Membership Interests Purchase Agreement

MEMBERSHIP INTERESTS PURCHASE AGREEMENT


BY AND AMONG


SPECTRASITE COMMUNICATIONS, INC.


AND


JEFFREY K. HAWKINS, EDWIN L. KEUCK,


AND


H&K INVESTMENTS, LLC


DATED


DECEMBER 31, 1997 2
MEMBERSHIP INTERESTS PURCHASE AGREEMENT


THIS MEMBERSHIP INTERESTS PURCHASE AGREEMENT (together with the Schedules and Exhibits hereto, the "Agreement"), dated December 31, 1997 and effective January 1, 1998 (the "Effective Date"), is entered into by and among SpectraSite Communications, Inc., a Delaware corporation ("SpectraSite"), and Jeffrey K. Hawkins, an individual residing in Jackson County, Missouri ("Hawkins"), and Edwin L. Keuck, an individual residing in Jackson County, Missouri ("Keuck"), and H&K Investments, LLC, a Missouri limited liability company ("H&K").


WHEREAS, Hawkins and Keuck are the owners of all of the membership interests in H&K (the "Membership Interests"), and Hawkins and Keuck are the sole members of H&K;


WHEREAS, H&K is engaged in the business of owning and leasing space on telecommunications towers;


WHEREAS, SpectraSite is engaged in all aspects of the telecommunications tower business; and


WHEREAS, on the "Closing Date," as defined herein, Hawkins and Keuck wish to sell to SpectraSite, and SpectraSite wishes to purchase from Hawkins and Keuck, all of the Membership Interests for the consideration and pursuant to the terms and conditions set forth herein.


NOW, THEREFORE, in consideration of the mutual agreements, covenants, representations, and warranties set forth herein, the parties agree as follows:


ARTICLE I
DEFINITIONS


In addition to the other terms defined herein, the following definitions will apply throughout this Agreement:


1.1 ACM's. The term "ACM's" has the meaning set forth in Section 3.19(b).


1.2 Affiliate. The term "Affiliate" has the meaning set forth in Rule 405 of the Securities Act of 1933, as amended.


1.3 Claims. The term "Claims" has the meaning set forth in Section 3.14.


1.4 Closing. The term "Closing" has the meaning set forth in Section 9.1.


1.5 Closing Date. The term "Closing Date" has the meaning set forth in Section 9.1. 3
1.6 Deposit. The term "Deposit" has the meaning set forth in Section 2.3.


1.7 Easements. The term "Easements" has the meaning set forth in Section 3.9D.


1.8 Effective Date. The term "Effective Date" has the meaning set forth in the Recitals hereof.


1.9 Escrow Agent. The term "Escrow Agent" has the meaning set forth in Section 2.3.


1.10 Escrow Agreement. The term "Escrow Agreement" has the meaning set forth in Section 2.3.


1.11 Environmental Laws. The term "Environmental Laws" has the meaning set forth in Section 5.19.


1.12 Financial Statements. The term "Financial Statements" has the meaning set forth in Section 3.6.


1.13 H&K. The term "H&K" has the meaning set forth in the Recitals hereof.


1.14 H&K Agreements. The term "H&K Agreements" means all agreements, documents and other instruments executed and delivered by H&K in connection with the consummation of the transactions contemplated by this Agreement.


1.15 H&K Indemnified Party. The term "H&K Indemnified Party" has the meaning set forth in Section 10.2.


1.16 Hawkins. The term "Hawkins" has the meaning set forth in the Recitals hereof.


1.17 Hawkins Agreements. The term "Hawkins Agreements" means all agreements, documents and other instruments executed and delivered by Hawkins in connection with the consummation of the transaction contemplated by this Agreement.


1.18 Hazardous Materials. The term "Hazardous Materials" has the meaning set forth in Section 3.19(b).


1.19 Improvements. The term "Improvements" has the meaning set forth in Section 3.9B.


1.20 Indemnified Party. The term "Indemnified Party" has the meaning set forth in Section 10.3.


1.21 Indemnity Obligor. The term "Indemnity Obligor" has the meaning set forth in Section 10.3.


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1.22 Keuck. The term "Keuck" has the meaning set forth in the Recitals hereof.


1.23 Keuck Agreements. The term "Keuck Agreements" means all agreements, documents and other instruments executed and delivered by Hawkins in connection with the consummation of the transaction contemplated by this Agreement.


