<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 11, 1998
REGISTRATION STATEMENT NO. 333-59297
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
PRE-EFFECTIVE
AMENDMENT NO. 2
TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PINNACLE HOLDINGS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENTS)
----------------
DELAWARE 4899 65-0652634
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
1549 RINGLING BOULEVARD, 3RD FLOOR
SARASOTA, FLORIDA 34236
(941) 364-8886
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STEVEN DAY
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY
PINNACLE HOLDINGS INC.
1549 RINGLING BOULEVARD, 3RD FLOOR
SARASOTA, FLORIDA 34236
(941) 364-8886
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
COPIES OF COMMUNICATIONS TO:
CHESTER E. BACHELLER, ESQ. WINTHROP B. CONRAD, JR., ESQ.
MICHAEL L. JAMIESON, ESQ. DAVIS POLK & WARDWELL
HOLLAND & KNIGHT LLP 450 LEXINGTON AVENUE
400 NORTH ASHLEY DRIVE, SUITE 2300 NEW YORK, NEW YORK 10017
TAMPA, FLORIDA 33602 (212) 450-4000
(813) 227-8500
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act of 1933 registration statement number of
earlier effective registration statements for the same
offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 registration number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectuses: one to be
used in connection with an offering in the United States (the "U.S.
Prospectus") and the other to be used in connection with a concurrent
international offering outside the United States (the "International
Prospectus"). The U.S. Prospectus and the International Prospectus will be
identical in all respects, except for the front cover pages. The form of U.S.
Prospectus is included herein and the form of the front cover page of the
International Prospectus follows the front cover page of the U.S. Prospectus.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 31. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered hereunder. All
such fees and expenses shall be borne by the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $ 67,850
NASD filing fee.................................................. $ 25,340
Nasdaq listing fee............................................... $ 95,000
Printing and engraving expenses.................................. $ 100,000
Accounting fees and expenses..................................... $ 150,000
Legal fees and expenses.......................................... $ 250,000
Blue Sky fees and expenses....................................... $ 5,000
Transfer Agent's fees and expenses............................... $ 20,000
Directors' and Officers' insurance............................... $ 70,000
Miscellaneous.................................................... $ 218,650
----------
Total.......................................................... $1,000,000
==========
</TABLE>
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* Estimated
ITEM 32. SALES TO SPECIAL PARTIES.
Not applicable.
ITEM 33. RECENT SALES OF UNREGISTERED SECURITIES.
The securities issued or sold by the Company since May 1995, the date of
inception, which were not registered under the Securities Act are listed
below:
(i) Pursuant to the Stockholders Agreement, since December 31, 1995, the
Company has issued to ABRY II 200,000 shares of Class A Common Stock and
172,266 shares of Class E Common Stock. 35,000 shares of the Class A Common
Stock were issued in exchange for shares of Pinnacle Towers Inc. that were
held by ABRY II and the remaining shares were issued in exchange for
capital contributions made by ABRY II to the Company at a rate of 1 share
per each $100 contribution. Additionally, a total of 12,000 shares of Class
B Common Stock and a total of 31,000 shares of Class D Common Stock were
issued to the Company's founders in exchange for all of the capital stock
of Pinnacle Towers Inc. held by them. Furthermore, 2,500 shares of Class A
Common Stock were issued to the REIT investors for $100 per share.
(ii) From February 16, 1996 through June 25, 1997, the Company issued
19,000 shares of Class D Common Stock to certain employees of the Company
as compensation pursuant to their employee subscription agreements.
Pursuant to his subscription agreement, Mr. Day also purchased 500 shares
of Class B Common Stock for $100 per share.
(iii) On April 30, 1997, the Company sold 2,500 shares of Class E Common
Stock to James Dell'Apa for consideration of $100 per share.
(iv) On March 17, 1998, the Company issued $325,000,000 in principal
amount of its 10% Senior Discount Notes due 2008, pursuant to a Purchase
Agreement dated as of March 17, 1998, between the Company and the initial
purchasers thereof.
The shares of capital stock issued in the above transactions were offered
and sold in reliance upon the exemption from registration under Section 4(2)
as transactions by an issuer not involving any public offering. The recipients
of securities in each such transaction represented their intentions to acquire
the securities for investment only and not with a view to or for sale in
connection with any distribution thereof and appropriate
II-1
<PAGE>
legends were affixed to the share certificates issued in such transaction. All
recipients had adequate access, through their relationship with the Company to
information about the Company.
ITEM 34. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pinnacle Holdings Inc., a Delaware corporation (the "Delaware Corporation").
The Delaware Corporation's Certificate of Incorporation and Bylaws contain
provisions limiting the personal liability of its directors for monetary
damages resulting from breaches of their duty of care to the extent permitted
by Section 102(b)(7) of the Delaware General Corporation Law. The Delaware
Corporation's Certificate of Incorporation and Bylaws also contain provisions
making indemnification of the Delaware Corporation's directors and officers
mandatory to the fullest extent permitted by the Delaware General Corporation
Law, including circumstances in which indemnification is otherwise
discretionary.
The Delaware General Corporation Law permits the indemnification by a
Delaware corporation of its directors, officers, employees and other agents
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement in connection with specified actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than
derivative actions which are by or in the right of the corporation) if they
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceedings, had no reasonable cause to believe their
conduct was illegal. A similar standard of care is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement
of such an action and require court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The Company intends to obtain directors' and officers'
liability insurance, consistent with the provisions of the Delaware General
Corporation Law, to protect directors and officers from liabilities under
various laws, including the Securities Act.
ITEM 35. TREATMENT OF PROCEEDS FROM STOCK BEING REGISTERED.
Not applicable.
ITEM 36. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.0 Underwriting Agreement
3.1.1 Amended and Restated Certificate of Incorporation of the Company**
Certificate of Amendment of Amended and Restated Certificate of
3.1.2 Incorporation
3.1.3 Bylaws of the Company**
4.1 Indenture dated as of March 20, 1998 among the Company and The
Bank of New York, as Trustee**
4.2 Exchange and Registration Rights Agreement dated as of March 20,
1998 by and among the Company and each of the Purchasers referred
to therein**
4.3 Specimen Stock Certificate
4.4 Registration Agreement
4.5 Recapitalization Agreement
5.1 Opinion of Holland & Knight LLP****
8.1 Opinion of Holland & Knight LLP
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.1 Second Amended and Restated Credit Agreement dated February 26,
1998 by and among Pinnacle Towers, Inc., a wholly-owned subsidiary
of the Company ("PTI"), NationsBank of Texas, N.A. and Goldman,
Sachs Credit Partner L.P.**
10.2 First Amendment to Second Amended and Restated Credit Agreement
dated March 17, 1998**
10.3 Form of Purchase and Sale Agreement dated January 9, 1998 by and
among PTI and Southern Communications**
10.4 Form of Southern Communications Master Site Lease Agreement by and
among PTI and Southern Communications**
10.5 Form of Option to Direct Construction or Acquisition of Additional
Tower Facilities by and among PTI and Southern Communications**
10.6 Form of Exchange Agreement by and among PTI and Southern
Communications**
10.7 Form of Lease Agreement--Non-Restricted Premises**
10.8 Form of Lease Agreement--Restricted Premises**
10.9 Form of Master Antenna Site Lease by and among PTI and Teletouch
Communications, Inc.**
10.10 Contract of Sale by and among PTI and Teletouch Communications,
Inc. and First Amendment to Contract of Sale**
10.11 Executive Employment Agreement between the Company and Robert
Wolsey dated May 3, 1995**
10.12 Executive Employment Agreement between the Company and Steven Day
dated February 17, 1997**
10.13 Executive Employment Agreement between the Company and James
Dell'Apa dated May 3, 1995**
10.14 Subscription Agreement dated December 31, 1995 by and among ABRY
II and PTI**
10.15 Second Amended and Restated Subscription and Stockholders
Agreement dated May 16, 1996 by and among PTI, the Company and
certain stockholders**
10.16 Capital Contribution Agreement dated February 26, 1998**
10.17 Convertible Promissory Note due 1998 dated February 11, 1998 by
and among the Company and ABRY II**
10.18 Services Agreement by and among PTI and PTI II**
10.19 Amended Capital Contribution Agreement dated May 29, 1998***
10.20 Third Amended and Restated Credit Agreement dated May 29, 1998***
10.21 Purchase Agreement dated as of July 7, 1998 among MobileMedia, its
affiliates and the Company****
10.22 Proposed Form of Master Lease for Transmitter Systems Space
between the Company and MobileMedia Communications, Inc.****
10.23 Form of Management and Consulting Services Agreement dated as of
April , 1995 between Pinnacle Towers Inc. and ABRY*
10.24 Stock Incentive Plan
21.1 List of Subsidiaries**
23.1 Consent of Holland & Knight LLP (contained in Exhibit 5.1)****
23.2 Consent of PricewaterhouseCoopers LLP, independent certified
public accountants*
23.3 Consent of Arthur Andersen LLP, independent certified public
accountants*
23.4 Consent of Ernst & Young LLP, independent certified public
accountants*
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
Powers of Attorney (included on signature pages of
24.1 Registration Statement)****
27.1 Financial Data Schedule****
</TABLE>
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* Previously filed on July 27, 1998 with Amendment No. 1 to the Company's
Registration Statement on Form S-11.
** Previously filed on April 1, 1998 with the Company's Registration
Statement on Form S-4 (SEC file no. 333-49147).
*** Previously filed on June 11, 1998 with Amendment No. 1 to the Company's
Registration Statement on Form S-4.
**** Previously filed on July 17, 1998 with the Company's Registration
Statement on Form S-11 (SEC file no. 333-59297).
(b) Financial Statement Schedules
None
ITEM 37. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions described in Item 14, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4), or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-11 AND HAS DULY CAUSED THIS
AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE CITY OF SARASOTA, STATE OF
FLORIDA, ON AUGUST 11, 1998.
Pinnacle Holdings, Inc.
/s/ Steven Day
By: _________________________________
Steven Day, Chief Financial
Officer
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C>
SIGNATURES TITLE
DATE
* Chief Executive August 11, 1998
- ------------------------------------- Officer, President,
ROBERT WOLSEY Chief Operating
Officer and
Director
/s/ Steven Day Vice President, August 11, 1998
- ------------------------------------- Chief Financial
STEVEN DAY Officer, Secretary
and Director
* Executive Vice August 11, 1998
- ------------------------------------- President and
JAMES DELL'APA Director
* Director August 11, 1998
- -------------------------------------
ANDREW BANKS
* Director August 11, 1998
- -------------------------------------
PENI GARBER
* Director August 11, 1998
- -------------------------------------
PEGGY KOENIG
* Director August 11, 1998
- -------------------------------------
ROYCE YUDKOFF
/s/ Steven Day
*By: _______________________________,
STEVEN DAY
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.0 Underwriting Agreement*
3.1.1 Amended and Restated Certificate of Incorporation of the Company**
Amendment to the Amended and Restated Certificate of
3.1.2 Incorporation*
3.1.3 Bylaws of the Company**
4.1 Indenture dated as of March 20, 1998 among the Company and The
Bank of New York, as Trustee**
4.2 Exchange and Registration Rights Agreement dated as of March 20,
1998 by and among the Company and each of the Purchasers referred
to therein**
4.3 Specimen Stock Certificate*
4.4 Registration Rights Agreement*
5.1 Opinion of Holland & Knight LLP****
8.1 Opinion of Holland & Knight LLP
10.1 Second Amended and Restated Credit Agreement dated February 26,
1998 by and among Pinnacle Towers, Inc., a wholly-owned subsidiary
of the Company ("PTI"), NationsBank of Texas, N.A. and Goldman,
Sachs Credit Partner L.P.**
First Amendment to Second Amended and Restated Credit Agreement
10.2 dated March 17, 1998**
10.3 Form of Purchase and Sale Agreement dated January 9, 1998 by and
among PTI and Southern Communications**
10.4 Form of Southern Communications Master Site Lease Agreement by and
among PTI and Southern Communications**
10.5 Form of Option to Direct Construction or Acquisition of Additional
Tower Facilities by and among PTI and Southern Communications**
Form of Exchange Agreement by and among PTI and Southern
10.6 Communications**
10.7 Form of Lease Agreement--Non-Restricted Premises**
10.8 Form of Lease Agreement--Restricted Premises**
Form of Master Antenna Site Lease by and among PTI and Teletouch
10.9 Communications, Inc.**
10.10 Contract of Sale by and among PTI and Teletouch Communications,
Inc. and First Amendment to Contract of Sale**
Executive Employment Agreement between the Company and Robert
10.11 Wolsey dated May 3, 1995**
10.12 Executive Employment Agreement between the Company and Steven Day
dated February 17, 1997**
10.13 Executive Employment Agreement between the Company and James
Dell'Apa dated May 3, 1995**
Subscription Agreement dated December 31, 1995 by and among ABRY
10.14 II and PTI**
10.15 Second Amended and Restated Subscription and Stockholders
Agreement dated May 16, 1996 by and among PTI, the Company and
certain stockholders**
10.16 Capital Contribution Agreement dated February 26, 1998**
10.17 Convertible Promissory Note due 1998 dated February 11, 1998 by
and among the Company and ABRY II**
10.18 Services Agreement by and among PTI and PTI II**
10.19 Amended Capital Contribution Agreement dated May 29, 1998***
10.20 Third Amended and Restated Credit Agreement dated May 29, 1998***
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
Purchase Agreement dated as of July 7, 1998 among MobileMedia, its
10.21 affiliates and the Company****
10.22 Proposed Form of Master Lease for Transmitter Systems Space
between the Company and MobileMedia Communications, Inc.****
10.23 Form of Management and Consulting Services Agreement dated as of
April , 1995 between Pinnacle Towers Inc. and ABRY
10.24 Form of Stock Incentive Plan*
21.1 List of Subsidiaries**
23.1 Consent of Holland & Knight LLP (contained in Exhibit 5.1)
Consent of PricewaterhouseCoopers LLP, independent certified
23.2 public accountants
Consent of Arthur Andersen LLP, independent certified public
23.3 accountants
Consent of Ernst & Young LLP, independent certified public
23.4 accountants
Powers of Attorney (included on signature pages of Registration
24.1 Statement)
27.1 Financial Data Schedule
</TABLE>
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* To be filed by amendment.
** Previously filed on April 1, 1998 with the Company's Registration
Statement on Form S-4.
*** Previously filed on June 11, 1998 with Amendment No. 1 to the Company's
Registration Statement on Form S-4.
**** Previously filed on July 17, 1998 with the Company's Registration
Statement on Form S-11.
<PAGE>
EXHIBIT 1.0
13,500,000 SHARES
PINNACLE HOLDINGS INC.
COMMON STOCK, $.001 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
August ___, 1998
<PAGE>
August __, 1998
Morgan Stanley & Co. Incorporated
Smith Barney Inc.
Goldman, Sachs & Co.
NationsBanc Montgomery Securities LLC
Raymond James & Associates, Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Morgan Stanley & Co. International Limited
Smith Barney Inc.
Goldman Sachs International
NationsBanc Montgomery Securities LLC
Raymond James & Associates, Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England
Dear Sirs and Mesdames:
Pinnacle Holdings Inc., a Delaware corporation (the "COMPANY"), proposes to
issue and sell to the several Underwriters (as defined below), and certain
shareholders of the Company (the "SELLING SHAREHOLDERS") named in Schedule I
hereto propose to sell to the several Underwriters (as defined below), an
aggregate of 13,500,000 shares of the Common Stock, par value $.001 per share,
of the Company (the "FIRM SHARES"), of which 11,739,130 shares are to be issued
and sold by the Company (the "COMPANY SHARES") and 1,760,870 shares are to be
sold by the Selling Shareholders (the "SELLING SHAREHOLDER SHARES").
It is understood that, subject to the conditions hereafter stated,
10,800,000 Firm Shares (the "U.S. FIRM SHARES"), consisting of 9,391,304 Company
Shares and 1,408,696 Selling Shareholder Shares, will be sold to the several
U.S. Underwriters named in Schedule II hereto (the "U.S. UNDERWRITERS") in
connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement between U.S. and International Underwriters of even
date herewith), and 2,700,000 Firm Shares (the "INTERNATIONAL SHARES"),
consisting of 2,347,826 Company Shares
<PAGE>
and 352,174 Selling Shareholder Shares, will be sold to the several
International Underwriters named in Schedule III hereto (the "INTERNATIONAL
UNDERWRITERS") in connection with the offering and sale of such International
Shares outside the United States to persons other than United States and
Canadian Persons. Morgan Stanley & Co. Incorporated, Smith Barney Inc.,
Goldman, Sachs & Co., NationsBanc Montgomery Securities LLC and Raymond James &
Associates, Inc. shall act as representatives (the "U.S. REPRESENTATIVES") of
the several U.S. Underwriters, and Morgan Stanley & Co. International Limited,
Smith Barney Inc., Goldman Sachs International, NationsBanc Montgomery
Securities LLC and Raymond James & Associates, Inc. shall act as representatives
(the "INTERNATIONAL REPRESENTATIVES") of the several International Underwriters.
The U.S. Underwriters and the International Underwriters are hereinafter
collectively referred to as the "Underwriters."
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 1,760,870 shares of the Common Stock,
par value $.001 per share, of the Company (the "ADDITIONAL COMPANY SHARES"), and
the Selling Shareholders severally propose to sell to the Underwriters not more
than an additional 264,130 shares of the Common Stock, par value $.001 per
share, of the Company (the "ADDITIONAL SELLING SHAREHOLDER SHARES," and together
with the Additional Company Shares, the "ADDITIONAL SHARES") if and to the
extent that you, as Managers of the offering, shall have determined to exercise,
on behalf of the Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 3 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES." The
shares of Common Stock, par value $.001 per share of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "COMMON STOCK." The Company and the Selling Shareholders are
hereinafter sometimes collectively referred to as the "SELLERS."
As part of the offering contemplated by this Agreement, the Underwriters
have agreed to reserve out of the Shares, up to 675,000 shares, for sale to the
Company's employees, officers, and directors and other parties associated with
the Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus under
the heading "UNDERWRITERS" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold
by the Underwriters pursuant to the Directed Share Program (the "DIRECTED
SHARES") will be sold by the Underwriters pursuant to this Agreement at the
public offering price. Any Directed Shares not orally confirmed for purchase by
any Participants by the end of the first business day after the date on which
this Agreement is executed will be offered to the public by the Underwriters as
set forth in the Prospectus.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-11 (File No. 333-59297)
relating to the Shares. The registration statement contains two prospectuses to
be used in connection with the offering and sale of the shares: the U.S.
prospectus, to be used in connection with the offering and sale of Shares in the
United States and Canada to United States and Canadian Persons, and the
international prospectus, to be used in connection with the offering and sale of
Shares outside the United States and Canada to persons other than United States
and Canadian Persons. The international prospectus is identical to the U.S.
prospectus except for the outside front cover page.
