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EXHIBIT 10.19
OPTION ESCROW AGREEMENT
This AGREEMENT (the "Agreement"), dated as of May 12, 1997, by
and among WHITNEY EQUITY PARTNERS, L.P. ("WEP"), a Delaware limited
partnership, KITTY HAWK CAPITAL LIMITED PARTNERSHIP, III ("Kitty Hawk"), a
Delaware limited partnership, and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ SINGER & ▇▇▇▇▇▇▇▇▇, LLP (the
"Escrow Agent"), as escrow agent hereunder. Any capitalized terms used herein
and not otherwise defined herein, shall have the meanings assigned to them in
the Stock Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, WEP, Kitty Hawk, Integrated Site Development, Inc.
(the "Company"), a Delaware corporation, U.S. Towers, Inc., a Delaware
corporation, Telesite Services, LLC, an Arkansas limited liability company, and
Metrosite Management, LLC, an Arkansas limited liability company, are parties
to a Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of May
12, 1997;
WHEREAS, pursuant to the Stock Purchase Agreement, WEP has
purchased from the Company 3,203,118 shares of 8% Series A Cumulative
Convertible Redeemable Preferred Stock, $0.001 par value per share, of the
Company (the "Series A Preferred Stock") and has the right to purchase up to
2,236,959 shares (the "Option Shares") of 8% Series B Cumulative Convertible
Redeemable Preferred Stock, $0.001 par value per share, of the Company (the
"Series B Preferred Stock,"), and (B) Kitty Hawk has purchased 259,712 shares
(the "Kitty Hawk Shares") of Series A Preferred Stock and, if WEP exercises the
WEP Option, shall purchase the lesser of (i) 7.5% of the Option Shares and (ii)
that number of Option Shares having an aggregate purchase price of $1,500,000
(the "Kitty Hawk Option Shares");
WHEREAS, pursuant to the Stock Purchase Agreement, WEP and
Kitty Hawk have agreed that 129,856 of the Kitty Hawk Shares shall be deposited
with the Escrow Agent to be held in escrow (the "Escrowed Shares") for the
purpose of indemnifying Whitney in the event Kitty Hawk fails to fulfill its
obligation to purchase the Kitty Hawk Option Shares in accordance with the
terms of the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants contained herein, the parties hereto agree as follows:
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1. ESCROW.
(a) WEP and Kitty Hawk hereby establish this
escrow by designating the Escrow Agent as their escrow agent for the purposes
set forth herein, and the Escrow Agent hereby agrees to act as said escrow
agent.
(b) Kitty Hawk is herewith assigning and
delivering to the Escrow Agent, and the Escrow Agent hereby acknowledges
receipt of, the Escrowed Shares, duly endorsed in blank or accompanied by stock
powers duly executed in blank. The term "Escrowed Shares" as used herein shall
include such securities of the Company distributed with respect to the Escrowed
Shares then in escrow, together with any proceeds thereof. Upon receipt of any
securities distributed to Kitty Hawk with respect to the Escrowed Shares or any
proceeds with respect to any Escrowed Shares, Kitty Hawk agrees to promptly
deliver such distributed securities or proceeds, as the case may be, directly
to the Escrow Agent, to be held in escrow in accordance with the terms hereof.
(c) The Escrow Agent shall hold and release the
Escrowed Shares in accordance with the terms and conditions of this Agreement.
2. DISPOSITION OF ESCROWED SHARES.
(a) If WEP (or its successors or assigns)
exercises the WEP Option and purchases the WEP Option Shares, and Kitty Hawk
fails to purchase the Kitty Hawk Option Shares on the Second Closing Date in
accordance with the terms of the Stock Purchase Agreement, then WEP may provide
written notice (the "Default Notice") to the Escrow Agent stating that Kitty
Hawk failed to fulfill its obligation to purchase the Kitty Hawk Option Shares
in accordance with the terms of the Stock Purchase Agreement. The Default
Notice shall be accompanied by a certification by WEP that a copy of the
Default Notice was contemporaneously delivered to Kitty Hawk. Promptly
following twenty (20) days after its receipt of the Default Notice, the Escrow
Agent shall deliver the Escrowed Shares to WEP, provided, however, that no such
delivery of the Escrowed Shares shall be made if the Escrow Agent shall have
received from Kitty Hawk a notice (the "Kitty Hawk Counter Notice") stating
that WEP is not entitled to the Escrowed Shares pursuant to the terms of the
Stock Purchase Agreement. The Kitty Hawk Counter Notice shall be accompanied
by a certification by Kitty Hawk that a copy of the Kitty Hawk Counter Notice
was contemporaneously delivered to WEP.
