PINNACLE HOLDINGS INC, S-3, 2000-01-04

PINNACLE HOLDINGS INC
S-3, 2000-01-04
REAL ESTATE

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<PAGE>

As filed with the Securities and Exchange Commission on January 4, 2000

Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PINNACLE HOLDINGS INC.
(Exact name of registrant as specified in its governing instruments)
---------------
1549 Ringling Boulevard, Third Floor
Sarasota, Florida 34236
(941) 364-8886
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Steven Day
Vice President, Chief Financial Officer and Secretary
Pinnacle Holdings Inc.
1549 Ringling Boulevard, 3rd Floor
Sarasota, Florida 34236
(941) 364-8886
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copies of communications to:
CHESTER E. BACHELLER, ESQ. WILLIAM M. HARTNETT, ESQ.
Holland & Knight LLP Cahill Gordon & Reindel
400 North Ashley Drive, Suite 80 Pine Street
2300 New York, New York 10005
Tampa, Florida 33602 (212) 701-3000
(813) 227-8500
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [_]
If this form is a filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act 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(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [_]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Title of each Class of Amount Maximum Aggregate Amount of
Securities to be to be Offering Price Offering Registration
Registered Registered Per Unit Price(1) Fee(2)
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<S> <C> <C> <C> <C>
Common Stock, par value
$.001 per share......... 9,200,000 $40.375 $371,450,000 $98,062.80
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</TABLE>
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(1) Estimated solely for purpose of calculating the registration fee pursuant
to Rule 457(a) under the Securities Act of 1933, as amended, and includes
shares that may be purchased by the Underwriters pursuant to an over-
allotment option.
(2) Calculated based upon the average of high and low prices reported on The
Nasdaq Stock Market's National Market on December 29, 1999, in accordance
with Rule 457(c) under the Securities Act of 1933, as amended.
---------------
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>

The information in this preliminary Prospectus is not complete and may be
changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary Prospectus is not an offer to sell nor does it seek an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.
Subject to Completion, Dated January 4, 2000

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Pinnacle Holdings Inc.
8,000,000 Shares
Common Stock

- --------------------------------------------------------------------------------

This is a public offering of common stock of Pinnacle Holdings Inc. We are
offering 8,000,000 shares of common stock of which 2,700,000 are being
offered by the selling stockholders listed under the heading "Selling
Stockholders" on page 9 and 5,300,000 are being offered by us.

Our common stock trades on the Nasdaq National Market under the symbol
"BIGT". On December 29, 1999, the last reported sale price of our common
stock was $40.00 per share.

Investing in our common stock involves risks. See "Risk Factors" beginning on
page 9.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Per
Share Total
------- ------------
<S> <C> <C>
Public offering price $ $
Underwriting discounts and commissions $ $
Proceeds, before expenses, to Pinnacle Holdings Inc. $ $
Proceeds, before expenses, to selling stockholders $ $
</TABLE>

We and the selling stockholders have granted the underwriters the right to
purchase up to 1,200,000 additional shares at the public offering price to
cover any over-allotments.

The underwriters are severally underwriting the shares being offered. The
underwriters expect to deliver the shares against payments in Baltimore,
Maryland on , 2000.

Deutsche Banc Alex. Brown
Goldman, Sachs & Co.
Merrill Lynch & Co.
Raymond James & Associates Inc.
Salomon Smith Barney
Banc of America Securities LLC

The date of this Prospectus is , 2000.
<PAGE>

Pictures of Various Towers
<PAGE>

Map of U.S. Indicating Company's Current Communications Sites and Pending
Communications Sites
<PAGE>

PROSPECTUS SUMMARY

As used in this Prospectus, unless the context otherwise requires, "we,"
"us," "our," "Company" or "Pinnacle" refers to Pinnacle Holdings Inc., the
issuer of the Common Stock, and its subsidiaries. The following summary
contains basic information about us and this offering. It likely does not
contain all the information that is important to you. For a more complete
understanding of this offering, we encourage you to read this entire Prospectus
and the documents we have referred you to.

