<PAGE>
As filed with the Securities and Exchange Commission on February 17, 1999
Registration Statement No. 333-59297
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 6
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 Identification Number)
incorporation or Code Number)
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)
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Copies of communications to:
Chester E. Bacheller, Esq. Robert E. Buckholz, Jr., Esq.
Holland & Knight LLP Sullivan & Cromwell
400 North Ashley Drive, Suite 2300 125 Broad Street
Tampa, Florida 33602 New York, New York 10004
(813) 227-8500 (212) 558-4000
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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. [_]
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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 of Common Stock in the United States and
Canada (the "U.S. Prospectus") and one to be used in connection with a
concurrent international offering of Common Stock outside the United States
and Canada (the "International Prospectus"). The complete U.S. Prospectus
follows this explanatory note. After the U.S. Prospectus are the following
alternate pages for the International Prospectus: a front cover page, a
separate Underwriting section and a back cover page. All other pages of the
U.S. Prospectus are to be used for both the United States offering and the
international offering. Each alternative page for the International Prospectus
included herein is labeled "Alternate Page for International 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.............. $ 101,200
NASD filing fee.................................................. $ 30,500
Nasdaq listing fee............................................... $ 95,000
Printing and engraving expenses.................................. $ 300,000
Accounting fees and expenses..................................... $ 350,000
Legal fees and expenses.......................................... $ 450,000
Blue Sky fees and expenses....................................... $ 5,000
Transfer Agent's fees and expenses............................... $ 20,000
Directors' and Officers' insurance............................... $ 70,000
Miscellaneous.................................................... $ 178,300
----------
Total.......................................................... $1,500,000
==========
</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.
(v) On September 3, 1998, the Company sold 30,000 shares of the Senior
Preferred Stock and warrants to purchase up to 3,432 shares of Class F
Common Stock to New York Life Insurance Company for an aggregate purchase
price of $30.0 million.
II-1
<PAGE>
(vi) On September 3, 1998, the Company sold 32.5 shares of Junior
Preferred Stock to ABRY/Pinnacle, Inc., an affiliate of ABRY II, for an
aggregate purchase price of $32.5 million.
(vii) On December 16, 1998, the Company sold 26.2 shares of the Junior
Preferred Stock to ABRY/Pinnacle, Inc. for an aggregate purchase price of
$26.2 million.
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 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 U.S. Underwriting Agreement
1.1 International Underwriting Agreement
3.1.1 Amended and Restated Certificate of Incorporation of the Company
3.1.2 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**
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
4.3 Specimen Stock Certificate*****
4.4 Registration Agreement*****
4.5 Recapitalization Agreement
4.6 Certificate of Designation Series A Senior Preferred Stock******
4.7 Certificate of Designation Series B Junior Preferred Stock******
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.**
10.2 First Amendment to Second Amended and Restated Credit Agreement
dated March 17, 1998**
10.3 Third Amended and Restated Credit Agreement dated May 29, 1998***
10.4 First Amendment to Third Amended and Restated Credit
Agreement********
10.5 Second Amendment to Third Amended and Restated Credit
Agreement*******
10.6 Third Amendment to Third Amended and Restated Credit Agreement
10.7 Form of Purchase and Sale Agreement dated January 9, 1998 by and
among PTI and Southern Communications**
10.8 Form of Southern Communications Master Site Lease Agreement by and
among PTI and Southern Communications**
10.9 Form of Option to Direct Construction or Acquisition of Additional
Tower Facilities by and among PTI and Southern Communications**
10.10 Form of Exchange Agreement by and among PTI and Southern
Communications**
10.11 Form of Lease Agreement--Non-Restricted Premises**
10.12 Form of Lease Agreement--Restricted Premises**
10.13 Form of Master Antenna Site Lease by and among PTI and Teletouch
Communications, Inc.**
10.14 Contract of Sale by and among PTI and Teletouch Communications,
Inc. and First Amendment to Contract of Sale**
10.15 Executive Employment Agreement between the Company and Robert
Wolsey dated May 3, 1995**
10.16 Executive Employment Agreement between the Company and Steven Day
dated February 17, 1997**
10.17 Executive Employment Agreement between the Company and James
Dell'Apa dated May 3, 1995**
10.18 Subscription Agreement dated December 31, 1995 by and among ABRY
II and PTI**
10.19 Second Amended and Restated Subscription and Stockholders
Agreement dated May 16, 1996 by and among PTI, the Company and
certain stockholders**
10.20 Capital Contribution Agreement dated February 26, 1998**
10.21 Convertible Promissory Note due 1998 dated February 11, 1998 by
and among the Company and ABRY II**
10.22 Services Agreement by and among PTI and PTI II**
10.23 Amended Capital Contribution Agreement dated May 29, 1998***
10.24 Purchase Agreement dated as of July 7, 1998 among MobileMedia, its
affiliates and the Company****
10.25 Amendment to Purchase Agreement dated September 2, 1998 between
PTI and MobileMedia and certain of its affiliates******
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.26 Form of Master Lease for Transmitter Systems Space between the
Company and MobileMedia Communications, Inc.****
10.27 Form of Management and Consulting Services Agreement dated as of
April , 1995 between Pinnacle Towers Inc. and ABRY*
10.28 Stock Incentive Plan
10.29 First Amendment to Capital Contribution Agreement
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 public
accountants********
23.4 Consent of Ernst & Young LLP, independent public
accountants********
24.1 Powers of Attorney (included on signature pages of Registration
Statement)****
27.1 Financial Data Schedule********
</TABLE>
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+To be filed by amendment.
* 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).
***** Previously filed on August 11, 1998 with Amendment No. 2 to the
Company's Registration Statement on Form S-11.
****** Previously filed on September 18, 1998 with the Company's Report on
Form 8-K.
******* Previously filed on January 5, 1999 with Amendment No. 4 to the
Company's Registration Statement on Form S-11.
******** Previously filed on January 21, 1999 with Amendment No. 5 to the
Company's Registration Statement on Form S-11.
(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.
II-4
<PAGE>
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-5
<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. 6 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 February 17, 1999.
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 February
- ------------------------------------- Officer, President 17, 1999
Robert Wolsey and Director
/s/ Steven Day Vice President, February
- ------------------------------------- Chief Financial 17, 1999
Steven Day Officer, Secretary
and Director
* Executive Vice February
- ------------------------------------- President, Chief 17, 1999
James Dell'Apa Operating Officer
and Director
* Director February
- ------------------------------------- 17, 1999
Andrew Banks
* Director February
- ------------------------------------- 17, 1999
Peni Garber
* Director February
- ------------------------------------- 17, 1999
Peggy Koenig
* Director February
- ------------------------------------- 17, 1999
Royce Yudkoff
/s/ Steven Day
*By: _______________________________,
Steven Day
Attorney-in-fact
</TABLE>
II-6
<PAGE>
EXHIBIT 1.0
PINNACLE HOLDINGS INC.
COMMON STOCK
__________
U.S. UNDERWRITING AGREEMENT
________________________
February ....., 1999
BT Alex. Brown Incorporated,
Salomon Smith Barney Inc.,
NationsBanc Montgomery Securities LLC,
Raymond James & Associates, Inc.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o BT Alex. Brown Incorporated,
1 South Street,
Baltimore, MD 21202.
Ladies and Gentlemen:
Pinnacle Holdings Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
16,000,000 shares (the "Firm Shares") and, at the election of the Underwriters,
up to 2,400,000 additional shares (the "Optional Shares") of Common Stock, par
value $.001 per share ("Stock"), of the Company (the Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof being collectively called the "Shares").
It is understood and agreed to by all parties that the Company is
concurrently entering into an agreement (the "International Underwriting
Agreement") providing for the sale by the Company of up to a total of 4,600,000
shares of Stock (the "International Shares"), including the overallotment option
thereunder, through arrangements with certain underwriters outside the United
States and Canada (the "International Underwriters"), for whom BT Alex. Brown
International, Salomon Brothers International Limited, NationsBanc Montgomery
Securities LLC, Raymond James & Associates, Inc., and Deutsche Bank AG London
are acting as lead managers. Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement and the
International Agreement are hereby expressly made conditional on one another.
The Underwriters hereunder and the International Underwriters are simultaneously
entering into an Agreement between U.S. and International Underwriting
Syndicates (the "Agreement
<PAGE>
between Syndicates") which provides, among other things, for the transfer of
shares of Stock between the two syndicates. Two forms of prospectus are to be
used in connection with the offering and sale of shares of Stock contemplated by
the foregoing, one relating to the Shares hereunder and the other relating to
the International Shares. The latter form of prospectus will be identical to the
former except for certain substitute pages as included in the registration
statement and amendments thereto as mentioned below. Except as used in Sections
2, 3, 4, 9 and 11 herein, and except as the context may otherwise require,
references hereinafter to the Shares shall include all the shares of Stock which
may be sold pursuant to either this Agreement or the International Underwriting
Agreement, and references herein to any prospectus whether in preliminary or
final form, and whether as amended or supplemented, shall include both the U.S.