1.24 Leased Real Property. The term "Leased Real Property" has the meaning set forth in Section 3.9A.


1.25 Loan Payments. The term "Loan Payments" has the meaning set forth in Section 6.1.


1.26 Loss. The term "Loss" has the meaning set forth in Section 10.1(a).


1.27 Membership Interests. The term "Membership Interests" has the meaning set forth in the Recitals hereof.


1.28 PCB's. The term "PCB's" has the meaning set forth in Section 3.19(e).


1.29 Permits. The term "Permits" has the meaning set forth in Section 3.16.


1.30 Person. The term "person" means any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.


1.31 Promissory Notes. The term "Promissory Notes" has the meaning set forth in Section 2.3.


1.32 Purchase Price. The term "Purchase Price" has the meaning set forth in Section 2.2.


1.33 Purchase Price Escrow. The term "Purchase Price Escrow" has the meaning set forth in Section 2.3.


1.34 Real Property Leases. The term "Real Property Leases" has the meaning set forth in Section 3.9A


1.35 Receivables. The term "Receivables" has the meaning set forth in Section 3.12.


1.36 Representatives. The term "Representatives" has the meaning set forth in Section 6.3.


1.37 Required Consents. The term "Required Consents" has the meaning set forth in Section 3.5.


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1.38 Revenue Escrow. The term "Revenue Escrow" shall have the meaning set forth in Section 6.1 hereof.


1.39 Rules. The term "Rules" has the meaning set forth in Section 3.15.


1.40 Specifications. The term "Specifications" has the meaning set forth in Section 3.9C.


1.41 SpectraSite. The term "SpectraSite" has the meaning set forth in the Recitals hereof.


1.42 SpectraSite Agreements. The term "SpectraSite Agreements" means all agreements, documents and other instruments executed and delivered by SpectraSite in connection with the consummation of the transaction contemplated by this Agreement.


1.43 SpectraSite Indemnified Party. The term "SpectraSite Indemnified Party" has the meaning set forth in Section 10.1(a).


1.44 Tax Returns. The term "Tax Returns" has the meaning set forth in Section 3.18.


1.45 Taxes. The term "Taxes" has the meaning set forth in Section 3.18.


1.46 Tower Attachment Leases. The term "Tower Attachment Leases" has the meaning set forth in Section 3.10.


1.47 Tower Sites. The term "Tower Sites" has the meaning set forth in Section 3.9A.


1.48 Towers. The term "Towers" has the meaning set forth in Section 3.9B.


1.49 Warranties. The term "Warranties" has the meaning set forth in Section 3.9C.


ARTICLE II
PURCHASE OF SHARES AND PURCHASE PRICE


2.1 Purchase of Membership Interests. At the Closing, Hawkins and Keuck shall sell to SpectraSite, and SpectraSite shall purchase from Hawkins and Keuck, all of the Membership Interests.


2.2 Purchase Price. The aggregate purchase price of the Membership Interests is $1,400,000.00 (the "Purchase Price")
2.3 Payment of Purchase Price. Simultaneously with the execution and delivery of this Agreement, SpectraSite shall wire transfer immediately available funds to H&K in the amount of $100,000.00 (the "Deposit"). H&K shall hold the Deposit in trust and escrow as security for the performance by SpectraSite of its obligations hereunder. Simultaneously with the execution and delivery of this Agreement, the parties hereto and Bannister Bank and Trust


4 6 Company (the "Escrow Agent") shall execute and deliver an Escrow Agreement in the form attached hereto as Exhibit A (the "Escrow Agreement"). Simultaneously with the execution and delivery of this Agreement, SpectraSite shall wire transfer immediately available funds in the amount of $1,200,000.00 (the "Purchase Price Escrow") to the Escrow Agent and the Escrow Agent shall hold the Purchase Price Escrow pursuant to the terms and conditions hereof and the terms and conditions of the Escrow Agreement. At the Closing, the Purchase Price shall be satisfied and paid by SpectraSite as follows: (a) the Escrow Agent shall wire transfer immediately available funds in the amount of one-half (1/2) of the Purchase Price Escrow, less the amount of the Loan Payments, to each of Hawkins and Keuck and (b) SpectraSite shall make and deliver to each of Hawkins and Keuck a promissory note payable to their respective order in the aggregate principal amount of $50,000.00, which shall bear interest at the rate of nine percent (9.0%) per annum and shall be in the form attached hereto as Exhibit B (collectively, the "Promissory Notes"). The Promissory Notes shall be subject to offset by SpectraSite for indemnification claims pursuant to Section 10.6 hereof. The amount of the Loan Payments shall be dispersed in accordance with Sections 9.2(i) and 9.3(d) hereof.


ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HAWKINS, KEUCK, AND H&K


Hawkins, Keuck, and H&K jointly and severally represent and warrant to SpectraSite as follows:


3.1 Organization and Good Standing. H&K is a limited liability company duly organized and validly existing under the laws of the State of Missouri. H&K has all requisite power and authority to own, operate, and lease its assets and to conduct the operations of its business as presently conducted. H&K is not required to qualify to conduct business as a foreign corporation in any state. H&K has previously delivered to SpectraSite true and complete copies of its Articles of Organization and Operating Agreement, including all amendments thereto. H&K does not have any subsidiaries and does not own any equity interest or any security convertible, exercisable, or exchangeable into any equity interest of any Person.


3.2 Authority. Hawkins, Keuck, and H&K have the unrestricted legal right and power to execute and deliver this Agreement, the Hawkins Agreements, the Keuck Agreements, and the H&K Agreements, as the case may be, and to consummate the transactions contemplated hereby and thereby. The execution, delivery, and performance of this Agreement and the H&K Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary manager and member action. This Agreement, the Hawkins Agreements, the Keuck Agreements, and the H&K Agreements have been, or with respect to the Hawkins Agreements, the Keuck Agreements, and the H&K Agreements to be executed at the Closing, will be duly executed and delivered by the Hawkins, Keuck, and H&K, as the case may be, and each constitutes, or will constitute when executed and delivered, a valid and binding obligation of Hawkins, Keuck, and H&K, enforceable against Hawkins, Keuck, and H&K, as the case may be, in accordance with its terms.


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3.3 Membership Interests. Hawkins and Keuck are the sole beneficial and record owners of the Membership Interests, with each owning fifty percent (50%) of such Membership Interests, free and clear of all security interests, mortgages, liens, claims, and encumbrances of every kind. There are no outstanding subscriptions, options, warrants, calls, puts, or other agreements or instruments which may entitle or obligate Hawkins, Keuck, H&K, or any other Person to acquire the Membership Interests or any other membership interest in H&K.


3.4 No Conflict or Breach. The execution, delivery and performance of this Agreement, the Hawkins Agreements, the Keuck Agreements, and the H&K Agreements does not and will not:


(a) conflict with the Articles of Organization or Operating Agreement of H&K;


(b) violate any law, statute, judgment, order, decree, or regulation of any legislative body, court, administrative agency, governmental authority, or arbitrator applicable to or relating to H&K, the Towers, or the Improvements;


(c) conflict with, constitute a default under, result in a breach or acceleration of or, except as set forth on Schedule 3.5, require notice to or the consent of any third party under any of the Real Property Leases or the Tower Attachment Leases or any other contract, agreement, commitment, mortgage, note, license or other instrument or obligation to which H&K is party or by which it is bound or by which the Towers or the Improvements are affected; or


(d) result in the creation or imposition of any lien, charge, or encumbrance of any nature whatsoever on any of the Towers or the Improvements.


3.5 Consents and Approvals. Schedule 3.5 describes: (a) each consent, approval, authorization, registration, or filing with any federal, state or local judicial or governmental authority or administrative agency and (b) each consent, approval, authorization of or notice to any other third party, which is required in connection with the valid execution and delivery of this Agreement or the consummation of the transactions contemplated herein or therein (the items described in clauses (a) and (b), collectively, the "Required Consents").


3.6 Financial Statements. H&K has previously delivered to SpectraSite a true and complete copy of its unaudited Balance Sheet as of October 31, 1997 (the "Financial Statements"). The Financial Statements: (a) are true, complete and correct; (b) are in accordance with the books and records of H&K; (c) present fairly the assets, liabilities and financial condition of H&K as of the respective dates thereof, and the results of operations for the periods then ending; and (d) have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved.


H&K has no liability or obligation, whether accrued, absolute, or contingent that is not reflected or reserved against in the Financial Statements, except for those that are not required by generally accepted accounting principles to be included therein. Any items of income or expense which are unusual or of a nonrecurring nature are separately disclosed in the Financial


6 8 Statements. H&K has not received from any of its certified public accountants letters to the management of H&K with respect to the Financial Statements.


3.7 Books and Records. The books and records of H&K relating to its business and assets are true, accurate, and complete in all material respects.


3.8 Inventory and Personal Property. H&K does not own any inventory, machinery, equipment, tools, furniture, office equipment, supplies, materials, vehicles, or any other personal property other than such personal property as may be included in the Improvements.


