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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 31, 1999
PINNACLE HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-24773 65-0652634
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1549 Ringling Boulevard, Third Floor Sarasota, Florida 34236
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (941) 364-8886
N/A
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(Former name or former address, if changed since last report)
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This Report on Form 8-K contains forward-looking statements within the
meaning of that term in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements are based on the Registrant's current expectations. Statements
contained herein that are not historical facts are forward-looking statements
made pursuant to the safe harbor provisions described above. Future events and
actual results are subject to a number of risks and uncertainties and could
differ materially from those currently anticipated or desired as a result of a
number of factors, including, the effect of the substantial indebtedness and the
Registrant's ability to service such indebtedness; the Registrant's dependence
upon successfully identifying, consummating and integrating acquisitions; a
significant portion of the Registrant's revenues coming from a limited number of
customers; fulfilling the Registrant's anticipated capital needs for future
acquisition and construction activity; business conditions and growth in the
wireless communications industry; the impact of competition from the
Registrant's competitors; and other risks and uncertainties, some of which have
been or will be identified from time to time in the Registrant's reports filed
with the Securities and Exchange Commission. Additional discussion of these
factors effecting the Registrant's business and prospects is contained in the
Registrant's filings with the Securities and Exchange Commission. Readers are
cautioned not to place undue reliance on any forward-looking statements
contained herein, which speak only as of the date hereof. The Registrant
undertakes no obligation to publicly update or revise such forward-looking
statements.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 29, 1999, Pinnacle Towers Inc., a Delaware corporation and wholly
owned subsidiary of the Registrant, entered into an Agreement for Purchase and
Sale of Assets (as amended, the "Agreement") with Motorola, Inc. ("Motorola") to
acquire approximately 1,858 communications sites, including approximately 499
owned sites, 526 managed sites and 833 leased sites for an aggregate purchase
price of approximately $255 million in cash and stock, plus fees and expenses.
The purchase price was determined through arms-length negotiations by the
parties. The acquisition was completed on August 31, 1999. The acquired
Motorola communications sites are largely clustered in urban areas throughout
the United States and Canada with over 50% of the owned sites overlapping with
the Registrant's existing communications site portfolio. Prior to this
acquisition, Motorola leased space on these communications sites to third-party
wireless communications providers, which leases were assumed by the Registrant
in the acquisition. The Registrant intends to integrate these communications
sites into its rental site business by continuing to lease space on these
communications sites to existing tenants and by leasing space to other third-
party wireless communications providers. The Registrant believes that its
acquisition of the Motorola communications sites will enhance its ability to
offer its customers attractive tower clusters in high growth markets and
transportation corridors. In addition, the managed sites will enable the
Registrant to provide its customers urban rooftop sites such as the World Trade
Center in New York, Sears Tower in Chicago and the Allied Bank Building in
Houston. The Registrant believes these sites will allow it to further diversify
its customer base by providing it with an inventory of high altitude sites in
urban areas. The Registrant is taxed as a Real Estate Investment Trust ("REIT")
for federal income tax purposes. The federal tax rules and regulations relating
to REITs limit the Registrant's ability to own and derive income from certain
types of assets. The Registrant is considering disposing of at least a portion
of the rooftop communications sites it acquired from Motorola in order to
minimize the risk that the ownership of or income from such assets might
negatively affect the Registrant's qualification as a REIT. Among the actions
being considered by the Registrant is the transfer of such assets to a
corporation in which the Registrant will own substantially all of the equity
interests in such corporation, substantially all of which shall be in the form
of non-voting, convertible preferred stock, with the Registrant agreeing to
provide certain management and other services to such corporation. Certain
members of management of the Registrant will likely own more than 90% of the
voting stock of such corporation, which would represent a very limited portion
of the overall equity capital of the corporation.
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The transaction was funded with borrowings under the Registrant's senior
credit facility with Bank of America, N.A. and the issuance of 418,520 shares of
common stock of the Registrant to Motorola, valued at $10.0 million. The shares
of common stock issued to Motorola have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), and may not be offered or sold
in the United States by Motorola absent registration or an applicable exemption
from the registration requirements. In connection with the issuance of the
shares of common stock to Motorola, the Registrant and Motorola entered into a
registration rights agreement dated as of August 31, 1999 (the "Registration
Rights Agreement"), pursuant to which, if the Registrant proposes to register
its common stock under the Securities Act for sale to the public for its own
account prior to one year from the date of the Registration Rights Agreement,
then the Registrant is required to give notice thereof to Motorola and to offer
to include the shares of common stock issued to Motorola in such registration,
subject to certain conditions and limitations. The Registrant is generally
required to bear the expenses of such registration, except underwriting
discounts and commissions and legal fees and expenses of counsel to Motorola.
