.
The Expert shall be appointed in default of agreement between
the Seller and the Purchaser within the five ensuing Business
Days by the Chairman for the time being of the Institute of
Environmental Management and Assessment.
16.7.2 Where any dispute is referred for decision by an Expert:
(i) the Seller and the Purchaser shall promptly provide
the Expert with such information as he may reasonably
require to enable him to reach his decision;
(ii) the Expert shall act as an expert and not as an
arbitrator;
(iii) the Expert's decision (which shall be given by him in
writing stating his reasons for it) shall be final
and binding on the Seller and the Purchaser (save in
case of manifest error); and
(iv) the Expert's costs and expenses shall be borne by the
Seller and the Purchaser in such proportions as the
Expert may decide to be fair and reasonable in the
circumstances or, if no such decision is made by the
Expert, by the Purchaser and the Seller in equal
proportions.
59
17 Repayment of Intra-Group balances
17.1 On the Closing Date, the Purchaser shall procure that the relevant
Group Company shall pay the Settlement Amount by wire transfer of
immediately available funds to the Seller's Nominated Account.
17.2 The Seller and the Purchaser agree that the Settlement Amount is
obtained by netting (a) an amount paid by the Seller (as agent of the
relevant members of the Seller's Group) to the Purchaser (as agent of
the relevant Group Companies) sufficient to ensure that the Intra-Group
Receivables are fully discharged; and (b) an amount paid by the
Purchaser (as agent of the relevant Group Company) to the Seller (as
agent of the relevant members of the Seller's Group), sufficient to
ensure that the Intra-Group Payables are fully discharged.
18 Guarantee by the Guarantor
18.1 In consideration of the Seller entering into this Agreement, the
Guarantor unconditionally and irrevocably guarantees to the Seller
(which takes the benefit of this guarantee for itself and as trustee
for each Group Company) the due and punctual performance of all the
obligations and Liabilities of the Purchaser under or otherwise arising
out of or in connection with this Agreement (as any of such obligations
and Liabilities may from time to time be varied, extended, increased or
replaced) but subject to the same limit on the Liability as applies to
the Purchaser under this Agreement.
18.2 If any obligation or Liability of the Purchaser expressed to be the
subject of the guarantee contained in this Clause 18 (the "NGT
Guarantee") is not or ceases to be valid or enforceable against the
Purchaser (in whole or in part) on any ground whatsoever (including,
but not limited to, any defect in or want of powers of the Purchaser or
irregular exercise of such powers, or any lack of authority on the part
of any person purporting to act on behalf of the Purchaser, or any
legal or other limitation, disability or incapacity, or any change in
the constitution of, or any amalgamation or reconstruction of, or the
liquidation, administration or insolvency of the Purchaser), the
Guarantor shall nevertheless be liable to the Seller in respect of that
purported obligation or liability as if the same were fully valid and
enforceable and the Guarantor were the principal debtor in respect
thereof.
18.3 The liability of the Purchaser under the NGT Guarantee shall not be
discharged or affected in any way by:
18.3.1 any variation, extension, increase, renewal, determination,
release or replacement of this Agreement;
18.3.2 the Seller granting any time, indulgence, concession, relief,
discharge or release to the Purchaser or any other person or
realising, giving up, agreeing to any variation, renewal or
replacement of, releasing, abstaining from or delaying in
taking advantage of or otherwise dealing with any securities
from or other rights or remedies which it may have against the
Purchaser or any other person; or
60
18.3.3 any other matter or thing which, but for this provision, might
exonerate or affect the liability of the Guarantor (including,
without limitation, the termination, supervening illegality or
invalidity of this Agreement).
18.4 The NGT Guarantee is in addition to any other security or right now or
hereafter available to the Purchaser and is a continuing security
notwithstanding any liquidation, administration, insolvency or other
incapacity of the Purchaser or the Guarantor.
18.5 Until the full and final discharge of all obligations and Liabilities
which are the subject of the NGT Guarantee, the Guarantor:
18.5.1 waives all of its rights of subrogation, reimbursement and
indemnity against the Purchaser and agrees not to demand or
accept any security from the Purchaser in respect of any such
rights and not to prove in competition with the Seller in the
liquidation or insolvency of the Purchaser; and
18.5.2 agrees that it will not claim or enforce payment (whether
directly or by set-off, counterclaim or otherwise) of any
amount which may be or has become due to the Guarantor by the
Purchaser or any other person liable to the Seller in respect
of the obligations hereby guaranteed if and so long as the
Purchaser is in default under this Agreement.
61
In witness whereof this Agreement has been duly executed.
SIGNED by
on behalf of CROWN CASTLE /s/ E. Blake Hawk
INTERNATIONAL CORP.:
SIGNED by
on behalf of NGG TELECOMS INVESTMENT /s/ Edward Astle
LIMITED:
SIGNED by
on behalf of NATIONAL GRID HOLDINGS /s/ Edward Astle
ONE PLC:
62
Schedule 1
The Company and the Subsidiaries
1 Particulars of the Company
----------------------------------------------------- -------------------------------------------
Name of Company: Crown Castle UK Holdings Limited
----------------------------------------------------- -------------------------------------------
Registered number: 3242381
----------------------------------------------------- -------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
----------------------------------------------------- -------------------------------------------
Date and place of incorporation: 27 August 1996(1)
England and Wales
----------------------------------------------------- -------------------------------------------
Issued share capital: 333,595,225 ordinary shares of(pound)1 each
----------------------------------------------------- -------------------------------------------
Authorised share capital: (pound)500,000,000 divided into 500,000
ordinary shares of(pound)1 each
----------------------------------------------------- -------------------------------------------
Registered shareholders and shares held: Crown Castle UK Holding Corp
333,595,225
----------------------------------------------------- -------------------------------------------
Beneficial shareholders and shares held: None
----------------------------------------------------- -------------------------------------------
Directors: Peter Graham Abery
John Patrick Kelly
William Benjamin Moreland
Andrew Sloey
----------------------------------------------------- -------------------------------------------
Secretary: Angela Mary Dennehy
----------------------------------------------------- -------------------------------------------
Accounting reference date: 31 December
----------------------------------------------------- -------------------------------------------
Auditors: KPMG LLP
----------------------------------------------------- -------------------------------------------
2 Particulars of the Subsidiaries
---------------------------------------------------- --------------------------------------------
Name of Subsidiary: Crown Castle UK Limited
---------------------------------------------------- --------------------------------------------
Registered number: 3196207
---------------------------------------------------- --------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
---------------------------------------------------- --------------------------------------------
Date and place of incorporation: 9 May 1996(2)
England and Wales
---------------------------------------------------- --------------------------------------------
Issued share capital: 287,030,156 ordinary shares of(pound)1 each
---------------------------------------------------- --------------------------------------------
Authorised share capital: (pound)500,000,000 in 500,000 ordinary shares
of (pound)1 each
---------------------------------------------------- --------------------------------------------
Registered shareholders and shares held: Crown Castle UK Holdings Limited
287,030,156
---------------------------------------------------- --------------------------------------------
- ------------------
1 The company was incorporated under the name "Diohold Limited" as a private
limited company.
2 The company was incorporated under the name "Hackremco Limited (No. 1129)"
as a private limited company.
63
---------------------------------------------------- --------------------------------------------
Beneficial shareholders and shares held: None
---------------------------------------------------- --------------------------------------------
Directors: Peter Graham Abery
John Patrick Kelly
William Benjamin Moreland
Andrew Sloey
---------------------------------------------------- --------------------------------------------
Secretary: Angela Mary Dennehy
---------------------------------------------------- --------------------------------------------
Accounting reference date: 31 December
---------------------------------------------------- --------------------------------------------
Auditors: KPMG LLP
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Name of Subsidiary: Crown Castle UK Finance plc
---------------------------------------------------- --------------------------------------------
Registered number: 3347387
---------------------------------------------------- --------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
---------------------------------------------------- --------------------------------------------
Date and place of incorporation: 8 April 1997(3)
England and Wales
---------------------------------------------------- --------------------------------------------
Issued share capital: 50,000 ordinary shares fully paid
---------------------------------------------------- --------------------------------------------
Authorised share capital: (pound)50,000 divided into 50,000 ordinary
shares of (pound)1 each
---------------------------------------------------- --------------------------------------------
Registered shareholders and shares held: Crown Castle UK Holdings Limited 1
Crown Castle UK Limited 49,999
---------------------------------------------------- --------------------------------------------
Beneficial shareholders and shares held: None
---------------------------------------------------- --------------------------------------------
Directors: Peter Graham Abery
John Patrick Kelly
William Benjamin Moreland
Andrew Sloey
---------------------------------------------------- --------------------------------------------
Secretary: Angela Mary Dennehy
---------------------------------------------------- --------------------------------------------
Accounting reference date: 31 December
---------------------------------------------------- --------------------------------------------
Auditors: KPMG LLP
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Name of Subsidiary: Crown Castle Communications Limited
---------------------------------------------------- --------------------------------------------
Registered number: 2903056
---------------------------------------------------- --------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
---------------------------------------------------- --------------------------------------------
Date and place of incorporation: 28 February 1994(4)
England and Wales
---------------------------------------------------- --------------------------------------------
Issued share capital: 2,500,100 ordinary shares fully paid
---------------------------------------------------- --------------------------------------------
Authorised share capital: (pound)3,000,000 in 3,000,000 ordinary
---------------------------------------------------- --------------------------------------------
- --------------------
3 The company was incorporated under the name "Premtrade Limited" as a
private company on 8 April 1997.
4 The company was incorporated under the name "Millennium Communications
Limited" as a private limited company.
64
---------------------------------------------------- --------------------------------------------
shares of (pound)1 each
---------------------------------------------------- --------------------------------------------
Registered shareholders and shares held: Crown Castle UK Limited 2,500,100
---------------------------------------------------- --------------------------------------------
Beneficial shareholders and shares held: None
---------------------------------------------------- --------------------------------------------
Directors: Peter Graham Abery
Andrew Sloey
---------------------------------------------------- --------------------------------------------
Secretary: Angela Mary Dennehy
---------------------------------------------------- --------------------------------------------
Accounting reference date: 31 December
---------------------------------------------------- --------------------------------------------
Auditors: KPMG LLP
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Name of Subsidiary: Terracom Estates Limited
---------------------------------------------------- --------------------------------------------
Registered number: 03120642
---------------------------------------------------- --------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
---------------------------------------------------- --------------------------------------------
Date and place of incorporation: 1 November 1995(5)
England and Wales
---------------------------------------------------- --------------------------------------------
Issued share capital:
100,000 A ordinary
shares fully paid,
10,840 B ordinary
shares full paid,
2,410 C ordinary
shares fully paid,
4,820 E ordinary
shares fully paid
and 2,410 F ordinary
shares fully paid
---------------------------------------------------- --------------------------------------------
Authorised share capital: (pound)2,000 divided into 110,000 A ordinary
shares of 1p each, 15,000 B ordinary
shares of 1p each, 15,000 C ordinary
shares of 1p each, 30,000 D ordinary
shares of 1p each, 15,000 E ordinary
shares of 1p each and 15,000 F ordinary
shares of 1p each
---------------------------------------------------- --------------------------------------------
Registered shareholders and shares held: Crown Castle UK Limited 120,480
---------------------------------------------------- --------------------------------------------
Beneficial shareholders and shares held: None
---------------------------------------------------- --------------------------------------------
Directors: Peter Graham Abery
Andrew Sloey
John Joseph Ward
---------------------------------------------------- --------------------------------------------
Secretary: Angela Mary Dennehy
---------------------------------------------------- --------------------------------------------
Accounting reference date: 31 December
---------------------------------------------------- --------------------------------------------
Auditors: KPMG LLP
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Name of Subsidiary: Terracom Design & Development Limited
---------------------------------------------------- --------------------------------------------
Registered number: 02816853
---------------------------------------------------- --------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
---------------------------------------------------- --------------------------------------------
- --------------------
5 The company was incorporated under the name "Plougmann Vingtost & Partners
Limited" as a private limited company.
65
---------------------------------------------------- --------------------------------------------
Date and place of incorporation: 11 May 1993(6)
England and Wales
---------------------------------------------------- --------------------------------------------
Issued share capital: 10,000 ordinary shares fully paid
---------------------------------------------------- --------------------------------------------
Authorised share capital: (pound)10,000 divided into 10,000 ordinary
shares of (pound)1 each
---------------------------------------------------- --------------------------------------------
Registered shareholders and shares held: Terracom Estates Limited 10,000
---------------------------------------------------- --------------------------------------------
Beneficial shareholders and shares held: None
---------------------------------------------------- --------------------------------------------
Directors: Peter Graham Abery
Andrew Sloey
John Joseph Ward
---------------------------------------------------- --------------------------------------------
Secretary: Angela Mary Dennehy
---------------------------------------------------- --------------------------------------------
Accounting reference date: 31 December
---------------------------------------------------- --------------------------------------------
Auditors: KPMG LLP
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Name of Subsidiary: Triscape Planning Limited
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Registered number: 03246721
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
---------------------------------------------------- --------------------------------------------
Date and place of incorporation: 6 September 1996(7)
England and Wales
---------------------------------------------------- --------------------------------------------
Issued share capital: 1,000 ordinary shares fully paid
---------------------------------------------------- --------------------------------------------
Authorised share capital: (pound)1,000 in 1,000 ordinary shares of
(pound)1 each
---------------------------------------------------- --------------------------------------------
Registered shareholders and shares held: Terracom Estates Limited 1,000
---------------------------------------------------- --------------------------------------------
Beneficial shareholders and shares held: None
---------------------------------------------------- --------------------------------------------
Directors: Peter Graham Abery
Andrew Sloey
John Joseph Ward
---------------------------------------------------- --------------------------------------------
Secretary: Angela Mary Dennehy
---------------------------------------------------- --------------------------------------------
Accounting reference date: 31 December
---------------------------------------------------- --------------------------------------------
Auditors: KPMG LLP
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Name of Subsidiary: Mercator Developments Limited
---------------------------------------------------- --------------------------------------------
Registered number: 3844675
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
---------------------------------------------------- --------------------------------------------
Date and place of incorporation: 20 September 1999
England and Wales
---------------------------------------------------- --------------------------------------------
- --------------------
6 The company was incorporated under the name "Rosa Developments Limited" as
a private limited company.