and the international versions thereof.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-11 (File No. 333-59297) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to
you for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective, each
as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; and such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "Prospectus";
2
<PAGE>
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an 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, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
BT Alex. Brown Incorporated expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an 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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter through BT Alex. Brown Incorporated expressly for use
therein;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the Prospectus;
(e) The Company and its subsidiaries have good and indefeasible title
to, or a valid leasehold interest in, all of their material assets, except
as is described in the Prospectus or where the failure thereof would not
reasonably be expected to have a material adverse effect on the financial
condition, results of operations, business or property of the Company and
its subsidiaries on a consolidated basis (a "Material Adverse Effect");
3
<PAGE>
(f) Each of the Company and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware; each of the Company and its subsidiaries has the
corporate power and authority to own its properties and to carry on its
business as now being and hereafter proposed to be conducted as described
in the Prospectus. Each of the Company and its subsidiaries is duly
qualified, in good standing and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization, except where the
failure to so qualify would not reasonably be expected to have a Material
Adverse Effect;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable and conform to the description of the Stock contained in the
Prospectus; and 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 (except for directors' qualifying
shares and as described in the Prospectus) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims;
(h) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder and under the International Underwriting Agreement
have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein and in the International
Underwriting Agreement, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the Stock contained
in the Prospectus;
(i) The issue and sale of the Shares by the Company hereunder and
under the International Underwriting Agreement and the compliance by the
Company with all of the provisions of this Agreement and the International
Underwriting Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except for any such conflicts, breaches or
violations that, individually or in the aggregate, would not have a
Material Adverse Effect, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the
4
<PAGE>
transactions contemplated by this Agreement and the International
Underwriting Agreement, except the registration under the Act of the Shares
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by the
Underwriters and the International Underwriters;
(j) The Company and its subsidiaries are in compliance in all
material respects with all of the provisions of their respective
certificate of incorporation and by-laws, and no event has occurred or
failed to occur, which has not been remedied or waived, the occurrence or
non-occurrence of which constitutes, or which with the passage of time or
giving of notice or both would constitute, a default by the Company or any
of its subsidiaries under any indenture, agreement or other instrument, or
any judgment, decree or order to which the Company or any of its
subsidiaries is a party or by which they or any of their properties is
bound which, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect;
(k) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, under the caption "Certain Federal
Income Tax Considerations", and under the caption "Underwriting", insofar
as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(l) Other than as set forth in the Prospectus, there is no action,
suit, proceeding or any other litigation pending or, to the best of the
Company's knowledge, threatened against the Company or any of its
subsidiaries, or in any other manner relating directly and materially
adversely to the Company, any of its subsidiaries, or any of their material
properties, in any court or before any arbitrator of any kind or before or
by any governmental body which would reasonably be expected to have a
Material Adverse Effect;
(m) 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 the Company and
its subsidiaries to own, build, maintain or operate their businesses or
properties have been duly authorized and obtained, are in full force and
effect except where the failure to be so obtained or in effect would not,
individually or in the aggregate, have a Material Adverse Effect; and the
Company and its subsidiaries are and 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
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which would reasonably be expected to have a Material Adverse Effect; 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; the Company and its subsidiaries are not 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 execution and delivery of this Agreement, the
Shares, or the performance thereof, in accordance with their respective
terms;
(n) The Company and its subsidiaries are in compliance in all
material respects with all applicable laws; the Company and its
subsidiaries have duly and timely filed all reports, statements and filings
that are required to be filed by any of them under the Communications Act
of 1934, as amended, 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;
(o) The Company is not required to register under the provisions of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"). Neither the entering into or performance by the Company of this
Agreement nor the offering and sale of the Shares violates any provision of
such act or requires any consent, approval, or authorization of, or
registration with, the Commission or any other governmental or public body
of authority pursuant to any provisions of such act;
(p) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(q) The Company is organized in conformity with the requirements for
qualification as a real estate investment trust under Sections 856 through
860 of the Internal Revenue Code of 1986, as amended (the "Code"), and its
proposed method of operation as described in the Prospectus will enable it
to continue to maintain the requirements for taxation as a real estate
investment trust under the Code; and
(r) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to which
the business or operations of the Company or any of its subsidiaries will
be affected by the Year 2000 Problem. As a result of such review, the
Company has no reason to believe, and does not believe, that the Year 2000
Problem will
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have a Material Adverse Effect or result in any material loss or
interference with the Company's business or operations. The "Year 2000
Problem" as used herein means any significant risk that computer hardware
or software used in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of data or in the
operation of mechanical or electrical systems of any kind will not, in the
case of dates or time periods occurring after December 31, 1999, function
at least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
1. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $........................, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a) of this Section 2, that portion of the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 2,400,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
2. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
3. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as BT Alex. Brown Incorporated may request upon at least forty-eight
hours' prior notice to the Company, shall be delivered by or on behalf of the
Company to BT Alex. Brown Incorporated, for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified
by the Company to BT Alex. Brown
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Incorporated at least forty-eight hours in advance. The Company will cause the
certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of BT Alex. Brown Incorporated, 1
South Street, Baltimore, Maryland 21202 (the "Designated Office"). The time and
date of such delivery and payment shall be, with respect to the Firm Shares,
9:30 a.m., New York City time, on ............., 1999 or such other time and
date as BT Alex. Brown Incorporated and the Company may agree upon in writing,
and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date
specified by BT Alex. Brown Incorporated in the written notice given by BT Alex.
Brown Incorporated of the Underwriters' election to purchase such Optional
Shares, or such other time and date as BT Alex. Brown Incorporated and the
Company may agree upon in writing. Such time and date for delivery of the Firm
Shares is herein called the "First Time of Delivery", such time and date for
delivery of the Optional Shares, if not the First Time of Delivery, is herein
called the "Second Time of Delivery", and each such time and date for delivery
is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(k) hereof, will be delivered at the offices of Sullivan &
Cromwell, 125 Broad St., New York, NY 10004 (the "Closing Location"), and the
Shares will be delivered at the Designated Office, all at such Time of Delivery.
A meeting will be held at the Closing Location at 2:00 p.m., New York City time,
on the New York Business Day next preceding such Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
4. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus prior to the last Time of Delivery which shall be disapproved by
you promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or prospectus, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any
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proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or Prospectus
or for additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 A.M. New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering
or sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus in order
to comply with the Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in securities
as many copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the time of issue
of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its stockholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations thereunder (including, at the option of the Company,
Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder and under the International
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Underwriting Agreement, any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar securities
(other than pursuant to employee stock option plans existing on, or upon
the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without your prior written
consent;
(f) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), to make
available to its stockholders consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement and the International Underwriting
Agreement in the manner specified in the Prospectus under the caption "Use
of Proceeds";
(i) To use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations National
Market System ("NASDAQ");
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act; and
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b)
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Registration Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the Act.
5. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the International Underwriting
Agreement, the Agreement between Syndicates, the Selling Agreement, the Blue Sky
Memorandum, closing documents (including compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the NASDAQ;
(v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (vi) the cost of preparing stock certificates; (vii) the cost and
charges of any transfer agent or registrar; and (viii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
6. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
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(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such written opinion or opinions dated such Time of
Delivery, with respect to the Shares, this Agreement, the Registration
Statement and the Prospectus as well as such other related matters as you
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters;
(c) Holland & Knight LLP, counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached
as Annex II hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company is a corporation incorporated and validly
existing as a corporation in good standing under the laws of the State
of Delaware. The Company has the requisite corporate power and
authority to own the properties and conduct its business as now
conducted as described in the Prospectus;
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business as now conducted as described in
the Prospectus so as to require such qualifications, except where the
failure to so qualify would not individually or in the aggregate have
a Material Adverse Effect;
(iii) Pinnacle Towers Inc. is a corporation incorporated and
validly existing as a corporation in good standing under the laws of
Delaware;
(iv) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company (including the Shares being delivered at such Time of
Delivery) have been duly and validly authorized and issued and are
fully paid and nonassessable; and the Shares conform to the
description of the Stock contained in the Prospectus.
(v) The unissued Shares to be issued and sold by the Company to
the Underwriters hereunder and under the International Underwriting
Agreement have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein and in the
International Underwriting Agreement, will be duly and validly issued
and fully paid and non-assessable and will conform to the description
of the Stock contained in the Prospectus;
(vi) To the knowledge of such counsel, the issue and sale of the
Shares by the Company hereunder and under the International
Underwriting Agreement and the compliance by the Company with all of
the provisions of this Agreement and the
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International Underwriting Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, except for any
such conflicts, breaches or violations that, individually or in the
aggregate, would not have a Material Adverse Effect, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties;
(vii) To such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is subject
which, if determined adversely to the Company or any of its
subsidiaries, would have a Material Adverse Effect; and to such
counsel's knowledge, no such proceedings are threatened by
governmental authorities or others;
(viii) To such counsel's knowledge, no consent, approval,
authorization, license, qualification, exemption or order of or with
any court or governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement and the International
Underwriting Agreement, except the registration under the Act of the
Shares, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue sky
laws in connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters;
(ix) To such counsel's knowledge, all material Licenses
necessary for the Company and its subsidiaries to own, build, maintain
or operate their businesses or properties as now conducted as
described in the Prospectus have been duly authorized and obtained and
are in full force and effect;
(x) This Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the
Company;
(xi) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock, under the caption
"Certain Federal Income Tax Considerations",
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and under the caption "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair;
(xii) The Company is not an "investment company," as such term
is defined in the Investment Company Act; and
(xiii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder,
although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to
in the opinion in subsection (xi) of this Section 7(c); they have no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any amendment to
the Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or
described as required.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the
United States.
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(d) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective date
of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto (the
executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(e)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the Underwriters so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or preferred
stock by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities or preferred stock;
(g) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the NASDAQ; (ii) a
suspension or material limitation in trading in the Company's securities on
NASDAQ; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iv) in the judgment of
the Underwriters makes it impracticable or inadvisable to proceed with
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the public offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(h) The Shares to be sold at such Time of Delivery shall have been
duly listed for quotation on NASDAQ;
(i) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each of the directors and executive
officers substantially to the effect set forth in Subsection 5(e) hereof in
form and substance satisfactory to you;
(j) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(k) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (e) of this Section and as to such other matters as
you may reasonably request.
7 (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, 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, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through BT Alex. Brown Incorporated expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or
16
<PAGE>
supplement thereto, 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, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through BT Alex. Brown Incorporated
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by each party to this Agreement from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable
17
<PAGE>
by such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of each party to this
Agreement in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company one the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Shares purchased under this Agreement (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by 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 Company on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) 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 which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any 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 subsection (d), 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 which 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
8 (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such
18
<PAGE>
Shares, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Shares, or the Company notifies you that it has so arranged for
the purchase of such Shares, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
9 The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or
19
<PAGE>
director or controlling person of the Company, and shall survive delivery of and
payment for the Shares.