The foregoing is subject to the actual provisions of the Agreement and the
Registration Rights Agreement, which are incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
It is impracticable to provide the financial statements relative to the
acquired business described in Item 2 at the time this report on Form 8-K is
filed. The Registrant intends to file the required financial statements as soon
as practicable, but no later than 60 days from the date of this filing.
(b) PRO FORMA FINANCIAL INFORMATION.
It is impracticable to provide the pro forma financial information
relative to the acquired business described in Item 2 at the time this report on
Form 8-K is filed. The Registrant intends to file the required pro forma
financial information as soon as practicable, but no later than 60 days from the
date of this filing.
(c) EXHIBITS.
Exhibit Number Description
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2.1 Agreement for Purchase and Sale of Assets dated June 25,
1999 between Pinnacle Towers Inc. and Motorola, Inc.*
2.2 Amendment to Agreement for Purchase and Sale of Assets
dated as of August 31, 1999 between Pinnacle Towers Inc.
and Motorola, Inc.
4.1 Registration Rights Agreement dated as of August 31, 1999
between the Registrant and Motorola, Inc.
23.1 Consent of KPMG LLP, independent certified public
accountants.+
*Incorporated by reference to the Registrant's Registration Statement on
Form S-3 (SEC File No 333-82273), as amended, filed with the Securities and
Exchange Commission on July 2, 1999.
+To be filed by amendment.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PINNACLE HOLDINGS INC.
(Registrant)
By: /s/ Steven R. Day
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Steven R. Day, Chief Financial Officer,
Vice President and Secretary
Date: September 14, 1999
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EXHIBIT 2.2
August 31, 1999
Motorola, Inc.
1301 East Algonquin Road
Schaumburg, IL 60196
Re: Agreement for Purchase and Sale of Assets dated June 29, 1999
(the "Agreement").
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Ladies and Gentlemen:
This letter agreement will amend certain provisions of the Agreement as set
forth below. Capitalized terms used but not defined in this letter will have the
meanings assigned to them in the Agreement.
1. Closing. The Closing will occur at the offices of Holland & Knight LLP,
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195 Broadway, 24th Floor, New York, New York, on August 31, 1999.
2. Purchase Price. The Purchase Price specified in Section 2.1(a)(i) of
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the Agreement will be paid to Seller as follows: (a) $245,000,000 cash,
in immediately available funds, at Closing; (b) shares (the "Shares")
of common stock ("Common Stock") of Pinnacle Holdings Inc., a Delaware
corporation ("PHI") will be issued to Seller by PHI at Closing, and the
number of Shares shall have an aggregate value of $10,000,000. The
number of Shares to be issued at Closing is 418,520 based on the
average of the high and low trading value of the Common Stock on the
Nasdaq Stock Market for the five trading day period ending August 26,
1999. At Closing, Seller and PHI will enter into an agreement regarding
registration of the Shares, and PHI will deliver the Shares to Seller.
Seller will deliver the Letter of Credit to Purchaser upon Purchaser's
payment of the cash portion of the Purchase Price and PHI's delivery of
the Shares.
3. Indemnification. (a) Section 11.1 of the Agreement is hereby amended
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and restated in its entirety as follows:
All representations and warranties contained in the Agreement or in
any agreement or other document delivered pursuant hereto shall
terminate at Closing and shall be of no further force and effect.
Notwithstanding the foregoing, the covenants and agreements of the
parties contained in the Agreement that are to be performed
following Closing shall survive Closing until such
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covenant is performed or unless specifically provided otherwise
in the Agreement, this letter or any other amendment to the
Agreement or any agreement or document delivered pursuant
hereto or thereto.
(b) Section 11.2(a)(i) is hereby amended and restated in its
entirety as follows:
(i) caused by any failure to fulfill any covenant or
agreement of Purchaser contained herein or in any other
agreement or document delivered pursuant hereto.