THE COMPANY

Overview

We are a leading independent provider of wireless communications site space
in the United States. We focus primarily on renting space on communications
sites to providers of wireless communications services such as PCS, cellular,
paging, SMR/ESMR, wireless data transmission and radio and television
broadcasting. We believe that focusing exclusively on the communications site
rental business allows us to achieve the highest cash flow margins with the
lowest level of risk on our invested capital in the communications site
business. Our growth strategy is focused on growing cash flow by increasing
tenancy on our existing sites and acquiring tall towers and other site
structures that are located in areas of high wireless rental site demand that
can accommodate multiple tenants. As a result of our extensive base of
communications sites and our acquisition strategy, we believe we are well
positioned to continue benefiting from the growth opportunities in the rapidly
consolidating tower industry and from the strong demand for communications site
rental space fueled by the growing demand for wireless services. We had
annualized site rental revenue and EBITDA on a pro forma basis of $163.4
million and $81.1 million, respectively, for the nine months ended September
30, 1999 as though they had been completed as of January 1, 1998. See "Our
Unaudited Pro Forma Financial Data."

Since our formation in May 1995, we have focused on creating a portfolio of
communications site clusters in high growth markets such as Atlanta,
Birmingham, Boston, Chicago, Houston, Los Angeles, New Orleans, New York,
Orlando and Tampa. As of December 24, 1999, we have completed 345 acquisitions,
acquiring 3,032 communications sites, including 1,591 owned sites, 583
"managed" sites and 858 "leased" sites, and we have constructed 100 towers. We
also have agreements or letters of intent to acquire 766 additional
communications sites, including 405 owned sites and 361 managed sites. Managed
sites are tower or rooftop communications sites owned by others where we have
the exclusive right to market antenna space. Leased sites are tower or rooftop
communications sites owned by others where we have a non-exclusive right to
market antenna space.

We currently have over 3,600 customers renting space on one or more of our
communications sites. Our tenants include all forms of wireless communications
providers, operators of private wireless networks and government agencies,
including Arch Communications, BellSouth Mobility, the Federal Bureau of
Investigation and the Bureau of Alcohol, Tobacco & Firearms, Motorola, Nextel,
Pagemart, PageNet, Skytel, Southern Communications, Sprint PCS and Teletouch.
Our customers are generally responsible for the installation of their own
equipment and the incremental utilities costs associated with that equipment.
In addition, adding customers on a communications site does not increase our
monitoring, maintenance or insurance costs. Therefore, when new customers or
additional equipment are added to a communications site, we are able to
increase revenue with limited incremental costs, thereby increasing cash flow
margins. Furthermore, we experience minimal churn as our communications site
locations serve an essential function in our customers' wireless networks and
cannot easily be replaced.

1
<PAGE>

We believe that "same tower" revenue growth is a meaningful indicator of the
organic growth of our business. Same tower revenue growth is measured by
comparing the annualized revenues of our communications sites at the end of a
period to the annualized revenues for the same sites at the end of a prior
period without considering revenues from the communications sites we acquired
during the period. Taking into consideration leases for new tenants, we
experienced same tower revenue growth of approximately 20% for the year ended
December 31, 1998 on our base of communications sites as of December 31, 1997.

Our Business and Growth Strategy

. Marketing and Development Strategy. We aggressively market space on our
communications sites to leverage our fixed costs over a broad base of
customers. The key elements of our marketing and development strategy
include:

--owning and assembling clusters of communications sites in high growth
regions to offer our customers the ability to rapidly and efficiently
fulfill their network expansion plans across a particular market or
region;

--targeting a diversified customer base that uses differing types of
wireless technologies with different height requirements to maximize the
utilization of our communications sites;

--using our customer relationships and our established reputation as a
highly professional and reliable communications site space provider to
lease space on additional communications sites;

--using information obtained from our customers concerning their future
expansion plans to guide our acquisition and new construction programs;
and

--premarketing communications site rental space to new wireless
communications service providers based on the market intelligence we
gain by tracking Federal Communications Commission (the "FCC") filings.