7 The company was incorporated under the name "Terracom Northern Limited" as
a private limited company.
66
---------------------------------------------------- --------------------------------------------
Issued share capital: 2 ordinary shares fully paid
---------------------------------------------------- --------------------------------------------
Authorised share capital: (pound)1,000 in 1,000 ordinary shares of
(pound)1 each
---------------------------------------------------- --------------------------------------------
Registered shareholders and shares held: Crown Castle UK Limited 2
---------------------------------------------------- --------------------------------------------
Beneficial shareholders and shares held: None
---------------------------------------------------- --------------------------------------------
Directors: Peter Graham Abery
---------------------------------------------------- --------------------------------------------
Secretary: Angela Mary Dennehy
---------------------------------------------------- --------------------------------------------
Accounting reference date: 31 December
---------------------------------------------------- --------------------------------------------
Auditors: None
---------------------------------------------------- --------------------------------------------
---------------------------------------------------- --------------------------------------------
Name of Subsidiary: Crown Castle UK Pension Trust Limited
---------------------------------------------------- --------------------------------------------
Registered number: 3390775
---------------------------------------------------- --------------------------------------------
Registered office: Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick CV34 6TN
---------------------------------------------------- --------------------------------------------
Date and place of incorporation: 23 June 1997(8)
England and Wales
---------------------------------------------------- --------------------------------------------
Issued share capital: 1 ordinary share fully paid
---------------------------------------------------- --------------------------------------------
Authorised share capital: (pound)100 in 100 ordinary shares of
(pound)1 each
---------------------------------------------------- --------------------------------------------
Registered shareholders and shares held: Crown Castle UK Limited 1
---------------------------------------------------- --------------------------------------------
Beneficial shareholders and shares held: None
---------------------------------------------------- --------------------------------------------
Directors: Peter Graham Abery
Rita Dora
John Fitzsimons
Andrew Sloey
Alan Taylor
John Joseph Ward
---------------------------------------------------- --------------------------------------------
Secretary: Angela Mary Dennehy
---------------------------------------------------- --------------------------------------------
Accounting reference date: 31 December
---------------------------------------------------- --------------------------------------------
Auditors: None
---------------------------------------------------- --------------------------------------------
- --------------------
8 The company was incorporated under the name "Boxtrade Limited" as a private
limited company.
67
Schedule 2
Retained Names and Marks
(Clause 13.2)
Application Number: UK 2,173,589
Class: 6, 9, 12, 16, 19, 25, 36-38
Status: Registered
Application date: 30 July 1998
Journal reference: 6274, 4546
[CROWN CASTLE WAVE LOGO]
Conditions: The applicant claims the colours red, purple, blue and green as
an element of the second mark in the series.
Class 6: Name plaques, signs, sign boards; all of metal.
Class 9: Tapes, discs, CDs, CD-Roms, videos; luminous name plaques,
signs and signboards.
Class 12: Cars, vans.
Class 16: Stationery items, stationery, paper, booklets, brochures,
pamphlets, folders, binders, pens, pencils; name plaques, signs
and signboards, all of paper or cardboard.
Class 19: Name plaques, signs, signboards.
Class 25: Articles of clothing; footwear; headgear; T-shirts, overalls.
Class 36: Site acquisition for the telecommunication, transmission and
broadcasting industries.
Class 37: Planning, consultancy, installation and maintenance of
broadcasting, telecommunication and transmission equipment,
apparatus and instruments.
Class 38: Broadcasting, telecommunication, transmission and
transmission mast site sharing services; provision of
distribution and transmission network services.
Proprietor: Crown Castle UK Ltd
Warwick Technology Park
Gallows Hill
Heathcote Lane
Warwick
CV34 6TN
Agent: Marks & Clerk
57-60 Lincoln's Inn Fields
London
WC2A 3LS
Week Ending History
68
07 Aug 1998 Added
25 Sep 1998 New-App-Date Old: 30-Jan-1998
02 Apr 1999 Journal-Set New-Goods
30 Apr 1999 Status: Advert1
13 Aug 1999 Registration
20 Aug 1999 Status: Registered
03 Dec 1999 New-Proprietor Old: Castle Transmission International Ltd
13 Feb 2002 Other-Update
69
Serial Number: US 75-632792
Application Number: 2,568,828
Class: 9, 16, 19-21, 25, 36-38
Status: Registered
Application date: 3 Feb 1999
Registered: 14 May 2002
[CROWN CASTLE WAVE LOGO]
I C Date: 7 July 1998
Class 9: Pre-recorded tapes, discs, cds cd-roms, and
videos about telecommunication network equipment
and services, and information about specific bid
proposals provided to customers concerning
telecommunication network equipment services.
Class 16: Stationery items, namely, letterhead
stationery, envelopes, memo pads, and facsimile
transmission paper, labels, folders, binders,
pens, pencils, printed paper signs; and
booklets, brochures and pamphlets featuring
information concerning telecommunication network
equipment and services.
Class 19: Non-luminous and non-mechanical signs not of metal.
Class 20: Plaques and signboards.
Class 21: Cups, plates and mugs.
Class 25: Clothing, namely, footwear, hats, t-shirts and overalls.
Class 36: Telecommunications airtime brokerage
services; cable television transmission; land
acquisition, namely, real estate brokerage; real
estate management; real estate development.
Class 37: Installation of broadcasting,
telecommunication and transmission equipment,
apparatus and instruments, namely, transmitters,
antennas, combiners, multiplexers, in addition
to antennae support structures, namely, maps and
towers and ancillary equipment such as diesel
generators and satellite disc installations.
Class 38: Television broadcasting, radio broadcasting,
and broadcasting and transmission via wireless
media of analog, digital, audio, video, pager,
radio, microwave, television, data, and
emergency signals; and television and radio
transmission services in the nature of providing
microwave links carrying television and video
signals from the customers' television and radio
studios to applicant's tower network.
Proprietor: Crown Castle UK Ltd
Warwick Technology Park
70
Gallows Hill Heathcote Lane
Warwick
United Kingdom CV34 6TN
Service: Albert B. Kimball, JR.
Bracewell & Patterson LLP
711 Louisiana STE 2900
Houston TX 77002
71
Application Number: CTM 1,535,475
Class: 36-38
Status: Registered
Application date: 1 March 2000
[CROWN CASTLE WAVE LOGO]
Languages: English/Spanish
Class 36: Telecommunication site acquisition services,
transmission site acquisition services, and
broadcasting site acquisition services, real
estate management, site management and real
estate development services.
Class 37: Planning, consultancy, installation and
maintenance of broadcasting, telecommunication
and transmission equipment, apparatus and
instruments.
Class 38: Broadcasting, telecommunication,
transmission and transmission mast site sharing
services; provision of distribution and
transmission network services.
Seniorities: 2,173,589|1999 08 13 1: GB
Proprietor: Crown Castle UK Ltd
Warwick Technology Park
Gallows Hill
Heathcote Lane,
CV34 6TN
Warwick
United Kingdom
Service: Marks & Clerk
Sussex House
83-85 Mosley Street
Manchester
M2 3LG
United Kingdom
Received by OHIM: 1 March 2000
Week Ending History
18 Sep 2000 Status: Advertised
09 Apr 2001 Status: Registered
31 Mar 2003 Other-Update
72
Schedule 3
Closing Obligations
(Clause 6)
1 Seller's Obligations
1.1 General Obligations
On Closing, the Seller shall deliver or make available to the Purchaser
the following:
1.1.1 evidence that the Seller is authorised to execute this
Agreement;
1.1.2 transfers of the Shares duly executed by the registered
holders in favour of the Purchaser or as it may direct
accompanied by the relative share certificates (or an express
indemnity in a form satisfactory to the Purchaser in the case
of any certificate found to be missing);
1.1.3 the written resignations of all of the directors and
secretaries of each Group Company from their office as a
director or secretary and as an employee or as the Purchaser
may otherwise direct to take effect on the date of Closing
and, in particular, in relation to Peter Abery, evidence in a
form reasonably satisfactory to the Purchaser of (i) the
satisfaction in full of all costs and expenses relating to his
termination as an employee and international secondment under
a Severance Agreement dated 12 February 2004; and (ii) the
Seller's express written release of Peter Abery from all
post-termination non-compete restrictions in the British
Isles. The Seller's written acknowledgement and reiteration of
its sole responsibility for all costs and expenses relating to
the Severance Agreement described above shall satisfy the
requirement to (i) above;
1.1.4 the written resignations of the auditors of each Group Company
to take effect on the date of Closing, with acknowledgements
signed by each of them in a form satisfactory to the Purchaser
to the effect that they have no claim against any Group
Company and containing the statement referred to in Section
394 of the Companies Act to the effect that there are no
circumstances connected with their resignation which they
consider should be brought to the notice of the members or
creditors of any Group Company;
1.1.5 the certificates of incorporation, corporate seals (if any),
cheque books, statutory and other books of each Group Company
(duly written up to the date immediately before the Closing
Date) and the share certificates in respect of each of the
Subsidiaries;
1.1.6 all the Books and Records of each Group Company and all title
deeds and other documentation relating to the Properties;
1.1.7 (if the Purchaser so requires) an irrevocable power of
attorney (in the Agreed Terms) executed by the Seller in
favour of the Purchaser to enable the Purchaser (pending
registration of the relevant transfers) to exercise all voting
and other rights attaching to the Shares and to appoint
proxies for this purpose;
1.1.8 evidence of release of the Liens on the Shares and the shares
of any Group Company existing pursuant to the Amended and
Restated Credit and Exchange Offer Agreement dated as of 10
October 2003, between Seller, Crown Castle
73
Operating Company, Crown Castle International Corp de Puerto
Rico, J.P. Morgan Chase Bank as agent and the Lenders from
time to time, as defined therein;
1.1.9 evidence reasonably satisfactory to the Purchaser of the
termination of the agreements (except for those agreements
identified in Section 6.4 of the Disclosure Letter) between
the Group Companies and the Seller or other members of the
Seller's Group;
1.1.10 releases or waivers in the Agreed Terms in respect of the
Liens affecting any of the Shares or the shares of any Group
Company;
1.1.11 a certificate signed by an executive officer with respect to
matters described in Clauses 8.1.1 and 8.1.2;
1.1.12 evidence that the Seller has, or has procured that: in
relation to the software licences set out in Section 3.5(7)(a)
of the Disclosure Letter, that all reasonably necessary steps
have been taken so as to enter into such agreements or
arrangements with relevant third parties as are reasonably
necessary to ensure that the Group is able to continue to use
such software in substantially the same manner as it did
immediately prior to the date of this Agreement and that such
use will not infringe any third party Intellectual Property
rights after Closing in any material respect; and
1.1.13 evidence that the Seller has, or has procured that in relation
to the software licences set out in Section 5.1.1 of the
Disclosure Letter, that all reasonably necessary steps have
been taken so as to obtain a sufficient number of additional
licences so as to ensure that the Group's use of that software
after Closing does not infringe any third party Intellectual
Property rights in any material respect.
2 The Purchaser's and Guarantor's Obligations
On Closing, the Purchaser and Guarantor shall deliver or make available
to the Seller:
2.1.1 evidence that each of the Purchaser and the Guarantor are
authorised to execute this Agreement;
2.1.2 a certificate signed by an executive officer of the Purchaser
with respect to the matters described in Clauses 8.5.1 and
8.5.2; and
2.1.3 a certificate signed by an executive officer of the Guarantor
with respect to the matters described in Clauses 8.6.1 and
8.6.2.
3 Board Resolutions of the Group Companies
On Closing, the parties shall join in procuring the passing of board
resolutions of each Group Company inter alia:
3.1.1 (if so required by the Purchaser) revoking all existing
authorities to bankers in respect of the operation of its bank
accounts and giving authority in favour of such persons as the
Purchaser may nominate to operate such accounts;
3.1.2 approving in relation to the Company only the registration of
the transfer of the Shares referred to in paragraph 1.1.2 of
this Schedule 3 subject only to their being duly stamped;
74
3.1.3 accepting the resignations referred to in paragraph 1.1.3 of
this Schedule 3 and appointing such persons (within the
maximum number permitted by the Articles of Association) as
the Purchaser may nominate as directors and secretary;
3.1.4 (if so required by the Purchaser) accepting the resignations
referred to in paragraph 1.1.4 of this Schedule 3 and
appointing alternative auditors;
3.1.5 (if so required by the Purchaser) changing its registered
office in accordance with instructions given by the Purchaser;
and
3.1.6 (if so required by the Purchaser) changing its accounting
reference date in accordance with instructions given by the
Purchaser.