(c) Section 11.2(b)(i) is hereby amended and restated in its
entirety as follows:
(i) caused by any failure to fulfill any covenant or agreement
of Seller contained herein or in any other agreement or
document delivered pursuant hereto.
(d) All references to representations and warranties set forth in
Section 11.3(a) are hereby deleted.
4. Covenants. (a) To the extent that Seller has not delivered all of
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the Commitments and Surveys required to be delivered at Closing
pursuant to Section 6.6(a) and Section 6.6(b) of the Agreement,
Purchaser hereby waives such failure to deliver; provided,
however, that Seller shall continue to cooperate with Purchaser
in obtaining such required Commitments and Surveys and shall
share equally the costs related thereto as specifically set forth
in Section 2.5, Section 6.6(a) and Section 6.6(b) of the
Agreement.
(b) The second sentence of Section 6.6(a) of the Agreement is
hereby amended by adding the following to the end of such
sentence:
; and provided further, however, that with respect to the
general lease exception, Seller shall deliver an ALTA Statement
stating that there are no (i) parties in possession of the
Owned Real Estate and the Designated Ground Leased Real Estate
other than persons or entities to which Seller has granted
possessory rights in the ordinary course of Seller's business,
the existence of which Seller has otherwise communicated to
Purchaser, and (ii) options to purchase or rights of first
refusal to acquire all or any portion of the Owned Real Estate
or Seller's interest in the Designated Ground Leased Real
Estate.
(c) [Intentionally Left Blank]
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(d) Section 6.6(d) of the Agreement is hereby terminated in its
entirety and shall be of no further force or effect. Accordingly,
Section 6.6(e) shall be renumbered as Section 6.6(d).
(e) Subject to the Master Sublease Agreement, the Operating Agreement
and the Land Lease Agreement, notwithstanding Section 1.6 of the
Agreement, neither Seller nor any Affiliate shall have any liability or
obligation with respect to (i) obtaining any third party consent, (ii)
the failure to obtain any third party consent or (iii) relating to any
arrangement designed to provide Purchaser the obligations and benefits,
under or with respect to any contracts of the Business or any claim or
right of any benefit arising thereunder or resulting therefrom.
(f) Seller shall pay any real estate taxes and franchise taxes for any
periods prior to the Closing Date.
5. Transferred Employees. For a period of one (1) year from the Closing
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Date, Purchaser shall provide Seller with the following information in
writing within fifteen days of the end of each calendar month: (i) the
names of the Transferred Employees who no longer work for Purchaser;
(ii) the reason for the Transferred Employees no longer working for
Purchaser (i.e., resignation, forced relocation, termination with or
without Cause); and (iii) whether the required severance payment, if
any, has been paid to such Transferred Employees pursuant to Section
8.1 of the Agreement.
6. Purchase Price Allocation. The parties agree that the Purchase Price
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shall be allocated in accordance with the methodology set forth on
Schedule A.
7. Schedules. Schedules 1.0., 4.7(a), 4.7(b) and 4.8 are hereby amended
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and restated in their entirety as set forth on Schedule B hereto;
provided, however, that such Schedules shall be amended from time to
time by mutual agreement of the parties.
8. Section 2.4. The phrase "thirty (30) days" set forth in the first
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sentence of Section 2.4 of the Agreement shall be replaced with "sixty
(60) days."
9. Environmental Permits. The Environmental Permits to be delivered
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pursuant to Section 7.9 of the Agreement are attached hereto as Schedule
C.
10. Further Execution of Special Warranty Deeds and Assignments and
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Assumptions of Ground Leases. Notwithstanding the attachment of amended
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and restated Schedules 4.7(a) relating to Owned Real Estate and 4.7(b)
relating to Ground Leased Real Estate, due to the fact that a Commitment
has not yet been received for each parcel of Ground Leased Real Estate
and Owned Real Estate, certain Purchased Assets may have been
inappropriately categorized. In the event that any Commitment shall
disclose the existence of a Ground Leased Real Estate site, or an Owned
Real Estate site, not so previously categorized, or for which a special
warranty deed or an assignment and assumption of ground lease has not
been duly executed, whether relating to Purchased Assets in the United
States or in Canada,
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Seller and Purchaser shall each, in good faith, upon the request of the
other, duly execute and deliver, in recordable form, as necessary, the
special warranty deed, assignment and assumption of ground lease, state
specific transfer affidavits and transfer tax declarations and all such
other documents required or reasonably necessary to carry out the
purposes of the Agreement and the conveyance of the Purchased Assets as
intended herein.