. Acquisition Strategy. We are focused on acquiring clusters of
communications sites in high growth markets. We target tall towers that
have existing tenants with capacity for more. Our strategy allows us to
choose tower locations and avoid potentially speculative "build-to-suit"
mandates. The key elements of our acquisition strategy include:

--targeting population centers and key transportation corridors in high
growth wireless communications markets;

--acquiring tall communications site structures that can accommodate a
diversified customer base that uses different types of wireless
technologies with different height requirements;

--selecting communications sites that will allow us to create or enhance a
cluster of sites in a given area;

--employing a disciplined valuation process to acquire communications
sites that have existing cash flow and identified potential for
significant future cash flow growth from additional tenants; and

--committing significant personnel to identifying, negotiating and closing
communications site acquisitions.

2
<PAGE>

. New Tower Construction Strategy. We also selectively construct new towers
in and around major markets where we already have a presence to enhance
our existing communications site clusters. Tower construction is only
initiated after at least one anchor tenant is identified and after we
have determined, based on market research, that the capital outlay for
the construction project would exceed our minimum required return on
invested capital. We do not pursue large build-to-suit mandates or engage
in speculative construction projects. During 1997, 1998 and 1999, we
constructed 22, 47 and 23 towers, respectively. We estimate that we will
identify 80 to 100 new tower build opportunities this year.

Our Strengths

We believe the following to be the strengths of our business:

. Focus on Communications Site Rental Business. We focus on the rental of
communications site space as opposed to other lower margin segments of
the tower industry such as site acquisition services or tower
construction services. Furthermore, we do not engage in large scale
"build-to-suit" programs, preferring instead to focus on our core
acquisition strategy and complementary selective construction strategy
designed to enhance coverage in targeted markets.

. Communications Site Portfolio. We believe that the location, size and
capacity of our site portfolio creates significant competitive advantages
by enabling us to provide our diverse wireless customers with sites in a
given area.

. Successful Acquisition Strategy. Through our acquisition process we
identify communications sites that typically have existing cash flow and
enhance our existing portfolio. We have demonstrated the ability to
identify, successfully negotiate the purchase of and integrate what we
believe to be value enhancing acquisitions.

. Ability to Increase Rental Revenue. Because of our aggressive marketing
efforts to all major wireless communication providers we have signed a
significant number of new tenants over the last four years. Additional
tenants increase the operating leverage of our communications site
portfolio and generally increase our overall cash flow margins. We have
generated a cumulative increase in total monthly revenues for the 29
towers acquired in 1995 of approximately 133% through December 31, 1998.
In addition, the 119 communications sites acquired in 1996 and the 134
communications sites acquired in 1997 have experienced cumulative
increases in total monthly revenues of approximately 68% and 14%,
respectively, through December 31, 1998.

Recent Developments

Motorola Antenna Site Acquisition and Transfer of Roof Top Communications
Sites

On August 31, 1999, we completed the acquisition of approximately 1,858
communications sites, including approximately 499 owned sites, 526 managed
sites and 833 leased sites from Motorola, Inc. ("Motorola") for $255 million in
cash and stock, plus fees and expenses (the "Motorola Antenna Site
Acquisition"). The Motorola communications sites that we acquired are largely
clustered in urban areas throughout the United States and Canada with over 50%
of the owned sites overlapping with our existing communications site portfolio.
We believe that the Motorola Antenna Site Acquisition greatly enhances our
ability to offer our customers attractive tower clusters in high growth markets
and transportation corridors. In addition, the Motorola managed sites that we
acquired enable us to provide our customers with urban rooftop sites such as
the World Trade Center in New York, the Sears Tower in Chicago and the Allied
Bank Building in Houston. We believe these sites will allow us to further
diversify

3
<PAGE>

our customer base by providing us with an inventory of high altitude sites in
urban areas. For the nine months ended September 30, 1999, the Motorola
communications sites generated $55.7 million and $17.7 million in site rental
revenue and EBITDA on a pro forma basis, respectively. See "Risk Factors--There
are certain risks associated with the Motorola Antenna Site Acquisition."