10 If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company shall then be
under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.
11 In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of BT Alex. Brown
Incorporated, 1 South Street, Baltimore, Maryland 21202, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.
12 This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
13 Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
15 This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
20
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Master
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
Pinnacle Holdings Inc.
By:................................
Name:
Title:
Accepted as of the date hereof:
BT Alex. Brown Incorporated
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC.
Raymond James & Associates, Inc.,
As representatives of the
several U.S. Underwriters
BT Alex. Brown Incorporated
By:....................................
Name:
Title:
21
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
- --------------------------------------------- ----------------- ----------------------
Underwriter Total Number of Number of Optional
Firm Shares to be Shares to be Purchased
Purchased if Maximum Option
Exercised
<S> <C> <C>
BT Alex. Brown Incorporated..................
Salomon Smith Barney Inc.....................
NationsBanc Montgomery Securities LLC........
Raymond James & Associates, Inc..............
----------------- ----------------------
----------------- ----------------------
Total................................... 16,000,000 2,400,000
</TABLE>
<PAGE>
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished [separately] to the
representatives of the Underwriters (the "Representatives")[and are
attached hereto];
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus as
indicated in their reports thereon copies of which [have been separately
furnished to the Representatives][are attached hereto] and on the basis of
specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal years
1
<PAGE>
which were included or incorporated by reference in the Company's Annual
Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
2
<PAGE>
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the consolidated long-
term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for decreases or increases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
3
<PAGE>
EXHIBIT 1.1
PINNACLE HOLDINGS INC.
COMMON STOCK
_________________
UNDERWRITING AGREEMENT
(INTERNATIONAL VERSION)
-------------------------
February __, 1999
BT Alex. Brown International,
Salomon Brothers International Limited,
NationsBanc Montgomery Securities LLC,
Raymond James & Associates, Inc.,
Deutsche Bank AG London,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o BT Alex. Brown International,
Austin Friars House,
2-6 Austin Friars, 2nd Floor,
London EC2N 2HE, England.
Ladies and Gentlemen:
Pinnacle Holdings Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
4,000,000 shares (the "Firm Shares") and, at the election of the Underwriters,
up to 600,000 additional shares (the "Optional Shares") of Common Stock, par
value $.001 per share (the "Stock"), of the Company (the Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof being collectively called the "Shares").
It is understood and agreed to by all parties that the Company is
concurrently entering into an agreement, a copy of which is attached hereto (the
"U.S. Underwriting Agreement"), providing for the sale by the Company of up to a
total of 18,400,000 shares of Stock (the "U.S. Shares"), including the
overallotment option thereunder, through arrangements with certain underwriters
in the United States (the "U.S. Underwriters"), for whom BT Alex. Brown
Incorporated, Salomon Smith Barney Inc., NationsBanc Montgomery Securities LLC
and Raymond James & Associates, Inc., and Deutsche Bank AG London are acting as
representatives. Anything herein and therein to the contrary notwithstanding,
the respective closings under this Agreement and the U.S. Underwriting Agreement
are hereby expressly made conditional on one another. The Underwriters hereunder
and the U.S. Underwriters are simultaneously entering into an Agreement between
U.S. and International Underwriting Syndicates (the "Agreement between
Syndicates") which provides, among other things, for the transfer of shares of
Stock between the two syndicates and for consultation by the Lead Managers
hereunder with BT Alex. Brown Incorporated prior to exercising the rights of the
Underwriters under Section 7 hereof. Two forms of prospectus are to be used in
<PAGE>
connection with the offering and sale of shares of Stock contemplated by the
foregoing, one relating to the Shares hereunder and the other relating to the
U.S. Shares. The latter form of prospectus will be identical to the former
except for certain substitute pages as included in the registration statement
and amendments thereto as mentioned below. Except as used in Sections 2, 3, 4, 9
and 11 herein, and except as the context may otherwise require, references
hereinafter to the Shares shall include all of the shares of Stock which may be
sold pursuant to either this Agreement or the U.S. Underwriting Agreement, and
references herein to any prospectus whether in preliminary or final form, and
whether as amended or supplemented, shall include both of the U.S. and the
international versions thereof.
In addition, this Agreement incorporates by reference certain provisions
from the U.S. Underwriting Agreement (including the related definitions of
terms, which are also used elsewhere herein) and, for purposes of applying the
same, references (whether in these precise words or their equivalent) in the
incorporated provisions to the "Underwriters" shall be to the Underwriters
hereunder, to the "Shares" shall be to the Shares hereunder as just defined, to
"this Agreement" (meaning therein the U.S. Underwriting Agreement) shall be to
this Agreement (except where this Agreement is already referred to or as the
context may otherwise require) and to the representatives of the Underwriters or
to BT Alex. Brown Incorporated shall be to the addressees of this Agreement and
to BT Alex. Brown International, and, in general, all such provisions and
defined terms shall be applied mutatis mutandis as if the incorporated
provisions were set forth in full herein having regard to their context in this
Agreement as opposed to the U.S. Underwriting Agreement.
1. The Company hereby makes with the Underwriters the same
representations, warranties and agreements as are set forth in Section 1 of the
U.S. Underwriting Agreement, which Section is incorporated herein by this
reference.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $......, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 600,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given
2
<PAGE>
within a period of 30 calendar days after the date of this Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless you and the Company otherwise agree in writing, earlier than two or
later than ten business days after the date of such notice.
3. Upon the authorization by BT Alex. Brown International of the release
of the Firm Shares, the several Underwriters propose to offer the Firm Shares
for sale upon the terms and conditions set forth in the Prospectus and in the
forms of Agreement among Underwriters (International Version) and Selling
Agreements, which have been previously submitted to the Company by you. Each
Underwriter hereby makes to and with the Company the representations and
agreements of such Underwriter as a member of the selling group contained in
Sections 3(d) and 3(e) of the form of Selling Agreements.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as BT Alex. Brown International may request upon at least forty-eight
hours' prior notice to the Company shall be delivered by or on behalf of the
Company to BT Alex. Brown International, for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified
by the Company to BT Alex. Brown Incorporated at least forty-eight hours in
advance. The Company will cause the certificates representing the Shares to be
made available for checking and packaging at least twenty-four hours prior to
the Time of Delivery (as defined below) with respect thereto at the office of BT
Alex. Brown International, 1 South Street, Baltimore, Maryland 21202 (the
"Designated Office"). The time and date of such delivery and payment shall be,
with respect to the Firm Shares, 9:30 a.m., New York City time, on
............., 1999 or such other time and date as BT Alex. Brown International
and the Company may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York City time, on the date specified by BT Alex. Brown
International in the written notice given by BT Alex. Brown International of the
Underwriters' election to purchase such Optional Shares, or such other time and
date as BT Alex. Brown International and the Company may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery", such time and date for delivery of the Optional Shares, if
not the First Time of Delivery, is herein called the "Second Time of Delivery",
and each such time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 of the U.S. Underwriting Agreement,
including the cross receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 7(k) of the U.S. Underwriting
Agreement, will be delivered at the offices of Sullivan & Cromwell, 125 Broad
Street, New York, New York 10004 (the "Closing Location"), and the Shares will
be delivered at the Designated Office, all at such Time of Delivery. A meeting
will be held at the Closing Location at .......p.m., New York City time, on the
New York Business Day next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday,
3
<PAGE>
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close.
5. The Company hereby makes to the Underwriters the same agreements as are
set forth in Section 5 of the U.S. Underwriting Agreement, which Section is
incorporated herein by this reference.
6. The Company and the Underwriters hereby agree with respect to certain
expenses on the same terms as are set forth in Section 6 of the U.S.
Underwriting Agreement, which Section is incorporated herein by this reference.
7. Subject to the provisions of the Agreement between Syndicates, the
obligations of the Underwriters hereunder shall be subject, in their discretion,
at each Time of Delivery, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of such
Time of Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and
additional conditions identical to those set forth in Section 7 of the U.S.
Underwriting Agreement, which Section is incorporated herein by this reference.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, 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, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through BT Alex. Brown International expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, 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, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company
4
<PAGE>
by such Underwriter through BT Alex. Brown International expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, in each case as set forth in the table on
the cover page of the Prospectus. The relative
5
<PAGE>
fault shall be determined by 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 Company
on the one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (d) 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 which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any 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 subsection (d), 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 which 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to you to
purchase such Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Shares, or the Company notifies you that it has so arranged for
the purchase of such Shares, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
6
<PAGE>
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligation of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to any Underwriter except as
provided in Section 6 and Section 8 hereof, but, if for any other reason any
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through BT Alex. Brown International for
all out-of-pocket expenses approved in writing by BT Alex. Brown International,
including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company shall then be under no further
liability to any Underwriter in respect of the Shares not so delivered except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by BT Alex. Brown International.
7
<PAGE>
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Underwriters in care of BT Alex. Brown
International, Austin Friars House, 2-6 Austin Friars, 2nd Floor, London EC2N
2HE, England, Attention: Investment Banking, telephone No. (171) 786-7444,
facsimile transmission No. (171) 786-7440; and if to the Company shall be
delivered or sent by registered mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by BT Alex. Brown International upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, United States of America.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Master
Agreement among Underwriters, the form of which shall be furnished to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
8
<PAGE>
Very truly yours,
Pinnacle Holdings Inc.
By:........................................
Name:
Title:
Accepted as of the date hereof:
BT Alex. Brown International
Salomon Smith Barney International
NationsBanc Montgomery Securities LLC
Raymond James & Associates, Inc.
Deutsche Bank AG London,
As representatives of the
several International Underwriters
BT Alex. Brown International
By:....................................
Name:
Title:
9
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
----------- ------------ ------------------
TOTAL NUMBER NUMBER OF
OF FIRM OPTIONAL SHARES TO
SHARES TO BE BE PURCHASED IF
UNDERWRITER PURCHASED MAXIMUM OPTION
EXERCISED
<S> <C> <C>
BT Alex. Brown International.........................
Salomon Smith Barney International...................