<PAGE>
The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
It is understood that on July 7, 1998, the Company entered into an
agreement (the "PURCHASE AGREEMENT") with MobileMedia Corporation
("MOBILEMEDIA") to acquire 163 wireless communications towers from MobileMedia
for $170 million plus fees and expenses (the "MOBILEMEDIA ACQUISITION"). It is
further understood that pursuant to the Purchase Agreement, the Company intends
to enter into a 15-year lease (the "MASTER LEASE") to provide rental tower space
to MobileMedia Communications, Inc. ("MM COMMUNICATIONS"), an affiliate of
MobileMedia. For the purposes of this agreement, all references to the "Pro
Forma Company" refer to the operations of the Company after giving effect to the
MobileMedia Acquisition.
It is also understood that on , 1998, the Company, ABRY
Broadcast Partners II, L.P. ("ABRY") and all of the Non-ABRY Selling
Shareholders (as defined herein) entered into a recapitalization agreement (the
"Recapitalization Agreement") and on August , 1998 the Company amended its
certificate of incorporation in order to convert, substantially
contemporaneously with the closing of the offering of the Shares, any and all
outstanding shares of the Company's Class A, Class B, Class C, Class D and Class
E Common Stock into shares of Common Stock and to provide for a distribution to
holders of certain classes of such common stock to satisfy certain preferential
rights and yields relating thereto (such transactions being referred to herein
as the "RECAPITALIZATION"). In connection with the Recapitalization, the
Company, ABRY II and the Non-ABRY Selling Shareholders also entered into a
registration rights agreement dated as of August , 1998 (the "REGISTRATION
RIGHTS AGREEMENT").
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Registration Statement and the
<PAGE>
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iii) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
(c) The Company (i) has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, (ii) has, and after giving effect to the MobileMedia
Acquisition, will have, the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
(iii) is and, after giving effect to the MobileMedia Acquisition, will be,
duly qualified to transact business and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on either the Company and its subsidiaries, taken
as a whole, or on the Pro Forma Company and its subsidiaries, taken as a
whole.
(d) Each subsidiary of the Company (i) has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, (ii) has, and after giving effect to the
MobileMedia Acquisition, will have, the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and (iii) is and, after giving effect to the MobileMedia Acquisition, will
be, duly qualified to transact business and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, or the Pro Forma Company and its subsidiaries, taken as a whole; all
of the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
<PAGE>
(f) The Purchase Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding obligation of, the
Company and, to the knowledge of the Company, MobileMedia; the Purchase
Agreement is in full force and effect as of the date hereof and neither the
Company, nor, to the knowledge of the Company, MobileMedia, is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under the Purchase Agreement, except for violations and defaults
which individually or in the aggregate would not be material to either the
Company and its subsidiaries, taken as a whole, or the Pro Forma Company
and its subsidiaries, taken as a whole; the U.S. Bankruptcy Court for the
District of Delaware has entered an order approving the Purchase Agreement
and the MobileMedia Acquisition, and, to the Company's knowledge (after due
inquiry), no notice of appeal in respect of such approval has been filed by
any party.
(g) Each of the Recapitalization Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by the
Company, and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
(h) After giving effect to the Recapitalization, upon the Closing of
the offering, the authorized, issued and outstanding capital stock of the
Company will be as set forth in the Prospectus under the caption
"Capitalization" in the column entitled "Pro Forma As Adjusted," and the
authorized capital stock of the Company will conform as to legal matters in
all material respects to the description thereof contained in the
Prospectus.
(i) The shares of Common Stock outstanding prior to the issuance of
the Shares to be sold by the Company (including the shares of Common Stock
to be exchanged pursuant to the Recapitalization for the Shares to be sold
by the Selling Shareholder), have been duly authorized and are and, after
giving effect to the Recapitalization, will be, as of the Closing Date,
validly issued, fully paid and non-assessable.
(j) The Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights.
(k) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Purchase
Agreement, the
<PAGE>
Recapitalization Agreement and the Registration Rights Agreement will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or the Pro
Forma Company and its subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, the Purchase Agreement, the Recapitalization
Agreement or the Registration Rights Agreement, except as described in the
Prospectus and such as may be required by the securities or Blue Sky laws
of, the various states in connection with the offer and sale of the Shares.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change in the
MobileMedia Acquisition or in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, or the Pro Forma Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement).
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject or, to the Company's knowledge (after due inquiry), to which the
Pro Forma Company or any of its subsidiaries is a party or to which any of
the Pro Forma Company's properties is subject, that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(n) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The Company is not and, after giving effect to the Mobile Media
Acquisition, the Recapitalization and the offering and sale of the Shares
and the application of the proceeds thereof as described in the Prospectus,
will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
<PAGE>
(p) The Company and its subsidiaries (i) are and, to the Company's
knowledge (after due inquiry), after giving effect to the MobileMedia
Acquisition, will be, in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
and, after giving effect to the MobileMedia Acquisition, will have,
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are and, to the Company's knowledge (after due inquiry), after giving
effect to the MobileMedia Acquisition, will be, in compliance with all
terms and conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole or on the Pro Forma Company and its
subsidiaries, taken as a whole.
(q) All licenses, permits, consents, certificates of need,
authorizations, certifications, accreditations, franchises, approvals,
grants of rights by, or filings or registrations with, any federal, state,
local or foreign court or governmental or public body, authority, or other
instrumentality or third person (including without limitation the Federal
Communications Commission (the "FCC") and the Federal Aviation Authority
("FAA")) (any of the foregoing a "LICENSE") necessary for either the
Company and its subsidiaries or the Pro Forma Company and its subsidiaries
to own, build, maintain or operate their respective businesses or
properties have been duly authorized and obtained, and are in full force
and effect, except where the failure to so be obtained or in effect would
not, individually or in the aggregate, have a material adverse effect on
the Company or on the Pro Forma Company; and the Company and its
subsidiaries are and, after giving effect to the MobileMedia Acquisition,
will continue to be in compliance in all material respects with all
provisions thereof; no event has occurred which permits (or with the
passage of time would permit) the revocation or termination of any License,
or which could result in the imposition of any restriction thereon, which
is of such a nature or the effect of which would reasonably be expected to
have a material adverse effect on the Company or on the Pro Forma Company;
no material License is the subject of any pending or, to the best of the
Company's knowledge, threatened challenge or revocation which, if such
License were revoked, would reasonably be expected to have a material
adverse effect on the Company or on the Pro Forma Company; the Company and
its subsidiaries are not, and after giving effect to the MobileMedia
Acquisition will not be, required to obtain any material License that has
not already been obtained from, or effect any material filing or
registration that has not already been effected with, the FCC, the FAA or
any other federal, state or local regulatory authority in connection with
the
<PAGE>
execution and delivery of this Agreement, the Purchase Agreement, the
Registration Rights Agreement or the Recapitalization Agreement.
(r) The Company and its subsidiaries have, and after giving effect to
the MobileMedia Acquisition, will have, duly and timely filed all reports,
statements and filings that are required to be filed by any of them under
the Communications Act and the rules and regulations promulgated
thereunder, and are in all material respects in compliance therewith,
including without limitation the rules and regulations of the FCC and FAA;
the Company is not aware of any event or circumstance constituting
noncompliance (or any person alleging noncompliance) with any rule or
regulation of the FAA which such event or circumstance would reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or on the Pro Forma Company and its
subsidiaries, taken as a whole.
(s) There does not exist and to the Company's knowledge (after due
inquiry), after giving effect to the MobileMedia Acquisition, there will
not exist, any costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole or on the Pro
Forma Company and its subsidiaries, taken as a whole.
(t) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(u) The Company has, since its inception, been organized and
operated, and as of the Closing Date and after giving effect to the
Recapitalization and the offering and upon consummation of the MobileMedia
Acquisition, will continue to be organized and to operate, in a manner so
as to qualify as a "real estate investment trust" ("REIT") under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the
"CODE").
(v) The Company has and, after giving effect to the MobileMedia
Acquisition, will have, good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by it
which is material to the business of
<PAGE>
either the Company or the Pro Forma Company, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as could not reasonably be expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole and do
not materially interfere with the use made and proposed to be made of such
property by the Company or the Pro Forma Company; and any real property and
buildings held under lease by the Company are and, after giving effect to
the MobileMedia Acquisition, will be, held by the Company under valid,
subsisting and enforceable leases with such exceptions as could not
reasonably be expected to have a material adverse effect on the Company and
its subsidiaries taken as a whole or on the Pro Forma Company and its
subsidiaries taken as a whole and which are not material and do not
materially interfere with the use made and proposed to be made of such
property and buildings by the Company or the Pro Forma Company, except as
described in or contemplated by the Prospectus.
(w) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company and
its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (iii) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as described
in or contemplated by the Prospectus.
(x) (A) There are no administrative or judicial proceedings pending
before, or threatened by, the FCC with respect to the Company, MobileMedia
or any subsidiary of either the Company or MobileMedia, or any towers owned
or operated by the Company or MobileMedia or any such subsidiaries which,
if determined adversely, individually or in the aggregate, could reasonably
be expected to have a material adverse effect upon the Company and its
subsidiaries taken on a whole, or the Pro Form Company and its
subsidiaries, taken as a whole and (B) the registration with the FCC of
such towers is in full force and effect and is not subject to any special
conditions (other than those conditions of a type customarily imposed under
the general rules, regulations and policies of the FCC) that would
materially and adversely affect the operation of such towers, taken as a
whole.
(y) The Company and its subsidiaries possess and, after giving effect
to the Mobile Media Acquisition, will possess, all certificates,
authorizations, permits and licenses issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary
<PAGE>
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse effect on the business or
operations of the Company and its subsidiaries, taken as a whole, or the
Pro Forma Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(z) The pro forma financial statements of the Company, and the related
notes thereto, included in the Prospectus present fairly in all material
respects the pro forma financial position of the Company, as of the dates
indicated and the results of their operations for the periods specified;
the pro forma combined financial information, and the related notes
thereto, included in the Prospectus has been prepared in accordance with
the applicable requirements of the Exchange Act and is based upon good
faith estimates and assumptions believed by the Company to be reasonable.
(aa) The Company is and, after giving effect to the Mobile Media
Acquisition, will be, insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which the Company is engaged;
the Company has not been refused any insurance coverage sought or applied
for; and the Company has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition, financial or otherwise, or the earnings, business or
operations of the Company or the Pro Forma Company, except as described in
or contemplated by the Prospectus.
(ab) None of the Shares distributed in connection with the Directed
Share Program will be offered or sold outside of the United States.
(ac) The Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business
with the Company, or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
(ad) The Company has obtained all consents and waivers under the
Company's Senior Credit Facility (as defined in the Prospectus) necessary
to consummate the Offering and the Recapitalization.
<PAGE>
(ae) Pinnacle Towers Inc., Tower Systems, Inc. and Coverage Plus
Antennae Systems, Inc. are the only subsidiaries of the Company.
2. Representations and Warranties of the Selling Shareholders. Each of the
Selling Shareholders, severally and not jointly, represents and warrants to and
agrees with each of the Underwriters, on behalf of itself only, and not with
respect to any other Selling Shareholder, that:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, this
Agreement, the Recapitalization Agreement, the Registration Rights
Agreement, the Custody Agreement signed by such Selling Shareholder and
First Union National Bank, as Custodian, relating to the deposit of the
Shares to be sold by such Selling Shareholder (the "CUSTODY AGREEMENT")
and, as applicable, the Power of Attorney appointing certain individuals
as such Selling Shareholder's attorneys-in-fact to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement (the "POWER OF ATTORNEY") will not contravene any
provision of applicable law, or the certificate of incorporation or by-laws
of such Selling Shareholder (if such Selling Shareholder is a corporation),
or the agreement of limited partnership of such Selling Shareholder (if
such Selling Shareholder is a limited partnership), or any agreement or
other instrument binding upon such Selling Shareholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such Selling Shareholder of its
obligations under this Agreement, the Recapitalization Agreement, the
Registration Rights Agreement or the Custody Agreement or Power of Attorney
of such Selling Shareholder, except such as may be required by the
Securities Act of 1933 and the securities or Blue Sky laws of the various
states or foreign jurisdictions in connection with the offer and sale of
the Shares.
(c) Such Selling Shareholder has, and on the Closing Date will have,
valid title to the Shares to be sold by such Selling Shareholder and the
legal right and power, and all authorization and approval required by law,
to enter into this Agreement, the Recapitalization Agreement, the
Registration Rights Agreement, the Custody Agreement and, as applicable,
the Power of Attorney and to sell, transfer and deliver the Shares to be
sold by such Selling Shareholder.
<PAGE>
(d) The Custody Agreement and, as applicable, the Power of Attorney
have been duly authorized, executed and delivered by such Selling
Shareholder and are valid and binding agreements of such Selling
Shareholder.
(e) Delivery of the Shares to be sold by such Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear of
any security interests, claims, liens, equities and other encumbrances.
(f) Each of the Recapitalization Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by each of the
Selling Shareholders that is a party thereto, and constitutes a valid and
binding obligation of each such party and is enforceable against each such
party in accordance with its terms.
(g) All information in the Registration Statement under the caption
"Principal and Selling Stockholders", when such Registration Statement
became effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and all such information in the
Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. Agreements to Sell and Purchase. Each of the Company and the
Selling Shareholders, severally and not jointly, hereby agrees to sell to the
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from such
seller at $______ a share (the "PURCHASE PRICE") the number of Firm Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the number of Firm Shares to be
sold by such Seller as the number of Firm Shares set forth in Schedule II or
Schedule III hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each of the Company and the
Selling Shareholders, severally and not jointly, agree to sell to the U.S.
Underwriters the Additional Shares, and the U.S. Underwriters shall have a one-
time right to purchase, severally and not jointly, up to 2,025,000 Additional
Shares at the Purchase Price. If the Underwriters elect to purchase less than
all of the
<PAGE>
Additional Shares, then the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) to be purchased
from each Seller shall bear the same proportion to the total number of
Additional Shares purchased as the number of Company Shares or Selling
Shareholder Shares sold by such Seller (as the case may be) bears to the total
number of Firm Shares. If you, on behalf of the Underwriters, elect to exercise
such option, you shall so notify the Company and the Selling Shareholders in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each U.S.
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased as the number of Firm Shares set forth in
Schedule II hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) the issuance by the Company of shares of
Common Stock pursuant to the Recapitalization, (C) the issuance of shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing or (D) the grant of options to purchase shares of Common
Stock under the Company's Stock Incentive Plan provided such options do not vest
prior to the expiration of the 180-day period referenced herein, and provided
further, that in the case of subclause (C) of this paragraph, the recipient of
any such shares agrees to execute a lock-up agreement in the form of Exhibit A
hereof.
In addition, each Selling Shareholder, agrees that, without the prior
written consent of Morgan Stanley & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 180 days after the date of
the Prospectus, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
<PAGE>
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at $___
a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by you at
a price that represents a concession not in excess of $____ a share under the
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $___ a share, to any Underwriter or to
certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company and to the Selling Shareholders in Federal or other funds
immediately available in New York City against delivery of such Firm Shares for
the respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on August __, 1998, or at such other time on the same or such other date,
not later than August __, 1998, as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company and to the
Selling Shareholders in Federal or other funds immediately available in New York
City against delivery of such Additional Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section 3 or at such other time on the same
or on such other date, in any event not later than September __, 1998, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."Certificates for the Firm
Shares and Additional Shares shall be in definitive form and registered in such
names and in such denominations as you shall request in writing not later than
one full business day prior to the Closing Date or the Option Closing Date, as
the case may be. The certificates evidencing the Firm Shares and Additional
Shares shall be delivered to you on the Closing Date or the Option Closing Date,
as the case may be, for the respective accounts of the several Underwriters,
with any transfer taxes payable in connection with the transfer of the Shares to
the Underwriters duly paid, against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 4:00 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
<PAGE>
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change in the MobileMedia Acquisition, or, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or
the Pro Forma Company and its subsidiaries taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by Robert J. Wolsey, in his
capacity as the Chief Executive Officer of the Company and by Steven Day,
in his capacity as the Chief Financial Officer of the Company, to the
effect set forth in Section 6(a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date.
The officers signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received a certificate from or on
behalf of each Selling Shareholder, dated the Closing Date and signed by or
on behalf of such Selling Shareholder, to the effect that the
representations and warranties of such Selling Shareholder contained in
this Agreement are true and correct as of the Closing Date and that such
Selling Shareholder has complied with all of the agreements and satisfied
all of the conditions on its part to be preferred or satisfied hereunder on
or before the Closing Date.
(d) The Underwriters shall have received on the Closing Date an
opinion of Holland & Knight LLP, outside counsel for the Company, dated the
Closing Date,
<PAGE>
confirming the consummation of the Recapitalization and to the effect set
forth in Exhibit B hereto.
(e) The Underwriters shall have received on the Closing Date an
opinion of Kirkland & Ellis, counsel for ABRY II, dated the Closing Date,
to the effect that:
(i) the execution and delivery by ABRY II of, and the
performance by ABRY II of its obligations under, this Agreement, the
Recapitalization Agreement, the Registration Rights Agreement and the
Custody Agreement will not violate any provision of applicable law,
except as rights to indemnity and contribution may be limited by
applicable law, or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over ABRY II, which judgment, order or decree is
specifically applicable to ABRY II, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by ABRY II of its
obligations under this Agreement, the Custody Agreement, the
Registration Rights Agreement or the Recapitalization Agreement,
except such as may be required by the Securities Act of 1933 and the
securities or Blue Sky laws of the various states and foreign
jurisdictions in connection with the offer and sale of the Shares. In
rendering the opinion expressed in this paragraph (i) as to violations
of applicable law, such counsel may assume that none of the
Registration Statement, the Prospectus or any preliminary prospectus
contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in the light
of the circumstances under which they were made not misleading;
(ii) ABRY II is the sole registered owner of the Shares to be
sold by ABRY II;
(iii) each of the Custody Agreement, the Recapitalization
Agreement and the Registration Rights Agreement is a valid and binding
agreement of ABRY II and enforceable against ABRY II in accordance
with its terms; and
(iv) upon payment of the purchase prices specified in this
Agreement and delivery to the Underwriters of the certificates
representing the Shares to be sold by ABRY II pursuant to this
Agreement, the Underwriters will have acquired ownership of such
Shares free of any adverse claims (as defined under the New York
Uniform Commercial Code).
<PAGE>
(f) The Underwriters shall have received on the Closing Date an
opinion of Testa, Hurwitz & Thibeault, LLP, counsel for ABRY II, dated the
Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by ABRY II;
(ii) the execution and delivery by ABRY II of, and the
performance by ABRY II of its obligations under, this Agreement, the
Custody Agreement, the Recapitalization Agreement and the Registration
Rights Agreement will not contravene the agreement of limited
partnership of ABRY II, or, to the best of such counsel's knowledge,
any agreement or other instrument binding upon ABRY II;
(iii) ABRY II is a limited partnership duly formed under the
laws of [ ]; ABRY II has the legal right and
partnership power, and all authorization and approval required by law,
to enter into this Agreement, the Custody Agreement, the
Recapitalization Agreement and the Registration Rights Agreement; and
(iv) the Custody Agreement, the Recapitalization Agreement and
the Registration Rights Agreement have been duly authorized, executed
and delivered by ABRY II.