11. Agreement. Except as expressly modified or supplemented hereby, the
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Agreement and all agreements, instruments, and documents executed or
delivered pursuant thereto have remained and shall remain at all times
in full force and effect in accordance with their respective terms.
12. Entire Agreement. Purchaser and Seller hereby agree that Section 15.7 of
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the Agreement is amended to include this letter agreement.
13. Software License. Purchaser hereby grants and the parties agree that
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they will enter into a mutually acceptable perpetual, royalty-free, non-
exclusive license to Seller with respect to the software set forth on
Schedule 1.2(i) and Schedule 13.3 of the Agreement within fifteen (15)
days from the date hereof.
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Please evidence your agreement to the foregoing by executing this letter in
the space provided below.
Sincerely yours,
PINNACLE TOWERS INC.,
A DELAWARE CORPORATION
BY:
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ITS:
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PINNACLE TOWERS CANADA INC.,
A NEW BRUNSWICK CORPORATION
BY:
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ITS:
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AGREED AND ACCEPTED AS OF
AUGUST 31, 1999.
MOTOROLA, INC., A DELAWARE
CORPORATION
BY:
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ITS:
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MOTOROLA CANADA LIMITED
BY:
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ITS:
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The schedules to this Agreement have been omitted pursuant to Item
601(b)(2) of Regulation S-K. The Registrant agrees to furnish these schedules
upon request.
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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT, is entered into this 31st day of August, 1999, by and
between Pinnacle Holdings Inc., a Delaware corporation (the "COMPANY") and
Motorola, Inc., a Delaware corporation ("MOTOROLA").
WHEREAS, pursuant to an Agreement for Purchase and Sale of Assets dated
June 29, 1999, by and between Pinnacle Towers Inc., a Delaware corporation and a
wholly owned subsidiary of the Company, and Motorola (the "PURCHASE AGREEMENT"),
the Company will issue shares of common stock, no par value, of the Company (the
"COMMON STOCK") on the date hereof; and
WHEREAS, the Company and Motorola desire to provide for the potential
registration of the shares of Common Stock to be acquired by Motorola;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
"AFFILIATE" means any Person which directly or indirectly controls, or is
controlled by, or is under common control with, the corporation or other entity
specified. The term "control" means the possession, directly or indirectly, or
in conjunction with others, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act (as defined
herein).
"COMMON STOCK" shall have the meaning set forth in the preamble to this
Agreement and shall include any successor securities thereto.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement.
"EXCHANGE ACT" shall have the meaning set forth in Section 2.3(h) hereof.
"LEGAL EXPENSES" shall have the meaning set forth in Section 2.4 hereof.
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"PERSON" shall mean an individual, a corporation, a partnership, a limited
liability company, an association, a trust, joint venture or any other entity,
organization, or division, including a government or political subdivision or an
agency or instrumentality thereof.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble of
this Agreement.
"REGISTRABLE SECURITIES" shall mean any and all of the following owned by
Motorola or its Affiliates (a) subject to Section 2.6, the 418,520 shares of
Common Stock being issued pursuant to the Purchase Agreement, or (b) any other
security issuable upon the conversion or exercise of any security or which is
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, such securities.
"REGISTRATION EXPENSES" shall have the meaning set forth in Section 2.4
hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"SELLING EXPENSES" shall have the meaning set forth in Section 2.4 hereof.