Following the closing of the Motorola Antenna Site Acquisition we
transferred a portion of the rooftop communication sites we acquired from
Motorola to Pinnacle Towers III, Inc. ("PT III"), a corporation in which we own
substantially all of the equity interests, and a $39.2 million convertible
promissory note, in order to minimize the risk that the ownership of or income
from such assets might negatively affect our qualification as a Real Estate
Investment Trust ("REIT"). We also agreed to make our personnel, facilities and
general and administrative overhead available to PT III with the cost thereof
to be reimbursed to us by PT III. Certain members of our management currently
own approximately 91% of the outstanding voting stock of PT III, which
represents a very limited portion of the overall equity capital of the PT III.
See "Business--Our Acquisition Strategy--Motorola Site Acquisition".

Recent and Other Pending Acquisitions

Since September 30, 1999, we have acquired 32 communications sites for an
aggregate purchase price of $20.7 million. At December 24, 1999, we have
entered into letters of intent or purchase agreements to acquire 766
communications sites for approximately $123.4 million.

4
<PAGE>

THE OFFERING(/1/)

Common Stock offered:

By Pinnacle................ 5,300,000 shares

By the Selling 2,700,000 shares
Stockholders...............

Total..................... 8,000,000 shares

Common Stock to be
outstanding after this
offering(/2/)..............
46,394,520 shares

Use of Proceeds............. We intend to use the net proceeds of this
offering to repay existing debt under our credit
facility. The net proceeds of this offering
received by the selling stockholders listed under
the heading "Selling Stockholders" (the "Selling
Stockholders") will not be available to us. See
the "Use of Proceeds" section of this Prospectus
for further details.

Risk Factors................ See "Rick Factors" beginning on page 9 for a
discussion of factors you should carefully
consider before deciding to invest in our Common
Stock.

NASDAQ National Market "BIGT"
Symbol.....................
- --------
(1) Does not include 1,200,000 shares of Common Stock subject to a 30-day over-
allotment option granted to the underwriters, 800,000 shares of Common
Stock by us and 400,000 shares of Common Stock by the Selling Stockholders.
(2) Excludes approximately 3,000,000 shares of Common Stock reserved for
issuance pursuant to our stock incentive plan, 2,949,691 of which are
subject to outstanding options.

Our headquarters are located at 1549 Ringling Boulevard, Third Floor,
Sarasota, Florida 34236, and our telephone number is (941) 364-8886. Our
website is www.pinnacletowers.com. The information provided on our website is
not incorporated into this Prospectus.

5
<PAGE>

OUR SUMMARY HISTORICAL AND UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL DATA

The following table presents our summary historical and unaudited pro forma
consolidated financial data. The summary historical consolidated financial data
for the period of inception (May 3, 1995) through December 31, 1995 and for
each of the three years ended December 31, 1996, 1997 and 1998 were derived
from our consolidated historical financial statements incorporated by reference
in this Prospectus which have been audited by PricewaterhouseCoopers LLP,
independent certified public accountants. The unaudited consolidated statement
of operations data for the nine months ended September 30, 1998 and 1999 are
derived from our unaudited condensed consolidated financial statements, which
are contained elsewhere in this Prospectus. The unaudited pro forma
consolidated financial data as of and for the year ended December 31, 1998 and
for the nine months ended September 30, 1999 were derived from our unaudited
pro forma consolidated financial statements contained elsewhere in this
Prospectus. The summary financial information should be read in conjunction
with, and is qualified in its entirety by, the information contained in our
audited consolidated financial statements and their related notes,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Our Unaudited Pro Forma Financial Data" and "Our Selected
Historical Consolidated Financial Data" included elsewhere in this Prospectus.