(g) The Underwriters shall have received on the Closing Date an
opinion of Holland & Knight, counsel for the Selling Shareholders other
than ABRY II (the "NON-ABRY SELLING SHAREHOLDERS"), dated the Closing Date,
to the effect set forth in Exhibit C hereto.
(h) The Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, counsel for the Underwriters, dated the
Closing Date, in a form satisfactory to the Underwriters.
With respect to Section 6(e), Section 6(f) and Section 6(g) above,
Kirkland & Ellis, Testa, Hurwitz & Thibeault, LLP and Holland & Knight may
rely upon an opinion or opinions of counsel for any Selling Shareholders
and, with respect to factual matters
<PAGE>
and to the extent such counsel deems appropriate, upon the representations
of each Selling Shareholder contained herein and in the Custody Agreement
and Power of Attorney of such Selling Shareholder and in other documents
and instruments; provided that (A) each such counsel for the Selling
Shareholders is satisfactory to your counsel, (B) a copy of each opinion so
relied upon is delivered to you and is in form and substance satisfactory
to your counsel, (C) copies of such Custody Agreements and Powers of
Attorney and of any such other documents and instruments shall be delivered
to you and shall be in form and substance satisfactory to your counsel and
(D) Kirkland & Ellis and Holland & Knight shall state in their opinion that
they are justified in relying on each such other opinion.
The opinions of Holland & Knight, Kirkland & Ellis and Testa, Hurwitz
and Thibeault, LLP described in Sections 6(d), 6(e), 6(f) and 6(g) above
(and any opinions of counsel for any Selling Shareholder referred to in the
immediately preceding paragraph) shall be rendered to the Underwriters at
the request of the Company or one or more of the Selling Shareholders, as
the case may be, and shall so state therein.
(i) The Underwriters shall have received, on each of the date hereof
and the Closing Date, letters dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to the Underwriters,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus, from each of the following
independent public accountants: (i) Arthur Andersen LLP (with respect to
the financial statements and certain financial information of the tower
operations of Southern Communications Services, Inc., (ii) Ernst & Young
(with respect to the financial statements and certain financial information
of the tower operations of MobileMedia Corporation and its affiliates), and
(iii) Pricewaterhouse Coopers LLP (with respect to the financial statements
and certain financial information of the Company, Shore Communications,
Inc., Tidewater Communications, and Majestic Communications, Inc.);
provided that the letters delivered on the Closing Date shall use a "cut-
off date" not earlier than the date hereof.
(j) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the Closing
Date.
(k) The Recapitalization as described in the Prospectus shall have
been consummated; the Recapitalization Agreement shall be in full force and
effect and no amendment thereto shall have been entered into except with
the consent of the Underwriters;.
<PAGE>
(l) The Purchase Agreement shall be in full force and effect and no
amendment thereto shall have been entered into and none of the conditions
to closing set forth thereon shall have been waived (except in either case
with the consent of the Underwriters); the U.S. Bankruptcy Court for the
District of Delaware shall have entered an order approving the Purchase
Agreement and the MobileMedia Acquisition, and no notice of appeal in
respect of such approval shall have been filed by any party.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to you, without charge, 8 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 7(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
<PAGE>
furnish to the Company) to which Shares may have been sold by you on behalf
of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-
month period ending September 30, 1999 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required
by the National Association of Securities Dealers, Inc. or the rules of
such association from sale, transfer, assignment, pledge or hypothecation
for a period of three months following the date of the effectiveness of the
Registration Statement, and Morgan Stanley & Co. Incorporated will notify
the Company as to which Participants will need to be so restricted. At the
request of Morgan Stanley & Co. Incorporated, the Company will direct the
transfer agent to place stop transfer restrictions upon such securities for
such period of time; the Company will pay all fees and disbursements of
counsel reasonably incurred by the Underwriters in connection with the
Directed Share Program and stamp duties, similar taxes or duties or other
taxes, if any, incurred by the Underwriters in connection with the Directed
Share Program.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of each
Seller's obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's accountants
and counsel for the Selling Shareholders in connection with the registration and
delivery of the Shares under the Securities Act and all other fees or expenses
in connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable
<PAGE>
thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Shares under
state securities laws and all expenses in connection with the qualification of
the Shares for offer and sale under state securities laws as provided in Section
7 hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing
fees and the reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and expenses
incident to listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) certain costs and expenses
of the Sellers relating to investor presentations on any "road show" undertaken
in connection with the marketing of the offering of the Shares, including, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Sellers and any such
consultants, and one half of the cost of any aircraft chartered or limosines
rented in connection with the road show, and (ix) all other costs and expenses
incident to the performance of the obligations of any of the Sellers hereunder
for which provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 9 entitled "Indemnity
and Contribution", and the last paragraph of Section 11 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements of
their counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
The provisions of this Section shall not supersede or otherwise affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
9. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall
<PAGE>
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section [ ] hereof.
(b) The Company also agrees to indemnify and hold harmless Morgan Stanley
& Co. Incorporated ("Morgan Stanley") and each person, if any, who controls
Morgan Stanley within the meaning of either Section 15 of the Act, or Section 20
of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments incurred as a result of Morgan Stanley's participation
as a "qualified independent underwriter" within the meaning of Rule 2720 of the
National Association of Securities Dealers' Conduct Rules in connection with the
offering of the Shares, except for any losses, claims, damages, liabilities, and
judgments resulting from Morgan Stanley's, or such controlling person's, willful
misconduct.
(c) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Selling Shareholder furnished in writing by or on behalf of
such Selling Shareholder expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto;
provided, that with respect to any untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus the indemnity
agreement contained in this subsection (b) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased any Shares, to the extent that a prospectus relating to
such Shares was required to be delivered by such Underwriter under the Act in
connection with such purchase and any such loss, claim, damage or liability of
such Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Shares to
such person, a copy of the Prospectus if the Company had previously furnished
copies thereof to such Underwriter.
<PAGE>
(d) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(e) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 9, 9 or 9, such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company within the meaning of either such Section and
(iii) the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Shareholders and all persons, if any, who control
any Selling Shareholder within the meaning of either such Section, and that all
such reasonable fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the
<PAGE>
Underwriters and such control persons of any Underwriters, such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated. In the case of any
such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
In the case of any such separate firm for the Selling Shareholders and such
control persons of any Selling Shareholders, such firm shall be designated in
writing by the persons named as attorneys-in-fact for the Selling Shareholders
under the Powers of Attorney.
Notwithstanding anything contained herein to the contrary, if indemnity may
be sought pursuant to Section 6(a) or Section 6(b) hereof in respect of such
action or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local counsel)
for Morgan Stanley in its capacity as a "qualified independent underwriter" and
all persons, if any, who control Morgan Stanley within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(f) To the extent the indemnification provided for in Section 9, 9 or 9 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 9 above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause 9
above but also the relative fault of the indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by each Seller and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Sellers on the one hand and the Underwriters on the other hand shall be
determined by
<PAGE>
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Sellers or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
(g) The Sellers and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 9. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any reasonable legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(h) The indemnity and contribution provisions contained in this Section 9
and the representations, warranties and other statements of the Company and the
Selling Shareholders contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, any Selling Shareholder or any person controlling
any Selling Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
10. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a
<PAGE>
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses 10
through 10, such event, singly or together with any other such event, makes it,
in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I and Schedule II bears to the
aggregate number of Firm Shares set forth opposite the names of all such non-
defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you, the
Company and the Selling Shareholders for the purchase of such Firm Shares are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Shareholders. In any such case either you or the relevant Sellers
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. If, on the Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than one-
tenth of the aggregate number of Additional Shares to be purchased, the non-
defaulting Underwriters shall have the option to (i) terminate their obligation
hereunder to purchase Additional Shares or (ii) purchase not less than the
number of Additional Shares that such non-defaulting Underwriters would have
been obligated to purchase in the absence of such default. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
<PAGE>
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of any Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
reasonable out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
<PAGE>
Very truly yours,
PINNACLE HOLDINGS INC.
By: _____________________________
Name:
Title:
<PAGE>
ABRY BROADCAST PARTNERS, L.P.
By: ABRY Capital, L.P.
General Partner
By: ABRY Holdings, Inc.
General Partner
By: ____________________________
Name:
Title:
<PAGE>
The Non-ABRY Selling Shareholders named in
Schedule I hereto, acting severally
By:___________________________________________
Robert J. Wolsey
Attorney-in-Fact
By:___________________________________________
Steven Day
Attorney-in-Fact
<PAGE>
Accepted as of the date hereof
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
GOLDMAN SACHS & CO.
NATIONSBANC MONTGOMERY SECURITIES LLC
RAYMOND JAMES &
ASSOCIATES, INC.
Acting severally on behalf of themselves and the several
U.S. Underwriters named in Schedule II hereto.
By: Morgan Stanley & Co. Incorporated
By:___________________________________________
Name:
Title:
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
SMITH BARNEY INC.
GOLDMAN SACHS INTERNATIONAL
NATIONSBANC MONTGOMERY SECURITIES LLC
RAYMOND JAMES &
ASSOCIATES, INC.
Acting severally on behalf of themselves and the several
International Underwriters named in Schedule III hereto.
By: Morgan Stanley & Co.
International Limited
By:___________________________________________
Name:
Title:
SCHEDULE I
SELLING SHAREHOLDERS
<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES NUMBER OF ADDITIONAL
SELLING SHAREHOLDER TO BE SOLD SHARES TO BE SOLD
- ----------------------------------------------------------------------- --------------------
<S> <C> <C>
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ABRY Broadcast Partners II, L.P.............. 1,451,371 217,705
Robert Wolsey................................ 108,553 16,283
James Dell'Apa............................... 78,837 11,825
Steven Day................................... 65,191 *** 9,779 ***
Kathleen R. Day.............................. -- --
Ben Gaboury.................................. 6,324 949
David Zahn................................... 6,324 949
Slade Lindsay................................ 25,297 3,794
James Bokish................................. 6,324 949
Shirley Putnam............................... 6,324 949
Martin Alvarez............................... 6,324 949
--------- -------
Total Selling Shareholder Shares:.. [1,760,870] * [264,130] **
========= =======
</TABLE>
_______________
* Adds to 1,760,869
** Adds to 264,131
*** Needs to be broken down between Mr. and Mrs. Day.
<PAGE>
SCHEDULE II
U.S. UNDERWRITERS
<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
- -------------------------------------------------- ---------------------
<S> <C>
Morgan Stanley & Co. Incorporated.................
Smith Barney Inc..................................
Goldman, Sachs & Co...............................
NationsBanc Montgomery Securities LLC.............
Raymond James & Associates, Inc...................
[ ]..
----------
Total U.S. Firm Shares:................ 10,800,000
==========
</TABLE>
<PAGE>
SCHEDULE III
INTERNATIONAL UNDERWRITERS
<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
- -------------------------------------------------- ---------------------
<S> <C>
Morgan Stanley & Co. International Limited........
Smith Barney Inc..................................
Goldman Sachs International.......................
NationsBanc Montgomery Securities LLC.............
Raymond James & Associates, Inc...................
[ ]..
---------
Total International Shares:............ 2,700,000
=========
</TABLE>
<PAGE>
EXHIBIT A
August __, 1998
Morgan Stanley & Co. Incorporated
Smith Barney Inc.
Goldman Sachs International
NationsBanc Montgomery Securities LLC
Raymond James & Associates, Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Morgan Stanley & Co. International Limited
Smith Barney Inc.
Goldman Sachs International
NationsBanc Montgomery Securities LLC
Raymond James & Associates, Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated ("MORGAN
STANLEY") proposes to enter into an Underwriting Agreement (the "UNDERWRITING
AGREEMENT") with Pinnacle Holdings Inc., a Delaware corporation (the "COMPANY"),
providing for the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including Morgan Stanley (the "UNDERWRITERS"), of shares (the
"SHARES") of Common Stock, par value $.001 per share of the Company (the "COMMON
STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Morgan Stanley on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences
<PAGE>
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. In addition, the undersigned agrees
that, without the prior written consent of Morgan Stanley on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 180 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
________________________________________
(Name)
________________________________________
(Address)
<PAGE>
[insert Exhibit B]
<PAGE>
[insert Exhibit C]
<PAGE>
EXHIBIT 3.1.2
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PINNACLE HOLDINGS INC.
Pinnacle Holdings Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify as follows:
FIRST: The name of the Corporation is Pinnacle Holdings Inc.
SECOND: The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended to delete ARTICLE FOUR thereof in its entirety and
to insert in its place ARTICLE FOUR as set forth in Exhibit A attached hereto.
---------
THIRD: This Certificate of Amendment of Amended and Restated Certificate
of Incorporation was duly adopted by the requisite vote of the Board of
Directors of the Corporation and by the consent in writing, setting forth the
action so taken, of the holders of a majority of all outstanding capital stock
entitled to vote thereon, pursuant to Sections 228 and 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Pinnacle Holdings Inc. has caused this Certificate of
Amendment of Amended and Restated Certificate of Incorporation to be executed by
its Secretary this ____ day of August, 1998.
PINNACLE HOLDINGS INC.
By:___________________________
Steven R. Day, Secretary
<PAGE>
EXHIBIT A
ARTICLE FOUR
------------
PART A. AUTHORIZED SHARES
-----------------
1. NUMBER OF AUTHORIZED SHARES.
---------------------------
1A. PRIOR TO AUTOMATIC CONVERSION. Prior to the automatic conversion
-----------------------------
of shares of capital stock described in Section 2 of this Part A, the total
number of shares of capital stock which the corporation has authority to issue
is 105,494,150 shares, consisting of:
a. 202,500 shares of Class A Common Stock, par value $0.001 per
share (the "Class A Common");
--------------
b. 12,000 shares of Class B Common Stock, par value $0.001 per share
(the "Class B Common");
--------------
c. 64,884 shares of Class C Common Stock, par value $0.001 per share
(the "Class C Common");
--------------
d. 40,000 shares of Class D Common Stock, par value $0.001 per share
(the "Class D Common");
--------------
e. 174,766 shares of Class E Common Stock, par value $0.001 per
share (the "Class E Common");
--------------
f. 100,000,000 shares of Common Stock, par value $0.001 per share
(the "New Common"); and
----------
g. 5,000,000 shares of Preferred Stock, par value $0.001 per share
(the "Preferred Stock").
---------------
Prior to the automatic conversion of shares of capital stock described
in Section 2 of this Part A, the Class A Common, Class B Common, Class C Common,
Class D Common and Class E Common are collectively referred to as the "Class
-----
Common." The Class Common and the New Common are collectively referred to as the
- ------
"Common Stock". Shares of Common Stock will have the rights, preferences and
------------
limitations separately set forth below. Capitalized terms used but not otherwise
defined in this Article Four are defined in Section 8 of Part C below.
1B. SUBSEQUENT TO AUTOMATIC CONVERSION. Immediately subsequent to
----------------------------------
the automatic conversion of shares of capital stock described in Section 2 of
this Part A, the total number of shares of capital stock which the corporation
shall have authority to issue is 105,000,000 shares, consisting of:
<PAGE>
a. 100,000,000 shares of Common Stock, par value $0.001 per share
(the "New Common"); and
----------
b. 5,000,000 shares of Preferred Stock, par value $0.001 per share
(the "Preferred Stock").
---------------
Immediately subsequent to the automatic conversion of shares of
capital stock described in Section 2 of this Part A, the New Common will be
referred to as the "Common Stock". Shares of Common Stock will have the rights,
------------
preferences and limitations separately set forth below. Capitalized terms used
but not otherwise defined in this Article Four are defined in Section 8 of Part
C below.
2. AUTOMATIC CONVERSION OF SHARES.
------------------------------
2A. CONVERSION OF CLASS COMMON. Effective immediately prior to the
--------------------------
consummation of the closing of a firm underwritten public offering (the "IPO")
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of shares of New Common by the
corporation (the "IPO Effective Time"):
A. Class A Common. Each outstanding share of Class A Common
--------------
shall be converted into (i) 72.7825668 shares of New Common
and (ii) the right to receive from the Company out of its
proceeds from the IPO the Unpaid Yield on such share of
Class A Common as of such date and the Unpaid Preference
Amount on such share of Class A Common as of such date.
B. Class B Common. Each outstanding share of Class B Common
--------------
shall be converted into (i) 72.7825668 shares of New Common
and (ii) the right to receive from the Company out of its
proceeds from the IPO the Unpaid Preference Amount on such
share of Class B Common as of such date.
C. Class C Common and Class D Common. Each outstanding share
---------------------------------
of Class D Common shall be converted into 1.6221 shares of
Class C Common and, simultaneously therewith, each such
share of Class C Common shall be converted into 72.7825668
shares of New Common.
D. Class E Common. Each outstanding share of Class E Common
--------------
shall be converted into (i) 72.7825668 shares of New Common
and (ii) the right to receive from the Company out of its
proceeds from the IPO the Unpaid Preference Amount on such
share of Class E Common as of
<PAGE>
such date.
2B. MECHANICS OF CONVERSION. The outstanding shares of Class Common
-----------------------
shall be converted into New Common automatically at the IPO Effective Time
without any further action by the corporation, the holders of such shares or any
other party and whether or not certificates representing such shares are
surrendered to the corporation or its transfer agent, and provided further that
the corporation shall not be obligated to issue certificates representing the
shares of New Common issuable upon such conversion unless certificates
evidencing such shares of Class Common are either delivered to the corporation
or its transfer agent, duly endorsed, or the holder notifies the corporation or
its transfer agent that such certificates have been lost, stolen or destroyed
and executes an agreement satisfactory to the corporation to indemnify the
corporation from any loss incurred by it in connection with such certificate.
The corporation shall, as soon as practicable after such delivery or agreement
and indemnification, issue and deliver to such holder of Class Common a
certificate or certificates for the number of shares of New Common to which the
holder shall be entitled (subject to reduction for shares of New Common sold by
such holder in the IPO, if any) and, as soon as practicable following its
receipt of proceeds from the IPO, the cash payments, if applicable, described
above. Such conversion shall be deemed to have been made at the IPO Effective
Time.
2B. STATUS OF CONVERTED STOCK. In case any shares of Class Common
-------------------------
are converted pursuant to this Section 2 of Part A, the shares so converted
shall be cancelled and retired and shall not be reissued, and the corporation
may from time to time take appropriate action, including the restatement and
integration of the certificate of incorporation and renumbering of this Article
Four in connection therewith upon adoption of such restatement by the board of
directors without a vote of the stockholders, to reflect the corresponding
reduction in the corporation's authorized capital stock.
2C. NO FRACTIONAL SHARES. The corporation shall not be required to
--------------------
issue fractional shares of New Common upon conversion of the Class Common. If
more than one share of Class Common shall be surrendered for conversion at one
time by the same holder, the number of full shares of New Common which shall be
issuable upon the conversion of such shares of Class Common shall be computed on
the basis of the aggregate number of shares of Class Common so surrendered. If
any fraction of a share of New Common would, except for the provisions of this
Section, be issuable on the conversion of any shares of Class Common, the number
of shares of New Common to be issued shall be rounded to the nearest whole
share.