75
Schedule 4
Determination of Closing Date Balance Sheet and
Completion Statements
(Clause 7)
Part 1
1 Accounting Policies and Bases
1.1 The Closing Date Balance Sheet and the Completion Statements shall be
prepared in accordance with:
1.1.1 the policies or bases as set out in Part 6 of Schedule 4;
1.1.2 (subject to the requirements of Paragraph 1.1.1 which shall
prevail over the provisions of this Paragraph 1.1.2) in
accordance with the historical cost convention and the same
accounting policies, measurement bases and estimation
techniques as used in preparing the audited annual
consolidated accounts of the Group for the financial year
ended on 31 December 2003; and to the extent that the
accounting policies, measurement bases and estimation
techniques adopted in such accounts are different to those
applied in the preparation of the March Accounts arising
solely from the differences arising from the preparation of
the accounts for the year ended 31 December 2003 due to it
being a fiscal year end, the accounting policies, measurement
bases and estimation techniques used for the March Accounts
shall instead be adopted and consistently applied; and
1.1.3 (subject to the requirements of Paragraph 1.1.1 and 1.1.2
which shall prevail over the provisions of this Paragraph
1.1.3), UK GAAP.
2 Completion Statements
2.1 Pursuant to Clause 7.2, during the 30 Business Days following the
Seller's receipt of the Completion Statements, the Seller and its
independent auditors shall be permitted to review the non-proprietary
working papers relating to such Completion Statements. The Completion
Statements shall become binding upon the parties and deemed finally
determined on the 30th Business Day following delivery thereof unless
the Seller gives notice of its disagreement with the Completion
Statements (a "Notice of Disagreement") to the Purchaser prior to such
date. For the avoidance of doubt, the 30 Business Day period referenced
in this paragraph 2.1 shall not commence until (i) each Completion
Statement shall have been delivered to the Seller and (ii) the
non-proprietary working papers relating to each such Completion
Statement shall have been delivered or made available to the Seller.
2.2 Any Notice of Disagreement shall be in writing and specify with
reasonable detail the nature of any disagreement and amount disputed so
asserted, and shall include only disagreements based on (i)
mathematical errors, (ii) the Closing Working Capital Amount, the Final
Closing Cash Amount and/or the Final Cash Deferred Income Amount set
out in the Completion Statements not being calculated in the manner
provided in the definition(s) thereof or (iii) the amounts recorded in
the line items reflected on the Closing Date Balance Sheet not being
obtained from and in accordance with the Books and Records or in
accordance with the Accounting Policies.
76
2.3 During the 20 Business Day period following the delivery of a Notice of
Disagreement, the Seller and the Purchaser shall seek in good faith to
resolve in writing any differences that they may have with respect to
the matters specified in such Notice of Disagreement and to agree on
final Completion Statements. During such period the Purchaser and its
independent auditors shall have access to the non-proprietary working
papers prepared in connection with such Notice of Disagreement. For the
avoidance of doubt, the 20 Business Day period referenced in this
paragraph 2.3 shall not commence until the non-proprietary working
papers prepared in connection with such Notice of Disagreement shall
have been delivered or made available to the Purchaser.
2.4 At the end of such 20 Business Day period, if the Seller and the
Purchaser have not otherwise agreed, the Seller and the Purchaser shall
submit to a nationally recognised independent public accounting firm in
the United Kingdom as shall be reasonably agreed upon by the parties
hereto in writing or in default of agreement, nominated by the
President for the time being of the Institute of Chartered Accountants
in England and Wales (the "Accounting Firm") for expert determination
any and all matters that remain in dispute and were properly included
in such Notice of Disagreement, in each case in the form of a written
brief, copied to all parties. The Seller or the Purchaser, as
applicable, shall have the right to respond in writing to the written
brief, by submitting such response to the other party and the
Accounting Firm. The Seller and the Purchaser shall jointly request
that each expert determination be conducted in an expedited manner, and
the Seller and the Purchaser shall, using reasonable endeavours, cause
the Accounting Firm to render a determination resolving the matters
submitted thereto within 30 Business Days after submission. The
Accounting Firm may only resolve those disagreements permitted to be
asserted in a Notice of Disagreement pursuant to paragraph 2.2 of this
Schedule 4, and may not make any other determination. The Accounting
Firm shall act as an expert and not as an arbitrator. The determination
of the Accounting Firm shall be final and binding on the parties, and
judgment may be entered upon the determination of the Accounting Firm
in any court having jurisdiction over the party against which such
determination is to be enforced.
2.5 The Seller and the Purchaser shall instruct the Accounting Firm to
allocate the fees and expenses of the Accounting Firm incurred in
connection with this paragraph 2 such that each party shall bear the
portion of such fees and expenses incurred by the Accounting Firm in
connection with matters in respect of which such party has not
prevailed, and such fees and expenses shall be allocated between the
Seller and the Purchaser as the Accounting Firm shall so determine.
77
Schedule 4
Part 2
March Balance Sheet
(Clause 1.1)
UK GAAP
(pound)'000
Fixed Assets
Fixed & intangible assets, net 532,253
Investments in advance to affiliates 0
Investments in subsidiaries 100
Goodwill and other intangible assets, net 39,787
Other assets, net 24
------------
Fixed Assets 572,164
============
Current Assets
Cash and Cash Equivalents 11,207
Receivables, net 27,376
Inventories 4,275
Prepaid Expenses and other current assets 26,265
------------
Current Assets 69,123
============
641,287
============
Current Liabilities
Trade Accounts Payable (15,915)
Other creditors (7,393)
Accruals ( 1 yr (87,535)
Accrued Interest 0
Intercompany payables (receivables) 4,763
Long-term debt, less current maturities 0
------------
Current Liabilities (106,080)
============
Long-term debt, less current maturities 0
Inter-Company Notes (109,270)
Site rental deposits and other liabilities (82,461)
------------
78
UK GAAP
(pound)'000
Total Liabilities (297,811)
============
Net Current Assets/(Current Liabilities) (36,957)
============
Total Assets less Current Liabilities 535,207
------------
Net Assets 343,476
============
Capital and Reserves 343,476
============
79
Schedule 4
Part 3
Base Working Capital Amount
(Clause 1.1)
General Ledger
(pound)'000 reference
Base Working Capital Assets 32,385
Less: Base Working Capital Liabilities (39,819)
------------------
Base Working Capital Amount (7,434)
==================
Base Working Capital Assets
Trade Debtors 28,134 1.1210; 1.1212.BTWS;
1.1390; 2.1390;
133-133.1390
Doubtful debts provision (1,100) 1.1220; 2.1220;
133-133.1220
Other Debtors 342 1.1390.DTVSL;
1.1390.SUNDRY02; 1.1310
Less: Receivables in deferred income (15,113) See below
Less: VAT on receivables in deferred income (2,645) 17.5%* Receivables in
deferred income
------------------
Total Receivables 9,618
==================
Total Prepayments 18,492 See below
==================
Inventory 4,851 1.1411; 1.1412;
1.1412.DOLPHIN;
1.1438.JNL;
1.1412.MODULE;
1.1412.OBSOLETE;
1.1412.TMOBILE
Inventory (purchase variance) 1.1420
(70)
Inventory (provision) (2,079) 1.1450
WIP All and only codes with
1,573 prefix 1.15
------------------
Total Inventory 4,275
==================
Total Receivables for Base Working Capital 9,618
Total Prepayments for Base Working Capital 18,492
-----------------
80
General Ledger
(pound)'000 reference
Total Inventory for Base Working Capital 4,275
------------------
Base Working Capital Assets 32,385
==================
Base Working Capital Liabilities
Trade Creditors (8,819) 1.4110
AP Logged Accruals 1.4212; 1.4130
367
Goods Received Not Invoiced (7,462) 1.4120
------------------
Total Payables (15,914)
==================
Creditors - others (645) 1.4215; 1.4216; 1.4217;
1.4219; 115-115.4213
Staff Expenses 49 1.4271; 1.4278;
1.4278.CONTROL; 1.4279
Tax Creditors (6,796) 1.4273; 1.4272; 1.4233;
1.4233.INPUT;
1.4233.OUTPUT;
1.4233.SUSP;
1.4233.CORP; 2.4711;
133-133.4233.CORP;
133-133.4233.INPUT;
133-133.4233.OUTPUT;
133-133.4233.SUSP
Accruals for Base Working Capital Liabilities (19,901) 1.4299; 1.4299.LEGAL;
1.4299.AUDIT;
1.4299.INVOICE;
1.4252.MANUAL;
1.4299.REBATES;
1.4251.MANUAL;
1.4299.STAFF; 1.4253;
1.4299.CASH;
1.4251.PMS;
1.4251.PMSBTVAT;
1.4251.PMSBT;
115-115.4299
1.4299.INTERCO
1.4299.FASBACCR
Restructuring 1.4780
(339)
Finance Lease Creditor ( 1 yr 1.4310.GENERAL
(778)
Add FASB Liability 1,742 1.4299.FASBACCR
Add: Powergen accrual 2,500
------------------
Add: Intercompany 263 1.4299.INTERCO
==================
Total Accrued Liabilities (23,905)
==================
Total Payables for Base Working Capital (15,914)
81
General Ledger
(pound)'000 reference
Total Accrued Liabilities for Base Working Capital (23,905)
------------------
Base Working Capital Liabilities (39,819)
==================
Prepayments
General Prepayment 2,145 1.1829
Insurance 1,167 1.1822
Interest Receivable 15 1.1829.INTEREST
Licences 32 1.1829.LICENCE
Rates Non-Property 1,118 1.1824.MANUAL
Rents Non-Property 13 1.1821.MANUAL
Revenue 3,410 1.1826
Service Contracts 425 1.1829.SERVICE
Staff Costs 21 1.1829.STAFF
Utilities 191 1.1829.UTILITIE
DLA 50 1.1829.DLA
Rates 0 1.1824.PMS
Rents 6,319 1.1821.PMS
BT Reach 3,586 1.1821.PMSBT
-------------------
Total Prepayments 18,492
NB. The non cash amounts attributable to H3G sites not yet at RFI has been
eliminated from Revenue Prepayments 1.1826
==================
Receivables in Deferred Income
Site Share; Existing BT Rental; Site Share BT Reach 11,875 1.4401; 1.4408.RENTAL;
1.4408.NEW
T Mobile NI Rollout 0 1.4403.NITMOB
Other revenue deferrals 2,115 1.4406
BBC DAB 0 1.4409.BBCDAB
DTT MUX C 1,123 1.4409.(VARIOUS)
Northern Ireland Esat 0 1.4409.NIESAT
------------------
Total Receivables in Deferred Income 15,113
==================
82
Schedule 4
Part 4
Estimated Cash Deferred Income Amount
(Clause 1.1)
Illustrative Estimated General Ledger reference
at Closing
(pound)'000 (pound)'000
Cash Deferred Income Account Balance Unpaid as of Account Date
Site Share 22,500 1.4401
Existing BT Rental 800 1.4408.RENTAL
Site Share BT Reach 3,800 1.4408.NEW
-------------------
Total Site share 27,100 800
T Mobile NI Rollout 700 1.4403.NITMOB
Other Revenue Deferrals 3,400 3,200 1.4406
BBC DAB 100 100 1.4409.BBCDAB
DTT MUX C 900 800 1.4409.(VARIOUS)
Northern Ireland Esat 600 0 1.4409.NIESAT
------------------- --------------------------
32,800 4,900
Cash Deferred Income (including 32,800
Unpaid Amounts)
less Unpaid Amounts (4,900)
-------------------
Estimated Cash Deferred Income 27,900
-------------------
NB. The accounts "Transmission" GL ref 1.4402, "Broadcast" GL ref 1.4405 and
"DTT Mux D" GL ref 1.4409.(VARIOUS) are specifically excluded from Cash Deferred
Income
83
Schedule 4
Part 5
Illustration of Post-Closing Adjustment Mechanisms
(Clause 7.5)
The Seller and the Purchaser agree that the following calculations are for
illustration purposes only, and that the Seller makes no representation or
warranty with respect to the accuracy of the hypothetical figures set out below,
as actual results may vary substantially.