(b) If WEP (or its successors or assigns)
exercises the WEP Option and purchases the WEP Option Shares, and Kitty Hawk
purchases the Kitty Hawk Option Shares on the Second Closing Date in accordance
with the terms and of the Stock Purchase Agreement, then Kitty Hawk may provide
written notice (the "Compliance Notice") to the Escrow Agent stating that Kitty
Hawk fulfilled its obligation to purchase the Kitty Hawk Option Shares in
accordance with the terms of the Stock Purchase Agreement. The Kitty Hawk
Compliance Notice shall be accompanied by a certification by Kitty Hawk that a
copy of the Compliance Notice was contemporaneously delivered to WEP. Promptly
following twenty (20) days after its receipt of the Compliance Notice, the
Escrow
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Agent shall deliver the Escrowed Shares to Kitty Hawk, provided, however, that
no such delivery of the Escrowed Shares shall be made if the Escrow Agent shall
have received from WEP a notice (the "WEP Counter Notice") stating that Kitty
Hawk is not entitled to the Escrowed Shares pursuant to the terms of the Stock
Purchase Agreement. The WEP Counter Notice shall be accompanied by a
certification by WEP that a copy of the WEP Counter Notice was
contemporaneously delivered to Kitty Hawk.
(c) On December 1, 1997, the Escrow Agent shall
deliver to Kitty Hawk all of the Escrowed Shares, if any, then remaining in
escrow. Notwithstanding the foregoing, the Escrowed Shares shall not be
released pursuant to this Section 2(c) if a Default Notice or WEP Counter
Notice was received by the Escrow Agent before December 1, 1997. The Escrowed
Shares shall be released in accordance with the provisions of Section 4(g)
hereof.
3. DIVIDENDS AND VOTING POWER.
While the Escrowed Shares are being held in escrow, Kitty Hawk
shall be entitled to all rights (other than the right to dispose of the
Escrowed Shares) with respect to the Escrowed Shares, including without
limitation, the right to exercise all voting power and to receive and retain
any and all dividends (other than stock or liquidating dividends, which shall
be deposited into escrow in accordance with the terms and conditions of
paragraph 1(b) hereof) declared or paid on the Escrowed Shares being held in
escrow.
4. NO LIABILITY OF ESCROW AGENT.
(a) The duties and obligations of the Escrow
Agent shall be determined solely by the express provisions of this Agreement,
and the Escrow Agent shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement.
(b) The Escrow Agent shall not be responsible in
any manner whatsoever for any failure or inability of WEP or Kitty Hawk to
perform or comply with any of the provisions of this Agreement or the Stock
Purchase Agreement.
(c) In the performance of its duties hereunder,
the Escrow Agent shall be entitled to rely upon any document, instrument or
signature believed by it to be genuine and signed by WEP or Kitty Hawk. The
Escrow Agent may assume that any person purporting to give any notice in
accordance with the provisions hereof has been duly authorized to do so.
(d) The Escrow Agent shall not be bound by any
modification, cancellation or rescission of this Agreement unless in writing
and signed by it, WEP and Kitty Hawk.
(e) The Escrow Agent shall not be liable for any
error of judgment, or any action taken or omitted to be taken hereunder, except
in the case of its willful misconduct or gross
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negligence. The Escrow Agent shall be entitled to consult with counsel of its
choosing and shall not be liable for any action taken or omitted by it in
accordance with the advice of such counsel.
(f) The Escrow Agent shall have no responsibility
as to the validity or value of the Escrowed Shares held in escrow hereunder.
Furthermore, the Escrow Agent shall have no duty as to the collection or
protection of the Escrowed Shares (including the proceeds thereof) income
thereon, nor as to the preservation of any rights pertaining thereto, beyond
the safe custody of any such Escrowed Shares (including the proceeds thereof)
or income thereon actually in its possession.
(g) In the event that the Escrow Agent shall be
uncertain as to its duties or rights hereunder or shall receive instructions
from any party hereto with respect to any or all of the Escrowed Shares
(including the proceeds thereof) or income thereon which, in its reasonable
opinion, are in conflict with any of the provisions of this Agreement or any
instructions received from one of the other parties to this Agreement, the
Escrow Agent shall be entitled to (i) refrain from taking any action other than
to keep the Escrowed Shares (including the proceeds thereof) or income thereon
in question until such time as there has been a "final determination" of the
rights of the applicable parties with respect to such Escrowed Shares
(including the proceeds thereof) or income thereon or (ii) deposit at any time
the Escrowed Shares, together with any proceeds received by it, into any court
with competent jurisdiction and to commence an action in the nature of
interpleader to adjudicate the parties' rights thereto and thereafter shall
have no further obligations or liabilities to anyone under this Agreement. For
purposes of this subparagraph 4(g), there shall be deemed to have been a "final
determination" of the rights of the applicable parties with respect to such
Escrowed Shares in question (including the proceeds thereof) or income thereon
at such time as any of the applicable parties shall file with the Escrow Agent
(i) an official certified copy of a court order, together with an opinion of
counsel of the party filing the foregoing, in form and substance acceptable to
the Escrow Agent and its counsel, stating that the court order is a final
determination of the rights of the parties hereto with respect to the Escrowed
Shares in question, that the time to appeal from said court order has expired,
and that said court order is binding upon the applicable parties, or (ii) a
fully executed agreement or consent by and among the applicable parties, which
provides for disposition of the Escrowed Shares in question (including the
proceeds thereof) or income thereon.