PART B. PREFERRED STOCK
---------------
Shares of Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the corporation is hereby authorized to
determine and alter all rights, preferences and privileges and qualifications,
limitations and restrictions of any such series (including, without limitation,
voting rights and the limitation and
<PAGE>
exclusion of voting rights) granted to or imposed upon any wholly unissued
series of Preferred Stock and the number of shares constituting any such series
and the designation thereof, and to increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of any
series after the issuance of shares of that series. If the number of shares of
any series is so decreased, then the shares constituting such reduction will
resume the status which such shares had prior to the adoption of the resolution
originally fixing the number of shares of such series. No share of any series of
Preferred Stock will be sold or otherwise transferred (with or without
consideration) to any individual if such transfer would result in the ownership
by such individual in combination with four or fewer individuals (within the
meaning of Section 542(a)(2) of the Code) of more than fifty percent of the
aggregate value of all shares of all classes of capital stock of the corporation
(the "Percentage Ownership Limit").
--------------------------
PART C. COMMON STOCK
------------
Except as otherwise provided in this ARTICLE FOUR or as otherwise
required by applicable law, all shares of Class A Common, Class B Common, Class
C Common, Class D Common and Class E Common will be identical in all respects
and will entitle the holders of such shares to the same rights and privileges,
subject to the same qualifications, limitations and restrictions.
Except as otherwise required by applicable law, all shares of New Common
will be identical in all respects and will entitle the holders of such shares to
the same rights and privileges.
1. VOTING RIGHTS. If there are any shares of Class Common issued
-------------
and outstanding, then except as otherwise provided in this Part C or as
otherwise required by applicable law, the holders of Class A Common, Class B
Common, Class C Common, Class D Common and Class E Common, as a single combined
class, will be entitled to vote in the election of directors and on all other
matters submitted to a vote of the corporation's stockholders, with each holder
of Class A Common, Class B Common, Class C Common and Class E Common being
entitled to a number of votes equal to the number of Units assigned to the
shares of Class A Common, Class B Common, Class C Common and Class E Common held
by such holder, and with each holder of Class D Common being entitled to a
number of votes equal to the number of Units assigned to the shares of Class C
Common which would be issued upon the conversion of the shares of Class D Common
held by such holder pursuant to Section 3 of this Part C if the record date for
such vote were the Conversion Date.
If there are no shares of Class Common issued and outstanding, then except
as otherwise provided in this Part C or as otherwise required by applicable law,
the holders of Common Stock will be entitled to vote in the election of
directors and on all other matters submitted to a vote of the corporation's
stockholders, with each holder of Common Stock being entitled to one vote for
each share Common Stock held by such
<PAGE>
holder.
2. DISTRIBUTIONS. If there are no shares of Class Common issued
-------------
and outstanding, then subject to any right of any holder of Preferred Stock to
receive any amount of any Distribution, the holders of Common Stock will be
entitled to receive any Distribution ratably among such holders on the basis of
the number of shares of Common Stock held by such holders.
If there are any shares of Class Common issued and outstanding, then
subject to any right of any holder of Preferred Stock to receive any amount of
any Distribution, each Distribution will be made to the holders of Class A
Common, Class B Common, Class C Common, Class D Common and Class E Common in the
following priority:
2A. SENIOR YIELD. First, to the holders of Class A Common, as a
------------
separate class, in an amount up to the aggregate Unpaid Yield on the outstanding
shares of Class A Common immediately prior to such Distribution. Any amount paid
to the holders of Class A Common pursuant to this paragraph 2A will be paid pro
rata among the holders of Class A Common based upon the aggregate amount of the
Unpaid Yield on the shares of Class A Common held by them immediately prior to
such Distribution. No Distribution will be made under any of paragraphs 2B
through 2F unless the amount of the Unpaid Yield on each outstanding share of
Class A Common is equal to zero. Any Distribution made pursuant to this
paragraph 2A will be treated for purposes of determining whether all required
Distributions have been made under this Section 2A as a payment of the Yield on
the Class A Common.
2B. SENIOR PREFERENCE AMOUNT. Second, to the holders of Class A
------------------------
Common, as a separate class, in an amount up to the aggregate Unpaid Preference
Amount for the outstanding shares of Class A Common immediately prior to such
Distribution. Any amount paid pursuant to this paragraph 2B will be paid pro
rata among the holders of Class A Common based upon the aggregate amount of the
Unpaid Preference Amount for the shares of Class A Common held by them
immediately prior to such Distribution. No Distribution will be made under any
of paragraphs 2C through 2F unless the amount of the Unpaid Preference Amount
for each outstanding share of Class A Common is equal to zero. Any Distribution
made pursuant to this paragraph 2B will be treated for purposes of determining
whether all required Distributions have been made pursuant to this Section 2B as
a payment of the Preference Amount for the Class A Common.
2C. MEZZANINE PREFERENCE AMOUNT. Third, to the holders of Class E
---------------------------
Common, as a separate class, in an amount up to the aggregate Unpaid Preference
Amount for the outstanding shares of Class E Common immediately prior to such
Distribution. Any amount paid to the holders of class E Common pursuant to this
paragraph 2C will be paid pro rata among the holders of Class E Common based
upon the aggregate amount of the Unpaid Preference Amount for the shares of
Class E Common held by them immediately prior to such Distribution. No
Distribution will be made under any of paragraphs 2D through 2F unless the
amount of the Unpaid
<PAGE>
Preference Amount for each outstanding share of Class E Common is equal to zero.
Any Distribution made pursuant to this paragraph 2C will be treated for purposes
of determining whether all required Distributions have been made pursuant to
this Section 2C as a payment of the Preference Amount for the Class E Common.
2D. JUNIOR YIELD. Fourth, to the holders of Class B Common, as a
------------
separate class, in an amount up to the aggregate Unpaid Yield on the outstanding
shares of Class B Common immediately prior to such Distribution. Any amount paid
pursuant to this paragraph 2D will be paid pro rata among holders of Class B
Common based upon the aggregate amount of the Unpaid Yield on the shares of
Class B Common held by them immediately prior to such Distribution. No
Distribution will be made under paragraph 2E or 2F unless the amount of the
Unpaid Yield on each outstanding share of Class B Common is equal to zero. Any
Distribution made pursuant to this paragraph 2D will constitute a payment of the
Yield on the Class B Common.
2E. JUNIOR PREFERENCE AMOUNT. Fifth, to the holders of Class B
------------------------
Common, as a separate class, in an amount up to the aggregate Unpaid Preference
Amount for the outstanding shares of Class B Common immediately prior to such
Distribution. Any amount paid pursuant to this paragraph 2E will be paid pro
rata among the holders of Class B Common based upon the aggregate amount of the
Unpaid Preference Amount for the shares of Class B Common held by them
immediately prior to such Distribution. No Distribution will be made under
paragraph 2F unless the amount of the Unpaid Preference Amount for each
outstanding share of Class B Common is equal to zero. Any Distribution made
pursuant to this paragraph 2E will constitute a payment of the Preference Amount
for the Class B Common.
2F. ALL COMMON. After the required amounts (if any) of the
----------
Distribution have been made pursuant to each of paragraphs 2A through 2E, the
holders of Class A Common, Class B Common, Class C Common, Class D Common and
Class E Common, as a single combined class, will be entitled to receive the
remaining portion of such Distribution, ratably among such holders on the
following basis: for any holder of Class A Common, Class B Common, Class C
Common or Class E Common, on the basis of the number of Units assigned to the
shares of Class A Common, Class B Common, Class C Common and Class E Common held
by such holder immediately prior to such Distribution, and for any holder of
Class D Common, on the basis of the number of Units assigned to the shares of
Class C Common which would be issued upon the conversion of the shares of Class
D Common held by such holder pursuant to Section 3 of this Part C if the record
date for such Distribution were the Conversion Date.
<PAGE>
3. CONVERSION OF CLASS D COMMON AND UNIT DETERMINATIONS. The
----------------------------------------------------
following provisions shall apply if there are any shares of Class Common issued
and outstanding:
3A. CONVERSION OF CLASS D COMMON. On and after the Conversion Date,
----------------------------
the holders of Class D Common will be entitled to convert shares of Class D
Common into shares of Class C Common in accordance with this Section 3. The
number of shares of Class C Common issuable upon the conversion of all Class D
Common outstanding on the Conversion Date will be 53,625, and such shares of
Class C Common will be issued upon such conversion to the holders of Class D
Common pro rata according to the number of shares of Class D Common held by them
at the close of business on the Conversion Date.
3B. CONVERSION PROCEDURE. Each conversion of shares of Class D
--------------------
Common into shares of Class C Common will be effected by the surrender of the
certificate or certificates representing the shares of Class D Common to be
converted at the principal office of the corporation at any time during normal
business hours, together with a written notice by the holder of such Class D
Common stating that such holder desires to convert the shares of Class D Common
represented by such certificate or certificates into shares of Class C Common.
Each such conversion will be deemed to have been effected as of the close of
business on the date on which such certificate or certificates have been
surrendered and such notice has been received (or, if later, at the close of
business on the Conversion Date), and at such effective time the rights of the
holder of the converted Class D Common as such holder will cease and the person
or persons in whose name or names the certificate or certificates for shares of
Class C Common are to be issued upon such conversion will be deemed to have
become the holder or holders of record of the shares of Class C Common to be
represented by such certificate(s). Promptly after such effective time, the
corporation will issue and deliver in accordance with the surrendering holder's
instructions the certificate or certificates for the Class C Common issuable
upon such conversion. The corporation will at all times reserve and keep
available out of its authorized but unissued shares of Class C Common, solely
for the purpose of issuance upon the conversion of the Class D Common, such
number of shares of Class C Common issuable upon the conversion of all
outstanding Class D Common. All shares of Class C Common which are so issuable
will, when issued, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges. The corporation will take all reasonable
actions which may be necessary and which may be within the corporation's control
to assure that all such shares of Class C Common may be so issued without
violation of any applicable law or governmental regulation or any requirements
of any domestic securities exchange upon which shares of Class C Common may be
listed (except for official notice of issuance which will be immediately
transmitted by the corporation upon issuance). The corporation will not close
its books against the transfer of shares of Common Stock in any manner which
would interfere with the timely conversion of Class D Common in accordance with
this Section 3.
3C. DETERMINATION OF CLASS C COMMON UNITS. The number of Units
-------------------------------------
<PAGE>
assigned to each share of Class C Common will be 1.0, increased by the sum of:
A. 0.000000512447552448 multiplied by the lesser of (1) the number
of shares of Class E Common outstanding at the time of
determination and (2) 100,000; plus
----
B. 0.00000212289044289 multiplied by the lesser of (1) the number of
shares of Class E Common outstanding at the time of determination
in excess of 100,000 shares, if any, and (2) 100,000; plus
----
C. 0.00000304839160839 multiplied by the lesser of (1) the number of
shares of Class E Common outstanding at the time of determination
in excess of 200,000, if any, and (2) 100,000.
4. STOCK SPLITS AND STOCK DIVIDENDS. If there are any shares of
--------------------------------
Class Common issued and outstanding, the corporation will not in any manner
subdivide (by stock split, stock dividend or otherwise) or combine (by reverse
stock split or otherwise) the outstanding Common Stock of one class unless the
outstanding Common Stock of all the other classes will be proportionately
subdivided or combined. All such subdivisions will be payable only in Class A
Common to the holders of Class A Common, in Class B Common only to the holders
of Class B Common, in Class C Common only to the holders of Class C Common, in
Class D Common only to the holders of Class D Common and in Class E Common only
to the holders of Class E Common.
5. TRANSFER OF COMMON STOCK.
------------------------
5A. TRANSFER RESTRICTIONS. Inasmuch as it is the intention of the
---------------------
corporation and its stockholders that the corporation satisfy the provisions of
the Code relating to qualification of the corporation as a "real estate
investment trust," particularly Section 856(a)(5) of the Code, no holder of any
share of any class of Common Stock may transfer any such share or any interest
therein to any other individual, firm, corporation, entity or other person if,
as a result of such transfer, either (i) beneficial ownership of all shares of
all classes of Common Stock would be held by less than 100 persons (the
"Aggregate Ownership Limit"), if beneficial ownership of all shares of all
-------------------------
classes of Common Stock was held by 100 or more persons prior to such transfer,
or (ii) a violation of the Percentage Ownership Limit (as defined in Part B)
would occur.
5B. REGISTRATION OF TRANSFERS. The corporation will keep at its
-------------------------
principal office (or such other place as the corporation reasonably designates)
a register for the registration of shares of Common Stock. Upon the surrender at
such place of any certificate representing shares of any class of Common Stock
with respect to all of which a transfer would satisfy all requirements of
paragraph 5A of this Part C, the corporation will, at the request of the
registered holder of such certificate, execute and
<PAGE>
deliver a new certificate or certificates in exchange therefor representing in
the aggregate the number of shares of the class represented by the surrendered
certificate, and the corporation forthwith will cancel such surrendered
certificate. Each such new certificate will be registered in such name and will
represent such number of shares of such class as is requested by the holder of
the surrendered certificate (so long as the requirements of this paragraph 5B
and paragraph 5A of this Part C are otherwise satisfied with respect to the
Common Stock represented by such certificate) and will be substantially
identical in form to the surrendered certificate. The issuance of new
certificates will be made without charge to the holders of the surrendered
certificates for any issuance tax in respect thereof or other cost incurred by
the corporation in connection with such issuance.
6. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to
-----------
the corporation (an affidavit of the registered holder being satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of any class of Common Stock, and in the case of
any such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the corporation (provided that if the holder is a financial
institution or other institutional investor then its own agreement will be
satisfactory) or, in the case of any such mutilation upon surrender of such
certificate, the corporation will (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
7. AMENDMENT AND WAIVER. If there are any shares of Class Common
--------------------
issued and outstanding, then no amendment or waiver of any provision of this
Part C will be effective without the prior approval of the holders of a majority
of the votes entitled to be cast by the holders of Common Stock, as described in
Section 1 of this Part C.
8. DEFINITIONS. As used in this Part C and in the following Part D,
-----------
the following terms will have the following respective meanings:
"CODE" means the Internal Revenue Code of 1986, as in effect from time
----
to time.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement dated as of
----------------------
the date of the initial issuance of Common Stock among the corporation, Pinnacle
Towers Inc., ABRY Broadcast Partners II, L.P., Michael D. Craig, the Gardere &
Wynne Savings and Retirement Plan Trust for the Benefit of Michael D. Craig,
James M. Dell'Apa and Robert J. Wolsey, as such Agreement has been and is in
effect from time to time.
"CONVERSION DATE" has the meaning assigned to that term in the Second
---------------
Amended and Restated Subscription and Stockholders Agreement dated as of May 16,
1996 among the corporation, Pinnacle Towers Inc., ABRY Broadcast Partners II,
L.P.,
<PAGE>
Michael D. Craig, the Gardere & Wynne Savings and Retirement Plan Trust for the
Benefit of Michael D. Craig, James M. Dell'Apa and Robert J. Wolsey, as such
Agreement has been and is in effect from time to time.
"DISTRIBUTION" means each distribution made by the corporation to
------------
holders of Common Stock, whether in cash, property, or securities of the
corporation and whether by dividend, liquidation distribution or otherwise;
provided that none of the following will be a Distribution: (a) any redemption
- --------
or repurchase by the corporation of any shares of Class B Common, Class C Common
or Class D Common for any reason, (b) any recapitalization or exchange of any
shares of Common Stock, or any subdivision (by stock split, stock dividend or
otherwise) or any combination (by reverse stock split or otherwise) of any
outstanding shares of Common Stock, (c) the consolidation or merger of the
corporation into or with any other entity or entities, nor the sale or transfer
by the corporation of all or any part of its assets, nor the reduction of the
capital stock of the corporation, or (d) a change in the number of Units in
respect of shares of Class C Common.
"UNIT" means the right to vote pursuant to paragraph 1 of this Part C
----
and the right to participate in Distributions pursuant to paragraph 2F of this
Part C and the number of Units per share of Common Stock shall be 1.0, except,
in the case of Class C Common, as adjusted pursuant to paragraph 3C of this Part
C.
"UNPAID PREFERENCE AMOUNT" for any share of Class A Common, Class B
------------------------
Common or Class E Common means $100.00 (in each case, as such amount is
proportionately reduced to reflect any split or subdivision of the Class A
Common, Class B Common or Class E Common and proportionately increased to
reflect any reverse split or combination of the Class A Common, Class B Common
or Class E Common), reduced by the aggregate amount of all Distributions made in
----------
respect of such share pursuant to paragraphs 2B, 2C or 2E, respectively, of this
Part C.
"UNPAID YIELD" for any share of Class A Common or Class B Common means
------------
an amount equal to the excess, if any, of (a) the aggregate Yield accrued on
---------- ------
such share over (b) the aggregate amount of Distributions made by the
----
corporation in respect of such share pursuant to paragraph 2A or paragraph 2D of
this Part C.
"YIELD" for any outstanding share of Class A Common or Class B Common
-----
on any date means the amount accruing daily on the Unpaid Preference Amount for
such share from time to time from the date of its issuance through and including
June 30, 1997, at the rate of 15% per annum, compounded annually, taking into
account the amount and timing of all Distributions in respect of such share
pursuant to paragraph 2B or paragraph 2E of this Part C; provided that, for
--------
purposes of determining the amount of the Yield thereon, each share of Class A
Common or Class B Common issued pursuant to the Contribution Agreement will be
deemed to have been issued on May 3, 1995.
<PAGE>
PART D. UNAUTHORIZED TRANSFERS
----------------------
1. EFFECT OF UNAUTHORIZED TRANSFERS. Any transfer of any share of
--------------------------------
any class of capital stock of the corporation in violation of the Percentage
Ownership Limit, the Aggregate Ownership Limit, and/or any other restriction or
requirement specified in this Article Four (a "Purported Transfer") will be void
------------------
and of no legal effect. Any Purported Transfer will cause (without action on the
part of the corporation, the transferee (the "Prohibited Transferee"), or the
---------------------
transferor) all shares (or interests therein) involved in such Purported
Transfer to be transferred to the corporation, as trustee (in such capacity, the
"Trustee") in trust for the exclusive benefit of one or more organizations
-------
described in Section 501(c)(3) of the Code (the "Charitable Beneficiaries"). The
------------------------
Trustee will be deemed to own such shares for the benefit of the Charitable
Beneficiaries on the day prior to the date of the Purported Transfer. Any
dividends or distributions paid by the corporation to the Purported Transferee
prior to discovery of a Purported Transfer will be disgorged and repaid to the
corporation, as Trustee, by the Prohibited Transferee. Any dividend declared
after a Purported Transfer but unpaid will be rescinded as void ab initio with
respect to the Prohibited Transferee. Any dividends so disgorged or rescinded
will then be paid over to the Trustee and held in trust for the Charitable
Beneficiaries. Any vote taken by a Prohibited Transferee prior to the discovery
by the corporation of a Purported Transfer will be rescinded as void ab initio.
With respect to the shares involved in the Purported Transfer, the Trustee will
be deemed to have an irrevocable proxy to vote such shares for the benefit of
the Charitable Beneficiaries.