All capitalized terms not herein defined shall have the meanings assigned to
them in the Purchase Agreement.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. [INTENTIONALLY LEFT BLANK]
SECTION 2.2. INCIDENTAL REGISTRATION. If the Company at any time
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proposes to register its Common Stock under the Securities Act for sale to the
public in a firm commitment underwritten public offering whether for its own
account or for the account of other security holders or both (except with
respect to registration statements on Forms S-4 or S-8 or another form not
available for registering Common Stock for sale by Motorola to the public), each
such time it will give at least five (5) business days' prior written notice to
Motorola of its intention to do so. Upon the written request of Motorola given
within three (3) business days after receipt of any such notice to register any
of its Registrable Securities (which request shall state the intended method of
disposition thereof), the Company will cause the Registrable Securities as to
which registration shall have been so requested to be included in the securities
to be covered by the registration statement proposed to be filed by the Company,
all to the extent requisite to permit the sale or other disposition by Motorola
(in accordance with its written request) of such Common Stock so registered. In
the event that Motorola has requested the registration of
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Common Stock pursuant to this Section, such Common Stock shall be included in
the underwriting on the same terms and conditions as the shares of Common Stock
otherwise being sold through underwriters under such registration. The amount of
Registrable Securities timely requested by Motorola to be included in such an
underwriting may be reduced on a pro rata basis only if the amount of Common
Stock to be sold by the Company and any other security holders is also reduced
on the same pro rata basis. This Section 2.2 shall terminate upon earlier to
occur of the date (a) Motorola holds less than 210,000 shares of Registrable
Securities, as adjusted pursuant to Section 2.6 and (b) three (3) years from the
date hereof.
SECTION 2.3. REGISTRATION PROCEDURES AND EXPENSES. If and whenever the
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Company is required by the provisions of Section 2.2 hereof to use its
reasonable efforts to effect the registration of Registrable Securities under
the Securities Act, the Company will, as reasonably promptly as possible:
(a) prepare and file with the Commission a registration statement
(which shall be on the form of general applicability which the Company is
eligible to use under the Securities Act satisfactory to the managing
underwriter selected as therein provided with respect to such securities
and use its reasonable efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided) and take all actions
reasonably requested by Motorola to facilitate the sale of all or such
portion of the Registrable Securities;
(b) notify Motorola of any request of the Commission for the amending
or supplementing of such registration statement or prospectus and prepare
and file with the Commission such amendments (including post-effective
amendments) and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for the period of distribution
contemplated thereby (determined as hereinafter provided) and comply with
the provisions of the Securities Act, its rules and regulations and any
other governmental rules, regulations or requirements with respect to the
disposition of all Registrable Securities covered by such registration
statement in accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(c) furnish to each seller such number of copies of the registration
statement and the prospectus included therein (including each preliminary
prospectus), and all amendments and supplements to such documents, as such
Persons may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities covered by such
registration statement;
(d) to the extent applicable, use its reasonable efforts to register
or qualify the Registrable Securities covered by such registration
statement under the securities or blue sky laws of such jurisdictions as
the sellers of Registrable Securities shall reasonably request; provided,
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however, that the Company shall not for any such purpose be required to
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qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service
of process in any such jurisdiction;
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(e) immediately notify each seller under such registration statement
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 contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and the Company will promptly prepare a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading;
(f) notify each seller of Registrable Securities participating in the
disposition of such Registrable Securities of any stop order or other
suspension of effectiveness of the registration or the initiation or
threatening of any proceeding for that purpose;
(g) make every reasonable effort to prevent the issuance of any stop
order or to obtain the withdrawal of any such order or other suspension of
the effectiveness of the registration statement at the earliest possible
moment;
(h) as promptly as practicable after filing with the Commission of
any document which is incorporated by reference into a registration
statement, deliver a copy of such document to each seller of Registrable
Securities;
(i) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by such registration statement;
(j) use reasonable efforts to list and keep listed all Registrable
Securities covered by such registration statement on any national
securities exchange or quotation system on which such Registrable
Securities is then listed or quoted, if any; and
(k) cause its subsidiaries to take all action necessary to effect the
registration of Registrable Securities contemplated hereby, including
filing any required financial information.
For purposes of paragraphs (a) and (b) of this Section and Section 2.2
hereof, the period of distribution of Common Stock in a firm commitment
underwritten public offering shall be deemed to extend until the later of the
date each underwriter has completed the distribution of all Common Stock
purchased by it and the termination of the period in which prospectuses must be
delivered under Rule 174 promulgated under the Securities Act.
It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Article II with respect to the Registrable
Securities of Motorola that Motorola shall furnish to the Company in writing
such information with respect to Motorola and the proposed distribution by
Motorola as shall be
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reasonably necessary in order to effect the registration of Motorola's
Registrable Securities and assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Section 2.2 hereof
covering an underwritten public offering, the Company and Motorola agree to
enter into such underwriting agreements, lock-up agreements, power of attorney
and custody agreements and other agreements with the managing underwriter
selected in the manner herein and other appropriate parties provided in such
form and containing such provisions as are customary in the securities business
for such an arrangement between major underwriters, others and companies of the
Company's size and investment stature, provided that, unless consented to by the
Company, such agreement shall not contain any such provision applicable to the
Company which is inconsistent with the provisions hereof.