NationsBanc Montgomery Securities LLC................
Raymond James & Associates, Inc......................
Deutsche Bank AG London..............................
--------- -----------
--------- -----------
Total........................................... 4,000,000 600,000
</TABLE>
10
<PAGE>
EXHIBIT 3.1.1
CERTIFICATE 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. The
Corporation filed its original Certificate of Incorporation with the Delaware
Secretary of State on August 18, 1995.
SECOND: The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended and restated in its entirety as set forth in
Exhibit A attached hereto and made a part hereof.
- ---------
THIRD: This Certificate 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, 242 and 245 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, Pinnacle Holdings Inc. has caused this Certificate of
Amended and Restated Certificate of Incorporation to be executed by its
Secretary this ____ day of February, 1999.
PINNACLE HOLDINGS INC.
By:
------------------------------
Steven R. Day, Secretary
<PAGE>
Exhibit A
AMENDED AND RESTATED
--------------------
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
PINNACLE HOLDINGS INC.
---------------------
ARTICLE ONE
-----------
The name of the corporation is Pinnacle Holdings Inc.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of
Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle
19805. The name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
PART A. AUTHORIZED SHARES
-----------------
1. NUMBER OF AUTHORIZED SHARES. The total number of shares of
---------------------------
capital stock which the corporation has authority to issue is 105,497,582
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");
--------------
<PAGE>
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. 3,432 shares of Class F Common Stock, par value $0.001 per share
(the "Class F Common");
--------------
g. 100,000,000 shares of Common Stock, par value $0.001 per share
(the "New Common"); and
----------
h. 5,000,000 shares of Preferred Stock, par value $0.001 per share
(the "Preferred Stock").
---------------
The Class A Common, Class B Common, Class C Common, Class D Common,
Class E Common and Class F 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.
2. AUTOMATIC CONVERSION OF SHARES AND ELIMINATION OF CLASS COMMON.
--------------------------------------------------------------
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) 22.0191567 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) 22.0191567 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
2
<PAGE>
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 22.0191567
shares of New Common.
D. Class E Common. Each outstanding share of Class E Common
--------------
shall be converted into (i) 22.0191567 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 such date.
E. Class F Common. Each outstanding warrant to acquire a share
--------------
of Class F Common shall be converted into a warrant to
acquire 22.0191567 shares of New Common.
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.
2C. Status of Converted Stock and Cancellation of Class Common. In
----------------------------------------------------------
case the 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, the Class Common shall be cancelled and eliminated, 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
3
<PAGE>
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 and cancellation and elimination of the
Class Common.
2D. 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
---------------
1. Generally. 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 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").
- ---------------
1A. Senior Preferred Stock.
----------------------
1. Designation and Number of Shares. 145,000 shares of the
--------------------------------
Preferred Stock of the Corporation shall constitute a series of Preferred
Stock designated as Series A Senior Preferred Stock (hereinafter referred
to as "Senior Preferred Stock").
2. Shares of Series Identical. All shares of this Series shall
--------------------------
be identical with each other in all respects.
4
<PAGE>
3. Dividends. (a) Dividends on each share of the Senior Preferred
---------
Stock shall accrue from the date of its original issue (the "Issue Date")
at an annual rate equal to the percentage of the Liquidation Value per
share set forth below for each corresponding time period (the "Dividend
Rate").
14.00% Through March 31, 1999
14.75% From April 1, 1999 through June 30, 1999
15.50% From July 1, 1999 through September 30, 1999
16.00% After September 30, 1999
The "Liquidation Value" per share shall be $1,000. Dividends will be
payable quarterly on the last day of the months of March, June, September
and December of each year in additional shares of Senior Preferred Stock
valued at the Liquidation Value or at the option of the Corporation, with
30 days prior written notice as to the method of payment, in cash, or any
combination thereof.
(b) Such dividends will accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of
the Corporation legally available for the payment of dividends. To the
extent that dividends on the Senior Preferred Stock are to be paid in
additional shares of Senior Preferred Stock, the dividends on such
additional shares of Senior Preferred Stock will accrue from the date that
such additional shares of Senior Preferred Stock were to have been
delivered in payment, whether or not such additional shares were delivered
and if not delivered, the dividends will be considered to be accrued and
unpaid. Any dividends payable quarterly that have not been paid in cash
shall be deemed to have been payable in additional shares of Preferred
Stock.
(c) So long as any shares of the Senior Preferred Stock are
outstanding, no dividend or distribution shall be declared or paid or set
aside for payment upon the common stock or upon any other stock of the
Corporation ranking junior to the Senior Preferred Stock ("Junior
Securities"), nor shall any common stock nor any other stock of the
Corporation ranking junior to the Senior Preferred Stock be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be
paid to or made available for a sinking fund for the redemption of any
shares of any such stock) by the Corporation other than:
(i) dividends or distributions paid in common stock and
cash dividends of up to an aggregate of $100,000 per
year paid in lieu of fractional shares in connection
with dividends or distributions paid in common stock;
(ii) dividends permitted to be made under clause (3) of the
third paragraph of Section 1011 of the Indenture
5
<PAGE>
dated as of March 20, 1998 between the Corporation and
The Bank of New York, as Trustee, relating to the 10%
Senior Discount Notes due 2008 of the Corporation in
the form that such Indenture exists as of September 3,
1998 (the "Indenture");
(iii) redemption of up to $32,500,000 aggregate Liquidation
Value (as defined in the Certificate of Designation for
the Series B Junior Preferred Stock) of the Company's
Series B Junior Preferred Stock for a price equal to
its Liquidation Value plus accrued and unpaid dividends
thereon, provided that such redemption price shall be
paid with the proceeds from the sale by the Company of
other Junior Securities; and
(iv) repurchases of capital stock of the Company owned by
either any deceased shareholder of the Company or
former employee of the Company, provided that, to the
extent the cost of any such repurchases exceeds the net
proceeds of "key man" life insurance policies for which
the Company or any of its subsidiaries is the
beneficiary, the aggregate amount of such repurchases
in excess of such net proceeds in any twelve-month
period may not exceed $1 million.
4. Redemption. (a) All (but not less than all) of the
----------
outstanding shares of Senior Preferred Stock may be redeemed at any time
and shall be required to be redeemed by the Corporation by September 30,
2008, at a redemption price per share equal to the Liquidation Value per
share, plus in each case an amount payable in cash equal to accrued and
unpaid dividends thereon (the total sum so payable on such a redemption
being hereinafter referred to as the "Redemption Price").
(b) Upon the occurrence of a Change in Control, each holder of
shares of Senior Preferred Stock shall have the right to cause the
Corporation to redeem all or part of the shares of Senior Preferred Stock
held by such holder. The Corporation shall, within 30 days following the
date of the consummation of a transaction resulting in a Change of Control,
mail an offer to redeem shares of Senior Preferred Stock at the Redemption
Price to each holder of shares of Preferred Stock. A holder may accept
such offer by written notice to the Corporation received by the Corporation
within 30 days of the offer. Any such redemption shall occur within 10
days after the end of such 30-day period. The term "Change of Control"
shall have the meaning ascribed to it in the Indenture.
6
<PAGE>
(c) Notice of Redemption. A notice of any proposed redemption
--------------------
shall state: (i) the time and date as of which the redemption shall occur;
(ii) the total number of shares to be redeemed; (iii) the Redemption Price;
(iv) the place or places where certificates for such shares are to be
surrendered for payment of the Redemption Price; and (v) that dividends on
the shares to be redeemed will cease to accrue on such redemption date
(unless the Corporation shall default in payment of the Redemption Price,
in which case such dividends will continue to accrue).
(d) Procedure for Redemption. Notice of any proposed redemption
------------------------
of the shares of Senior Preferred Stock shall be given by mailing a copy of
such notice, postage prepaid, to the holders of record of such shares at
their respective addresses then appearing on the books of the Corporation,
not more than ninety nor less than thirty days prior to the date fixed for
said redemption. On the date fixed for redemption of any shares, the
Corporation shall, and at any time not more than ninety days prior to such
date may, deposit the aggregate of the Redemption Price of the shares to be
redeemed with a bank, trust Corporation, accounting firm or law firm (the
"Depositary"), designated in the notice of such redemption, in trust for
payment to the holders of the shares to be redeemed, and deliver
irrevocable written instructions authorizing the Depositary to apply such
deposit solely to the redemption of such shares. Such written instructions
may provide that any of such deposit remaining unclaimed, at the expiration
of two years after the date fixed for such redemption, by the holder of any
of such shares be returned to the Corporation, after which return such
holder shall have no claim against the Depositary but shall have a claim as
an unsecured creditor against the Corporation for the redemption price
thereof (together with accrued and unpaid dividends as provided herein),
without interest. If notice of redemption shall have been given as herein
provided, dividends on the shares so called for redemption shall cease to
accrue, such shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the Redemption Price) shall cease
from and after the time and date fixed in the notice of redemption as the
time and date of redemption (unless the Corporation shall default in the
payment of the Redemption Price, in which case such rights shall not
terminate at such time and date). Upon surrender (in accordance with the
notice of redemption) of the certificate or certificates for any shares to
be so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice of redemption shall so state),
such shares shall be redeemed by the Corporation at the Redemption Price.
(e) If the Corporation is unable to meet its obligations under
Section 4(a) and 4(b) hereof, each holder of Senior Preferred Stock shall
have the option to receive in lieu of payment of the Redemption Price a
promissory note (the "Note") executed by the Corporation, in form and
substance satisfactory to
7
<PAGE>
the holder of Senior Preferred Stock, payable to such holder in the
original principal amount at the fixed rate of 16.00% per annum with a
maturity date of and a single payment of principal due on the date six (6)
months from the date of the mandatory redemption required pursuant to
Sections 4(a) and 4(b) hereto, which interest rate shall increase by 1.0%
per annum for each ninety (90) day period beyond such maturity date that
the Note remains unpaid.