2. NOTIFICATION OF PROPOSED TRANSFERS. In order that the
----------------------------------
corporation may enforce the Aggregate Ownership Limit and the Percentage
Ownership Limit, no share of any class or series of capital stock of the
corporation will be transferrable by the holder thereof unless, not less than 30
days prior to any such proposed transfer, the holder of any and all shares
proposed to be transferred ("Transferred Shares") delivers to the corporation
------------------
written notice of its intention to effect such a transfer, provided, however,
that this Section 2 of Part D shall automatically terminate at the IPO Effective
Time.
3. LEGEND. Each certificate for shares of capital stock of the
------
corporation shall bear substantially the following legend:
"The shares represented by this certificate are subject to
restriction on transfer and ownership for the purpose of the
corporation's maintenance of its status as a Real Estate Investment
Trust under the Internal Revenue Code of 1986, as amended. Subject to
certain further restrictions and except as expressly provided in the
corporation's certificate of incorporation, as amended, any transfer
of any share of capital stock of the corporation will be void and of
no legal effect if such transfer would result in (i) the ownership by
five or fewer individuals of more than fifty percent of the aggregate
value of all shares of capital stock of the corporation or (ii)
beneficial ownership of all shares of common stock
<PAGE>
would be held by less than 100 persons. Any shares of capital stock
purported to be transferred in violation of these restrictions will
be automatically transferred to the corporation, as trustee, for the
benefit of one or more charitable beneficiaries. A copy of the
corporation's certificate of incorporation, as amended, including the
foregoing restrictions on transfer, will be sent without charge to
each stockholder who so requests."
<PAGE>
EXHIBIT 4.3
FORM OF STOCK CERTIFICATE
- -------------------------
[PINNACLE HOLDINGS INC. LOGO]
PINNACLE HOLDINGS INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK
NUMBER SERIES
_________________ _______________
THIS CERTIFICATE IS TRANSFERABLE CUSIP _________
IN _________________
THIS CERTIFIES THAT
IS THE HOLDER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $0.001 PER
SHARE, OF PINNACLE HOLDINGS INC. transferable on the books of the Corporation in
person or by duly authorized attorney upon surrender of this Certificate
properly endorsed. This Certificate is not valid until countersigned by the
Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
PINNACLE HOLDINGS INC.
[SEAL]
Secretary President
Countersigned and Registered
______________________
Transfer Agent and Registrar,
Authorized Signature
LEGEND:
The shares represented by this certificate are subject to restriction on
transfer and ownership for the purpose of the corporation's maintenance of its
status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Subject
<PAGE>
to certain further restrictions and except as expressly provided in the
corporation's certificate of incorporation, as amended, any transfer of any
share of capital stock of the corporation will be void and of no legal effect if
such transfer would result in (i) the ownership by five or fewer individuals of
more than fifty percent of the aggregate value of all shares of capital stock of
the corporation or (ii) beneficial ownership of all shares of common stock would
be held by less than 100 persons. Any shares of capital stock purported to be
transferred in violation of these restrictions will be automatically transferred
to the corporation, as trustee, for the benefit of one or more charitable
beneficiaries. A copy of the corporation's certificate of incorporation, as
amended, including the foregoing restrictions on transfer, will be sent without
charge to each stockholder who so requests.
<PAGE>
EXHIBIT 4.4
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT (the "Agreement") is made as of July __,
---------
1998, among Pinnacle Holdings Inc., a Delaware corporation (the "Company"), ABRY
-------
Broadcast Partners II, L.P., a Delaware limited partnership ("ABRY"), Robert J.
----
Wolsey, Steven Day and James M. Dell'Apa (the "Executives") and the Persons
----------
named on the attached Exhibit A (together with the Executives, the "Executive
--------- ---------
Holders"). Capitalized terms used but not otherwise defined herein are defined
- -------
in Section 8 hereof.
The parties hereto agree as follows:
1. Demand Registrations.
--------------------
(a) Requests for Registration. At any time the holders of a majority
-------------------------
of the ABRY Registrable Securities may request registration under the Securities
Act of all or any portion of the ABRY Registrable Securities (i) on Form S-1 or
any similar long-form registration ("Long-Form Registrations"), (ii) on Form S-2
-----------------------
or S-3 or any similar short-form registration ("Short-Form Registrations") if
------------------------
available and (iii) on any applicable form pursuant to Rule 415 under the
Securities Act (a "415 Registration"). All registrations requested as described
----------------
in this Section 1 are referred to herein as "Demand Registrations." Each
--------------------
request for a Demand Registration shall specify the approximate number of
Registrable Securities requested to be registered and the anticipated per share
price range for such offering. Within ten days after receipt of any such
request, the Company shall give written notice of such requested registration to
all other holders of Registrable Securities and shall include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 15 days after the receipt
of the Company's notice.
(b) Long-Form Registrations. The holders of a majority of the ABRY
-----------------------
Registrable Securities shall be entitled to request three Long-Form
Registrations in which the Company shall pay all Registration Expenses
("Company-paid Long-Form Registrations"). A registration shall not count as one
------------------------------------
of the permitted Long-Form Registrations until it has become effective, and no
Long-Form Registration shall count as one of the Company-paid Long-Form
Registrations unless the holders of ABRY Registrable Securities are able to
register and sell at least 90% of the ABRY Registrable Securities requested to
be included in such registration; provided, that in any event the Company shall
--------
pay all Registration Expenses in connection with any registration initiated as a
Company-paid Long-Form Registration whether or not it has become effective and
<PAGE>
whether or not such registration is counted as one of the Company-paid Long-Form
Registrations.
(c) Short-Form Registrations. The holders of a majority of the ABRY
------------------------
Registrable Securities shall be entitled to request an unlimited number of
Short-Form Registrations in which the Company shall pay all Registration
Expenses. Demand Registrations shall be Short-Form Registrations whenever the
Company is permitted to use any applicable short form. After the Company has
become subject to the reporting requirements of the Securities Exchange Act, the
Company shall use commercially reasonable efforts to make Short-Form
Registrations on Form S-3 available for the sale of Registrable Securities.
(d) 415 Registrations.
-----------------
(i) The holders of a majority of the ABRY Registrable Securities
will be entitled to request one 415 Registration in which the Company will
pay all Registration Expenses. Subject to the availability of required
financial information, within 45 days after the Company receives written
notice of a request for a 415 Registration, the Company shall file with the
Securities and Exchange Commission a registration statement under the
Securities Act for the 415 Registration. The Company shall use its best
efforts to cause the 415 Registration to be declared effective under the
Securities Act as soon as practical after filing, and once effective, the
Company shall (subject to the provisions of clause (ii) below) cause such
415 Registration to remain effective for such time period as is specified
in such request, but for no time period longer than the period ending on
the earlier of (A) the third anniversary of the date of filing of the 415
Registration or (B) the date on which all ABRY Registrable Securities have
been sold pursuant to the 415 Registration or (C) the date as of which
there are no longer any ABRY Registrable Securities in existence.
(ii) If the holders of a majority of the ABRY Registrable
Securities notify the Company in writing that they intend to effect the
sale of all or substantially all of the ABRY Registrable Securities held by
such holders pursuant to a single integrated offering pursuant to a then
effective registration statement for a 415 Registration (a "Takedown"), the
--------
Company and each holder of Registrable Securities shall not effect any
public sale or distribution of its Equity Securities during the 90-day
period beginning on the date such notice of a Takedown is received, except
pursuant to such Takedown.
(e) Priority on Demand Registrations. If a Demand Registration is an
--------------------------------
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion
<PAGE>
the number of Registrable Securities and, if permitted hereunder, other
securities requested to be included in such offering exceeds the number of
Registrable Securities and other securities, if any, which can be sold therein
without adversely affecting the Company or the marketability of the offering,
the Company shall include in such registration (i) first, such quantity of
Company Registrable Securities as the holders of a majority of the ABRY
Registrable Securities may designate (which quantity may be less than the
quantity initially requested pursuant to Section 4(c)) and (ii) second, the
number of Registrable Securities and (if permitted by the holders of a majority
of the ABRY Registrable Securities) other securities requested to be included in
such registration, which in the opinion of such underwriters can be sold without
adversely affecting the Company or the marketability of the offering, pro rata
among the respective holders thereof on the basis of the number of shares
requested to be included in such registration (to the extent permitted to be so
included, in the case of securities which are not Registrable Securities) by
each such holder.
(f) Restrictions on Demand Registrations. The Company shall not be
------------------------------------
obligated to effect any Demand Registration within 180 days after the effective
date of a previous Demand Registration or a previous registration in which the
holders of Registrable Securities were given piggyback rights pursuant to
Section 2 hereof and in which there was no reduction in the number of
Registrable Securities requested to be included.
(g) Selection of Underwriters. The holders of a majority of the ABRY
-------------------------
Registrable Securities shall have the right to select the investment banker(s)
and manager(s) to administer the offering relating to any Demand Registration,
subject to the Company's approval which shall not be unreasonably withheld.
2. Piggyback Registrations.
-----------------------
(a) Right to Piggyback. Whenever the Company proposes to register any
------------------
of its securities under the Securities Act other than pursuant to a Demand
Registration and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
----------------------
shall give prompt written notice to all holders of Registrable Securities of its
intention to effect such a registration and shall include in such registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 20 days after the receipt of the
Company's notice; provided that the Company will not be required to give such
--------
notice or include Registrable Securities in such registration if holders of a
majority of the Registrable Securities (voting together as a single combined
class as provided in the Company's certificate of incorporation as in effect at
the time in question) so agree or declare in writing. For purposes of this
Agreement, the registered offering contemplated by the Recapitalization
Agreement will be
<PAGE>
deemed to be a Piggyback Registration (the "Proposed IPO"); provided that, to
------------ --------
the extent any provision of the Recapitalization Agreement is expressly contrary
to or inconsistent with any provision of this Agreement, the provisions of the
Recapitalization Agreement shall control.
(b) Piggyback Expenses. The Registration Expenses of the holders of
------------------
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration is
---------------------------------
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability
of the offering, the Company shall include in such registration (i) first, the
securities the Company proposes to sell, and (ii) second, the Registrable
Securities and (if permitted by the holders of a majority of the ABRY
Registrable Securities) other securities of the Company requested to be included
in such registration, pro rata among the holders of such Registrable Securities
and other securities of the Company on the basis of the number of shares
requested to be included in such registration by each such holder.
(d) Priority on Secondary Registrations. If a Piggyback Registration
-----------------------------------
is an underwritten secondary registration on behalf of holders of the Company's
securities who have the contractual right to initiate such a registration, and
the managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering without adversely affecting the
Company or the marketability of the offering, the Company shall include in such
registration the securities requested to be included therein by the holders
initially requesting such registration, any Registrable Securities requested to
be included therein and (if permitted by the holders of a majority of the ABRY
Registrable Securities) any other securities of the Company requested to be
included in such registration, in each instance which in the opinion of such
underwriters can be sold without adversely affecting the Company or the
marketability of the offering, pro rata among the holders thereof on the basis
of the number of shares requested to be included in such registration (to the
extent permitted to be so included, in the case of securities which are not
Registrable Securities) by each such holder.
(e) Selection of Underwriters. If any Piggyback Registration is an
-------------------------
underwritten offering, the selection of investment banker(s) and manager(s) for
the offering must be approved by the holders of a majority of the Registrable
Securities included in such registration (voting
<PAGE>
together as a single combined class as provided in the Company's certificate of
incorporation as in effect at the time in question). Such approval shall not be
unreasonably withheld.
(f) Other Registrations. If the Company has previously filed a
-------------------
registration statement with respect to Registrable Securities pursuant to
Section 1 hereof or pursuant to this Section 2, and if such previous
registration has not been withdrawn or abandoned, the Company shall not file or
cause to be effected any other registration of any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-8 or any successor form),
whether on its own behalf or at the request of any holder or holders of such
securities, until a period of at least 180 days has elapsed from the date such
previous registration became effective.
3. Holdback Agreements.
-------------------
(a) Each holder of Registrable Securities shall not effect any public
sale or distribution (including sales pursuant to Rule 144) of Equity Securities
of the Company during the seven days prior to and the 180-day period beginning
on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration (except as part of such underwritten
registration), unless the underwriter(s) managing such underwritten registration
otherwise agree. In the event of an Initial Public Offering (as defined in
Section 8), each holder of Registrable Securities shall take such other
necessary or desirable actions reasonably requested by the underwriter(s)
managing the Initial Public Offering.
(b) The Company shall not effect any public sale or distribution of
its Equity Securities during the seven days prior to and during the 180-day
period beginning on the effective date of any underwritten Demand Registration
or any underwritten Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-8 or any successor form),
unless the underwriter(s) managing such underwritten registration otherwise
agree.
4. Registration Procedures. Whenever the holders of Registrable
-----------------------
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, and in connection with the Proposed IPO, the Company shall
use its best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Company shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective;
(b) notify each holder of Registrable Securities of the effectiveness
of each registration statement filed hereunder and prepare and file with the
Securities and Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement;
<PAGE>
(c) if requested by the holders of a majority of the ABRY Registrable
Securities in connection with any Demand Registration, use its best efforts to
cause to be included in such registration statement shares of Common Stock
("Company Registrable Securities") to be offered in a primary offering of the
------------------------------
Company's securities contemporaneously with such offering;
(d) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(e) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(f) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus and/or registration
statement so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statements therein not
misleading;
(g) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system;
(h) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of the first registration statement
relating to Registrable Securities or securities of any class of the Company;
(i) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold (voting together as a single
combined class as provided in the Company's certificate of incorporation as in
effect at the time in question) or the underwriters, if any, reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities (including effecting a stock split or a combination of shares);
<PAGE>
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(k) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(l) use commercially reasonable efforts to obtain a cold comfort
letter from the Company's independent public accountants in customary form and
covering such matters of the type customarily covered by cold comfort letters,
and to permit the holders of the Registrable Securities to be sold in the
related offering to rely upon such opinions of legal counsel delivered in
connection with such offering, as the holders of a majority of the Registrable
Securities being sold reasonably request;
(m) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order; and
(n) use its best efforts to cause its management to participate fully
in the sale process, including, without limitation, the preparation of the
registration statement and the preparation and presentation of any "road shows,"
whether domestic or international.
Each Executive agrees that, if he is then an employee of the Company or direct
or indirect subsidiary of the Company, then he shall participate fully in the
sale process, including without limitation, the preparation of the registration
statement and the preparation and presentation of any such road shows.
5. Registration Expenses.
---------------------
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, whether incurred prior to, on or after the date
of this Agreement, including without limitation all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, fees and disbursements of custodians,
and fees and disbursements of counsel for the Company and all independent
certified
<PAGE>
public accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), shall be borne by the Company, and the Company shall
---------------------
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit or quarterly review, the expense of any
liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities issued by the
Company are then listed or on the NASD automated quotation system.
(b) In connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
requested to be included in such registration (voting together as a single
combined class as provided in the Company's certificate of incorporation as in
effect at the time in question).
6. Indemnification.
---------------
(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, such holder's officers and directors, and
each Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto (whether made or filed prior to, on or after the
date of this Agreement) or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company shall indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder shall furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, shall indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus (whether made or filed prior to, on or after the date of this
Agreement) or any amendment thereof or supplement thereto or any omission or
<PAGE>
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing by such holder; provided that the obligation to indemnify
shall be individual, not joint and several, for each holder and shall be limited
to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
7. Participation in Underwritten Registrations. No Person may
-------------------------------------------
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements, (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
that are standard and customary and are required under the terms of such
underwriting arrangements, and (c) completes and executes any other documents
reasonably required.
8. Definitions.
-----------
"415 Registration" has the meaning set forth in Section 1(a).
----------------
"ABRY Registrable Securities" means, irrespective of which Person
---------------------------
actually holds such securities, (i) any Common Stock held or acquired by ABRY or
any of its Affiliates on or
<PAGE>
after the date hereof, and (ii) any Common Stock issued or issuable with respect
to the securities referred to in clause (i) above by way of a distribution,
stock dividend, stock split, conversion or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular ABRY Registrable Securities, such securities will cease to be
ABRY Registrable Securities when they have been distributed to the public
pursuant to an offering registered under the Securities Act or sold to the
public through a broker, dealer or market maker in compliance with Rule 144 (or
any similar rule then in force) under the Securities Act. For purposes of this
Agreement, a Person will be deemed to be a holder of ABRY Registrable Securities
whenever such Person has the right to acquire such ABRY Registrable Securities
(upon conversion, or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the exercise of
such right), whether or not such acquisition has actually been effected.
"Common Stock" means, collectively, the common stock of the Company
------------
(including the "Class Common" and the "New Common," as those terms are used in
the Recapitalization Agreement) and any other class of Equity Securities of the
Company which is not limited to a fixed sum or percentage of par value or stated
value in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the issuer of such securities.
"Company Registrable Securities" has the meaning set forth in Section
------------------------------
4(c).
"Company-Paid Long Form Registration" has the meaning set forth in
-----------------------------------
Section 1(b).
"Demand Registration" has the meaning set forth in Section 1(a).
-------------------
"Equity Securities" of any Person means (i) any capital stock,
-----------------
partnership, member ship, joint venture or other ownership or equity interest,
participation or securities (whether voting or non-voting, whether preferred,
common or otherwise, and including any stock appreciation, contingent interest
or similar right) and (ii) any option, warrant, security or other right
(including debt securities) directly or indirectly convertible into or
exercisable or exchangeable for, or otherwise to acquire directly or indirectly,
any stock, interest, participation or security described in clause (i) above.
"Executive Registrable Securities" means, irrespective of which
--------------------------------
Person actually holds such securities, (i) any Common Stock held on the date
hereof by an Executive Holder, (ii) any Common Stock acquired hereafter by an
Executive Holder, or any executive employee of the Company or its Subsidiaries
who becomes a party to this Agreement, and (iii) any Common Stock issued or
issuable with respect to the securities referred to in clauses (i) or (ii) above
by way of a distribution, stock dividend, stock split, conversion or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular Executive Registrable Securities,
such securities will cease to be Executive Registrable Securities when they have
been distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public through a broker, dealer or market maker in
compliance
<PAGE>
with Rule 144 (or any similar rule then in force) under the Securities Act, as
in effect from time to time. For purposes of this Agreement, a Person will be
deemed to be a holder of Executive Registrable Securities whenever such Person
has the right to acquire such Executive Registrable Securities (upon conversion
or exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected.
"Long-Form Registration" has the meaning set forth in Section 1(a).
----------------------
"Person" means an individual, a partnership, a joint venture, a
------
corporation, a trust, a limited liability company, an unincorporated
organization or a government or any department or agency thereof.
"Piggyback Registration" has the meaning set forth in Section 2(a).
----------------------
"Proposed IPO" has the meaning set forth in Section 2(a).
------------
"Recapitalization Agreement" means the Recapitalization Agreement
--------------------------
dated as of the date of this Agreement among the Company and the parties to this
Agreement, as in effect from time to time.
"Registrable Securities" means, collectively, the ABRY Registrable
----------------------
Securities and the Executive Registrable Securities.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Securities Exchange Act" means the Securities Exchange Act of 1934,
-----------------------
as amended.
"Short-Form Registration" has the meaning set forth in Section 1(a).
-----------------------
"Takedown" has the meaning set forth in Section 1(d).