SECTION 2.4. EXPENSES. All expenses incurred by the Company in complying
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with Section 2.2 hereof, including, without limitation, all registration,
qualification and filing fees, blue sky fees and expenses, printing expenses,
fees and disbursements of counsel and independent public accountants for the
Company, escrow fees, fees of the National Association of Securities Dealers,
Inc., transfer taxes, fees of transfer agents and registrars, the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company which shall be paid in any
event by the Company), but excluding any Selling Expenses, are herein called
"REGISTRATION EXPENSES." All underwriting discounts and selling commissions
applicable to the sale of Registrable Securities are herein called "SELLING
EXPENSES." All fees and disbursements of counsel for the sellers of Registrable
Securities incurred in connection with registration of such capital stock
pursuant to Section 2.2 hereof are herein called "LEGAL EXPENSES."
The Company will pay all Registration Expenses in connection with any
registration statement filed pursuant to Section 2.1 or Section 2.2 hereof. All
Selling Expenses with respect to Registrable Securities and Legal Expenses in
connection with any registration statement filed pursuant to Section 2.2 hereof
shall be borne by Motorola.
SECTION 2.5. INDEMNIFICATION. In the event of a registration of any of
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the Registrable Securities of the Company under the Securities Act pursuant to
Section 2.2 hereof, the Company will indemnify and hold harmless each seller of
such Registrable Securities thereunder, its affiliates and each Person, if any,
who controls such entity, or any of its affiliates, within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (a
"CONTROLLING PERSON"), and the respective agents, employees, officers and
directors of the seller, its affiliates and any controlling person of either the
seller or its affiliates and to the extent it may be an affiliate or controlling
person with respect to any registration of capital stock of the Company under
the Securities Act other than pursuant to Section 2.2 hereof (the "SELLERS'
INDEMNIFIED PARTIES"), against any and all losses, pending or threatened claims,
damages or liabilities, joint or several (or actions in respect thereof),
including, as incurred and without limitation, reasonable costs of
investigating, preparing or defending any such claim or action ("LOSSES") to
which such sellers' and underwriters' indemnified parties may become subject
under the Securities Act or otherwise, insofar as such Losses arise out of or
are based upon any
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untrue statement or alleged untrue statement of any material fact made by the
Company contained in any registration statement under which such Registrable
Securities were registered under the Securities Act pursuant to Section 2.2
hereof, any preliminary prospectus or final prospectus contained therein, any
offering circular or other document, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company will not
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be liable in any such case if and to the extent that any such Loss arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, preliminary prospectus,
final prospectus, amendment or supplement, in reliance upon and in conformity
with information furnished by such seller in writing specifically for use in
such registration statement or prospectus; provided, further, that as to any
-------- -------
preliminary prospectus this indemnity agreement shall not inure to the benefit
of any of the sellers' indemnified parties on account of any Loss, or action
arising from the sale of any capital stock of the Company pursuant to Section
2.2 hereof to any Person by such seller if such seller failed to send or give a
copy of the final prospectus (the "FINAL PROSPECTUS") filed with the Commission
pursuant to Rule 424(b) promulgated under the Securities Act, as such Final
Prospectus may be amended or supplemented, to that Person within the time
required by the Securities Act, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in such preliminary prospectus was corrected in the Final Prospectus,
unless such failure resulted from non-compliance by the Company with Section
2.3(c) hereof. The indemnities of the Company contained in this Section shall
remain in full force and effect regardless of any investigation made by or on
behalf of any sellers' indemnified party or underwriters' indemnified party or
any opportunity therefor or any actual or constructive knowledge of any such
Person and shall survive any transfer of Registrable Securities.