5. No Senior Classes of Stock. So long as any shares of Senior
--------------------------
Preferred Stock are outstanding, the Corporation may not issue any class or
series of capital stock having dividend or liquidation rights prior to or
pari passu in priority with the Senior Preferred Stock.
6. Liquidation Rights. (a) Upon the dissolution, liquidation or
------------------
winding up of the Corporation, whether voluntary or involuntary, the
holders of the shares of the Senior Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to
stockholders, before any payment or distribution shall be made on the
common stock or on any other class of stock ranking junior to the Senior
Preferred Stock in respect of distributions upon liquidation or winding up,
payment in cash equal to the Liquidation Value per share, plus a payment in
cash equal to all dividends on such shares accrued and unpaid thereon to
the date payment is made available.
(b) After the payment to the holders of the shares of the Senior
Preferred Stock of the full preferential amounts provided for in this
paragraph (6), the holders of the Senior Preferred Stock as such shall have
no right or claim to any of the remaining assets of the Corporation.
(c) In the event the assets of the Corporation available for
distribution to the holders of shares of the Senior Preferred Stock upon
any dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary shall be insufficient to pay in full all amounts
to which such holders are entitled pursuant to subparagraph (6)(a) above,
no such distributions shall be made upon account of any shares of any other
class of stock of the Corporation.
7. Voting Rights. The holders of shares of Senior Preferred
-------------
Stock shall not be entitled to vote except as otherwise required by law and
except that, so long as any shares of Senior Preferred Stock are
outstanding, the affirmative vote of holders of 66 2/3% of the outstanding
shares of Senior Preferred Stock shall be required for the Corporation to
incur Debt (except Debt that could be then incurred without the limitation
imposed by Section 1008 of the Indenture), unless the ratio of (a) the
aggregate consolidated principal amount of Debt of the Corporation and its
Restricted Subsidiaries outstanding as of the most recent available
quarterly or annual balance sheet plus the
8
<PAGE>
liquidation value of any preferred stock of the Corporation outstanding as
of the most recent available quarterly or annual balance sheet (other than
the liquidation value of any then outstanding preferred stock ranking
junior to the Senior Preferred Stock in respect of distributions upon
liquidation or winding up to the extent that such liquidation value does
not exceed $60 million), after giving pro forma effect to the Incurrence of
such Debt and any other Debt Incurred since such balance sheet date that
remains outstanding and the receipt and application of the proceeds
thereof, less the principal amount of any Debt or preferred stock that was
outstanding as of such balance sheet date that no longer remains
outstanding, to (b) Adjusted Consolidated Cash Flow, determined on a pro
forma basis as if any such Debt had been incurred and the proceeds thereof
had been applied at the beginning of the relevant fiscal quarter, would be
less than or equal to 8.5 to 1. The term "Debt," "Restricted
Subsidiaries," "Incurred," "Incurrence," and "Adjusted Consolidated Cash
Flow" shall have the meanings ascribed to them in the Indenture.
8. Stock to be Reserved. The Corporation will at all times
--------------------
reserve and keep available out of its authorized Senior Preferred Stock,
solely for the purpose of paying dividends, such number of shares of Senior
Preferred Stock as shall be required to satisfy the dividend requirements
on the Senior Preferred Stock through September 30, 2008.
9. Retirement of Shares. Shares of Senior Preferred Stock that
--------------------
are redeemed by the Corporation shall be permanently retired and shall not
under any circumstances be reissued.
10. Transfer Agent, Conversion Agent and Registrar. The
----------------------------------------------
Corporation will, so long as any shares of Senior Preferred Stock are
outstanding, maintain an office or agency where such shares may be
presented for registration of transfer and exchange.
1B. Series B Preferred.
------------------
Section 1. Designation and Number of Shares. The Corporation is
--------------------------------
hereby authorized to issue from time to time a total of 100 shares to be
designated Series B Preferred Stock, with $0.001 par value per share,
having the preferences, qualification, rights and privileges herein set
forth (the "Series B Preferred"). Other capitalized terms used and not
------------------
otherwise defined herein have the meanings set forth in Section 9.
Section 2. Rank.
----
2A. Priority. The Series B Preferred will rank with respect to
--------
dividend rights and rights on liquidation, winding up and dissolution: (a)
senior
9
<PAGE>
to the Common Stock and all other Junior Securities; (b) pari passu with
all Pari Passu Securities; and (c) junior to all Senior Securities.
2B. Distributions. Any distribution made pursuant to dividend
-------------
rights or rights on liquidation, winding up, or dissolution will be made to
the holders of the Corporation's securities in accordance with the relative
priorities set forth above, and any such distribution will fully satisfy
the Corporation's obligations to the holders of a senior security prior to
any distribution to the holders of any junior security.
Section 3. Dividends.
---------
3A. General Obligation. When and as declared by the
------------------
Corporation's Board of Directors and to the extent permitted under the
General Corporation Law of the State of Delaware (as in effect from time to
time, the "DGCL"), and subject to the terms of any Senior Securities, the
----
Corporation will pay preferential dividends to the holders of the Series B
Preferred as provided in this Section 3. Dividends on each share of the
Series B Preferred (a "Share") will accrue on a daily basis at the rate of
-----
14% per annum of the sum of the Liquidation Value thereof from time to time
plus all accumulated and unpaid dividends thereon from and including the
date of issuance of such Share to and including the first to occur of: (a)
the date on which the Liquidation Value of such Share (plus all accrued and
unpaid dividends thereon) is paid to the holder thereof in connection with
the liquidation of the Corporation; or (b) the date on which such Share is
acquired by the Corporation. Such dividends will accrue whether or not
they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of
dividends. The date on which the Corporation initially issues any Share
will be deemed to be its "date of issuance" regardless of the number of
times transfer of such Share is made on the stock records maintained by or
for the Corporation and regardless of the number of certificates which may
be issued to evidence such Share.
3B. Dividend Reference Dates. To the extent not paid on March
------------------------
31, June 30, September 30 or December 31 of any year, beginning with the
first such date after the date of issuance of the Share in question (each a
"Dividend Reference Date"), all dividends which have accrued on each Share
-----------------------
outstanding during the three-month period (or other period, in the case of
the first Dividend Reference Date after the date of issuance of such Share)
ending upon each such Dividend Reference Date will be accumulated and will
remain accumulated and accrued dividends with respect to such Share until
paid to the holder thereof.
3C. Distribution of Partial Dividend Payments. If at any time
-----------------------------------------
the Corporation pays less than the total amount of dividends then accrued
with
10
<PAGE>
respect to the Series B Preferred, such payment will be distributed pro
rata among the holders thereof based upon the rank and number of Shares
held by each such holder.
Section 4. Liquidation. Subject to the terms of any Senior
-----------
Securities, upon any liquidation, dissolution or winding up of the
Corporation (whether voluntary or involuntary), each holder of Series B
Preferred will be entitled to be paid, after any required distribution or
payment is made upon any Senior Securities, before any distribution or
payment is made upon any Junior Securities, and on a pari passu basis (pro
rata according to the relative amounts to be paid) with any required
distribution or payment to be made upon any Pari Passu Securities, an
amount in cash equal to the aggregate Liquidation Value of all Shares held
by such holder (plus all accrued and unpaid dividends thereon), and the
holders of Series A Preferred will not be entitled to any further payment.
If upon any such liquidation, dissolution or winding up of the Corporation
the Corporation's assets to be distributed among the holders of the Series
B Preferred and any Pari Passu Securities are insufficient to permit
payment to such holders of the aggregate amount which they are entitled to
be paid under this Section 4, then the entire assets available to be
distributed to the Corporation's stockholders will be distributed pro rata
among the holders of Series B Preferred and any Pari Passu Securities based
upon the aggregate Liquidation Value (plus all accrued and unpaid
dividends) of the Series B Preferred, and the comparable amount payable to
the holders of any Pari Passu Securities, held by each such holder.
Neither the consolidation or merger of the Corporation into or with any
other entity or entities (whether or not the Corporation is the surviving
entity), 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 nor
any other form of recapitalization or reorganization affecting the
Corporation will be deemed to be a liquidation, dissolution or winding up
of the Corporation within the meaning of this Section 4.
Section 5. Approval by Series B Preferred of Dividends and
-----------------------------------------------
Redemptions. So long as any Series B Preferred remains outstanding,
-----------
without the prior written consent of the holders of a majority of the
outstanding shares of Series B Preferred, the Corporation will not, nor
will it permit any Subsidiary to, redeem, purchase or otherwise acquire
directly or indirectly any Junior Securities, nor will the Corporation
directly or indirectly pay or declare any dividend or make any distribution
upon any Junior Securities.
Section 6. Voting Rights. Except as otherwise may be required
-------------
herein or by the DGCL, the holders of the Series B Preferred will not be
entitled to notice of any meeting of the stockholders of the Corporation
and will not be entitled to vote, together with any other stockholders or
as a separate class, on any matter to be voted on the by the Corporation's
stockholders.
11
<PAGE>
Section 7. Registration of Transfer. The Corporation will keep at
------------------------
its principal office a register for the registration of Series B Preferred.
Upon the surrender of any certificate representing Series B Preferred at
such place, the Corporation will, at the request of the record holder of
such certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the
aggregate the number of Shares represented by the surrendered certificate.
Each such new certificate will be registered in such name and will
represent such number of Shares as is requested by the holder of the
surrendered certificate and will be substantially identical in form to the
surrendered certificate, and dividends will accrue on the Series B
Preferred represented by such new certificate from the date to which
dividends have been fully paid on such Series B Preferred represented by
the surrendered certificate.
Section 8. Replacement. Upon receipt of evidence reasonably
-----------
satisfactory to the Corporation (provided that an affidavit of the
registered holder will be satisfactory) of the ownership and the loss,
theft, destruction or mutilation of any certificate evidencing Share(s),
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 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 Series represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate, and dividends will accrue
on the Series B Preferred represented by such new certificate from the date
to which dividends have been fully paid on such lost, stolen, destroyed or
mutilated certificate.