Closing and Completion Adjustment Summary
At Closing (pound)
Closing Amount 150 (a)
add Estimated Closing Cash Amount 10 (b)
------------
Equity purchase price 160 (c)
------------
add Estimated Working Capital Adjustment Amount (or subtract if negative) 3 (d)
subtract Estimated Cash Deferred Income Amount (10) (e)
- ---------------------------------------------------------------------------------- ------------ -------------------
Net amount payable to Seller at Closing for equity 153 (c)+(d)+(e)
Net amount payable to Seller at Closing for debt (Settlement Amount) 50 (f)
Total amount payable to Seller at Closing (j)=(c)+(d)+(e)+(f) 203 (j)
- ---------------------------------------------------------------------------------- ------------ -------------------
Post Closing 30 days
Final Closing Cash Amount 15
less Estimated Closing Cash Amount (10)
------------
Adjustment payable) to or receivable from Seller 5 (g)
Closing Working Capital Adjustment Amount 3
less Final Working Capital Adjustment Amount (3)
------------
Adjustment payable to or receivable from Seller - (h)
Final Cash Deferred Income Amount (8)
less Estimated Cash Deferred Income Amount (10)
------------
Adjustment payable to or receivable from Seller 2 (i)
Increase / (decrease) in Consideration payable to Seller (k)=(g)+(h)+(j) 7 (k)
- ---------------------------------------------------------------------------------- ------------ -------------------
Total paid to Seller 210 (j)+(k)
Total paid for equity 160 (c)+(d)+(e)+(k)
------------ -------------------
Total paid for debt 50 (f)
- ---------------------------------------------------------------------------------- ------------ -------------------
84
Schedule 4
Part 6
Specific Accounting Policies
1.1 Balances in respect of Transmission (ledger account1.4402), Broadcast
Engineering (ledger account 1.4405 (and DTT Mux D (ledger account
1.4409.(VARIOUS) shall not be included in Closing Working Capital
Amount, Base Working Capital Amount, or Cash Deferred Income.
1.2 Balances in respect of DLA Surety (ledger account 1.1390.DLA) and ESAT
Surety (ledger account 1.1829.ESAT) shall not be included in Closing
Working Capital Amount or Base Working Capital Amount.
1.3 T-Mobile deferred income means non-cash income relating to the
acquisition of T-Mobile sites that relates to future periods.
1.4 Install deferred income means capital contributions secured from
customers as part of the install process that are being amortised over
the term of the licence. Deferred income for Install revenue is
calculated in accordance with the principles and requirements set out
in the following documents: (i) April 2002 Discussion Document provided
to Bob McLamb (KPMG Partner); (ii) Appendix A cost classifications; and
(iii) Install Revenue Value White Paper, all of which are in the Agreed
Terms.
1.5 Site Share deferred income means all billing that covers a future
period is posted to deferred income at the point that the invoice is
raised. Income relating to the current account period is released from
deferred income over the term covered by the billing.
1.6 H3G Variation, H3G Reservation Fees and H3G Settlement deferred income
are calculated in accordance with the requirements set out in the
following documents: (i) Minutes of the CC/KPMG teleconference held on
23 September 2003; and (ii) Memo to Mike Martin (KPMG Partner) dated 6
October 2003, all of which are in the Agreed Terms.
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Schedule 5
Warranties given by the Seller
1 Corporate Information
1.1 The Shares and the Group Companies
1.1.1 The Seller, through a 100% owned subsidiary:
(i) is the sole legal and beneficial owner of the Shares;
and
(ii) has the right to exercise all voting and other rights
over the Shares.
1.1.2 The Shares comprise the whole of the issued and allotted share
capital of the Company, have been properly and validly issued
and allotted and are each fully paid or credited as fully
paid.
1.1.3 The shareholders specified in paragraph 2 of Schedule 1:
(i) are the sole legal and beneficial owners of the
shares in the Subsidiaries; and
(ii) have the right to exercise all voting and other
rights over such shares.
1.1.4 The shares in the Subsidiaries comprise the whole of the
issued and allotted share capital of the Subsidiaries, have
been properly and validly issued and allotted and each are
fully paid or credited as fully paid.
1.1.5 No person has the right (whether exercisable now or in the
future and whether contingent or not) to call for the
allotment, conversion, issue, registration, sale or transfer,
amortisation or repayment of any share or loan capital or any
other security giving rise to a right over, or an interest in,
the capital of any Group Company under any option, agreement
or other arrangement (including conversion rights and rights
of pre-emption).
1.1.6 There are no Liens on the shares in any Group Company.
1.1.7 All consents necessary to effect the transfer of the Shares
have been obtained or will be obtained by Closing. For the
avoidance of doubt, the receipt of any consents which relate
to change of control or other similar provisions in contracts,
that are triggered as a result of the transactions
contemplated hereby shall not be deemed to be necessary to
effect the transfer of the Shares.
1.1.8 The Shares and the shares in the Subsidiaries have not been
and are not listed on any stock exchange or regulated market.
1.1.9 No Group Company:
(i) has any interest in, or has agreed to acquire, any
share capital or other security referred to in
paragraph 1.1.5 of any other company (wherever
incorporated) other than the Subsidiaries set out in
Schedule 1;
(ii) has any branch, division, establishment or operations
outside the jurisdiction in which it is incorporated;
or
(iii) has or has had in the last three years any associate
(being an entity that falls to be treated as such for
the purposes of FRS 9).
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1.1.10 The particulars contained in Schedule 1 are true, accurate and
not misleading in any material respect.
1.1.11 No Group Company has been involved in any corporate or group
restructuring, including by way of merger, demerger or
hive-down of material assets, during the last five years and
no such restructuring is currently taking place or envisaged.
1.2 Constitutional Documents, Corporate Registers and Minute Books
1.2.1 The memoranda and articles of association disclosed pursuant
to Schedule 1.2 of the Disclosure Letter are true and accurate
copies of the memoranda and articles of association of the
Group Companies and there have not been and are not any
breaches by any Group Company of its memorandum and articles
of association which would have a material and adverse effect
on the business of the Group.
1.2.2 The statutory books of whatsoever kind of each Group Company:
(i) are up-to-date;
(ii) are maintained in accordance with applicable law on a
proper and consistent basis;
(iii) contain complete and accurate records of all matters
required to be dealt with in such books and records;
and
(iv) have attached to them copies of all such resolutions
and agreements as are required by law to be delivered
to the Registrar of Companies and all other
resolutions passed by the relevant Group Company or
any class of members or shareholders, other than
resolutions relating to ordinary business at any
Annual General Meeting,
in each case in all material respects.
1.2.3 To the Seller's knowledge, all books and records referred to
in paragraph 1.2.2 and all other material documents which are
the property of each Group Company or ought to be in its
possession are in the possession (or under the control) of the
relevant Group Company and no notice or allegation that any of
such books and records contain any material inaccuracies has
been received.
1.2.4 All accounts, documents and returns required by Law to be
delivered or made to the Registrar of Companies have been duly
and correctly delivered or made on a timely basis.
2 Accounts
2.1 Latest Accounts
Section 2.1 of the Disclosure Letter sets out the audited annual
consolidated accounts of the Company and the audited annual accounts of
Crown Castle UK, in each case for the financial year ended on 31
December 2003, and the March Accounts (together, the "Accounts").
Except as set out in Section 2.1 of the Disclosure Letter, in the
footnotes to the Accounts, and except for the omission from the March
Accounts of footnotes and normal recurring adjustments reflected in
audited accounts, the Accounts (i) comply with the requirements of the
Companies Act and other applicable Law, (ii) comply with all current
statements of standard accounting practice, financial reporting
standards and
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Urgent Issues Task Force Abstracts applicable to a company incorporated
in England and Wales and have been prepared in accordance with the
historical cost convention and UK GAAP, on a basis consistent with
changes in the business of the Group and in all material respects in
accordance with the same measurement bases, accounting policies and
estimation techniques as the corresponding accounts for the preceding
three financial years except where estimation techniques have been
revised in order to present a more appropriate view of the underlying
transactions in accordance with UK GAAP and (iii) give a true and fair
view of each of (A) the state of affairs of the Group as at the
Accounts Date, in the case of the March Accounts, (B) its profit or
loss for the three month financial period ended on the Accounts Date,
in the case of the unaudited consolidated accounts of the Company and
the unaudited accounts of Crown Castle UK (in each case for the three
month financial period ended on the Accounts Date), and (C) the state
of affairs of the Group as at 31 December 2003, and its profit or loss
for the financial year ended on that date, in the case of the audited
annual consolidated accounts of the Company and the audited annual
accounts of Crown Castle UK (in each case for the financial year ended
on that date).
2.2 Management Accounts
2.2.1 The Management Accounts have been prepared, in all material
respects, in accordance with accounting policies used in
preparing the Accounts applied on a consistent basis.
2.2.2 The Management Accounts are not misleading in any material
respect and do not materially misstate the assets and
liabilities of the Group as at the Relevant Management
Accounts Date nor the profits or losses of the Group for the
period concerned.
2.3 Assets under Construction
To the Seller's knowledge, the Total Construction Cost for any
individual asset under construction will not materially exceed the
Projected Cost for that asset.
2.4 Accounting Controls
The Seller has disclosed, based on its most recent evaluation of
internal control over the Group's financial reporting, that the Seller
is not aware of:
2.4.1 any significant deficiency in the design or operation of
internal controls of the Group which could adversely affect in
any material respect the Seller's ability to record, process,
summarise and report financial data or any material weaknesses
in internal controls of the Group; or
2.4.2 any fraud, whether or not material, that involves management
or other employees who have a significant role in the Group's
internal controls.
3 Financial Obligations
3.1 Financial Facilities
Details of all financial facilities (including loans, derivatives and
hedging arrangements), in each case exceeding (pound)50,000,
outstanding or available to the Group Companies are given in the
Disclosure Letter.
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3.2 Guarantees
There is no material outstanding guarantee, indemnity, pledge,
suretyship or security (whether or not legally binding) given:
3.2.1 by any Group Company; or
3.2.2 for the benefit of any Group Company,
other than in the case of any indemnities arising in the ordinary
course of business consistent with past practice and in any other case
given by a Group Company in respect of the obligations or Liabilities
of another Group Company.
3.3 Off-Balance Sheet Financing
No Group Company has outstanding any loan capital, nor has it factored,
discounted or securitised any of its debts, nor has it engaged in any
financing of a type which would not be required to be shown or
reflected in the Accounts.
3.4 Grants and Subsidies
No Group Company is subject to any arrangement for receipt or repayment
of any grant, subsidy or financial assistance from any Governmental
Entity and, to the Seller's knowledge, no Group Company has incurred
any political expenditure or made any political donation during the
Relevant Period or is under any binding obligation to do so.
3.5 No Undisclosed Liabilities
As of the date of this Agreement, no Group Company has any Liabilities
which would be required by the Companies Act or current statements of
standard accounting practice, financial reporting standards and Urgent
Issues Task Force Abstracts applicable to a company incorporated in
England and Wales to be set out in a consolidated balance sheet of the
Company or Crown Castle UK that are not disclosed in the Accounts
(including the notes thereto), except for Liabilities (i) incurred in
the ordinary course of business consistent with past practice since the
Accounts Date; (ii) specifically reserved against in the Accounts (and
only to the extent of such reservation); or (iii) incurred outside the
ordinary course of business and which are immaterial.
4 Assets
4.1 Real Property
4.1.1 The Disclosure Letter sets out correct and complete lists of:
(i) real property owned freehold by a Group Company (the
"Owned Real Property");
(ii) real property which is owned part freehold and part
leasehold by a Group Company (the "Owned Mixed
Property");
(iii) real property owned leasehold by a Group Company (the
"Leasehold Property") or licenced to and used or held
by a Group Company for use in the operation or
conduct of the business of a Group Company (the
"Leasehold/Licenced Property") including rents and
licence fees payable in respect of such
Leasehold/Licenced Property as at 18 May 2004;
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(iv) real property licenced by National
Transcommunications Limited to a Group Company for
use in the operation or conduct of the business of a
Group Company (the "NTL Licenced Property"); and
(v) real property managed by a Group Company on behalf of
a third party, where a Group Company is entitled to
receipt of all or a portion of third party site
sharing income derived from such property as part of
the business of a Group Company (the "Managed
Property"); and such lists identify the individual
Owned Real Property, Owned Mixed Property,
Leasehold/Licenced Property, NTL Licenced Property
and Managed Property by name, grid reference and/or
by address or such description as may be commercially
reasonable and used by the applicable Group Company
to identify its location.
4.1.2 The Disclosure Letter sets out a list which is correct and
complete in all material respects of all leases, subleases and
other site sharing agreements entered into by a Group Company
as lessor or licensor with a third party as lessee or licencee
(such list including details of rents and licence fees
payable), other than Ancillary Agreements (collectively, "Site
Sharing Agreements") related to or affecting any Owned Real
Property, any Owned Mixed Property and any Leasehold/Licenced
Property or any interest therein. Except for the Site Sharing
Agreements and the Ancillary Agreements, there are no leases,
tenancy or site sharing agreements affecting any Owned Real
Property and no Group Company has entered into any other
leases, tenancy or site sharing agreements other than the
relevant Site Sharing Agreements in respect of any Owned Mixed
Property and any Leasehold/Licenced Property.
4.1.3 A Group Company is the legal and beneficial owner of (subject
to any Site Sharing Agreements and the Ancillary Agreements)
all Owned Real Property, Owned Mixed Property and Leasehold
Property, free and clear of all Liens, except for:
(i) Permitted Liens;
(ii) Liens set out in the Disclosure Letter;
(iii) Site Sharing Agreements set out in the Disclosure
Letter;
(iv) easements, covenants, notices and restrictions,
reservations and rights-of-way which are being
substantially complied with in the carrying on of the
business of the Group Companies thereat immediately
prior to the date of this Agreement;
(v) any condition that would be apparent as part of a
physical inspection of any Owned Real Property, Owned
Mixed Property or Leasehold/Licenced Property
actually made by or on behalf of the Purchaser prior
to the Closing;
(vi) town and country planning, building and other similar
restrictions;
(vii) restrictions imposed by any Governmental Entity; and
(viii) Liens that have been placed by any vendor, landlord
or other third party on property over which a Group
Company has easement rights or similar agreements
relating thereto.