--------
9. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company shall not hereafter enter
--------------------------
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement.
(b) Adjustments Affecting Registrable Securities. The Company shall
--------------------------------------------
not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would materially and
<PAGE>
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) Remedies. Any Person having rights under any provision of this
--------
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(d) Amendments and Waivers. Except as otherwise provided herein, the
----------------------
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of a majority of the Registrable
Securities (voting together as a single combined class as provided in the
Company's certificate of incorporation as in effect at the time in question);
provided, that no such amendment or waiver shall materially and adversely affect
- --------
the rights hereunder of any of the parties hereto when compared with its effect
on the other parties hereto without the prior written approval of such party.
(e) Successors and Assigns. All covenants and agreements in this
----------------------
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(f) Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement
--------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
(i) GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE
-------------
CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE,
<PAGE>
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR
PROVISIONS (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF DELAWARE.
(j) Notices. All notices, demands or other communications to be given
-------
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when given in a manner provided
for delivery of notices pursuant to the Recapitalization Agreement.
(k) WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES,
--------------------
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN
ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT
OR ANY ANCILLARY AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION,
COLLECTION OR ENFORCEMENT THEREOF.
(l) No Strict Construction. The parties hereto have participated
----------------------
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
(m) Transfer. Prior to transferring any Common Stock (other than a
--------
transfer pursuant to which such Common Stock ceases to be Registrable
Securities) to any Person, the Person transferring such Common Stock will cause
the prospective transferee to execute and deliver to the Company (for itself and
as the agent of the other members), a counterpart to this Agreement pursuant to
which the prospective transferee agrees to be bound by this Agreement to the
same extent as the Person transferring such Common Stock with respect to the
Common Stock so transferred.
(n) Entire Agreement. Except as otherwise expressly set forth herein,
----------------
this agreement and the other agreements referred to herein embodies the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes and preempts any prior understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration
Agreement as of the date first written above.
PINNACLE HOLDINGS INC.
By:____________________________________
Name:
Title:
ABRY BROADCAST PARTNERS II, L.P.
By: ABRY CAPITAL, L.P.
Its: General Partner
By: ABRY HOLDINGS, INC.
Its: General Partner
By:____________________________________
Name:
Title:
_______________________________________
Robert J. Wolsey
PANTERA, INC.
By: __________________________________
Its: __________________________________
PANTERA PARTNERSHIP, LTD.
By Pantera, Inc., its General Partner
By: __________________________________
Its: __________________________________
<PAGE>
__________________________________________
Steven Day
__________________________________________
Kathleen R. Day
SOUTH CREEK PARTNERSHIP, LTD.
By South Creek, Inc., its General Partner
By: _____________________________________
Its: _____________________________________
SOUTH CREEK, INC.
By: _____________________________________
Its: _____________________________________
__________________________________________
James M. Dell'Apa
__________________________________________
Paul Dell'Apa
__________________________________________
Frank Dell'Apa, Sr.
__________________________________________
Frank Dell'Apa, Jr.
__________________________________________
Charles Milewski
__________________________________________
Mary Milewski
<PAGE>
Exhibit A
---------
ADDITIONAL EXECUTIVE HOLDERS
----------------------------
Pantera, Inc.
Pantera Partnership, Ltd.
Kathleen R. Day
South Creek Partnership, Ltd.
South Creek, Inc.
Paul Dell'Apa
Frank Dell'Apa, Sr.
Frank Dell'Apa, Jr.
Charles Milewski
Mary Milewski
<PAGE>
EXHIBIT 4.5
RECAPITALIZATION AGREEMENT
--------------------------
This recapitalization agreement (the "Agreement") is made and entered into
effective as of August ___ 1998, by and among Pinnacle Holdings Inc. (the
"Company") and the persons and entities listed on the signature pages hereto
(collectively referred to herein as the "Participating Stockholders"). Terms
not otherwise defined herein shall have the meanings given in the Company's
Amended and Restated Certificate of Incorporation in effect on the date of this
Agreement.
Recitals
--------
A. The Company recently began negotiating a proposal with certain
underwriters to commence a public offering of common stock of the Company (the
"Proposed Offering"). The parties desire to set forth herein the terms of the
Participating Stockholders' participation in the Proposed Offering.
B. The Company and the Participating Stockholders are parties to (or have
agreed to be bound by) either a Second Amended and Restated Subscription and
Stockholders Agreement dated as of May 16, 1996, as amended effective July 1,
1997, or certain Employee Subscription Agreements (the "Stockholders
Agreements").
C. As of the date of this Agreement, the Company's outstanding capital
stock consists of: (i) 202,500 shares of Class A Common Stock, par value $0.001
per share ("Class A Common"); (ii) 12,000 shares of Class B Common Stock, par
value $0.001 per share ("Class B Common"); (iii) 40,000 shares of Class D Common
Stock, par value $0.001 per share ("Class D Common"); and (iv) 174,766 shares of
Class E Common Stock, par value $0.001 per share ("Class E Common"). The
ownership of the Company's outstanding capital stock is set forth in Schedule I
----------
hereto.
D. In connection with the Proposed Offering, the Participating
Stockholders (holders of a majority of the issued and outstanding shares of
capital stock of the Company) desire to cause a recapitalization of the Company
pursuant to which (i) the Company will have a single class of common stock
authorized and outstanding, (ii) the outstanding shares of Class D Common shall
be converted into shares of Class C Common Stock, par value $0.001 per share
("Class C Common"), and (iii) the outstanding shares of Class A Common, Class B
Common, Class C Common and Class E Common shall be converted into shares of a
single class of common stock and, in certain cases, the right to receive
payments from the Company upon the consummation of the Public Offering.
Accordingly, for good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, each party hereto agrees as follows:
<PAGE>
1. Certificate of Amendment. The Participating Stockholders will vote or
------------------------
act by written consent to approve, and Company will cause to be filed, an
amendment of ARTICLE FOUR of the Company's amended and restated certificate of
incorporation substantially in the form of Exhibit A hereto (the "Certificate of
---------
Amendment") with the Secretary of State of the State of Delaware prior to the
consummation of the Public Offering, which shall cause the following to occur:
(a) Capitalization. Effective immediately prior to the consummation of
--------------
the closing of a firm underwritten public offering (the "IPO") pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of shares of the Company's common stock (the "IPO
Effective Time"), the authorized capital stock of the Company shall consist of
100,000,000 shares of common stock, $0.001 per share ("Common Stock"), and
5,000,000 shares of preferred stock, $0.001 per share.
(b) Class A Common. At the IPO Effective Time, each outstanding share of
--------------
Class A Common shall be converted into (i) 72.7825668 shares of Common Stock and
(ii) the right to receive from the Company out of its proceeds from the IPO cash
in an amount equal to the Unpaid Yield on such share of Class A Common as of
such date (which is set forth by holder of Class A Common in Schedule I hereto),
----------
and $100.00, the Unpaid Preference Amount on such share of Class A Common as of
such date.
(c) Class B Common. At the IPO Effective Time, each outstanding share of
--------------
Class B Common shall be converted into (i) 72.7825668 shares of Common Stock and
(ii) the right to receive from the Company out of its proceeds from the IPO
$100.00, the Unpaid Preference Amount on such share of Class B Common as of such
date.
(d) Class C Common and Class D Common. At the IPO Effective Time, each
---------------------------------
outstanding share of Class D Common shall be converted into 1.6221 shares of
Class C Common and, simultaneously therewith, each such share of Class C Common
shall be converted into 72.7825668 shares of Common Stock.
(e) Class E Common. At the IPO Effective Time, each outstanding share of
--------------
Class E Common shall be converted into (i) 72.7825668 shares of Common Stock and
(ii) the right to receive from the Company out of its proceeds from the IPO
$100.00, the Unpaid Preference Amount on such share of Class E Common as of such
date.
2. Proposed Offering.
-----------------
(a) Definitions. As used in this Section, the following terms shall have
-----------
the respective meanings set forth in this subsection. Certain additional
defined terms
2
<PAGE>
used in this Section are defined elsewhere in this Agreement, including
elsewhere in this Section.
"Additional Shares" means any and all shares of Common Stock which the
Underwriters (as defined below) shall have an option to purchase pursuant to the
Underwriting Agreement (as defined below) for the purpose of covering over-
allotments in connection with the Proposed Offering.
"Firm Shares" means any and all shares of Common Stock, other than
Additional Shares, which are purchased pursuant to the Underwriting Agreement in
connection with the Proposed Offering.
"Original Issue Date" means, with respect to any share of Common Stock, the
date of original issuance by the Company of the shares of its capital stock
surrendered for conversion into such share of Common Stock pursuant to the
Certificate of Amendment.
(b) Structure of Proposed Offering. The Proposed Offering involves the
------------------------------
proposed sale by the Company and the Participating Stockholders of shares of
Common Stock to certain underwriters to be listed in a schedule to the
Underwriting Agreement referred to below (the "Underwriters"), for whom Morgan
Stanley & Co. Incorporated, Goldman, Sachs & Co., NationsBanc Montgomery
Securities LLC, Raymond James & Associates and Smith Barney Inc. are expected to
act as representatives (the "Representatives"), for distribution of such shares
(the "Shares") to the public under a Registration Statement on Form S-11 to be
filed under the Securities Act of 1933, as amended, as such Registration
Statement is thereafter amended. Based on its discussions with the
Representatives to date, the Company anticipates that pursuant to the
Underwriting Agreement, and subject to their respective terms and conditions,
the Underwriters will commit to purchase from the Company and the Participating
Stockholders a specified number of Firm Shares and will be granted an "over-
allotment" option to purchase up to a specified number of Additional Shares.
(c) Participation of Participating Stockholders. The parties to this
-------------------------------------------
Agreement have agreed that, notwithstanding any provision of the applicable
Stockholders Agreements:
(1) Each of the Company and the Participating Stockholders
(collectively, the "Sellers") shall be entitled to register and sell to the
Underwriters (A) the percentage of the total number of Firm Shares which
are registered and sold to the Underwriters by the Sellers which is set
forth opposite the name of such Seller in Schedule II attached to this
-----------
Agreement (such Seller's "Allocation Percentage"), and (B) the same
Allocation Percentage of the total number of Additional Shares which are
registered and sold to the Underwriters by the Sellers. The Allocation
Percentages of the Sellers set forth on Schedule II
-----------
3
<PAGE>
hereto shall apply regardless of the number of Firm Shares or Additional
Shares (if any) which may be registered or sold in the Proposed Offering.
(2) If any Seller notifies the Company in writing prior to the
execution of the Underwriting Agreement that it shall not tender, at the
closing of the sale and purchase of any Firm Shares or Additional Shares
pursuant to and in accordance with the terms of the Underwriting Agreement,
the full number of Firm Shares or Additional Shares which such
Participating Stockholder is entitled to sell pursuant to the Underwriting
Agreement and this Agreement (including by reason of this Section 2(c)(2)),
then the aggregate number of Firm Shares or Additional Shares (as the case
may be) that the remaining Participating Stockholders (the "Other Sellers")
shall be entitled to sell pursuant to the Underwriting Agreement shall be
increased by the number of such shares that such Seller failed to tender
(the "Extra Shares"). Unless all of the Other Sellers otherwise agree, the
Extra Shares shall be allocated among the Other Sellers pro rata, based on
--- ----
the ratio which the Allocation Percentage of each Other Seller bears to the
sum of the Allocation Percentages of all Other Sellers Each Other Seller
shall have the option, but not the obligation, to elect to sell its
proportionate part of such Extra Shares and may exercise such option in
whole or in part. If any such Other Seller declines or fails for any
reason to exercise such option at all or in full, then the Extra Shares as
to which such option was not exercised shall be apportioned among the
remaining Other Sellers who exercised their options in full on a similar
pro rata basis, and such process shall continue until either the full
--- ----
number of Extra Shares have been allocated to one or more Other Sellers or
until each of the Other Sellers has obtained by this process of
apportionment the right to sell the entire percentage of the Extra Shares
that it desires. If, after completion of such process, there remains any
Extra Shares which have not been allocated to one or more Other Sellers,
then the Company may increase by an equivalent number the number of Firm
Shares or Additional Shares (as the case may be) which are to be sold by
the Company pursuant to the Underwriting Agreement. If any Seller fails or
refuses for any reason to tender, at the closing of the sale and purchase
of any Firm Shares or Additional Shares pursuant to and in accordance with
the terms of the Underwriting Agreement, the full number of Firm Shares or
Additional Shares which such Participating Stockholder is entitled to sell
pursuant to such agreement and if such agreement is not terminated in
accordance with its terms, then the aggregate number of Firm Shares or
Additional Shares (as the case may be) that the remaining Sellers shall be
entitled to sell pursuant to the Underwriting Agreement shall be increased
in such manner as the Company, the Participating Stockholders (excluding
any thereof who is such a nontendering Seller) and the Representatives
shall agree.
(3) The Company covenants and agrees that (A) unless all of the
Participating Stockholders otherwise agree in writing, no person not named
on
4
<PAGE>
Schedule II hereto shall be entitled to register or sell securities in the
-----------
Proposed Offering and (B) no Participating Stockholder shall be permitted
to participate in the Proposed Offering on any basis which is more
favorable than the basis on which any Participating Stockholder is
permitted to participate. Without limiting the generality of subclause (B)
of this clause, no Participating Stockholder shall be required to execute
or deliver any underwriting agreement, custody agreement, power-of-
attorney, "lock-up" agreement or other agreement or instrument which
contains provisions that are materially more adverse to such Holder than
the most favorable form thereof required of any Participating Stockholder
(disregarding variations which appropriately reflect factual differences,
such as differences in the form of organization of Participating
Stockholders which are entities or in the number or type of securities held
or being registered and sold by the Participating Stockholders).
(4) Notwithstanding the foregoing, no Participating Stockholder
shall have any obligation to participate in the Proposed Offering in the
event that the offering price per share of Common Stock in the Proposed
Offering is less than $_____.
(5) The Firm Shares and Additional Shares to be sold by a
Participating Stockholder shall be take from the shares of Common Stock
owned by such Participating Stockholder based on the Original Issue Date of
such shares of Common Stock as follows: (A) first, shares of Common Stock
held by such Participating Stockholder, if any, with an Original Issue Date
which is more than one year, but not more than two years prior to the IPO
Effective Time, with those shares of Common Stock with the most recent
Original Issue Date being sold first; (B) second, shares of Common Stock
held by such Participating Stockholder, if any, with an Original Issue Date
which is more than two years prior to the IPO Effective Time; and (C)
third, shares of Common Stock held by such Participating Stockholder, if
any, with an Original Issue Date which is not more than one year prior to
the IPO Effective Time.
(d) Waiver. To the extent that such waiver is required for such
------
purpose, each party hereto hereby waives any provision of the applicable
Stockholders Agreements, or any other agreement or instrument referred to
therein to which such party hereto is a party or which otherwise govern the
terms of or such party's rights or obligations with respect to securities of the
Company held by such party which, absent such waiver, would prevent any
Participating Stockholder from participating in the Proposed Offering on the
basis and terms contemplated hereby, impose any restrictions upon such
participation on such basis or terms. Such waiver shall terminate if this
Agreement terminates in accordance with its terms.
(e) Transfer Restriction. In the event that during the period
--------------------
commencing on the date of this Agreement and terminating upon the first to occur
of
5
<PAGE>
consummation of the Proposed Offering or September 30, 1998, a Participating
Stockholder directly or indirectly sells, pledges, encumbers, assigns, gifts,
hypothecates, exchanges, transfers or otherwise disposes of any shares of
capital stock of the Company (a "Transfer"), such shares and the transferee
thereof (the "Transferee") shall be subject to and bound by the terms of this
Agreement, and such Participating Stockholder covenants and agrees that, in
connection with such Transfer, the Participating Stockholder shall delivery a
copy of this Agreement to the Transferee.
3. Termination. If the Proposed Offering shall not have been consummated
-----------
on or before September 30, 1998, this Agreement shall automatically terminate,
provided, however, that in the event the Proposed Offering shall not have been
consummated on or before September 30, 1998, but the Certificate of Amendment
shall have been filed with the Secretary of State of the State of Delaware on or
before September 30, 1998, the parties shall cooperate and take such actions as
may be reasonably required, including the adoption and filing of an additional
amendment to the Company's certificate of incorporation, to return the capital
structure of the Company to the capital structure in effect on the date of this
Agreement.
4. Representations and Warranties of the Company To Each of the
------------------------------------------------------------
Participating Stockholders. The Company represents and warrants to each of the
- --------------------------
Participating Stockholders as follows: (i) the Company has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby,
(ii) the execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action (including all stockholder
approvals and other action), and (iii) this Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
5. Representations and Warranties of each Participating Stockholder.
----------------------------------------------------------------
Each Participating Stockholder, severally and not jointly, and with respect to
itself only and not with respect to any other Participating Stockholder,
represents and warrants to the Company and each other Participating Stockholder
that (i) this Agreement has been duly executed and delivered by such
Participating Stockholder; (ii) the execution, delivery and performance by such
Participating Stockholder of, and the consummation by such Participating
Stockholder of the transactions contemplated by, this Agreement have been duly
and validly authorized by all necessary partnership action on the part of such
Participating Stockholder, if such Participating Stockholder is a partnership,
or by all necessary corporate action on the part of such Participating
Stockholder, if such Participating Stockholder is a corporation; and (iii) this
Agreement constitutes a legal, valid and binding obligation of such
Participating Stockholder enforceable in
6
<PAGE>
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, or by principles governing the availability of
equitable remedies).
6. No Joint Obligations of Participating Stockholders and Company. Each
--------------------------------------------------------------
Participating Stockholder and the Company shall be (i) obligated hereunder only
with respect to those covenants and agreements which by their terms are
applicable to such party, and no such party shall have any liability with
respect to any other party's obligations hereunder and (ii) separately and
independently entitled to rely on the representations and warranties of each
other party made to each party in this Agreement, and to the benefit of all
agreements, covenants, obligations and commitments of each other party made with
or to such party herein. Without limiting the generality of the preceding
sentence, no provision of this Agreement shall be construed as creating any
concept of "group" liability.
7. Miscellaneous.
-------------
(a) Survival of Provisions. The representations and warranties of the
----------------------
parties made in or pursuant to this Agreement shall survive the consummation of
any of the transactions contemplated hereby, in each case regardless of any
investigation that may have been or may be made by or on behalf of any other
party.
(b) Communications. All notices and other communications required or
--------------
permitted by this Agreement shall be in writing, and, (i) if to any
Participating Stockholder, addressed to such Participating Stockholder at such
Participating Stockholder's address specified in the Company's books and records
or at such other address as such Participating Stockholder may designate in a
written notice to the Company and (ii) if to the Company, to Pinnacle Holdings
Inc., 1549 Ringling Boulevard, 3rd Floor, Sarasota, Florida 34236 or to such
other address as the Company may designate in a written notice to each
Participating Stockholder. All notices and other communications required or
permitted by this Agreement shall be deemed to have been duly given if
personally delivered to the intended recipient at the proper address determined
pursuant to this Section or sent to such recipient at such address by registered
or certified mail, return receipt requested, Express Mail, Federal Express or
similar overnight delivery service for next business day delivery or by telegram
and will be deemed given, unless earlier received: (1) if sent by certified or
registered mail, return receipt requested, five calendar days after being
deposited in the United States mail, postage prepaid; (2) if sent by Express
Mail, Federal Express or similar overnight delivery service for next Business
Day delivery, the next Business Day after being entrusted to such service, with
delivery charges prepaid or charged to the sender's account; (3) if sent by
telegram, on the date sent; and (4) if delivered by hand, on the date of
delivery.