Section 9. Definitions. As used in this Section 1B, the following
-----------
terms have the following respective meanings:
"DGCL" has the meaning set forth in Section 3A of this Section
----
1B.
"Dividend Reference Date" has the meaning set forth in Section 3B
-----------------------
of this Section 1B.
"Junior Securities" means any capital stock or other equity
-----------------
securities of the Corporation, except for the Series B Preferred,
Senior Securities and Pari Passu Securities.
"Liquidation Value" means, in relation to any Share, $1,000,000.
-----------------
"Pari Passu Securities" means shares of any series of preferred
---------------------
12
<PAGE>
stock of the Corporation created and authorized in accordance with the
Restated Certificate of Incorporation of the Corporation, if the terms
of such series expressly provide that shares of such series will be
"Pari Passu Securities" with respect to the Series B Preferred.
"Senior Securities" means (a) shares of the Corporation's Series
-----------------
A Senior Preferred Stock, par value $0.001 per share, and (b) shares
of any other series of preferred stock of the Corporation created and
authorized in accordance with the Restated Certificate of
Incorporation of the Corporation, if the terms of such other series
expressly provide that shares of such series will be "Senior
Securities" with respect to the Series B Preferred.
"Series B Preferred" has the meaning set forth in Section 1 of
------------------
this Section 1B.
"Subsidiary" means any corporation of which the shares of
----------
outstanding capital stock possessing the voting power (under ordinary
circumstances) in electing the board of directors are, at the time as
of which any determination is being made, owned by the Corporation
either directly or indirectly through Subsidiaries.
Section 10. Amendment and Waiver. No amendment, modification or
--------------------
waiver will be binding or effective with respect to any provision of any of
Sections 1 through 10 hereof without the prior written consent of the
holders of a majority of the Series B Preferred outstanding at the time
such action is taken; provided that no change in the terms hereof may be
accomplished by merger or consolidation of the Corporation with another
corporation or entity unless the Corporation has obtained the prior written
consent of the holders of a majority of the Series B Preferred then
outstanding.
2. Consent Requirements. Notwithstanding Section 1 of this Part B,
--------------------
at any time when any share of the corporation's Series B Preferred Stock, par
value $0.001 per share (the "Series B Preferred"), is outstanding:
------------------
(a) the corporation will not authorize or issue any series of
Preferred Stock, or any share of any series of Preferred Stock, senior to
or on a parity with the Series B Preferred as to dividends or upon
liquidation, dissolution or winding up of the corporation, and
(b) the corporation will not incur any indebtedness (as that term is
defined in the Loan Agreement dated on or about December 16, 1998 between
ABRY/Pinnacle, Inc. and NationsBank, N.A.),
13
<PAGE>
without the prior unanimous affirmative vote or prior unanimous written
consent of the holders of the outstanding shares of the Series B Preferred.
3. Elimination of Series A Senior Preferred Stock and Series B
-----------------------------------------------------------
Preferred Stock. When no shares of Senior Preferred Stock or Series B Preferred
- ---------------
are outstanding, the board of directors may adopt a resolution or resolutions
that none of the authorized shares of such series are outstanding and that none
will be issued subject to the certificate of designations previously filed with
respect to such series, and a certificate setting forth such resolution or
resolutions may be filed pursuant to Section 103 of the General Corporation Law
of the State of Delaware that, when effective, shall have the effect of
eliminating from the certificate of incorporation all matters set forth in the
certificate of designations with respect to such series. 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
in connection therewith upon adoption of such restatement by the board of
directors without a vote of the stockholders, to reflect the elimination of the
matters set forth in the certificate of designations with respect to such Senior
Preferred Stock or Series B Preferred.
PART C. COMMON STOCK
------------
Except as otherwise provided in this ARTICLE FOUR or as otherwise
required by applicable law, all shares of Common Stock 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.
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, Class E Common, Class F Common and New
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, Class E Common, Class F Common and New 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, Class E Common, Class F Common and New 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
14
<PAGE>
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 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, Class E Common, Class F
Common and New Common in the following priority:
2A. Senior Yield. First, in an amount up to the aggregate Unpaid
------------
Yield on the shares of Class A Common outstanding 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, in an amount up to the
------------------------
aggregate Unpaid Preference Amount for the shares of Class A Common outstanding
immediately prior to such Distribution. Any amount paid to the holders of Class
A Common 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, in an amount up to the
---------------------------
aggregate Unpaid Preference Amount for the shares of Class E Common outstanding
immediately prior to such Distribution. Any amount paid to the holders of
Class E
15
<PAGE>
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 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, Class
E Common, Class F Common (if any) and New 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, Class E Common, Class F Common (if any) or New
Common, on the basis of the number of Units assigned to the shares of Class A
Common, Class B Common, Class C Common, Class E Common, Class F Common (if any)
and New 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
16
<PAGE>
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.
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
17
<PAGE>
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
-------------------------------------
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, in Class E Common only to
the holders of Class E Common, in Class F Common only to the holders of Class F
Common and in New Common only to the holders of New 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 to such transfer, or
(ii) a violation of the Percentage Ownership Limit (as defined
18
<PAGE>
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 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.
19
<PAGE>
"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., 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, for which the number of Units will be as determined
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
20
<PAGE>
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.
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
21
<PAGE>
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
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."
ARTICLE FIVE
------------
The corporation is to have perpetual existence.
ARTICLE SIX
-----------
In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the corporation is expressly authorized to
make, alter or repeal the bylaws of the corporation.
ARTICLE SEVEN
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
22
<PAGE>
ARTICLE EIGHT
-------------
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
this corporation will not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this Article Eight will not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE NINE
------------
The corporation expressly elects to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE TEN
-----------
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation in the manner now
or hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
23
<PAGE>
EXHIBIT 4.5
RECAPITALIZATION AGREEMENT
--------------------------
This recapitalization agreement (the "Agreement") is made and entered into
effective as of February ___, 1999, 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 "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").
B. The Company and the 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 common
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
beneficial ownership of the Company's outstanding capital stock is set forth in
Schedule I hereto.
- ----------
D. In connection with the Proposed Offering, the 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:
1. Certificate of Amendment. The Stockholders will vote or act by written
------------------------
consent to approve, and Company will cause to be filed, an amendment and
restatement of the Company's amended and restated certificate of incorporation
substantially in the
<PAGE>
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) 22.0191567 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) 22.0191567 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 22.0191567 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) 22.0191567 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. Termination. If the Proposed Offering shall not have been consummated
-----------
on or before March 31, 1999, this Agreement shall automatically terminate,
provided, however, that in the event the Proposed Offering shall not have been
consummated on or before March 31, 1999, but the Certificate of Amendment shall
have been filed with the Secretary of State of the State of Delaware on or
before March 31, 1999, 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
2
<PAGE>
incorporation, to return the capital structure of the Company to the capital
structure in effect on the date of this Agreement.
3. Representations and Warranties of the Company to each of the
------------------------------------------------------------
Stockholders. The Company represents and warrants to each of the 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).
4. Representations and Warranties of each Stockholder. Each Stockholder,
--------------------------------------------------
severally and not jointly, and with respect to itself only and not with respect
to any other Stockholder, represents and warrants to the Company and each other
Stockholder that (i) this Agreement has been duly executed and delivered by such
Stockholder; (ii) the execution, delivery and performance by such Stockholder
of, and the consummation by such Stockholder of the transactions contemplated
by, this Agreement have been duly and validly authorized by all necessary
partnership action on the part of such Stockholder, if such Stockholder is a
partnership, or by all necessary corporate action on the part of such
Stockholder, if such Stockholder is a corporation; and (iii) this Agreement
constitutes a legal, valid and binding obligation of such Stockholder
enforceable 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. No Joint Obligations of Stockholders and Company. Each 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.
3
<PAGE>
6. 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 Stockholder,
addressed to such Stockholder at such Stockholder's address specified in the
Company's books and records or at such other address as such 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 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.
(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 the Company and the Stockholders holding a
majority in voting interest of the capital stock of the Company.
4
<PAGE>
(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.
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective as provided herein.
Company:
PINNACLE HOLDINGS INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
5
<PAGE>
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
--------------------------------
James Bokish
--------------------------------
Shirley Putnam
--------------------------------
Slade Lindsay
6
<PAGE>
--------------------------------
Ben Gaboury
--------------------------------
David Zahn
--------------------------------
Martin Alvarez
7
<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 8,975 2,500
- --------------------------------------------------------------------------------------------------------
P. Dell'Apa - - - 300 -
- --------------------------------------------------------------------------------------------------------
F. Dell'Apa Sr. - - - 150 -
- --------------------------------------------------------------------------------------------------------
F. Dell'Apa Jr. - - - 100 -
- --------------------------------------------------------------------------------------------------------
Charles Milewski - - - 50 -
- --------------------------------------------------------------------------------------------------------
Mary Milewski - - - 425 -
- --------------------------------------------------------------------------------------------------------
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 25 590 - 296.46 -
- --------------------------------------------------------------------------------------------------------
Lindsay Investments, L.P. - - - 3,703.54 -
- --------------------------------------------------------------------------------------------------------
Ben Gaboury - - - 1,000 -
- --------------------------------------------------------------------------------------------------------
David Zahn - - - 1,000 -
- --------------------------------------------------------------------------------------------------------
Martin Alvarez - - - 1,000 -
- --------------------------------------------------------------------------------------------------------
Other Stockholders 2,475 $ 58,422 - - -
========================================================================================================
Total: 202,500 $4,821,134 12,000 40,000 174,766
========================================================================================================
</TABLE>
<PAGE>
EXHIBIT 10.6
THIRD AMENDMENT
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT is
dated as of the day of January 21, 1999 (this "Third Amendment"), and entered
into among PINNACLE TOWERS INC., a Delaware corporation (the "Borrower"), the
Lenders signatory hereto, NATIONSBANK, N.A., a national banking association,
individually and as Administrative Lender (in such latter capacity, the
"Administrative Lender"), and GOLDMAN SACHS CREDIT PARTNERS L.P., as Syndication
Agent (the "Syndication Agent").