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4.1.4 Each Group Company has sufficient rights to occupy and use the
Owned Real Property, the Owned Mixed Property or the
Leasehold/Licenced Property to enable it to perform its
obligations under each of the Site Sharing Agreements.
4.1.5 The Owned Real Property, the Owned Mixed Property, the
Leasehold/Licenced Property and the Managed Property:
(i) comprise all of the properties necessary;
(ii) enjoy sufficient ancillary, access and services
rights over other land; and
(iii) are in a sufficient state of repair and condition,
to enable each Group Company to carry on its business after
the date of this Agreement in the manner carried on
immediately prior to the date of this Agreement.
4.1.6 No material breach of the Planning Acts or of any bye-laws,
building regulations or other applicable Law has been
committed in relation to any Owned Real Property, Owned Mixed
Property or Leasehold/Licenced Property.
4.1.7 No material development, alterations or other works which
would require any permission or consent under the Planning
Acts or under any bye-laws, building regulations or other
applicable Law have been carried out in relation to any Owned
Real Property, Owned Mixed Property or Leasehold/Licenced
Property without all those permissions and consents having
been obtained and all conditions attached to those permissions
and consents have been observed and performed in all material
respects.
4.1.8 Since 24 February 1997, no Group Company has assigned or
transferred any Leasehold Property of which it was the
original tenant or in respect of which it entered into a
covenant with the landlord to observe and perform the tenant's
covenants under an applicable lease without receiving a full
and legally effective indemnity in respect of its Liability
under such lease and to the knowledge of the Seller, no Group
Company has had cause to claim on any such indemnity.
4.1.9 Since 24 February 1997, no Group Company has conveyed or
transferred any freehold property in respect of which it
entered into any covenant (including an indemnity covenant)
which continues to bind it without having received a full and
legally effective indemnity in respect of its Liability under
such covenant and to the knowledge of the Seller, no Group
Company has had cause to claim on any such indemnity.
This paragraph 4.1 does not relate to Environmental Matters which are
the subject of paragraph 9 of this Schedule.
4.2 Ownership of Assets
4.2.1 Each Group Company has legal and beneficial ownership of all
material assets reflected in the Accounts or acquired after
the Accounts Date, except for those sold or otherwise disposed
of since the Accounts Date in the ordinary course of business
and not contrary to the provisions of this Agreement, in each
case free and clear of all Liens except Permitted Liens and
Liens being discharged at Closing as set out in the Disclosure
Letter.
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4.2.2 No Group Company has at any relevant time been party to a
transaction pursuant to or as a result of which an asset
owned, purportedly owned or otherwise held by any Group
Company is liable to be transferred or re-transferred to
another person or which gives or may give rise to a right of
compensation or other payment in favour of another person.
This paragraph 4.2 does not relate to Intellectual Property and
information technology, such items being the subject of paragraph 5 of
this Schedule.
4.3 Plant and Machinery etc.
The material items of machinery, broadcasting and transmission
equipment and plant owned or used by each Group Company (i) are in good
repair and condition (subject to ordinary wear and tear and having
regard to their age, location and use); (ii) are in reasonably
satisfactory working order; (iii) have been adequately serviced and
maintained and (iv) are not materially surplus to that Group Company's
requirements.
4.4 Sufficiency of Assets
The assets owned, leased, licenced or managed to or by the Group are
sufficient to enable each Group Company to, and no Group Company shall
be dependent upon the Seller in order to, conduct its business
immediately following the date of this Agreement in substantially the
same manner as currently conducted and there are no assets which are
material to the conduct of the business of the Group as currently
conducted other than the assets owned, leased, licenced or managed by
the Group.
5 Intellectual Property and Information Technology
5.1 Information Technology
All the material records and systems (including computer systems and
software) and all material data and information of the Group:
5.1.1 are legally owned or licenced and recorded, stored, maintained
or operated or otherwise held exclusively by one or more of
the Group Companies and are not wholly or partly dependent in
any material respect on any facilities or means (including any
electronic, mechanical or photographic process, computerised
or otherwise) which are not under the exclusive ownership and
control of one or more the Group Companies;
5.1.2 have not failed or broken down to any extent in the last 12
months except as has not had a material and adverse effect on
the business of the Group;
5.1.3 to the Seller's knowledge, have not been subject to any
material logical intrusions (e.g. hacking) or physical
intrusions in the last 12 months;
5.1.4 have in place reasonably adequate protection against viruses
and harmful program codes in line with good business practice;
5.1.5 to the extent that they consist of third party software, are
being used pursuant to a valid licence agreement;
5.1.6 are subject to reasonably appropriate disaster recovery
arrangements to ensure that the their operation is
uninterrupted in any material respect, apart from
interruptions for scheduled maintenance;
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5.1.7 are provided with all reasonably necessary maintenance or
support by either a Group Company or by a third party, and in
line with good practice in the Group's industry as reasonably
necessary to run the business as currently conducted; and
5.1.8 in relation to operation, functionality and performance, will
be unaffected in any material respect by any change in date or
by any related change in the field configurations containing
date information.
5.2 Intellectual Property
5.2.1 In relation to Intellectual Property each Group Company has,
and in relation to Know-how, to the Seller's knowledge, each
Group Company has, the right to use, execute, reproduce,
display, perform, modify, enhance, distribute, prepare
derivative works of and sublicence, without payment to any
other person, the material Intellectual Property owned, used,
filed by or licenced by or to the Group or required by the
Group for the conduct of its business as substantially
presently conducted, and, to the knowledge of the Seller, the
consummation of the transactions contemplated by this
Agreement will not conflict with, alter or impair any such
rights in all material respects.
5.2.2 No written notice has been received in respect of any, and
there are no, actions, claims or proceedings pending or, to
the knowledge of the Seller, threatened as of the date of this
Agreement against the Seller, or any Group Company by any
person with respect to the ownership, validity,
enforceability, effectiveness or use of any Intellectual
Property or Know-How owned, used, filed by or licenced to a
Group Company or alleging that any Group Company is infringing
on the Intellectual Property or Know-How of any third party.
5.2.3 All reasonable details of all the material Intellectual
Property or Know-How owned, used, filed by or licenced by or
to (including the material terms of such licences) the Group
or required by the Group for the conduct of its business as
presently conducted have been delivered or made available to
the Purchaser.
5.2.4 To the Seller's knowledge, all material Intellectual Property
or Know-How owned or filed by a Group Company is valid and
subsisting and nothing has been done or omitted to be done by
any Group Company and there has been no act or omission of any
third party, which jeopardises the validity or subsistence of
any such Intellectual Property or Know-How.
5.3 Data Protection
5.3.1 To the Seller's knowledge, each Group Company has complied in
the last three years in all material respects with all
applicable requirements (including notification requirements)
of the Data Protection Act 1998.
5.3.2 No notice alleging non-compliance in any material respect with
the Data Protection Act 1998 (including any enforcement
notice, deregistration notice or transfer prohibition notice)
has been received by any of the Group Companies from the
Office of the Information Commissioner.
5.3.3 No undertaking has been made by any Group Company to the
Office of the Information Commissioner.
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5.3.4 No correspondence, dispute, enquiry or information notice has
been made or audit undertaken or, to the Seller's knowledge,
been proposed by the Office of the Information Commissioner in
relation to any Group Company.
5.3.5 No Group Company has any outstanding subject access requests
or outstanding court orders in respect of the rectification or
erasure of personal data.
5.3.6 No Group Company has been involved in a dispute with an
individual in respect of any infringement or alleged
infringement of the Data Protection Act 1998 and no Group
Company has received a written claim for compensation from any
individual in respect of any such infringement or alleged
infringement in the previous three years.
6 Contracts
6.1 Capital Commitments
Since the Accounts Date, the Group has incurred capital commitments in
the ordinary course of business and in accordance in all material
respects with the Budget.
6.2 Contracts
The Disclosure Letter sets out a complete and correct list of each
contract (together with any contract which amends or modifies any such
contract in a material respect) as of the date of this Agreement to
which a Group Company is a party that is:
6.2.1 an employment agreement which is not terminable at will and
which requires the payment of an amount (other than ordinary
severance pay) in excess of (pound)100,000 (one hundred
thousand pounds Sterling);
6.2.2 a collective bargaining agreement or other material contract
with any Representative Body;
6.2.3 a contract containing a covenant that following the Closing
would by its terms limit in any material respect the freedom
of any Group Company to carry on its business as it sees fit
or compete in any material respect with the Seller, any
Affiliate of the Seller or any third party;
6.2.4 a contract granting a Lien on the Shares, or the shares or the
material assets in any Group Company (other than contracts
which are immaterial to the business, subject to Permitted
Liens or relate to car leasing arrangements);
6.2.5 to the extent not set out pursuant to paragraph 6.2.6 below,
the master agreements pursuant to which the Company enters or
has entered into Site Sharing Agreements;
6.2.6 a material contract with any Major Customer or Major Supplier;
6.2.7 a contract relating to any material Indebtedness of a Group
Company; or
6.2.8 a material contract whereunder a Group Company acts as an
agent for a third party, or a third party acts as an agent for
a Group Company with the authority to bind such Group Company
(other than contracts with employees),
and true and complete copies of the contracts listed in Section 6.2 of
the Disclosure Letter have been provided or made available to the
Purchaser for review.
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6.3 Joint Ventures etc.
No Group Company is, or has agreed in writing to become, to the
knowledge of the Seller, effectively to become, a member of any joint
venture, consortium, partnership or other unincorporated association.
6.4 Agreements with Connected Parties
6.4.1 There is no Indebtedness (actual or contingent) nor any
indemnity, guarantee or security arrangement between any Group
Company and any current or former employee, current or former
director or any current or former consultant of any Group
Company or any person connected with any of such persons or in
which any such person is interested (whether directly or
indirectly) and since the enactment of Sarbanes-Oxley, no
Group Company has made any material loans (other than loans
which relate to ordinary course employee advances for business
purposes including annual travel arrangements) to any
executive director of a Group Company.
For the purposes of this Clause, "former" shall mean, in
relation to any employee, director or consultant, a person who
ceased to be employed by a Group Company not more than three
years prior to the date of this Agreement.
6.4.2 Set out in Section 6.4.2 of the Disclosure Letter is a list of
all contracts between a Group Company on the one hand, and the
Seller or any of its Subsidiaries (other than a Group
Company), on the other hand, which shall remain in full force
and effect as at Closing.
6.5 Commission and Finder's Fees
No (i) broker, investment banker, financial advisor or other person
(including any Relevant Employee or Former Employee), other than J.P.
Morgan Securities Inc., the fees and expenses of which will be paid by
the Seller, is entitled to any broker's, finder's, financial advisor's
or other fee, commission or bonus or similar payment and (ii) no fee,
commission or bonus or similar payment is payable by any Group Company,
in each case in connection with this Agreement or the transactions
contemplated hereby based upon arrangements made by or on behalf of the
Seller.
6.6 Compliance with Agreements
6.6.1 Each Contract listed in Section 6.2 of the Disclosure Letter
(collectively, the "Material Contracts") is valid, binding and
in full force and effect in all material respects and is
enforceable in all material respects by a Group Company in
accordance with its terms.
6.6.2 Each Group Company has performed in all material respects the
obligations required to be performed by it to date under the
Material Contracts, is not in breach or default thereunder
and, to the knowledge of the Seller, no other party to any
Material Contract is in breach or default in any material
respect thereunder.
6.6.3 No Notice to terminate any Material Contract currently in
effect has been served or received by any Group Company.
6.7 Effect of Sale of the Shares
Neither entering into, nor compliance with, nor completion of this
Agreement will:
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6.7.1 to the Seller's knowledge, cause any Major Customer or Major
Supplier to cease to do business with any Group Company on
substantially the same terms; or
6.7.2 result in a material breach of, or give any third party a
right to terminate or modify in any material respect, or
result in any material Lien under, any Material Contract to
which any Group Company is a party.
7 Employees and Employee Benefits
7.1 Definitions
For the purposes of this paragraph 7:
"appropriate representatives" has the meaning given in Regulation 10 of
the Transfer Regulations;
"employee representatives" means any and all appropriate
representatives, trade union, association of trade unions, European
Works Council, works council, staff association, staff council, shop
steward committee or other organisation or body of employees;
"Former Employees" means any employee who was employed by any Group
Company at any time within the Relevant Period but who is not employed
by any Group Company at the date of this Agreement;
"Relevant Employees" means those employees of the Group Companies who
are immediately prior to Closing employed by the Group and whose
details are set out in the Disclosure Letter;
"Senior Employee" means any employee employed or engaged by a Group
Company with an annual base salary, on the basis of full-time
employment, in excess of (pound)85,000 (eighty five thousand pounds
Sterling); and
"Transfer Regulations" means The Transfer of Undertakings (Protection
of Employment) Regulations 1981 as amended or re-enacted from time to
time.