7
<PAGE>
(c) Binding Effect; Successors and Assigns; Entire Agreement. Except
--------------------------------------------------------
as expressly provided in this Agreement, nothing in this Agreement, express or
implied, is intended or shall be construed to confer upon or give any person
other than the parties hereto any remedy or claim under or by reason of this
Agreement or any term, covenant or condition hereof, all of which shall be for
the sole and exclusive benefit of the parties. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors, heirs, executors, legal representatives and
permitted assigns. This Agreement sets forth the entire agreement and
understanding among the parties hereto as to the specific subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them with respect to such subject matter.
(d) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provision of this sentence, may not be amended, modified or
supplemented unless approved in writing by each of the Company and the
Participating Stockholders.
(e) Governing Law. This Agreement will be governed by, and will be
-------------
construed in accordance with, the laws of the state of Delaware, without regard
to conflict or choice of law principles of the state of Delaware which might
otherwise cause the internal laws of any other jurisdiction to be applied.
(f) Interpretation. The headings of the sections contained in this
--------------
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not affect the meaning or interpretation of this
Agreement.
(g) No Implied Waivers. No action taken pursuant to this Agreement,
------------------
including, without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, agreements, covenants,
obligations or commitments contained herein or made pursuant hereto. The waiver
by any party of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any preceding or succeeding breach and no failure by
any party to exercise any right, privilege or remedy hereunder shall be deemed a
waiver of such party's rights, privileges or remedies hereunder or shall be
deemed a waiver of such party's rights to exercise the same at any subsequent
time or times hereunder.
(h) Counterparts. This instrument may be executed in two or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.
(i) Further Assurances. Each party shall cooperate and take such
------------------
actions as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby.
8
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective as provided herein.
COMPANY:
PINNACLE HOLDINGS INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
PARTICIPATING STOCKHOLDERS:
ABRY BROADCAST PARTNERS II, L.P.
By ABRY Capital, L.P.
Its General Partner
By ABRY Holdings, Inc.
Its General Partner
By:_______________________________________
Name:_____________________________________
Title:____________________________________
____________________________________________
Robert J. Wolsey
____________________________________________
James M. Dell'Apa
____________________________________________
Steven Day
____________________________________________
Kathleen R. Day
9
<PAGE>
____________________________________________
James Bokish
____________________________________________
Shirley Putnam
____________________________________________
Slade Lindsay
____________________________________________
Ben Gaboury
____________________________________________
David Zahn
____________________________________________
Martin Alvarez
10
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
==================================================================================
UNPAID
------
YIELD FOR
---------
CLASS A CLASS A CLASS B CLASS D CLASS E
------- ------- ------- ------- -------
COMMON COMMON COMMON COMMON COMMON
------ ------ ------ ------ ------
NAME SHARES SHARES SHARES SHARES SHARES
- ---- ------ ------ ------ ------ ------
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ABRY Broadcast 200,000 $4,761,122 - - 172,266
Partners II, L.P.
- ----------------------------------------------------------------------------------
Robert J. Wolsey - - 4,900 5,900 -
- ----------------------------------------------------------------------------------
Pantera, Inc. - - 100 100 -
- ----------------------------------------------------------------------------------
Pantera Partnership, Ltd. - - 5,000 5,000 -
- ----------------------------------------------------------------------------------
James M. Dell'Apa - - 1,500 10,000 2,500
- ----------------------------------------------------------------------------------
Steven Day - - 500 1,900 -
- ----------------------------------------------------------------------------------
Kathleen R. Day - - - 1,900 -
- ----------------------------------------------------------------------------------
South Creek, Inc. - - - 200 -
- ----------------------------------------------------------------------------------
South Creek Partnership, - - - 6,000 -
Ltd.
- ----------------------------------------------------------------------------------
James Bokish - - - 1,000 -
- ----------------------------------------------------------------------------------
Shirley Putnam - - - 1,000 -
- ----------------------------------------------------------------------------------
Slade Lindsay - - - 4,000 -
- ----------------------------------------------------------------------------------
Ben Gaboury - - - 1,000 -
- ----------------------------------------------------------------------------------
David Zahn - - - 1,000 -
- ----------------------------------------------------------------------------------
Martin Alvarez - - - 1,000 -
- ----------------------------------------------------------------------------------
Other Stockholders 2,500 $ 59,012 - - -
==================================================================================
TOTAL: 202,500 $4,821,134 12,000 40,000 174,766
==================================================================================
</TABLE>
<PAGE>
SCHEDULE II
-----------
<TABLE>
<CAPTION>
==========================================================
NAME ALLOCATION PERCENTAGE
- ---- ---------------------
- ----------------------------------------------------------
<S> <C>
Pinnacle Holdings Inc. 86.956%
- ----------------------------------------------------------
ABRY Broadcast Partners II, L.P. 10.751%
- ----------------------------------------------------------
Robert J. Wolsey 0.804%
- ----------------------------------------------------------
James M. Dell'Apa 0.584%
- ----------------------------------------------------------
Steven Day 0.2415%
- ----------------------------------------------------------
Kathleen R. Day 0.2415%
- ----------------------------------------------------------
James Bokish 0.047%
- ----------------------------------------------------------
Shirley Putnam 0.047%
- ----------------------------------------------------------
Slade Lindsay 0.187%
- ----------------------------------------------------------
Ben Gaboury 0.047%
- ----------------------------------------------------------
David Zahn 0.047%
- ----------------------------------------------------------
Martin Alvarez 0.047%
==========================================================
</TABLE>
<PAGE>
EXHIBIT 8.1
July ___, 1998
Pinnacle Holdings, Inc.
1549 Ringling Boulevard, Third Floor
Sarasota, FL 34236
Re: Registration Statement on Form S-11
Registration No. _________________
Ladies and Gentlemen:
We have acted as counsel to Pinnacle Holdings, Inc., a Delaware corporation
(the "Company"), in connection with the Common Stock as more fully described in
the Company's Registration Statement on Form S-11 (the "Registration Statement,"
which includes the "Prospectus"), filed with the Securities and Exchange
Commission on or about the date hereof. In connection therewith, we have been
asked to provide an opinion regarding certain federal income tax matters related
to the Company. Capitalized terms used in this letter and not otherwise defined
herein have the meaning set forth in the Prospectus.
The opinions set forth in this letter are based on relevant provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
thereunder (including proposed and temporary Regulations), and interpretations
of the foregoing as expressed in court decisions, the legislative history, and
existing administrative rulings, policies and practices of the Internal Revenue
Service (the "Service") including its practices and policies indicated in
private letter rulings (which rulings are not binding on the Service except, in
the case of each such ruling, with respect to the specific taxpayer that
receives such ruling), all as of the date hereof. These provisions and
interpretations are subject to change, which may or may not be retroactive in
effect, which changes could adversely affect the opinions rendered herein and
the tax consequences to the Company and the investors in the Common Stock.
In rendering this opinion, we have examined the following documents: (1)
the Registration Statement and the facts and descriptions set forth therein of
the Company and its investments, activities, operations and governance; (2) the
Company's Certificate of Incorporation, as amended, Bylaws and stock ownership
information;
<PAGE>
Pinnacle Holdings, Inc.
July __, 1998
Page 2
(3) the Certificate of Incorporation, Bylaws and stock ownership information of
each QRS Corporation (for a list of QRS Corporations see Exhibit A); and (4) the
quarterly REIT qualification testing schedules prepared by the Company with the
assistance of the Company's accountants, Pricewaterhouse Coopers LLP through and
including June 30, 1998. The opinions set forth in this letter also are
premised on certain additional information and representations through
consultation with officers of the Company and the Company's accountants,
Pricewaterhouse Coopers LLP, including those contained in the Company's
management representation certificate to us dated July ____, 1998 (the
"Management Representation Certificate") regarding certain facts and other
matters (including among other things, the Company's stock ownership, assets,
acquisitions, revenues, and distributions) as are germane to the determination
that the Company has been and will be owned and operated in such a manner that
the Company has and will continue to satisfy the requirements for qualification
as a REIT under the Code.
We have made such factual and legal inquiries, including the procedures
described above and examination of the documents set forth above, as we have
deemed necessary or appropriate for purposes of our opinion. For purposes of
rendering our opinion, however, we have not made an independent investigation or
audit of the facts set forth in the above-referenced documents, including the
Registration Statement and the Management Representation Certificate. We
consequently have relied upon the representations in the Management
Representation Certificate that the information presented therein and in such
documents or otherwise furnished to us is accurate, and we have assumed that the
information presented in such documents or otherwise furnished to us is accurate
and complete with respect to all material facts relevant to our opinion.
In our review, we have assumed, with your consent, that all of the
representations and statements set forth in the documents that we reviewed
(including, without limitation, the Management Representation Certificate) are
true and correct, and each of the obligations imposed by any such document on
the parties thereto, including obligations imposed under the Certificate of
Incorporation of the Company and each QRS Corporation, have been and will be
performed or satisfied in accordance with their terms. Moreover, we have
assumed that the Company and each QRS Corporation has been and will continue to
be operated in the manner described in the relevant certificate of incorporation
or other organizational documents and in the Prospectus. We assume for the
purposes of this opinion that the Company and each QRS is validly organized and
duly incorporated under the laws of the jurisdiction of its incorporation. We
also have assumed the genuineness of all signatures, the proper execution of all
documents, the authenticity of all documents submitted to us as
<PAGE>
Pinnacle Holdings, Inc.
July __, 1998
Page 3
originals, the conformity to originals of documents submitted to us as copies,
and the authenticity of the originals from which any copies were made.
Based upon, subject to, and limited by the assumptions and qualifications
set forth herein, in the discussion in the Prospectus under the caption "Certain
Federal Income Tax Consequences" (which is incorporated herein by reference),
and the discussion herein, we are of the opinion that:
(a) the Company was organized and has operated in conformity with the
requirements for qualification and taxation as a real estate investment trust
("REIT") pursuant to Sections 856 through 860 of the Code for its taxable years
ended December 31, 1995, December 31, 1996, and December 31, 1997, and the
continued operation of the Company in a manner consistent with the statements
made in the Management Representation Certificate and the requirements for REIT
qualification as described in the Prospectus will enable it to continue to meet
the requirements for qualification and taxation as a REIT; and
(b) the descriptions of the law and the legal conclusions contained in the
Prospectus under the caption "Certain Federal Income Tax Considerations" are
correct in all material respects and the discussion thereunder fairly summarizes
the federal income tax considerations that are likely to be material to a holder
of Common Stock.
We assume no obligation to advise you of any changes in our opinion
subsequent to the delivery of this opinion letter, and we do not undertake to
update the opinion letter. The Company's qualification and taxation as a REIT
depends upon the Company's ability to meet on a continuing basis, through actual
annual operating and other results, the various requirements under the Code and
described in the Prospectus with regard to, among other things, the sources of
its gross income, the composition of its assets, the level of its distribution
to stockholders, and the diversity of its stock ownership. Holland & Knight LLP
will not review the Company's compliance with these requirements on a continuing
basis. Accordingly, no assurance can be given that the actual results of the
operations of the Company and the QRS Corporations, the sources of their income,
the nature of their assets, the level of the Company's distributions to
stockholders and the diversity of its stock ownership for any given taxable year
will satisfy the requirements under the Code for qualification and taxation as a
REIT. In addition, as noted above, our opinions are based solely on the
documents that we have examined, the additional information that we have
obtained, and the representations that have been made to us, and cannot be
relied upon if any of the facts contained in such documents or in such
additional information is, or later becomes, inaccurate or if any of the
representations made to us is, or later becomes, inaccurate.
<PAGE>
Pinnacle Holdings, Inc.
July __, 1998
Page 4
An opinion of counsel merely represents counsel's best judgment with
respect to the probable outcome on the merits and is not binding on the Service
or the courts. In certain instances with respect to matters for which there is
no relevant authority, including the effect of certain transfer restrictions
under the Lock-Up Agreements and the Stockholders Agreement on the ability of
the Company to satisfy the requirement for REIT qualification that its shares be
transferable, our opinion is based on authorities which we have considered to be
analogous even though certain such authorities have been rendered obsolete for
unrelated reasons by subsequent authorities. There can be no assurance that
positions contrary to our opinions will not be taken by the Service, or that a
court considering the issues would not hold contrary to our opinions.
This opinion letter has been prepared solely for your use in connection
with the filing of the Registration Statement on the date of this opinion letter
and should not be quoted in whole or in part or otherwise referred to, nor filed
with or furnished to any governmental agency or other person or entity, without
the prior written consent of this firm.
We hereby consent to the filing of our opinion, together with the
attachments thereto, as Exhibit 8.1 to the Registration Statement and to the use
of the name of our firm in the Registration Statement. In giving this consent,
however, we do not thereby admit that we are an "expert" within the meaning of
the Securities Act of 1933, as amended.
Very truly yours,
HOLLAND & KNIGHT LLP
<PAGE>
EXHIBIT A
QRS Corporations
of
Pinnacle Holdings, Inc.
Pinnacle Towers Inc.
Coverage Plus Antenna Systems, Inc.
Tower Systems, Inc.
<PAGE>
EXHIBIT 10.24
PINNACLE HOLDINGS, INC.
STOCK INCENTIVE PLAN
1. PURPOSE. The purpose of this Stock Incentive Plan (the "Plan") is to
further the interests of Pinnacle Holdings, Inc., a Florida corporation,
its Subsidiaries and its shareholders by providing incentives in the form
of grants of stock options and restricted stock to key employees and other
persons who contribute materially to the success and profitability of the
Company. Also, the Plan will assist the Company in attracting and
retaining key persons.
2. DEFINITIONS. The following definitions will apply to the Plan:
A. "AWARD" means, individually or collectively, a grant under the Plan of
a Nonqualified Stock Option, an Incentive Stock Option or Restricted
Stock.
B. "BOARD" means the board of directors of Pinnacle Holdings, Inc.
C. "CAUSE" means (i) any intentional misapplication by the Recipient of
the Company's funds, intended to result directly or indirectly in
significant gain or personal enrichment at the expense of the Company,
or any other act of dishonesty committed by the Recipient in
connection with the Company's business; (ii) the Recipient's
conviction of a crime involving moral turpitude; (iii) the Recipient's
non-performance or non-observance in any material respect of any
requirement with respect to the Recipient's employment; or (iv) any
other action by the Recipient involving willful and deliberate
malfeasance or negligence in the performance of the Recipient's
duties.
D. "CODE" means the Internal Revenue Code of 1986, as amended.
E. "COMMITTEE" means the stock incentive committee appointed by the Board
and consisting solely of two or more directors who are "outside
directors" as such term is defined in Section 162(m) of the Code, and
"nonemployee directors" as such term is defined in Rule 16b-3 under
the Securities Exchange Act of 1934 ("1934 Act"). The Board may
appoint a different stock incentive committee for the purpose of
granting Awards to Eligible Persons who are not subject to the
requirements of Section 16 of the 1934 Act or Section 162(m) of the
Code. If the Board does not appoint a stock incentive committee,
"Committee" means the Board.
F. "COMMON STOCK" means the Common Stock, par value $_____ per share of
Pinnacle Holdings, Inc., or such other class of shares or securities
as to which the Plan may be applicable pursuant to Section 9 of the
Plan.
G. "COMPANY" means Pinnacle Holdings, Inc. and its Subsidiaries.
<PAGE>
H. "DATE OF GRANT" means the date on which the Option or Restricted
Stock, whichever is applicable, is granted.
I. "DISABILITY" means "disability" as defined in the Company's long term
disability plan or policy.
J. "ELIGIBLE PERSON" means any person who performs or has in the past
performed services for the Company, whether as a director, officer,
Employee, consultant or other independent contractor, and any person
who performs services relating to the Company as an employee or
independent contractor of a corporation or other entity that provides
services for the Company.
K. "EMPLOYEE" means any person employed on an hourly or salaried basis by
the Company.
L. "FAIR MARKET VALUE" means the fair market value of the Common Stock.
If the Common Stock is publicly traded on the date as of which fair
market value is being determined, the Fair Market Value is the closing
sale price of the Common Stock on the trading day next preceding such
date as reported on the registered national exchange providing the
primary market in the Common Stock, or if the Common Stock was not
traded on such market, the average of the closing bid prices as
reported by the Nasdaq Stock Market on that date. If the Common Stock
is not publicly traded on the date as of which fair market value is
being determined, the Board will determine the fair market value of
the Shares, using such factors as the Board considers relevant, such
as the price at which recent sales have been made, the book value of
the Common Stock, and the Company's current and projected earnings.
M. "INCENTIVE STOCK OPTION" means a stock option, granted pursuant to
this Plan or any other Company plan, that satisfies the requirements
of Section 422 of the Code and that entitles the Recipient to purchase
stock of the Company.
N. "NONQUALIFIED STOCK OPTION" means a stock option, granted pursuant to
the Plan, that is not an Incentive Stock Option and that entitles the
Recipient to purchase stock of the Company.
O. "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option.
P. "OPTION AGREEMENT" means a written agreement, between the Company and
a Recipient, that sets out the terms and restrictions of an Option
Award.
Q. "OPTION SHAREHOLDER" means an Employee who has acquired Shares upon
exercise of an Option.
2
<PAGE>
R. "OPTION SHARES" means Shares that a Recipient receives upon exercise
of an Option.
S. "PERIOD OF RESTRICTION" means the period beginning on the Date of
Grant of a Restricted Stock Award and ending on the date on which all
restrictions applicable to the Shares subject to such Award expire.
T. "PLAN" means this Pinnacle Holdings, Inc. Stock Incentive Plan, as
amended from time to time.
U. "RECIPIENT" means an individual who receives an Award.
V. "RESTRICTED STOCK" means an Award granted pursuant to Section 7 of the
Plan.
W. "RESTRICTED STOCK AGREEMENT" means a written agreement, between the
Company and a Recipient, that sets out the terms and restrictions of a
Restricted Stock Award.
X. "SHARE" means a share of the Common Stock, as adjusted in accordance
with Section 9 of the Plan.
Y. "SUBSIDIARY" means any corporation 50 percent or more of the voting
securities of which are owned directly or indirectly by the Company at
any time during the existence of the Plan.
3. ADMINISTRATION. The Committee will administer the Plan. The Committee has
the exclusive power to select the Recipients of Awards pursuant to the
Plan, to establish the terms of the Awards granted to each Recipient, and
to make all other determinations necessary or advisable under the Plan.
The Committee has the sole discretion to determine whether the performance
of an Eligible Person warrants an Award under the Plan, and to determine
the size and type of the Award. The Committee has full and exclusive power
to construe and interpret the Plan, to prescribe, amend, and rescind rules
and regulations relating to the Plan, and to take all actions necessary or
advisable for the Plan's administration. The Committee, in the exercise of
its powers, may correct any defect or supply any omission, or reconcile any
inconsistency in the Plan, or in any Agreement, in the manner and to the
extent it deems necessary or expedient to make the Plan fully effective.