3.9 Real Property, Towers, and Improvements.


A. H&K does not own any real property. Schedule 3.9(A) contains: (i) a complete list of all leases for the real property leased by H&K (the "Real Property Leases"), true and complete copies of which have been previously delivered by H&K to SpectraSite and (ii) with respect to each of the Real Property Leases, a true and complete description of all real property that is leased by H&K thereunder (the "Leased Real Property"), including a separate true and complete description of the portion on which each of the Towers and the Improvements is located (the "Tower Sites"). Each of the Real Property Leases is valid, binding, and enforceable in accordance with its terms and is in full force and effect, and there are no offsets or defenses by either landlord or H&K thereunder. There are no existing defaults, and no events or circumstances have occurred which, with or without notice or lapse of time or both, would constitute defaults, under any of the Real Property Leases. The execution, delivery and performance of this Agreement, the Hawkins Agreements, the Keuck Agreements, and the H&K Agreements does not and will not, with respect to any such Real Property Lease: (i) permit the landlord to accelerate the rent or cause the lease terms to be renegotiated; (ii) constitute a default thereunder; or (iii) require the consent of the landlord thereunder or any third party.


Other than H&K and the lessees under the Tower Attachment Leases, there are no parties in possession of any portion of the Leased Real Property as lessees, subtenants, tenants at sufferance, or trespassers.


B. Schedule 3.9(B) contains: (i) a true and complete description, including the type and height, of each of the towers that is located on the Leased Real Property (the "Towers"); (ii) a true and complete description of all buildings, equipment shelters, fixtures, antenna, communications equipment, and other improvements located on the Leased Real Property and the Towers (the "Improvements"); and (iii) a true and complete description of all Improvements that H&K is required to construct within six (6) months after the Effective Date pursuant to the Tower Attachment Leases.


H&K is the sole owner of the Towers free and clear of all security interests, mortgages, liens, claims, and encumbrances of every kind except those listed on Schedule 3.9(C), all of which shall be removed at or prior to the Closing.


The lessee under the applicable Tower Attachment Lease is the owner of the Improvements subject only to customary security interests, mortgages, liens, claims, and


7 9 encumbrances of every kind. The Improvements are being used, occupied, and maintained by H&K and the owner thereof in accordance with all applicable Easements, Real Property Leases, Tower Attachment Leases, permits, insurance requirements, restrictions, ordinances, zoning laws, building setback lines, covenants, and reservations.


Each of the Leased Real Properties is serviced by all public utilities adequate in type and capacity to serve the Towers consistent with past practice.


None of the Leased Real Properties, nor any portion thereof, is subject to any pending suit for condemnation or other taking by any public authority, and to the best knowledge of H&K, Hawkins, and Keuck, no such condemnation or other taking is threatened or contemplated.


Each of the Towers (including guy anchors and wires) and the Improvements, and any fence surrounding the same, are located wholly within the Tower Site and do not encroach any other real property. No portion of the Tower Site has been leased or subleased (except pursuant to the Tower Attachment Leases), including for grazing purposes. No Tower Site is located within an area that has been designated by the Federal Insurance Administration, the Army Corps of Engineers, or the Federal Emergency Management Administration, or any other governmental authority as being subject to any special or increases flooding hazards.


H&K has previously delivered to SpectraSite true and complete copies of all deeds, title opinions, title insurance policies, surveys, and copies of all reports of engineers, environmental consultants, or other consultants in its possession that relate to the Leased Real Property.


C. H&K has previously delivered to SpectraSite true and complete copies of the construction contracts, specifications (the "Specifications"), and the warranties (the "Warranties") for the Towers and the Improvements. Each of the Towers and the Improvements was constructed in accordance with, and as of the date hereof meets and complies with, the Specifications in all respects. Each of the Towers and the Improvements is free from structural and mechanical defects and is in good operating order, condition and ordinary wear and tear excepted, is suitable for immediate use in the ordinary course of H&K's business, is free from defects, is merchantable and is of a quality and quantity presently usable in the ordinary course of H&K's business. None of the Towers or the Improvements is in need of repair or replacement other than as part of routine maintenance in the ordinary course of business.
Each of the Warranties is valid, binding, and enforceable in accordance with its terms and is in full force and effect, and there are no offsets or defenses by either the party making the Warranty or H&K thereunder. There are no existing defaults, and no events or circumstances have occurred which, with or without notice or lapse of time or both, would constitute defaults, under any of the Warranties. The execution, delivery and performance of this Agreement, the Hawkins Agreements, the Keuck Agreements, and the H&K Agreements does not and will not, with respect to any such Warranty: (i) invalidate such Warranty; (ii) constitute a default thereunder or (iii) require the consent of the party making the Warranty or any other Person.