7.2 Relevant Employees and Terms of Employment
7.2.1 Full particulars or, in the case of a document, a copy of the
following is set out in the Disclosure Letter:
(i) the total number of Relevant Employees to within 10
Relevant Employees;
(ii) a list of the following terms and conditions of the
Relevant Employees: notice period; job title; base
salary; location; principal benefits (including but
not limited to leave and post termination
restrictions) and date of continuous employment;
(iii) copies of standard form contracts of employment for
each grade of employee, together with standard form
documentation such as an employee handbook and a note
of any significant differences to the standard forms;
(iv) any arrangement or practice under which any Relevant
Employee may receive, or any Former Employee has
during the Relevant Period received, any contractual
payment;
(v) any arrangement or practice for the payment of
redundancy payments;
96
(vi) subject to the Data Protection Act 1998, where any
Relevant Employee has been within the Relevant Period
continuously absent from work for a period in excess
of one month, the reason for the absence where
reasonably practicable to do so and the likely future
duration of such absence if known but excluding any
Relevant Employee on maternity leave;
(vii) the terms of the contract of employment of each
Senior Employee;
(viii) any agreement for the secondment to any Group Company
of any person;
(ix) any agreement for or relating to the provision of any
consultancy service or the service of personnel to
any Group Company;
(x) any written employment policy operated in relation to
Relevant Employees or any group of them, whether
contractual, customary or discretionary;
(xi) any loan or other financial assistance provided to
any Relevant Employee which is outstanding;
(xii) the constitution of any Representative Body;
(xiii) any collective agreement, dismissal procedures
agreement, union membership agreement, trade dispute
or proceedings before any court or tribunal under or
by virtue of the provisions of the Trade Union and
Labour Relations (Consolidation) Act 1992; and
(xiv) any material outsourcing arrangements with any Group
Company to third parties outside of the Group.
7.2.2 All Relevant Employees at the date of this Agreement are
employed by the Group.
7.2.3 No Relevant Employee will be entitled to any additional
compensation, benefits or acceleration of vesting of any
benefits or any change to their terms of employment as a
result of the transactions contemplated by this Agreement.
7.2.4 Subject to paragraph 7.2.7 below, there is not any, and during
the Relevant Period there has not been any, industrial action
in the form of a labour strike, work stoppage or lockout with
respect to the Seller or any Group Company.
7.2.5 Subject to paragraph 7.2.7 below, neither the Seller nor any
Group Company is involved in any dispute with any Relevant
Employees (or any Representative Body) or Former Employee
under or affected by the Employment Relations Act 1999, the
Employment Rights Act 1996, the Equal Pay Act 1970, the Sex
Discrimination Acts 1975 and 1986, the Race Relations Act
1976, the Disability Discrimination Act 1995, Employment
Equality (Sexual Orientation) Regulations 2003, Employment
Equality (Religion or Beliefs) Regulations 2003 or the Trade
Union and Labour Relations (Consolidation) Act 1992.
7.2.6 Subject to paragraph 7.2.7 below, to the Seller's knowledge,
there are not any proceedings in connection with the conduct
of the business of the Seller or any Group Company pending
before any agency responsible for the prevention of unlawful
employment practices.
7.2.7 The provisions of each of paragraphs 7.2.4 to 7.2.6 above,
shall not apply for any such actions, disputes or proceedings
which are not reasonably likely to have a material and adverse
effect on the business of the Group.
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7.2.8 There is no contract of employment between any Group Company
and any Relevant Employee which cannot be lawfully terminated
by six months or less notice (or a payment in lieu of notice
for a period not exceeding six months) without giving rise to
any claim for damages or compensation except for any statutory
claim (other than a breach of contract claim brought in an
Employment Tribunal).
7.2.9 Within the period six months preceding of this Agreement and
at the date of this Agreement there have been and/or are no
definitive proposals to:
(i) terminate the employment of any Relevant Employee; or
(ii) to vary or amend any term or condition of employment
of any Relevant Employee other than in the ordinary
course of business.
7.2.10 There are no amounts owing to any Relevant Employee or Former
Employee other than remuneration accrued due (but not payable)
since the most recent pay day or business expenses due to be
reimbursed.
7.2.11 The union recognition agreements, collective agreements and
European Works Council agreements listed in the Disclosure
Letter are all the agreements between the Group Companies and
Representative Bodies.
7.2.12 To the Seller's knowledge, no agreement has been made by any
Group Company with any employee representatives in which a
Group Company has given any promise or commitment to keep in
operation any part of the Group Company's business or keep
open any sites where Group Companies are located.
7.2.13 Within the period of six months preceding the date of this
Agreement:
(i) no notice of any redundancies has been given to the
relevant Secretary of State with respect to any Group
Company;
(ii) no information and consultation exercise has started
with a trade union or unions or appropriate
representatives by any Group Company under the
provisions of Part IV of the Trade Union and Labour
Relations (Consolidation) Act 1992 or Regulation 10
of the Transfer Regulations in connection with
Relevant Employees or Former Employees; and
(iii) no Group Company has been a party to any relevant
transfer under the Transfer Regulations.
7.2.14 There is no claim by or on behalf of any Relevant Employee or
Former Employee nor is there any claim by or on behalf of any
Relevant Employee or Former Employee pending or, to the
Seller's knowledge, threatened, or reasonably capable of
arising, in respect of an accident, injury or disease.
7.2.15 Each Group Company is in compliance in all material respects
with all laws relevant to the employment and/or engagement of
the Relevant Employees and any consultancy or agency staff
except for instances of non-compliance not reasonably likely
to have a material and adverse effect on the business of the
Group.
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7.3 Liabilities to and for Relevant Employees etc.
In relation to the employment of the Relevant Employees no material
Liability (which remains undischarged) has been or, to the Seller's
knowledge, will be incurred by any Group Company for breach of any
contract of employment or consultancy agreement.
7.4 Incentive Schemes
7.4.1 The Seller has provided to the Purchaser copies of the rules
and other material documentation relating to all share
incentive, share option, profit sharing, bonus or other
incentive arrangements for or affecting any Relevant Employee
or any former employees of any of the Group Companies,
together with full details of all awards and options granted
and which remain outstanding.
7.4.2 No Group Company is or may become liable for any National
Insurance contributions arising out of the grant, exercise or
release of such awards and options which are not fully
provided for in the Accounts.
7.4.3 In respect of all share incentive, share option, profit
sharing, bonus or other incentive arrangements for or
affecting any Relevant Employees or any former employees of
any of the Group Companies, the Seller and the Group Companies
have properly complied with all requirements in relation to
PAYE and National Insurance contributions including making
such deductions as are required by Law from all payments made
or deemed to be or treated as made by them or on their behalf
and by duly accounting to the Inland Revenue for all sums so
deducted and for all other amounts for which they are required
to account under the PAYE and National Insurance contributions
systems.
7.4.4 The Crown Castle International Corp. Savings-Related Share
Option Plan was established and remains approved under the
Income Tax (Earnings and Pensions) Act 2003 and has been
operated at all times in accordance with that legislation.
7.4.5 There is not in existence nor is it proposed to introduce any
share incentive, share option, profit sharing, bonus or other
incentive arrangements for or affecting any Relevant Employees
or any former employees of any of the Group Companies.
7.4.6 No Group Company is liable to pay any amount to any employee
trust.
7.5 Pensions
7.5.1 The Seller's Pension Scheme and the GPP are the only
arrangements (funded or unfunded) under which a Group Company
has or could have any Liability for the purpose of providing
benefits on retirement or death and no Group Company otherwise
has any obligation (whether written or established by custom
or established pursuant to an oral promise) to provide any
such benefit or to make any payment for the purpose of
providing any such benefit.
7.5.2 The Seller has supplied to the Purchaser up-to-date
documentation relating to the Seller's Pension Scheme and the
GPP. Such documentation is accurate in all material respects
and is sufficient to provide the Seller with full details of
the benefits to be provided under the Seller's Pension Scheme
and the GPP and, in the case of the Seller's Pension Scheme,
of its funding position as at the date of the most recent
actuarial valuation on the bases applicable to that valuation.
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7.5.3 The Seller's Pension Scheme is approved as an exempt approved
scheme (within the meaning of Chapter I of Part XIV of the
Taxes Act), and, to the Seller's knowledge, there is no reason
why this approval could be withdrawn.
7.5.4 There is in force in respect of each employment with each
Group Company to which the Seller's Pension Scheme relates an
appropriate contracting-out certificate. To the Seller's
knowledge, there is no reason why any contracting-out
certificate could be cancelled, surrendered or varied.
7.5.5 Each Group Company and the Seller's Pension Scheme comply and
have, to the Seller's knowledge, at all times complied in all
material respects with all Laws applicable to the Seller's
Pension Scheme except to the extent that such laws will be
applied retrospectively.
7.5.6 To the Seller's knowledge, each Group Company has at all time
complied in all material respects with its duty to facilitate
access to a stakeholder pension scheme (under section 3 of the
Welfare Reform and Pensions Act 1999).
7.5.7 No claim, dispute, complaint or investigation has arisen which
relates to the Seller's Pension Scheme or to the provision of
retirement or death benefits in respect of the current and
former employees of each Group Company, and, to the Seller's
knowledge, there is no reason why any material claim, dispute,
complaint or investigation could arise.
7.5.8 All amounts under the Schedule of Contributions in respect of
the Seller's Pension Scheme and under the relevant scheme
member's contract of employment and under the schedule of
payments in respect of the GPP which are required to be paid
prior to Closing have been paid.
7.5.9 The assets of the Seller's Pension Scheme are not subject to
any Lien or charge, and do not include any securities issued
by, properties leased to or occupied by, or loans made to the
Seller or Crown Castle UK or any connected person (for the
purposes of Section 40 of the Pensions Act 1995).
7.5.10 Prior to Closing, no action has been taken by the Seller or
the Seller's Pension Scheme which has resulted in or could
result in the Seller's Pension Scheme being amended, closed,
terminated or wound up in whole or in part.
7.5.11 All lump sum death in service benefits (with the exception of
a refund of contributions) in respect of Relevant Employees
are fully insured.
7.5.12 No payment or repayment of any of the assets of any
occupational pension scheme or cancellation of any outstanding
payment to an occupational pension scheme has been made to or
for the benefit of a Group Company.
7.5.13 An announcement substantially in the form of the draft
announcement disclosed to the Purchaser, pursuant to Section
4.10.26(ix) of the Disclosure Letter, has been sent to all
members of the Seller's Pension Scheme who were affected by
the amendments set out therein.
7.5.14 The early retirement provisions of the Seller's Pension
Scheme, including actuarial reduction factors, were, as at the
date on which former members of the BBC Pension Scheme joined
the Seller's Pension Scheme, identical to the early retirement
provisions which were applicable to such members under the BBC
Pension Scheme immediately prior to their ceasing membership
of that scheme.
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8 Legal Compliance
8.1 Licences and Consents
8.1.1 All material licences, consents, authorisations, Orders,
warrants, confirmations, permissions, certificates, approvals,
registrations and authorities ("Licences") necessary for the
carrying on of the businesses of each of the Group Companies
as now carried on, and as previously carried on material to
the business of the Group (i) have been obtained, (ii) are in
full force and effect, (iii) do not contain conditions
(including termination conditions) which would hinder the
ordinary and usual course of business in any material respect;
and (iv) have been and are being complied with in all material
respects.
8.1.2 To the Seller's knowledge, there is no investigation, enquiry
or proceeding outstanding or anticipated which is likely to
result in the suspension, cancellation, modification or
revocation of any Licence.
8.1.3 None of the Licences has been breached and to the Seller's
knowledge the Seller has not received notification that any
Licence will be suspended, modified, revoked or not renewed
(whether as a result of the entry into or completion of this
Agreement or otherwise).
8.2 Compliance with Laws
8.2.1 Each Group Company is in compliance with all Laws (including
anti-trust laws, fair trading, state aid, consumer protection
or similar legislation) and Orders applicable thereto, except
for instances of non-compliance that are not reasonably likely
to have a material and adverse effect on the business of the
Group.
8.2.2 Neither the Seller nor any Group Company has received any
written notice during the Relevant Period from a Governmental
Entity that alleges that a Group Company is not in compliance
in any material respect with any Laws or Orders applicable
thereto.
8.2.3 Neither the Seller nor, any Group Company has received any
written notice during the Relevant Period that any
investigation or review by any Governmental Entity with
respect to any Group Company is pending or contemplated.
8.2.4 Since 1 January 1999, the Seller has not received notice from
the SEC or any other governmental entity that any of its
accounting policies or practices relating to or having an
impact on the Group are the subject of any review, inquiry,
investigation or challenge other than comments from the SEC on
the Seller's filings which comments have either been satisfied
or withdrawn by the SEC.
8.2.5 This paragraph 8.2 does not relate to matters with respect to
Taxes, which are subject to paragraph 12 of this Schedule,
employee related matters, which are subject to paragraphs 7.2
and 7.3 of this Schedule, Environmental Matters, which are
subject to paragraph 9 of this Schedule and intellectual
property matters which are subject to paragraph 5 of this
Schedule.
8.3 No Questionable Payments
To the Seller's knowledge, none of the directors, officers, agents,
employees or other persons acting on behalf of any Group Company has
been party to the use of any of the assets of the Group Companies for
unlawful contributions, gifts, entertainment or other
101
unlawful expenses relating to political activity or to the making of
any direct or indirect unlawful payment to government officials or
employees from such assets; to the establishment or maintenance of any
unlawful or unrecorded fund of monies or other assets; to the making of
any fraudulent entries in the books or records of any Group Company; or
to the making of any unlawful or material undisclosed payment.