In the event of a registration of any of the Registrable Securities under
the Securities Act pursuant to Section 2.2 hereof, each seller of such
Registrable Securities thereunder, severally and not jointly, will indemnify and
hold harmless the Company and each controlling person of the Company, each
officer of the Company who signs the registration statement, each director of
the Company, each underwriter and each controlling person of such underwriter
against any and all Losses to which the Company or such officer or director or
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such Losses arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
registration statement under which such Registrable Securities were registered
under the Securities Act pursuant to Section 2.2, any preliminary prospectus or
Final Prospectus contained therein, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, if and only to the extent that any such
Losses arise out of or are based upon an untrue statement or omission made in
reliance upon and in conformity with information pertaining to such seller, as
such, furnished in writing to the Company by such seller specifically for use in
such registration statement or prospectus; provided, further, however, that the
-------- ------- -------
liability of each seller hereunder
6
<PAGE>
shall not exceed the net proceeds received by such seller from the sale of
Registrable Securities covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of the
commencement or threatened commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party in writing thereof, but the
omission to so notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party other than under this
Section, or under this Section except to the extent actually prejudiced by such
failure to notify. In case any such action shall be brought against any
indemnified party, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel reasonably satisfactory to such indemnified party, and, after
notice from the indemnifying party to such indemnified party of its election so
to assume and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected; provided, however, that, if the defendants in any such action
-------- -------
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified party shall have the right to select separate counsel and
to assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred. In no event, however, shall the indemnifying party be liable
for fees and expenses of more than one counsel for the sellers' indemnified
parties and one counsel for the underwriters' indemnified parties (in each case
in addition to any local counsel) separate from their own counsel, in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
The indemnifying party shall not be liable to indemnify any indemnified
party for any settlement of any such action effected without the indemnifying
party's consent, which consent shall not be unreasonably withheld. Furthermore,
the indemnifying party shall not, except with the approval of each indemnified
party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to each indemnified party of a release from all liability in respect
of such claim or litigation without any payment or consideration provided by
each such indemnified party.
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If the indemnification provided for in this Section is unavailable to an
indemnified party under the first or second paragraphs hereof in respect of any
Losses referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Losses in such proportion
as is appropriate to reflect the relative fault of the indemnifying party and
the indemnified parties in connection with the actions or inactions which
resulted in such Losses. The relative fault of the Company on the one hand and
of the sellers of securities and any other sellers participating in the
registration statement on the other shall be determined by reference to, among
other things, whether the untrue or alleged omission to state a material fact
relates to information supplied by the Company or by the sellers of securities
or other sellers participating in the registration statement and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the sellers of securities agree that it would not be just
and equitable if contribution pursuant to this Section were determined by pro
---
rata allocation (even if the sellers of securities were treated as one entity
- ----
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section, no seller of
securities shall be required to contribute any amount in excess of the net
proceeds received by such seller from the sale of securities covered by the
registration statement filed pursuant hereto. 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.
SECTION 2.6. CHANGES IN COMMON STOCK. If, and as often as, there are any
-----------------------
changes in the Common Stock by way of stock split, stock dividend, combination
or reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof, as may be required, so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed.
SECTION 2.7. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and
---------------------------------------------
after the date hereof, the Company shall not enter into any agreement granting
any holder or prospective holder of any securities of the Company registration
rights with respect to such securities unless such new registration rights,
including, without limitation, standoff obligations, are subordinate to the
registration rights granted Motorola hereunder.
SECTION 2.8. TRANSFER OF REGISTRATION RIGHTS. The rights contained herein
-------------------------------
in favor of Motorola may be assigned by Motorola to any of its Affiliates.
8
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ARTICLE III
MISCELLANEOUS
SECTION 3.1. SUCCESSORS AND ASSIGNS. All covenants and agreements
----------------------
contained 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.
SECTION 3.2. REQUIRED SECURITIES FILINGS. The Company covenants that it
---------------------------
will file the reports required to be filed by the Company under the Securities
Act and the Exchange Act and the rules and regulations adopted by the Commission
thereunder; and it will take such further action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell capital stock without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the Commission. The Company
agrees to take all reasonable actions to have the Registrable Securities
continued to be listed on the Nasdaq Stock Market following any public offering.
SECTION 3.3. NOTICES. All notices, requests, demands and other
-------
communications hereunder shall be in writing and shall be, personally delivered
or sent by facsimile transmission with confirming copy sent by overnight courier
(such as Express Mail, Federal Express, etc.) and a delivery receipt obtained
and addressed to the intended recipient as follows:
(a) If to Motorola:
Motorola, Inc.