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D. Schedule 3.9(D) contains: (i) a complete list of all surface easements located on or used in connection with the Leased Real Property (the "Easements"), true and complete copies of the documents creating the Easements have been previously delivered by H&K to SpectraSite and (ii) with respect to each of the Easements, the name of the grantor and grantee thereof, the date of grant thereof, and the term thereof. The Person identified on Schedule 3.9(D) as the grantee under each of the Easements is the original grantee or has validly succeeded to the rights of the original grantee thereof and has good and valid title to such Easement, free and clear of all security interests, mortgages, liens, claims, and encumbrances of every kind. Each of the Easements is in full force and effect and has been paid for in full. No events or circumstances have occurred which, with or without notice of lapse of time or both, would constitute defaults, under any of the Easements. The execution, delivery and performance of this Agreement, the Hawkins Agreements, the Keuck Agreements, and the H&K Agreements does not and will not, with respect to any such Easement: (i) invalidate such Easement; (ii) constitute a default thereunder or (iii) require the consent of the grantor thereof or any third party.


Each of the Tower Sites has direct pedestrian and vehicular access to public roads with the use of any easement, license, or right of way other than as provided in the Real Property Leases. Such access is the only access that has been needed by H&K to conduct its business during the twelve (12) month period prior to the Effective Date.


3.10 Tower Attachment Leases. Schedule 3.10 contains: (i) a complete list of all leases for the rental of space on the Towers (the "Tower Attachment Leases"), true and complete copies of which have been previously delivered by H&K to SpectraSite; (ii) with respect to each of the Tower Attachment Leases, a true and complete description of all space that is leased thereunder and all of the equipment that is attached to the Towers pursuant thereto and (iii) with respect to each of the Tower Attachment Leases, a list of all monthly rental and other revenue payable to H&K thereunder. Each of the Tower Attachment Leases is valid, binding, and enforceable in accordance with its terms and is in full force and effect. There are no existing defaults, and no events or circumstances have occurred which, with or without notice or lapse of time or both, would constitute defaults, under any of the Tower Attachment Leases. The execution, delivery, and performance of this Agreement, the Hawkins Agreements, the Keuck Agreements, and the H&K Agreements does not and will not, with respect to any Tower Attachment Lease: (i) constitute a default thereunder, (ii) require the consent of any person or party; or (iii) affect the continuation, validity and effectiveness thereof or the terms thereof.
3.11 Contracts. Except for the Real Property Leases and the Tower Attachment Leases, H&K is not a party to, and the Towers and the Improvements are not bound or affected by, any other contracts, commitments, agreements (including, without limitation, agreements for the borrowing of money or the extension of credit, licenses, understandings and obligations) whether written or oral, except as described on Schedule 3.9(C).


3.12 Receivables. All accounts receivable and trade accounts due to H&K in connection with its business consist of lease payments due to H&K under the Tower Attachment Leases all of which are reflected on the Financial Statements (the "Receivables"). All Receivables owing on the Effective Date are, and to be owing at the Closing Date will be, legal, valid, and binding obligations, of the respective lessees under the applicable Tower Attachment Lease. All Receivables owing on the Effective Date are, and to be owing at the Closing Date


9 11 will be, collectible in full within the time period set forth in the applicable Tower Attachment Lease. There are no set-offs, counterclaims, or disputes asserted with respect to any Receivable and no discount or allowance from any Receivable has been made or agreed to.


3.13 Intellectual Property. H&K does not own or license from any Person, and does not use in the conduct of its business, any intellectual property rights, including: (a) trademarks, service marks, trade names, logos, and other designations; (b) copyrights; (c) inventions that are the subject of letters patent or applications therefor; and (d) confidential or proprietary processes, formulas, technical data, and other information that is of commercial value to H&K.


3.14 Litigation. There are no claims, actions, suits, arbitration proceedings, inquiries, hearings, injunctions, or investigations ("Claims") pending, or to the best knowledge of Hawkins, Keuck, and H&K, threatened, against H&K, its operations or its business. No Claims have been brought within the last two years against H&K or its business, or affecting the Towers, or relating to H&K's ownership, use, or operation of the Towers. There are no facts or circumstances which could serve as the basis for any Claim against H&K involving its business or the Towers, or, by virtue of the execution, delivery and performance of this Agreement, against SpectraSite.


3.15 Compliance with Decrees and Laws. There is no outstanding or, to the best knowledge of Hawkins, Keuck, and H&K, threatened, order, writ, injunction, or decree of any court, governmental ...