9 Environment
9.1 The Group Companies:
9.1.1 are in material compliance with and, to the Seller's
knowledge, have at all times prior to the date of this
Agreement complied with all Environmental Laws in all material
respects;
9.1.2 hold and comply in all material respects with and have
obtained and, to the Seller's knowledge, at all times prior to
the date of this Agreement complied in all material respects
with all Environmental Licences.
9.2 To the Seller's knowledge, there are no circumstances which are
reasonably likely to give rise to any suspension, revocation or
material modification of any material Environmental Licence, or which
may prejudice the renewal, extension or, where necessary, transfer of,
any such Environmental Licence.
9.3 There is no ongoing civil, criminal, regulatory or administrative
action, claim, investigation or other proceeding or suit against or
involving any Group Company relating to Environmental Law or
Environmental Licences or Industry Guidelines, nor have any such
proceedings, investigations or suits taken place or been settled and,
to the Seller's knowledge, there are no such proceedings,
investigations or suits pending or threatened nor to the Seller's
knowledge are there any circumstances which are reasonably likely to
give rise to a material investigation, proceeding or suit.
9.4 To the Seller's knowledge, no material work, measures or expenditure is
required in the next 12 months in connection with the business of any
Group Company in order to secure compliance with or maintain any
existing Environmental Licences or to comply with Environmental Laws.
9.5 Material details of all environmental, health and safety and Asbestos
assessments, audits, reviews or investigations, whether in draft (where
no final form report has been produced) or final form in the possession
of the Seller or any Group Company, concerning the current or previous
operations of any Group Company and/or the Environment at any Property
have been made available to the Purchaser.
9.6 To the Seller's knowledge, no Hazardous Substance is present on or has
been disposed of, stored, generated, released or buried at, on, from or
under any Property, so as to give rise to a material Liability on the
part of any Group Company, nor has any Group Company or any other
person or entity for which any Group Company can be liable to any
material extent, disposed of, stored, generated, released or buried any
Hazardous Substance or knowingly permitted such disposal, storage,
generation, release or burial at, on, from or under any other place, in
circumstances which are reasonably likely to give rise to a material
Liability of any Group Company under Environmental Law.
9.7 To the Seller's knowledge, no Radiation is present on or has been
generated or released, from any Relevant Equipment that will give rise
to a material Liability on the part of any
102
Group Company, nor has any Group Company or any other person or entity
for which any Group Company will be liable to any material extent
generated or released any Radiation or knowingly permitted such
generation or release from any other Relevant Equipment in
circumstances which will give rise to a Material Liability of any Group
Company under Environmental Law or Industry Guidelines.
10 Litigation
10.1 Current Proceedings
No Group Company (or any person for whose acts or defaults a Group
Company may be vicariously liable) is involved whether as claimant or
defendant or other party in any claim, legal action, proceeding, suit,
litigation, prosecution, investigation, enquiry, mediation or
arbitration (other than as claimant in the collection of debts arising
in the ordinary and usual course of its business and immaterial town
and country planning, building and other similar proceedings) (each a
"Claim").
10.2 Pending or Threatened Proceedings
To the Seller's knowledge, no Claim is pending or threatened by or
against any Group Company (or any person for whose acts or defaults a
Group Company may be vicariously liable).
10.3 Circumstances likely to lead to claims
To the Seller's knowledge, there are no investigations, disciplinary
proceedings or other circumstances likely to lead to any Claim
(excluding Claims relating to Environmental Law or Environmental
Licences) which, if adversely determined, is likely to have a material
adverse effect on the business of the Group.
10.4 No Court Orders etc
Neither the Seller nor any Group Company, nor any of the material
properties, assets or operations which it owns or in which it is
interested, is subject to any continuing injunction, judgment or order
of any Court, arbitrator, governmental agency or regulatory body, nor
in default under any order, licence, regulation or demand of any
governmental agency or regulatory body or with respect to any order,
suit, injunction or decree of any Court that is likely to have a
material and adverse effect on the Group.
11 Insurance
11.1 Particulars of Insurances
11.1.1 To the Seller's knowledge, all the material assets of each of
the Group Companies which are capable of being insured have at
all material times been and are insured consistent with normal
industry practice under an "all risks" policy on the basis of
"replacement cost valuation" subject to the customary terms,
conditions and exceptions of such policies.
11.1.2 To the Seller's knowledge, each Group Company has at all
material times complied in all material respects with the
statutory insurance requirements of the country of exposure.
103
11.1.3 To the Seller's knowledge, each Group Company has at all
material times been and is reasonably covered against
accident, physical loss or damage, third party liability
(including product liability), environmental liability (to the
extent that insurance is reasonably available), and other
risks normally covered by insurance by such companies.
11.2 Details of Policies
In respect of the insurances referred to in paragraph 11.1:
11.2.1 all premiums and any related insurance premium taxes have been
duly paid to date;
11.2.2 all the policies are in full force and effect;
11.2.3 to the Seller's knowledge, no circumstances have arisen which
would render any of the policies void or unenforceable for
illegality or otherwise;
11.2.4 to the Seller's knowledge, there has been no breach of the
terms, conditions and warranties of any of the policies that
would entitle insurers to decline to pay all or any part of
any claim made under the policies or to terminate any policy;
and
11.2.5 to the Seller's knowledge, neither the entering into, nor
compliance with nor completion of this Agreement will, or is
likely to, give an insurer the right to terminate, modify in
any material respect or lapse any insurance policy.
11.3 Insurance Claims
11.3.1 Details of all insurance claims made during the past three
years are contained in the Disclosure Letter.
11.3.2 No material insurance claim is outstanding and, to the
Seller's knowledge, no circumstances exist which are likely to
give rise to any material insurance claim.
11.3.3 To the Seller's knowledge, there has been no failure in the
past three years to notify the Group's insurers of any
circumstances which would have given rise to a material
insurance claim or any failure to notify which has resulted in
the Group's insurer not accepting any material insurance
claim.
11.4 Claims Refused
Since 9 May 1996 no claim has been refused or settled below the amount
claimed.
12 Tax
Definitions:
For the purposes of this paragraph 12:
"Clawback Provision" means Finance Act 2002 Section 111; Finance Act
2002 Section 113; Finance Act 2002 Schedule 35 paragraph 3; Schedule 35
paragraph 4; Finance Act 2003 Schedule 7 paragraph 3; Finance Act 2003
Schedule 7 paragraph 4(7); Finance Act 2003 Schedule 7 paragraph 9; and
Finance Act 2003 Schedule 7 paragraph 11; and
"Secondary Recovery Provision" means Finance Act 2002 Schedule 34
paragraph 8; Finance Act 2002 Schedule 35 paragraph 9; Finance Act 2003
Schedule 7 paragraph 5; and Finance Act 2003 Schedule 7 paragraph 12.
104
12.1 Each Group Company has timely filed (within any applicable extension
periods) with the appropriate Tax Authorities all Tax Returns required
to be filed (including any Tax Return which any Tax Authority may
require a Group Company to file) on or prior to the date of this
Agreement, such Tax Returns are true, accurate and complete in all
material respects, are not likely to become the subject of any material
dispute with any Tax Authority and all Taxes shown as due from such
Group Company on any such Tax Returns have been paid and all
Liabilities for Taxes of any Group Company have been discharged to the
extent that payment of such Taxes fell due on or prior to the date of
Closing. Copies of all corporation tax returns for each Group Company
for the last three years have been delivered or made available to the
Purchaser.
12.2 No Tax Authority has raised in writing any material disputes or claims
concerning any Liability for Taxes relating solely to the assets or
business of any Group Company and, there is no audit or investigation
pending or, to the Seller's knowledge, threatened, in respect of any
Liability for Taxes of any Group Company.
12.3 If Closing shall occur on or prior to 31 August 2004 and Closing were
the end of an accounting period (within the meaning of section 12 of
the Taxes Act) for each Group Company, as of 31 December 2003 the Tax
Written Down Value of the assets of any Group Company which constitute
Plant and Machinery which are not Long Life Assets was not less than
(pound)234,000,000 (two hundred and thirty four million pounds
Sterling).
12.4 If Closing shall occur on or prior to 30 September 2004 and Closing
were the end of an accounting period (within the meaning of section 12
of the Taxes Act) for each Group Company, as of 31 December 2003 the
Tax Written Down Value of the assets of any Group Company which
constitute Plant and Machinery which are not Long Life Assets was not
less than (pound)231,500,000 (two hundred and thirty one million, five
hundred thousand pounds Sterling).
12.5 Set out in Section 12.5 of the Disclosure Letter is the Seller's
reasonable estimation at the date of this Agreement of the Tax Written
Down Value as of a hypothetical tax year-end of 31 August 2004, setting
out the calculations related thereto. The Seller makes no warranty with
respect to the accuracy of such estimate or such calculations, which
are being furnished solely for informational purposes, as actual
results may vary substantially.
12.6 No Group Company has made a claim for relief from stamp duty or stamp
duty land tax which may be withdrawn pursuant to a Clawback Provision,
including without limitation, the application of any Clawback Provision
as a result of the execution of this Agreement, and no Group Company is
liable for stamp duty or stamp duty land tax of another company
pursuant to a Secondary Recovery Provision.
12.7 Each payment made pursuant to the Corporation Tax (Instalment Payments)
Regulations 1985, as well as the provision made in respect of such
payments in the Working Capital Statement, is a reasonable estimate of
the aggregate tax liability for the Pre-Closing periods of each Group
Company.
12.8 There are no outstanding written agreements or waivers extending the
statutory period of limitations or extending any concession that is not
a concession of general application to United Kingdom companies
applicable to any Group Company for any Pre-Closing Tax Period.
12.9 All Liabilities of the Group Companies for Taxes measured by reference
to income, profits or chargeable gains earned, accrued, or deemed
earned or accrued, or received on or
105
before the Accounts Date, or arising in respect of an Event occurring
on or before that date, are fully provided for or reserved against in
the Accounts.
12.10 Each Group Company has complied with its obligations to pay Taxes in
respect of, and report the payment of, employment income or employment
benefits, including any employee securities or options, relating to all
Relevant Employees and Former Employees and officers of such company
and, where required, has complied with its obligation to withhold such
Taxes from such person or has otherwise ensured that such person has
made good to the relevant Group Company the amount of such Taxes within
the statutory time limit.
12.11 The Disclosure Letter fully discloses all claims, elections,
disclaimers, withdrawals of claims or notifications that have not been
made as of the date of this Agreement but that are assumed to have been
made for purposes of the provisions or reserves for Taxes included in
the Accounts.
12.12 No Group Company has entered into any transaction or incurred any
liability the consideration for which was or will be otherwise than on
an arm's-length basis, nor has it agreed to do so, where the relevant
Tax Authority could reasonably be expected to adjust that company's
income, profits or capital gains for Tax purposes. Each Group Company
has kept full and accurate documentation recording the methodology used
to determine such consideration.
12.13 No Group Company has acquired any asset that will be deemed under
applicable Tax legislation to be disposed of and reacquired by a Group
Company as a result of this Agreement and no Liability for Taxes of a
Group Company will otherwise arise as a result of the entry into and
performance of this Agreement.
12.14 No transaction or event has occurred that would cause a Group Company
to be liable for any Taxes for which another person (other than a Group
Company) is primarily liable, including as a result of such other
person being or having been a member of the same group of companies.
12.15 All documents in the possession of any Group Company or in the
enforcement of which any Group Company may be interested (or, to the
extent that any such documents have been executed and retained outside
the United Kingdom, they would not attract United Kingdom stamp duty if
brought into the United Kingdom) and that attract stamp duty or
transfer duty in the United Kingdom or elsewhere have been duly stamped
in respect of UK stamp duty and any other transfer or documentary tax
of a similar nature and all such duty and tax wheresoever imposed or
payable, and any interest and penalties have been paid.
12.16 Each Group Company is and has at all times been resident for Tax
purposes in the jurisdiction in which it was incorporated, and each
such company is not and has never been treated as a resident or liable
to Tax in any other jurisdiction for Tax purposes, including pursuant
to any double taxation agreement. Each Group Company has kept proper
and adequate records to enable it to calculate and support such
calculations of its liability for Taxes and to comply with Tax law,
where such Liability or such requirement relates to the last six
accounting periods.
12.17 Each Group Company has fully complied with any relevant value added tax
Law.
12.18 Each Group Company has complied with all rules and regulations relating
to the withholding of Taxes.
106
12.19 No Group Company has, in the six years preceding the date of this
Agreement, been the subject of a PAYE audit in which non-compliance
with share plan PAYE Liability and/or National Insurance contributions
Liability was identified as an issue by the Inland Revenue.
13 Important Business Issues Since the Accounts Date
Since the Accounts Date as regards each Group Company:
13.1 there has been no material adverse change in the financial or trading
position and no event, fact or matter has occurred which will or is
likely to give rise to any such change;
13.2 there has been no disposal of, or agreement to dispose of, any material
fixed assets;
13.3 the business has been carried on in the ordinary and usual course, in
all material respects;
13.4 except as set out in the Budget, no material capital commitments have
been entered into or proposed by any Group Company. For these purposes
a material capital commitment is one involving capital expenditure of
over, or consideration equal to, (pound)3,000,000 (three million pounds
Sterling) exclusive of VAT;
13.5 the business has not been materially and adversely affected by the loss
of any Major Customer or Major Supplier and to the Seller's knowledge,
no notification has been received from any Major Customer or Major
Supplier that it intends to terminate such contract;
13.6 no Group Company has declared, made or paid any dividend or other
distribution to its members;
13.7 no Group Company has issued or allotted or agreed to issue or allot any
share capital or any other security giving rise to a right over its
capital;
13.8 no Group Company has redeemed or purchased or agreed to redeem or
purchase any of its share capital; and
13.9 no Group Company has changed the application of its accounting policies
which is material to the Accounts and Management Accounts taken as a
whole.