(h) The Escrow Agent or any successor to it as
escrow agent hereafter appointed may at any time resign and be discharged of
the duties imposed hereunder by giving notice to each of the parties hereto,
such resignation to take effect upon a successor escrow agent's acceptance of
appointment.
(i) The parties hereto acknowledge that the
Escrow Agent is counsel to WEP and consent that the Escrow Agent may represent
WEP, any of its affiliates and any entities in which WEP or its affiliates own
any securities, equity, debt or otherwise, in any dispute, controversy, action
or legal proceeding (including, without limitation, against Kitty Hawk or
involving this Agreement or the Stock Purchase Agreement).
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5. EXPENSES AND INDEMNIFICATION OF ESCROW AGENT.
WEP and Kitty Hawk shall jointly and severally reimburse and
indemnify the Escrow Agent for, and hold it harmless against, any and all loss,
liability, costs or expenses in connection herewith (including reasonable fees,
disbursements and other charges of counsel incurred by the Escrow Agent in any
dispute, controversy, action or legal proceeding between it and one of the
other parties hereto, or between it and a third party), incurred by the Escrow
Agent arising out of or in connection with its acceptance of, or the
performance of its duties and obligations under this Agreement (except those
arising out of or in connection with Escrow Agent's willful misconduct or gross
negligence) as well as the reasonable costs and expenses of defending against
any claim or liability arising out of or relating to this Agreement. As
between themselves, WEP and Kitty Hawk each agrees to bear fifty percent (50%)
of all amounts paid or reimbursed to the Escrow Agent pursuant to this Section
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6. TERMINATION.
This Agreement, and the obligations of the Escrow Agent
hereunder, shall terminate upon the release and delivery by the Escrow Agent of
all Escrowed Shares (including the proceeds thereof) and stock powers relating
thereto, if any, in accordance with the provisions of Section 2 hereof.
7. NOTICE.
All notices, instructions and other communications required or
permitted to be given, forwarded or transmitted hereunder or necessary or
convenient in connection herewith shall be in writing and shall be deemed to
have been duly given if delivered by facsimile transmission with a copy
delivered by personal service or sent by United States first class registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows, or to such other address as a party shall have given notice of
pursuant hereto:
In the case of WEP:
Whitney Equity Partners, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telefacsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
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With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telefacsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
In the case of Kitty Hawk
Kitty Hawk Capital Limited Partnership, III
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telefacsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to
▇▇▇▇▇ ▇▇▇▇▇ Mulliss & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telefacsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
In the case of the Escrow Agent:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telefacsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
8. GOVERNING LAW.
This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without regard
to the conflicts of law principles thereof.
9. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the parties hereto.
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10. ENTIRE AGREEMENT; AMENDMENTS.
This Agreement contains the entire agreement among the parties
hereto with respect to the subject matter hereof. This Agreement may be
amended only by a written instrument signed by all the parties hereto.
11. WAIVERS.
No waiver by any party of any breach of any term contained in
this Agreement, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such breach or a waiver of
any breach of any other term contained in this Agreement.
12. PARAGRAPH HEADINGS.
The paragraph headings contained in this Agreement are for
convenience of reference only and shall not limit or define the text thereof.
13. COUNTERPARTS.
Telefacsimile transmissions of any executed original document
and/or retransmission of any executed telefacsimile transmission shall be
deemed to be the same as the delivery of an executed original. At the request
of any party hereto, the other parties hereto shall confirm telefacsimile
transmissions by executing duplicate original documents and delivering the same
to the requesting party or parties. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date first above written.
WHITNEY EQUITY PARTNERS, L.P.
By: ▇.▇. ▇▇▇▇▇▇▇ Equity Partners, LLC,
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
KITTY HAWK CAPITAL LIMITED PARTNERSHIP, III
By: Kitty Hawk Partner Limited Partnership, III
Its General Partner
By: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: W. ▇▇▇▇▇ ▇▇▇▇▇▇
General Partner
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ SINGER & ▇▇▇▇▇▇▇▇▇, LLP
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇ SINGER & ▇▇▇▇▇▇▇▇▇, LLP
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SIGNATURE PAGE TO OPTION ESCROW AGREEMENT