WITNESSETH:
----------
WHEREAS, the Borrower, the Administrative Lender, the Syndication Agent,
and Lenders entered into a Third Amended and Restated Credit Agreement, dated as
of May 29, 1998, as amended by that certain First Amendment to Third Amended and
Restated Credit Agreement, dated as of June 29, 1998 and as further amended by
that certain Second Amendment to Third Amended and Restated Credit Agreement,
dated as of December 11, 1998 (as further amended, restated, or otherwise
modified from time to time, the "Credit Agreement");
WHEREAS, the Lenders, the Borrower, the Administrative Lender, and the
Syndication Agent have agreed to amend the Credit Agreement to make certain
changes to the terms therein upon the terms and conditions set forth below;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
Borrower, the Lenders, the Administrative Lender, and the Syndication Agent
agree as follows:
SECTION 1. Definitions.
-----------
(a) Generally. Unless specifically defined or redefined below, capitalized
---------
terms used herein shall have the meanings ascribed thereto in the Credit
Agreement.
(b) Addition of Definition of Change of Control. The definition of "Change
-------------------------------------------
of Control" shall be added to Article I of the Credit Agreement in alphabetical
order to read as follows:
"Change of Control" means the occurrence of one of more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Parent and its Subsidiaries, taken as a whole, to
any Person or group of related Persons, as defined in Section 13(d) of the
Securities Exchange Act of 1934 (a "Group"),
1
<PAGE>
other than Permitted Holders, (ii) any Person or Group (other than
Permitted Holders) shall become the owner, directly or indirectly,
beneficially or of record, of shares representing 30% or more of the
aggregate voting power represented by the issued and outstanding voting
stock of the Parent or any successor to all or substantially all of its
assets; or (iii) the first day on which a majority of the members of the
board of directors of the Parent are not Continuing Directors.
(c) Addition of Definition of Continuing Directors. The definition of
----------------------------------------------
"Continuing Directors" shall be added to Article I of the Credit Agreement in
alphabetical order to read as follows:
"Continuing Directors" means, as of any date of determination, any
member of the board of directors of the Parent who (i) was a member of such
board of directors on the date hereof or (ii) was nominated for election or
elected to such board of directors by any of the Permitted Holders or with
the approval of a majority of the Continuing Directors who were members of
such board at the time of such nomination or election.
(d) Addition of Definition of Permitted Holders. The definition of
-------------------------------------------
"Permitted Holders" shall be added to Article I of the Credit Agreement in
alphabetical order to read as follows:
"Permitted Holders" means as of the date of determination (i) Andrew
Banks, Royce Yudkoff or Robert Wolsey and any of their respective spouses,
estates, lineal descendants (including adoptive children), heirs,
executors, personal representatives, administrators and trusts for any of
their benefit and (ii) any other Person, the majority of which voting stock
is directly or indirectly owned by any Person described in clause (i)
above.
SECTION 2. Amendment to Section 9.01(q). Section 9.01(q) of the Credit
----------------------------
Agreement shall be deleted in its entirety and the following Section 9.01(q)
shall be substituted in its stead:
(q) The occurrence of one of more of the following events: (i) the
occurrence of a Change of Control, or (ii) the Parent shall own less than
100% of the Capital Stock of the Borrower, or the Borrower shall own less
than 100% of its Subsidiaries; or (iii) any one of the Chief Executive
Officer, Chief Financial Officer or Chief Operating Officer of the Borrower
shall, for any reason, fail to perform the primary roles and functions of
such position on behalf of the Borrower (whether pursuant to death,
extended disability, termination, resignation or otherwise) AND the
Borrower shall not have replaced such senior executive with a new employee
reasonably acceptable to the Majority Lenders within 60 days after such
failure;
2
<PAGE>
SECTION 3. Conditions Precedent. This Third Amendment shall not be
--------------------
effective until all proceedings of the Borrower taken in connection with this
Third Amendment and the transactions contemplated hereby shall be satisfactory
in form and substance to the Administrative Lender and Lenders, and the
Administrative Lender and Lenders shall have each received:
(a) copies of resolutions authorizing the execution, delivery and
performance of this Third Amendment by the Borrower and the Parent, and
legal opinions by counsel in form and substance satisfactory to the
Administrative Lender regarding the due execution, delivery and performance
of this Third Amendment and the legality, validity and the enforceability
thereof;
(b) copies of all agreements and documents in connection with any
equity offering by the Parent that would reduce the ownership percentage by
ABRY in the Parent;
(c) the Administrative Lender on behalf of Lenders, the Parent, the
Borrower and ABRY shall have entered into an amendment to that certain
Capital Contribution Agreement, dated as of May 29, 1998, among ABRY, the
Parent, the Borrower and the Administrative Lender on behalf of the
Lenders, such amendment to be in form and substance satisfactory to the
Administrative Lender and Lenders;
(d) evidence satisfactory to them that the Parent has received (or
will concurrently receive) gross proceeds from the issuance and sale of
common stock of the Parent in an amount not less than $200,000,000; and
(e) such other documents, instruments, and certificates, in form and
substance satisfactory to the Administrative Lender, as the Administrative
Lender shall deem necessary or appropriate in connection with this Third
Amendment and the transactions contemplated hereby.
SECTION 4. Representations and Warranties. The Borrower represents and
------------------------------
warrants to the Lenders and the Administrative Lender that (a) this Third
Amendment constitutes its legal, valid, and binding obligations, enforceable in
accordance with the terms hereof (subject as to enforcement of remedies to any
applicable bankruptcy, reorganization, moratorium, or other laws or principles
of equity affecting the enforcement of creditors' rights generally), (b) there
exists no Event of Default or Default under the Credit Agreement both before and
after giving effect to this Third Amendment, (c) its representations and
warranties set forth in the Credit Agreement and other Loan Papers are true and
correct on the date hereof both before and after giving effect to this Third
Amendment, (d) it has complied with all agreements and conditions to be complied
with by it under the Credit Agreement and the other Loan Papers by the date
hereof, (e) the Credit Agreement, as amended hereby, and the other Loan Papers
remain in full force and effect,
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<PAGE>
and (f) no notice to, or consent of, any Person is required under the terms of
any agreement of the Borrower in connection with the execution of this Third
Amendment.
SECTION 5. Further Assurances. The Borrower shall execute and deliver
------------------
such further agreements, documents, instruments, and certificates in form and
substance satisfactory to the Administrative Lender, as the Administrative
Lender or any Lender may deem necessary or appropriate in connection with this
Third Amendment.
SECTION 6. Counterparts. This Third Amendment and the other Loan Papers
------------
may be executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
SECTION 7. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS
----------------
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 8. GOVERNING LAW. (a) THIS AGREEMENT AND ALL LOAN PAPERS SHALL
-------------
BE DEEMED CONTRACTS MADE UNDER THE LAWS OF TEXAS AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF TEXAS, EXCEPT TO THE
EXTENT (A) FEDERAL LAWS GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF ALL OR ANY PART OF THIS AGREEMENT AND ALL LOAN PAPERS OR (B)
STATE LAW GOVERNS UCC COLLATERAL INTERESTS FOR PROPERTIES OF THE BORROWER AND
THE SUBSIDIARIES OUTSIDE THE STATE OF TEXAS. WITHOUT EXCLUDING ANY OTHER
JURISDICTION, THE BORROWER AND EACH SUBSIDIARY AGREES THAT THE COURTS OF TEXAS
WILL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH.
(b) THE BORROWER AND EACH SUBSIDIARY HEREBY WAIVES PERSONAL SERVICE OF ANY
LEGAL PROCESS UPON IT. IN ADDITION, THE BORROWER AND EACH SUBSIDIARY AGREES
THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY REGISTERED MAIL (RETURN RECEIPT
REQUESTED) DIRECTED TO THE BORROWER AT ITS ADDRESS DESIGNATED FOR NOTICE UNDER
THIS AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON RECEIPT
BY THE BORROWER. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE LENDER OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
4
<PAGE>
SECTION 9. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
--------------------
THE BORROWER, EACH SUBSIDIARY AND EACH LENDER HEREBY WAIVES ANY RIGHT THAT IT
MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT,
EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, THE OTHER
LOAN PAPERS, OR ANY RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE SHALL BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
5
<PAGE>
IN WITNESS WHEREOF, this Third Amendment to Third Amended and Restated
Credit Agreement is executed as of the date first set forth above.
THE BORROWER: PINNACLE TOWERS INC.
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
ACCEPTED AND AGREED:
PINNACLE HOLDINGS INC.
By:
-----------------------------
Its:
-----------------------------
ADMINISTRATIVE LENDER: NATIONSBANK,N.A., as Administrative Lender
--------------------------------------
By: Roselyn Drake
Its: Vice President
SYNDICATION AGENT: GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Syndication Agent
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
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<PAGE>
LENDERS: NATIONSBANK, N.A., individually as a Lender
--------------------------------------
By: Roselyn Drake
Its: Vice President
GOLDMAN SACHS CREDIT PARTNERS L.P.
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
BANKBOSTON, N.A.
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
SOCIETE GENERALE, NEW YORK BRANCH
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
7
<PAGE>
BANK OF AMERICA
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
KEY CORPORATE CAPITAL INC.
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
UNION BANK OF CALIFORNIA, N.A.
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
CO-BANK, ACB
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
<PAGE>
GENERAL ELECTRIC CAPITAL CORP.
--------------------------------------
By:
----------------------------------
Its:
----------------------------------
9
<PAGE>
EXHIBIT 10.28
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 Delaware 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; provided that "Cause" may be otherwise defined for purposes of
any Award in the related Option Agreement or Restricted Stock
Agreement.
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 currently and are not
expected to subsequently become 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 $.001 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.
<PAGE>
g. "Company" means Pinnacle Holdings Inc. and its Subsidiaries.
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
Common Stock.
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 Common Stock.
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.