14 Disclosure of Information
To the Seller's knowledge, each document specified in the Disclosure
Letter as being attached thereto as an agreed disclosure is a true and
complete copy of such document.
15 Authority and Capacity
15.1 Each of the Seller and each of the Group Companies is validly existing
and is a company duly incorporated under the law of its jurisdiction of
incorporation.
15.2 The Seller has the legal right and full power and authority to enter
into and perform this Agreement and any other documents to be executed
by it pursuant to or in connection with this Agreement.
15.3 This Agreement will, when executed, constitute valid and binding
obligations on the Seller, in accordance with its terms.
107
15.4 The Seller has taken all corporate action required by it to authorise
it to enter into and to perform this Agreement, and any other documents
to be executed by it pursuant to or in connection with this Agreement.
16 Insolvency etc.
16.1 No Group Company is insolvent or unable, whether as defined by Section
123 of the Insolvency Act 1986 or otherwise, to pay its debts,
including its future and prospective debts.
16.2 No Group Company has proposed or intends to propose any arrangement of
any type with its creditors or any group of creditors whether by court
process or otherwise under which such creditors shall receive or be
paid less than the amounts contractually or otherwise due to them.
16.3 No Group Company nor any creditor of any Group Company has presented
any petition, application or other proceedings for any administration
order, creditors' voluntary arrangement or similar relief by which the
affairs, business or assets of any Group Company concerned are managed
by a person appointed for the purpose by a court, governmental agency
or similar body, or by any creditor or by such company itself nor has
any such Order or relief been granted or appointment made.
16.4 No Order has been made, petition or application presented, resolution
passed or meeting convened for the purpose of winding-up any Group
Company or whereby the assets of any Group Company are to be
distributed to creditors or shareholders or other contributories of any
Group Company.
16.5 No receiver (including an administrative receiver), liquidator,
trustee, administrator, supervisor, nominee, custodian or similar
official has been appointed in respect of the whole or any part of the
business or assets of any Group Company nor has any step been taken for
or with a view to the appointment of such a person nor has any event
taken place or is likely to take place as a consequence of which such
an appointment might be made.
16.6 No creditor of any Group Company has taken, or is entitled to take any
steps to enforce, or has enforced any security over any assets of any
Group Company or is, to the Seller's knowledge, likely to do so in the
immediate future.
16.7 No Group Company is in default of any of its obligations in relation to
any of the financial facilities referred to in paragraph 3.1 of this
Schedule.
17 Broadcasting
17.1 Licences
17.1.1 In relation to licences issued under the Broadcasting Acts and
Wireless Telegraphy Acts to the Group, or used (as agent or
otherwise) by the Group, the Group:
(i) has disclosed these licences in Schedule 17.1.1 of
the Disclosure Letter;
(ii) has complied in all material respects with all
material terms of these licences;
(iii) has promptly met all material deadlines under these
licences (including, but not limited to, all payment
obligations, disclosure obligations and notification
obligations);
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(iv) to the Seller's knowledge, has not received
notification that any such licence will be revoked or
not renewed; and
(v) is not presently obliged and, to the Seller's
knowledge, will not be obliged, to commit material or
significant capital expenditure now or in the next 12
months in order to comply with the terms of the
licences as of the date of this Agreement.
17.2 Material Transmission customers contracts
In relation to each of the BBC Analogue Transmission Agreement, the BBC
Mux 1 DDT Transmission Agreement and the BBC Mux B DTT Transmission
Agreement, the Company has not commenced discussions regarding renewal
of the agreement nor has it been notified that the BBC does not propose
to renew the agreement.
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Schedule 6
Warranties given by the Purchaser
1 Authority and Capacity
1.1 The Purchaser is validly existing and is a company duly incorporated
under the Law of its jurisdiction of incorporation.
1.2 The Purchaser has the legal right and full power and authority to enter
into and perform this Agreement and any other documents to be executed
by it pursuant to or in connection with this Agreement.
1.3 This Agreement will, when executed, constitute valid and binding
obligations on the Purchaser, in accordance with its terms.
1.4 The Purchaser has taken all corporate action required by it to
authorise it to enter into and to perform this Agreement, and any other
documents to be executed by it pursuant to or in connection with this
Agreement.
2 Insolvency etc.
2.1 The Purchaser is not insolvent or unable, whether as defined by Section
123 of the Insolvency Act 1986 or otherwise, to pay its debts,
including its future and prospective debts.
2.2 The Purchaser has not proposed and does not intend to propose any
arrangement of any type with its creditors or any group of creditors
whether by court process or otherwise under which such creditors shall
receive or be paid less than the amounts contractually or otherwise due
to them.
2.3 Neither the Purchaser nor any creditor of the Purchaser has presented
any petition, application or other proceedings for any administration
Order, creditors' voluntary arrangement or similar relief by which the
affairs, business or assets of the Purchaser are managed by a person
appointed for the purpose by a court, governmental agency or similar
body, or by any creditor or by the Purchaser itself nor has any such
order or relief been granted or appointment made.
2.4 No Order has been made, petition or application presented, resolution
passed or meeting convened for the purpose of winding-up the Purchaser
or whereby the assets of the Purchaser are to be distributed to
creditors or shareholders or other contributories of the Purchaser.
2.5 No receiver (including an administrative receiver), liquidator,
trustee, administrator, supervisor, nominee, custodian or similar
official has been appointed in respect of the whole or any part of the
business or assets of the Purchaser nor has any step been taken for or
with a view to the appointment of such a person nor has any event taken
place or is likely to take place as a consequence of which such an
appointment might be made.
3 No Violation; Consents and Approvals
3.1 The execution and delivery by the Purchaser of this Agreement does not,
and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not:
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3.1.1 conflict with or result in any violation of any provision of
the organisational documents of Purchaser;
3.1.2 conflict with, result in a violation or breach of, or
constitute a default, or give rise to any right of
termination, revocation, cancellation or acceleration, under
any note, bond, mortgage, indenture, deed of trust, licence,
lease, contract, commitment or agreement to which the
Purchaser is a party, except for any such conflict, violation,
breach, default or right which is not reasonably likely to
have a material adverse effect on the ability of the Purchaser
to perform its obligations under this Agreement; or
3.1.3 conflict with or result in a violation of any Law or Order
applicable to the Purchaser or to the property or assets of
the Purchaser, except for any such conflict or violation which
is not reasonably likely to have a material adverse effect on
the ability of the Purchaser to perform its obligations under
this Agreement.
3.2 No consent, approval, licence, permit, Order or authorisation of,
registration, declaration or filing with, or notice to, any
Governmental Entity or any other person is required to be obtained or
made by or with respect to Purchaser in connection with the execution
and delivery of this Agreement, the performance of its obligations
hereunder or the consummation of the transactions contemplated hereby,
other than such consents, approvals, licences, permits, Orders,
authorisations, registrations, declarations or filings the failure of
which to be obtained or made are not reasonably likely to have a
material adverse effect on the ability of the Purchaser to perform its
obligations under this Agreement.
4 No Additional Warranties
The Purchaser acknowledges that it and its Representatives have had the
opportunity to conduct, and have conducted, due diligence
investigations in relation to the Group before the date of this
Agreement through access to a data room, which investigations, for the
avoidance of doubt, shall not affect the provisions of Clause 8.2. The
Purchaser further acknowledges that none of the Seller, any Subsidiary,
any of the Seller's Representatives nor any other person has made any
representation or warranty, expressed or implied, as to the accuracy or
completeness of any information regarding the Group Companies furnished
or made available to the Purchaser and its Representatives, except as
expressly set out in this Agreement, and except as expressly set out in
this Agreement, none of the Seller, any Subsidiary, any of the Seller's
Representatives nor any other person shall have or be subject to any
Liability to the Purchaser or any other person resulting from the
distribution to the Purchaser or any of its Representatives, or the
Purchaser's or any such Representative's use of, any such information,
including any Books and Records or any other information, documents or
management presentations or in any other form in expectation of the
transactions contemplated by this Agreement.
5 Tax Warranty
The Purchaser does not intend to permit the corporation tax Liabilities
of any Group Company, to the extent provided for in the Accounts and to
the extent payable by any company to remain undischarged. The Purchaser
is not entering into this Agreement on the assumption referred to in
Section 767AA(2) of the Taxes Act.
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6 Financial Warranty
The Purchaser warrants that it has, or will have, as at Closing
sufficient readily available funds for the payment in full of the
Closing Amount.
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Schedule 7
Warranties given by the Guarantor
1 Authority and Capacity
1.1 The Guarantor is validly existing and is a company duly incorporated
under the Law of its jurisdiction of incorporation.
1.2 The Guarantor has the legal right and full power and authority to enter
into and perform this Agreement and any other documents to be executed
by it pursuant to or in connection with this Agreement.
1.3 This Agreement will, when executed, constitute valid and binding
obligations on the Guarantor, in accordance with its terms.
1.4 The Guarantor has taken all corporate action required by it to
authorise it to enter into and to perform this Agreement, and any other
documents to be executed by it pursuant to or in connection with this
Agreement.
2 Insolvency etc.
2.1 The Guarantor is not insolvent or unable, whether as defined by Section
123 of the Insolvency Act 1986 or otherwise, to pay its debts,
including its future and prospective debts.
2.2 The Guarantor has not proposed and does not intend to propose any
arrangement of any type with its creditors or any group of creditors
whether by court process or otherwise under which such creditors shall
receive or be paid less than the amounts contractually or otherwise due
to them.
2.3 Neither the Guarantor nor any creditor of the Guarantor has presented
any petition, application or other proceedings for any administration
Order, creditors' voluntary arrangement or similar relief by which the
affairs, business or assets of the Guarantor are managed by a person
appointed for the purpose by a court, governmental agency or similar
body, or by any creditor or by the Guarantor itself nor has any such
order or relief been granted or appointment made.
2.4 No Order has been made, petition or application presented, resolution
passed or meeting convened for the purpose of winding-up the Guarantor
or whereby the assets of the Guarantor are to be distributed to
creditors or shareholders or other contributories of the Guarantor.
2.5 No receiver (including an administrative receiver), liquidator,
trustee, administrator, supervisor, nominee, custodian or similar
official has been appointed in respect of the whole or any part of the
business or assets of the Guarantor nor has any step been taken for or
with a view to the appointment of such a person nor has any event taken
place or is likely to take place as a consequence of which such an
appointment might be made.
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Schedule 8
Seller's Knowledge
Name Title
John P. Kelly President/CEO, Crown Castle International Corp.
W. Benjamin Moreland SVP/CFO/Treasurer, Crown Castle International Corp.
E. Blake Hawk General Counsel, Crown Castle International Corp.
Jay Brown Vice President, Finance, Crown Castle International Corp.
Peter G. Abery President and Managing Director, Crown Castle UK Limited
Angela M. Dennehy Director, Legal Services and Company Secretary, Crown Castle UK Limited
Graham Greener Director, Site Operations, Crown Castle UK Limited
Ben Quinn Director, Asset Management, Crown Castle UK Limited
Andrew Sloey Director, Finance, Crown Castle UK Limited
John J. Ward Director, Network Operations and Engineering, Crown Castle UK Limited
Dr. Shirin Tahzib Vice President, Information Systems and Services, Crown Castle UK Limited
Rita Dora Director, Human Capital, Crown Castle UK Limited
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Schedule 9
Transitional Services Agreement
The following is a summary of the terms for the Transitional Services
Agreement-Mobile Media.
The agreement shall provide that the Group Company shall make available to the
Seller's Group the individuals listed below for the services described below.
Individuals: Nick Davies
Russel Inman
Keith Hayler
John Village
Phil Osburne
Paul Segar (currently a consultant)
Chas Murray (currently a consultant)
Term: Twenty four (24) months following Closing.
Compensation: The internal rate card quoted by the Group Company plus
substantiated direct third party expenses consistent with practices at the
Closing Date. The compensation and reimbursement shall be billed monthly and
such amount is due within thirty (30) days of the invoice date.
Services: Consultation and technical services involving and relating to RF
transmission in the United States including radio planning for mobile media and
involving 1670-1675 Mhz spectrum and DVB-H deployment and transmission.
Scheduling: Seller's Group shall provide the Group Company with a schedule of
its requirements for the services on a monthly basis at least two months in
advance and the Group Company shall use best efforts to provide full and timely
access to indicated individuals in accordance with such schedule.
IP: Any intellectual property developed or discovered by an individual while
providing services to the Seller's Group while the individual is an employee or
consultant to the Group Company shall be the intellectual property for both the
Seller's Group and the Group Company.
Confidentiality: The parties shall be subject to commercially reasonable
confidentiality arrangements as to confidential and proprietary information.
Miscellaneous: The Group Company is not to be obliged to retain any of the named
individuals as an employee or consultant and any non-solicitation provision is
not to be applicable to the named individuals. The parties shall retain
reasonable commercial insurance as to the services to be provided by the named
individuals.
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