1301 East Algonquin Road
Schaumburg, Illinois 60196-1065
Attention:
Telephone No.: (847) 576-5012
Facsimile No.: (847) 576-3628
With copies to:
Motorola, Inc.
1303 East Algonquin Road
Schaumburg, Illinois 60196-1065
Attention: General Counsel
Telephone No.: (847) 576-5012
Facsimile No.: (847) 576-3628
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<PAGE>
(b) If to the Company:
Pinnacle Holdings Inc.
1549 Ringling Boulevard
Third Floor
Sarasota, Florida 34236
Attention: Steve Day
Telephone No.: (941) 364-8886
Facsimile No.: (941) 364-8761
With copies to:
Holland & Knight LLP
400 North Ashley
Tampa, Florida 33601-1288
Attention: Anderson L. Baldy, III
Telephone No.: (813) 227-6520
Facsimile No.: (813) 229-0134
Any party may change its address or add or change parties for receiving notice
by written notice given to the others named above. Notices shall be deemed
given as of the date of receipt.
SECTION 3.4. GOVERNING LAW; JURISDICTION. This Agreement shall be
---------------------------
interpreted in accordance with the substantive laws of the State of Delaware
applicable to contracts made and to be performed wholly within said state.
Except as set forth in Section 3.5, all disputes, legal actions, suits and
proceedings arising out of or relating to this Agreement shall be brought in a
federal district or state court located in Chicago, Illinois. Each party hereby
consents to the jurisdiction of the federal district or state court in Chicago,
Illinois. Each party hereby irrevocably waives all claims of immunity from
jurisdiction and any right to object on the basis that any dispute, action, suit
or proceeding brought in the federal district or state court of Chicago,
Illinois has been brought in an improper or inconvenient venue or forum.
SECTION 3.5. DISPUTES.
--------
(a) The Company and Motorola mutually desire that friendly
collaboration will develop between themselves. Accordingly, they shall try
to resolve in a friendly manner all disagreements and misunderstandings
connected with their respective rights and obligations under this
Agreement, including any amendments hereof.
(b) (i) To the extent that any misunderstanding or dispute cannot be
resolved agreeably in a friendly manner, the dispute will be mediated by a
mutually acceptable mediator to be chosen by the Company and Motorola
within forty-five (45) days after written notice by one of the parties
demanding mediation. Neither party may unreasonably withhold consent to the
selection of a mediator, however, by mutual agreement, the Company and
Motorola may postpone mediation until each has completed specified but
limited discovery with respect to a dispute. The parties may also agree to
attempt some other form of alternative dispute resolution
10
<PAGE>
("ADR") in lieu of mediation, including by way of example and without
limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through
negotiation, mediation or other form of ADR within six (6) months of the
date of the initial demand for it by one of the parties may then be
submitted to the courts for resolution. The use of any ADR procedures will
not be construed under the doctrine of laches, waiver or estoppel to affect
adversely the rights of either party. Nothing in this Section 15.11 will
prevent either party from resorting to judicial proceedings if (A) good
faith efforts to resolve the dispute under these procedures have been
unsuccessful or (B) interim relief from a court is necessary to prevent
serious and irreparable injury to one party or to others.
(c) Each of the Company and Motorola shall bear their own respective
costs of mediation or ADR but the Company and Motorola agree to share the
costs of the mediation or ADR equally.
SECTION 3.6. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement constitutes
-------------------------------
the entire agreement of the parties with respect to the subject matter hereof
and may not be modified or amended except in writing. No amendment, modification
or waiver shall be binding upon or effective with respect to any provision
hereof without the prior written consent of Motorola and the Company.
SECTION 3.7. COUNTERPARTS. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 3.8. PARTIAL INVALIDITY. In the event that any provision of this
------------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
SECTION 3.9. REMEDIES. In addition to any remedies set forth herein,
--------
Motorola shall be entitled to all other remedies, whether in law or in equity,
which they, individually or as a group, may be entitled to, including, without
limitation, temporary and/or permanent injunctive relief (without being required
to post a bond).
* * *
11
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be signed on its behalf by its duly authorized officers, all as of the day and
year first above written.
PINNACLE HOLDINGS INC. MOTOROLA, INC.
By: By:
------------------------------- ---------------------------------
Its: Its:
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