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<PAGE>
q. "Option Shareholder" means an Employee who has acquired Shares upon
exercise of an Option.
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 entity 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
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<PAGE>
of the Committee will not be liable for performing any act or making any
determination in good faith.
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 3,000,000. If an unexercised Option expires or becomes
unexercisable, the unpurchased Shares subject to such Option will be
available for other Awards under the Plan. If any portion of a Restricted
Stock Award is forfeited during the applicable Period of Restriction, the
forfeited shares 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 for the
same Recipient. 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 or for different
Awards. 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
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<PAGE>
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 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 anniversary 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.
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 or pursuant to 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 or pursuant to 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
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<PAGE>
the Recipient will expire on the one-year anniversary of the
Recipient's last day of employment, or, if earlier, the date
specified in or pursuant to subsection 6.d. of the Plan.
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 or pursuant to
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 or pursuant to 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 90 days following the last day of the Recipient's
employment, or, if earlier, the date specified in or pursuant to
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 90
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 or pursuant to 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
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<PAGE>
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.
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) if permitted by the Committee in
the case of such exercise, 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
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<PAGE>
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.
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
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<PAGE>
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 limitation, vesting restrictions, restrictions
based upon the achievement of specific Company-wide, Subsidiary,
individual performance goals and/or any other criteria that the
Committee may select, and/or restrictions under applicable federal or
state securities laws, and may require that the certificate
representing Restricted Stock carry a legend to give appropriate
notice of such restrictions. The Committee may also require that
Recipients make cash payments at the time of grant and/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. Termination of Service. If the Recipient ceases employment with the
Company,
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<PAGE>
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.
j. 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
(ii) 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.
With respect to persons subject to Section 16 of the 1934 Act, transactions
under the Plan
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<PAGE>
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. Without the consent of any such
Recipient or holder, the Board may establish a date or event upon which the
Plan and all unexercised Options will terminate; provided, however, that
the Board must provide to the Recipients of the unexercised Options or the
holders currently entitled to exercise the Options written notice of the
termination of the Plan and all outstanding Options no less than 30 days
prior to the date or event upon which the Plan and all unexercised Options
will terminate.
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
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<PAGE>
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.
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.
12
<PAGE>
EXHIBIT 10.29
FIRST AMENDMENT TO CAPITAL CONTRIBUTION AGREEMENT
-------------------------------------------------
THIS FIRST AMENDMENT TO CAPITAL CONTRIBUTION AGREEMENT is dated as of the
_____ day of January, 1999 (this "First Amendment"), and entered into among ABRY
BROADCAST PARTNERS II, L.P., a Delaware limited partnership ("ABRY"), PINNACLE
TOWERS INC., a Delaware corporation (the "Borrower"), PINNACLE HOLDINGS, INC.
("Parent"), the Lenders signatory hereto, NATIONSBANK, N.A., a national banking
association, individually and as Administrative Lender (in such latter capacity,
the "Administrative Lender").
WITNESSETH:
----------
WHEREAS, the Borrower, the Parent, ABRY, the Administrative Lender, and
Lenders entered into a Capital Contribution Agreement, dated as of May 29, 1998
(as amended, restated, or otherwise modified from time to time, the "Capital
Contribution Agreement");
WHEREAS, the Lenders, the Parent, the Borrower, ABRY, and the
Administrative Lender have agreed to amend the Credit Agreement to make certain
changes to the terms therein upon the terms and conditions set forth below;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
Borrower, the Parent, the Lenders, and the Administrative Lender agree as
follows:
SECTION 1. Definitions. Unless specifically defined or redefined below,
-----------
capitalized terms used herein shall have the meanings ascribed thereto in the
Capital Contribution Agreement.
SECTION 2. Amendment to Section. Section 5 of the Capital Contribution
--------------------
Agreement is amended by adding the following sentence to the end of that
Section:
Notwithstanding anything contained herein to the contrary, if at any time
ABRY representatives shall constitute less than a majority of the board of
directors of the Parent, the Administrative Lender may demand that ABRY,
upon twelve (12) Business Days' notice, make an equity capital contribution
to the Parent in immediately available funds of an amount up to but not
exceeding $9,000,000 (less capital contributions made by ABRY after January
_____, 1999). Upon demand as provided in this Section and in Section 2,
ABRY agrees that it shall be obligated to make the capital contribution as
required by this Section and Section 2.
SECTION 3. Conditions Precedent. This First Amendment shall not be
--------------------
effective until all proceedings of the Borrower, the Parent, and ABRY taken in
connection with this First Amendment and the transactions contemplated hereby
shall be satisfactory in form and substance
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to the Administrative Lender and Lenders, and the Administrative Lender and
Lenders shall have each received the following: copies of resolutions of the
Borrower, Parent and ABRY authorizing the execution, delivery and performance of
this First Amendment in form acceptable to the Administrative Lender, the Third
Amendment to the Credit Agreement, and such other documents, instruments, and
certificates, in form and substance satisfactory to the Lenders, as the Lenders
shall deem necessary or appropriate in connection with this First Amendment and
the transactions contemplated hereby.
SECTION 4. Representations and Warranties. The Borrower, the Parent, and
------------------------------
ABRY each represents and warrants to the Lenders and the Administrative Lender
that (a) this First Amendment constitutes its legal, valid, and binding
obligations, enforceable in accordance with the terms hereof (subject as to
enforcement of remedies to any applicable bankruptcy, reorganization,
moratorium, or other laws or principles of equity affecting the enforcement of
creditors' rights generally), (b) with respect to the Borrower and the Parent,
there exists no Event of Default or Default under the Credit Agreement both
before and after giving effect to this First Amendment, (c) its representations
and warranties set forth in the Credit Agreement and other Loan Papers to which
it is a party are true and correct on the date hereof both before and after
giving effect to this First Amendment, (d) it has complied with all agreements
and conditions to be complied with by it under the Credit Agreement and the
other Loan Papers to which it is a party by the date hereof, (c) the Capital
Contribution Agreement, as amended hereby, and the other Loan Papers remain in
full force and effect, and (f) no notice to, or consent of, any Person is
required under the terms of any agreement of the Borrower, Parent or ABRY in
connection with the execution of this First Amendment.
SECTION 5. Further Assurances. ABRY, the Parent, and the Borrower shall
------------------
execute and deliver such further agreements, documents, instruments, and
certificates in form and substance satisfactory to the Administrative Lender, as
the Administrative Lender or any Lender or any Lender may deem necessary or
appropriate in connection with this First Amendment.
SECTION 6. Counterparts. This First Amendment and the other Loan Papers
------------
may be executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
SECTION 7. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS
----------------
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 8. GOVERNING LAW. (a) THIS AGREEMENT AND ALL LOAN PAPERS SHALL BE
-------------
DEEMED CONTRACTS MADE UNDER THE LAWS OF TEXAS AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE
2
<PAGE>
LAWS OF TEXAS, EXCEPT TO THE EXTENT (A) FEDERAL LAWS GOVERN THE VALIDITY,
CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF ALL OR ANY PART OF THIS
AGREEMENT AND ALL LOAN PAPERS OR (B) STATE LAW GOVERNS UCC COLLATERAL INTERESTS
FOR PROPERTIES OF ABRY, THE PARENT, BORROWER AND THE SUBSIDIARIES OUTSIDE THE
STATE OF TEXAS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, ABRY, THE PARENT,
BORROWER AND EACH SUBSIDIARY AGREES THAT THE COURTS OF TEXAS WILL HAVE
JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH.
(b) ABRY, THE PARENT, THE BORROWER AND EACH SUBSIDIARY HEREBY WAIVES
PERSONAL SERVICE OF ANY LEGAL PROCESS UPON IT. IN ADDITION, ABRY, THE PARENT,
THE BORROWER AND EACH SUBSIDIARY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON
IT BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO ABRY, THE PARENT,
THE BORROWER AT ITS ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON RECEIPT BY ABRY, THE
PARENT, AND THE BORROWER. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE LENDER OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
SECTION 9. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
--------------------
ABRY, THE PARENT, THE BORROWER, EACH SUBSIDIARY AND EACH LENDER HEREBY WAIVES
ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN
TORT, CONTRACT, EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS
AGREEMENT, THE OTHER LOAN PAPERS, OR ANY RELATED MATTERS, AND AGREES THAT ANY
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
================================================================================
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
================================================================================
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<PAGE>
IN WITNESS WHEREOF, this First Amendment to Capital Contribution Agreement
is executed as of the date first set forth above.
COMPANY: PINNACLE TOWERS, INC.
_________________________________________
By:______________________________________
Its:_____________________________________
PARENT: PINNACLE HOLDINGS, INC.
_________________________________________
By:______________________________________
Its:_____________________________________
ABRY BROADCAST PARTNERS II, L.P.
By ABRY Capital, L.P.
Its General Partner
By ABRY Holdings, Inc.,
Its General Partner
_________________________________________
By:______________________________________
Its:_____________________________________
NATIONSBANK, N.A, as Administrative
Lender, and individually as a Lender
_________________________________________
By: Roselyn Drake
Its: Vice President
4
<PAGE>
GOLDMAN SACHS CREDIT PARTNERS
L.P.
_________________________________________
By:______________________________________
Its:_____________________________________
BANKBOSTON, N.A.
_________________________________________
By:______________________________________
Its:_____________________________________
SOCIETE GENERALE, NEW YORK
BRANCH
_________________________________________
By:______________________________________
Its:_____________________________________
BANK OF AMERICA
_________________________________________
By:______________________________________
Its:_____________________________________
UNION BANK OF CALIFORNIA, N.A.
_________________________________________
By:______________________________________
Its:_____________________________________
5
<PAGE>
KEY CORPORATE CAPITAL, INC.
_________________________________________
By:______________________________________
Its:_____________________________________
CO-BANK, ACB
_________________________________________
By:______________________________________
Its:_____________________________________
GENERAL ELECTRIC CAPITAL CORP.
_________________________________________
By:______________________________________
Its:_____________________________________
6