In exercising this power, the Committee may retain counsel at the expense
of the Company. The Committee also has the power to determine the duration
and purposes of leaves of absence which may be granted to a Recipient
without constituting a termination of the Recipient's employment for
purposes of the Plan. Any of the Committee's determinations will be final
and binding on all persons. A member of the Committee will not be liable
for performing any act or making any determination in good faith.
3
<PAGE>
4. SHARES SUBJECT TO PLAN. Subject to the provisions of Section 9 of the
Plan, the maximum aggregate number of Shares that may be subject to Awards
under the Plan is 5,269,000. If an unexercised Award expires or becomes
unexercisable, the unpurchased Shares subject to such Award will be
available for other Awards under the Plan.
5. ELIGIBILITY. Any Eligible Person that the Committee in its sole discretion
designates is eligible to receive an Award under the Plan. Only an
Employee may receive an Incentive Stock Option. The Committee's grant of
an Award to a Recipient in any year does not entitle the Recipient to an
Award in any other year. Furthermore, the Committee may grant different
Awards to different Recipients. The Committee may consider such factors as
it deems pertinent in selecting Recipients and in determining the types and
sizes of their Awards. Recipients may include persons who previously
received stock, stock options or other benefits under the Plan or another
plan of the Company or a Subsidiary, whether or not the previously granted
benefits have been fully exercised or vested. An Award will not enlarge or
otherwise affect a Recipient's right, if any, to continue to serve the
Company and its Subsidiaries in any capacity, and will not restrict the
right of the Company or a Subsidiary to terminate at any time the
Recipient's employment.
6. OPTIONS. The Committee may grant Options to purchase Common Stock to
Recipients in such amounts as the Committee determines in its sole
discretion. Subject to the provisions of Section 9 of the Plan, during any
12-month period, the Committee may not grant to any Recipient Options to
purchase more than a total of 1,000,000 Shares. An Option Award may be in
the form of an Incentive Stock Option or a Nonqualified Stock Option. The
Committee may grant an Option alone or in addition to another Award. Each
Option will satisfy the following requirements:
A. WRITTEN AGREEMENT. Each Option granted to a Recipient will be
evidenced by an Option Agreement. The terms of the Option Agreement
need not be identical for different Recipients. The Option Agreement
will contain such provisions as the Committee deems appropriate and
will include a description of the substance of each of the
requirements in this Section 6.
B. NUMBER OF SHARES. Each Option Agreement will specify the number of
Shares that the Recipient may purchase upon exercise of the Option.
C. EXERCISE PRICE.
I. INCENTIVE STOCK OPTION. Except as provided in subsection 6(l) of
the Plan, the exercise price of each Share subject to an
Incentive Stock Option will equal the exercise price designated
by the Committee, but will not be less than the Fair Market Value
of the Share on the Date of Grant.
II. NONQUALIFIED STOCK OPTION. The exercise price of each Share
subject to
4
<PAGE>
a Nonqualified Stock Option will equal the exercise price
designated by the Committee.
D. DURATION OF OPTION.
I. INCENTIVE STOCK OPTION. Except as otherwise provided in this
Section 6, an Incentive Stock Option will expire on the earlier
of the tenth anniver sary of the Date of Grant or the date set by
the Committee on the Date of Grant.
II. NONQUALIFIED STOCK OPTION. Except as otherwise provided in this
Section 6, a Nonqualified Stock Option will expire on the tenth
anniversary of its Date of Grant or, at such earlier or later
date set by the Committee on the Date of Grant.
E. VESTING OF OPTION. Each Option Agreement will specify the vesting
schedule applicable to the Option. The Committee, in its sole
discretion, may accelerate the vesting of any Option at any time. An
unexercised Option that is not fully vested will become fully vested
if the Recipient of the Option dies or terminates employment with the
Company because of Disability.
F. DEATH.
I. INCENTIVE STOCK OPTION. If a Recipient dies, an Incentive Stock
Option granted to the Recipient will expire on the one-year
anniversary of the Recipient's death, or if earlier, the date
specified in subsection 6.d. of the Plan, unless the Committee
sets an earlier expiration date on the Date of Grant.
II. NONQUALIFIED STOCK OPTION. If a Recipient dies, a Nonqualified
Stock Option granted to the Recipient will expire on the one-year
anniversary of the Recipient's death, or if earlier, the date
specified in subsection 6.d. of the Plan, unless the Committee
sets an earlier or later expiration date on the Date of Grant, or
a later expiration date subsequent to the Date of Grant but prior
to the one-year anniversary of the Recipient's death.
G. DISABILITY.
I. INCENTIVE STOCK OPTION. If the Recipient terminates employment
with the Company because of his Disability, an Incentive Stock
Option granted to the Recipient will expire on the one-year
anniversary of the Recipient's last day of employment, or, if
earlier, the date specified in subsection 6.d. of the Plan.
5
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II. NONQUALIFIED STOCK OPTION. If the Recipient terminates employment
with the Company because of his Disability, a Nonqualified Stock
Option granted to the Recipient will expire on the one-year
anniversary of the Recipient's last day of employment, or, if
earlier, the date specified in subsection 6.d. of the Plan,
unless the Committee sets an earlier or later expiration date on
the Date of Grant or a later expiration date subsequent to the
Date of Grant but prior to the one-year anniversary of the
Recipient's last day of employment.
H. RETIREMENT OR INVOLUNTARY TERMINATION.
I. INCENTIVE STOCK OPTION. If the Recipient terminates employment
with the Company as a result of his retirement in accordance with
the Company's normal retirement policies, or if the Company
terminates the Recipient's employment other than for Cause, an
Incentive Stock Option granted to the Recipient will expire 90
days following the last day of the Recipient's employment, or, if
earlier, the date specified in subsection 6.d. of the Plan,
unless the Committee sets an earlier expiration date on the Date
of Grant.
II. NONQUALIFIED STOCK OPTION. If the Recipient terminates
employment with the Company as a result of his retirement in
accordance with the Company's normal retirement policies, or if
the Company terminates the Recipient's employment other than for
Cause, a Nonqualified Stock Option granted to the Recipient will
expire 180 days following the last day of the Recipient's
employment, or, if earlier, the date specified in subsection 6.d.
of the Plan, unless the Committee sets an earlier or later
expiration date on the Date of Grant or a later expiration date
subsequent to the Date of Grant but prior to 180 days following
the Recipient's last day of employment.
I. TERMINATION OF SERVICE. If the Recipient's employment with the
Company terminates for any reason other than the reasons described in
Sections 6.f, 6.g., 6.h., or 6.j. of the Plan, an Option granted to
the Recipient will expire 30 days following the last day of the
Recipient's employment with the Company, or, if earlier, the date
specified in subsection 6.d. of the Plan, unless the Committee sets an
earlier or later expiration date on the Date of Grant or a later
expiration date subsequent to the Date of Grant but prior to the 30th
day following the Recipient's last day of employment. The Committee
may not delay the expiration of an Incentive Stock Option more than 90
days after termination of the Recipient's employment. During any
delay of the expiration date, the Option will be exercisable only to
the extent it is exercisable on the date the Recipient's employment
terminates, subject to any adjustment under Section 9 of the Plan.
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J. CAUSE. Notwithstanding any provisions set forth in the Plan, if the
Company terminates the Recipient's employment for Cause, any
unexercised portion(s) of the Recipient's Option(s) will expire
immediately upon the earlier of the occurrence of the event that
constitutes Cause or the last day the Recipient is employed by the
Company.
K. CONDITIONS REQUIRED FOR EXERCISE. An Option is exercisable only to
the extent it is vested according to the terms of the Option
Agreement. Furthermore, an Option is exercisable only if the issuance
of Shares upon exercise would comply with applicable securities laws.
Each Agreement will specify any additional conditions required for the
exercise of the Option.
L. TEN PERCENT SHAREHOLDERS. An Incentive Stock Option granted to an
individual who, on the Date of Grant, owns stock possessing more than
10 percent of the total combined voting power of all classes of stock
of either the Company or any parent or Subsidiary, will have an
exercise price of 110 percent of Fair Market Value on the Date of
Grant and will be exercisable only during the five-year period
immediately following the Date of Grant. For purposes of calculating
stock ownership of any person, the attribution rules of Code Section
424(d) will apply, and any stock that such person may purchase under
outstanding options will not be considered.
M. MAXIMUM OPTION GRANTS. The aggregate Fair Market Value, determined on
the Date of Grant, of Shares with respect to which any Incentive Stock
Options under the Plan and all other plans of the Company or its
Subsidiaries become exercisable by any individual for the first time
in any calendar year will not exceed $100,000.
N. METHOD OF EXERCISE. An Option will be deemed exercised when the
person entitled to exercise the Option (i) delivers written notice to
the President of the Company (or his delegate, in his absence) of the
decision to exercise, (ii) concurrently tenders to the Company full
payment for the Shares to be purchased pursuant to the exercise, and
(iii) complies with such other reasonable requirements as the
Committee establishes pursuant to Section 8 of the Plan. Payment for
Shares with respect to which an Option is exercised may be made (i) in
cash, (ii) by certified check, (iii) in the form of Common Stock
having a Fair Market Value equal to the exercise price, or (iv) by
delivery of a notice instructing the Company to deliver the Shares to
a broker subject to the broker's delivery of cash to the Company equal
to the exercise price. No person will have the rights of a
shareholder with respect to Shares subject to an Option granted under
the Plan until a certificate or certificates for the Shares have been
delivered to him. A partial exercise of an Option will not affect the
holder's right to exercise the remainder of the Option from time to
time in accordance with the Plan.
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O. LOAN FROM COMPANY TO EXERCISE OPTION. The Committee may, in its
discretion and subject to the requirements of applicable law,
recommend to the Company that it lend the Recipient the funds needed
by the Recipient to exercise an Option. The Recipient will apply to
the Company for the loan, completing the forms and providing the
information required by the Company. The loan will be secured by such
collateral as the Company may require, subject to its underwriting
requirements and the requirements of applicable law. The Recipient
will execute a promissory note and any other documents deemed
necessary by the Company.
P. DESIGNATION OF BENEFICIARY. Each Recipient may file with the Company
a written designation of a beneficiary to receive the Recipient's
Options in the event of the Recipient's death prior to full exercise
of such Options. If the Recipient does not designate a beneficiary,
or if the designated beneficiary does not survive the Recipient, the
Recipient's estate will be his beneficiary. Recipients may, by
written notice to the Company, change a beneficiary designation.
Q. NONTRANSFERABILITY OF OPTION. An Option granted under the Plan is not
transferable except by will or the laws of descent and distribution.
During the lifetime of the Recipient, all rights of the Option are
exercisable only by the Recipient.
7. RESTRICTED STOCK. The Committee may grant Restricted Stock Shares to
Recipients in such amounts as the Committee determines in its sole
discretion. The Committee may grant Restricted Stock alone or in addition
to another Award. Each Restricted Stock Award granted to a Recipient will
satisfy the following requirements:
A. WRITTEN AGREEMENT. Each Restricted Stock Award granted to a Recipient
will be evidenced by a Restricted Stock Agreement. The terms of the
Restricted Stock Agreement need not be identical for different
Recipients. The Restricted Stock Agreement will specify the Period(s)
of Restriction. In addition, the Restricted Stock Agreement will
include a description of the substance of each of the requirements in
this Section 7 and will contain such provisions as the Committee deems
appropriate.
B. NUMBER OF SHARES. Each Agreement will specify the number of
Restricted Stock Shares granted to the Recipient.
C. TRANSFERABILITY. Restricted Stock Shares may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction, or upon earlier
satisfaction of any other conditions, as specified in the Restricted
Stock Agreement.
D. OTHER RESTRICTIONS. The Committee will impose on Restricted Stock
Shares any other restrictions that the Committee deems advisable,
including, without
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limitation, vesting restrictions, restrictions based upon the
achievement of specific Company-wide, Subsidiary, and/or individual
performance goals, and/or restrictions under applicable federal or
state securities laws, and may legend the certificate representing
Restricted Stock to give appropriate notice of such restrictions. The
Committee may also require that Recipients make cash payments at the
time of grant or upon expiration of restrictions. Any such cash
payments will equal an amount not less than the par value of the
Restricted Stock Shares.
E. CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to subsection 8.d. of the Plan, each certificate representing
Restricted Stock Shares will bear the following legend:
"The sale or other transfer of the Shares of stock represented by
this certificate, whether voluntary, involuntary, or by operation
of law, is subject to certain restrictions on transfer as set
forth in the Pinnacle Holdings, Inc. Stock Incentive Plan, as
amended, and in a Restricted Stock Agreement dated
________________. A copy of the Plan and the Restricted Stock
Agreement may be obtained from the Chief Financial Officer of
Pinnacle Holdings, Inc.."
F. REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Section
7, Restricted Stock Shares will become freely transferable by the
Recipient after the Period of Restriction expires. The Recipient will
be entitled to removal of the legend required by subsection 8.e. of
the Plan following the expiration of the Period of Restriction.
G. VOTING RIGHTS. During the Period of Restriction, Recipients holding
Restricted Stock Shares may exercise full voting rights with respect
to such Shares.
H. DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Recipients holding Restricted Stock Shares will be entitled to receive
all dividends and other distributions paid with respect to such
Shares. If any such dividends or distributions are paid in Shares,
such Shares will be subject to the same restrictions on
transferability and forfeitability as the Restricted Stock Shares with
respect to which they were paid.
I. DEATH. In the Recipient dies, the restrictions on the Recipient's
Restricted Stock Shares will expire on the date of the Recipient's
death.
J. DISABILITY. If the Recipient terminates employment with the Company
because of his total and permanent Disability, the restrictions on the
Recipient's Restricted Stock Shares will expire on the Recipient's
last day of employment.
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K. TERMINATION OF SERVICE. If the Recipient ceases employment for any
reason other than death or Disability, the Recipient will forfeit
immediately all nonvested Restricted Stock Shares held by the
Recipient to the Company. The Committee may, in its sole discretion
and upon such terms and conditions as it deems proper, provide for
expiration of the restrictions on Restricted Stock Shares following
termination of employment.
L. DESIGNATION OF BENEFICIARY. Each Recipient may file with the Company
a written designation of a beneficiary to receive the Recipient's
Restricted Stock Shares in the event of the Recipient's death prior to
removal of all restrictions on such Shares. If the Recipient does not
designate a beneficiary, or if the designated beneficiary does not
survive the Recipient, the Recipient's estate will be his beneficiary.
Recipients may, by written notice to the Company, change a beneficiary
designation.
8. TAXES; COMPLIANCE WITH LAW; APPROVAL OF REGULATORY BODIES; LEGENDS. The
Company will have the right to withhold from payments otherwise due and
owing to the Recipient or his beneficiary or to require the Recipient or
his beneficiary to remit to the Company in cash upon demand an amount
sufficient to satisfy any federal (including FICA and FUTA amounts), state,
and/or local withholding tax requirements at the time the Recipient or his
beneficiary recognizes income for federal, state, and/or local tax purposes
with respect to any Award under the Plan.
The Committee may grant Awards and the Company may deliver Shares under the
Plan only in compliance with all applicable federal and state laws and
regulations and the rules of all stock exchanges on which the Company's
stock is listed at any time. An Option is exercisable only if either (i) a
registration statement pertaining to the Shares to be issued upon exercise
of the Option has been filed with and declared effective by the Securities
and Exchange Commission and remains effective on the date of exercise, or
(i) an exemption from the registration requirements of applicable
securities laws is available. The Plan does not require the Company,
however, to file such a registration statement or to assure the
availability of such exemptions. Any certificate issued to evidence Shares
issued under the Plan may bear such legends and statements, and will be
subject to such transfer restrictions, as the Committee deems advisable to
assure compliance with federal and state laws and regulations and with the
requirements of this Section 8. No Option may be exercised, and Shares may
not be issued under the Plan, until the Company has obtained the consent or
approval of every regulatory body, federal or state, having jurisdiction
over such matters as the Committee deems advisable.
Each person who acquires the right to exercise an Option or to ownership of
Shares by transfer, bequest or inheritance may be required by the Committee
to furnish reasonable evidence of ownership of the Option as a condition to
his exercise of the Option or receipt of Shares. In addition, the
Committee may require such consents and releases of taxing authorities as
the Committee deems advisable.
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With respect to persons subject to Section 16 of the 1934 Act, transactions
under the Plan are intended to comply with all applicable conditions of
Rule 16b-3 under the 1934 Act, as such Rule may be amended from time to
time, or its successor under the 1934 Act. To the extent any provision of
the Plan or action by the Committee or the Company fails to so comply, it
will be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
9. ADJUSTMENT UPON CHANGE OF SHARES. If a reorganization, merger,
consolidation, reclassification, recapitalization, combination or exchange
of shares, stock split, stock dividend, rights offering, or other expansion
or contraction of the Common Stock occurs, the Committee will equitably
adjust the number and class of Shares for which Awards are authorized to be
granted under the Plan, the number and class of Shares then subject to
Awards previously granted to Employees under the Plan, and the price per
Share payable upon exercise of each Award outstanding under the Plan. To
the extent deemed equitable and appropriate by the Board, subject to any
required action by shareholders, any Award will pertain to the securities
and other property to which a holder of the number of Shares of stock
covered by the Award would have been entitled to receive in connection with
any merger, consolidation, reorganization, liquidation or dissolution.
10. LIABILITY OF THE COMPANY. Neither the Company, its parent nor any
Subsidiary that is in existence or hereafter comes into existence will be
liable to any person for any tax consequences incurred by a Recipient or
other person with respect to an Award.
11. AMENDMENT AND TERMINATION OF PLAN. The Board may alter, amend, or
terminate the Plan from time to time without approval of the shareholders
of the Company. The Board may, however, condition any amendment on the
approval of the shareholders of the Company if such approval is necessary
or advisable with respect to tax, securities or other laws applicable to
the Company, the Plan, Recipients or Eligible Persons. Any amendment,
whether with or without the approval of shareholders of the Company, that
alters the terms or provisions of an Award granted before the amendment
(unless the alteration is expressly permitted under the Plan) will be
effective only with the consent of the Recipient of the Award or the holder
currently entitled to exercise the Award.
12. EXPENSES OF PLAN. The Company will bear the expenses of administering the
Plan.
13. DURATION OF PLAN. Awards may be granted under the Plan only during the 10
years immediately following the original effective date of the Plan.
14. NOTICES. All notices to the Company will be in writing and will be
delivered to the President of the Company. All notices to a Recipient will
be delivered personally or mailed to the Recipient at his address appearing
in the Company's personnel records. The address of any person may be
changed at any time by written notice given in accordance with this Section
14.
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15. APPLICABLE LAW. The validity, interpretation, and enforcement of the Plan
are governed in all respects by the laws of Florida and the United States
of America.
16. EFFECTIVE DATE. The effective date of the Plan will be the earlier of (i)
the date on which the Board adopts the Plan or (ii) the date on which the
Shareholders approve the Plan.
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