The following summary unaudited pro forma statement of operations data have
been prepared to reflect the results of our operations as if each of the
following had been completed as of January 1, 1998:

.all individually insignificant acquisitions completed during 1998;

. acquisitions of other communications sites completed since January 1,
1999;

. the Southern Towers Acquisition described elsewhere in this Prospectus.
See "Business--Our Acquisition Strategy;"

. the MobileMedia Acquisition described elsewhere in this Prospectus. See
"Business--Our Acquisition Strategy;"

. the Motorola Antenna Site Acquisition and transfer of rooftop
communication sites to PT III described elsewhere in this Prospectus. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations--Overview" and "Business--Our Acquisition Strategy;"

. other individually insignificant acquisitions of communications sites
businesses for which we have entered into agreements or letters of intent
to acquire as of December 24, 1999, and that we believe are probable;

. related financing of the acquisitions referred to above;

. our initial public offering ("IPO") in February 1999 and an additional
public offering in July 1999 (the "Secondary Offering") described
elsewhere in this Prospectus; and

. this offering and the application of the net proceeds to us therefrom as
described under "Use of Proceeds."

To the extent not consummated prior to October 1, 1999, the pro forma
balance sheet data as of September 30, 1999 have been prepared as if each such
transaction referred to above was completed by September 30, 1999. The pro
forma adjustments are based upon available information and certain assumptions
that we believe are reasonable. The pro forma consolidated financial data do
not purport to present what our results of operations or financial position
would actually have been, or to project our results of operations or financial
position at any future period.

6
<PAGE>

<TABLE>
<CAPTION>
Period from Nine Pro Forma
Inception Months as Adjusted
(May 3, 1995) Pro Forma as Ended for Nine
through Years Ended December 31, Adjusted September 30, Months Ended
December 31, -------------------------- December 31, ------------------ September 30,
1995 1996 1997 1998 1998 1998 1999 1999
------------- ------- ------- -------- ------------ -------- -------- -------------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Site rental revenue..... $ 733 $ 4,842 $12,881 $ 32,019 $160,759 $ 21,128 $ 48,816 $122,579
Direct site operating
expenses, excluding
depreciation and
amortization........... 181 1,135 2,633 6,166 60,159 3,966 11,691 44,511
------ ------- ------- -------- -------- -------- -------- --------
Gross profit, excluding
depreciation and
amortization........... 552 3,707 10,248 25,853 100,600 17,162 37,125 78,068
Other expenses:
General and
administrative(a)...... 306 916 1,367 4,175 18,605 2,720 2,823 10,779
Corporate
development(a)......... 369 1,421 3,723 6,382 6,382 4,955 5,731 5,731
State franchise, excise
and minimum taxes...... -- 26 67 686 686 398 700 700
Depreciation............ 282 2,041 6,335 22,513 102,306 13,358 35,118 78,007
------ ------- ------- -------- -------- -------- -------- --------
Loss from operations.... (405) (697) (1,244) (7,903) (27,379) (4,269) (7,247) (17,149)
Interest expense........ 181 1,155 6,925 12,300 24,830 7,276 14,439 12,203
Amortization of original
issue discount and debt
issuance costs......... 59 164 292 16,427 20,565 11,636 17,335 17,335
------ ------- ------- -------- -------- -------- -------- --------
Loss before
extraordinary item..... $ (645) $(2,016) $(8,461) $(36,630) $(72,774) $(23,181) $(39,021) $(46,687)
====== ======= ======= ======== ======== ======== ======== ========
Extraordinary loss from
Extinguishment of
debt................... -- -- -- 5,641 5,641 -- -- --
------ ------- ------- -------- -------- -------- -------- --------
Net loss................ $ (645) $(2,016) $(8,461) $(42,271) $(78,415) $(23,181) $(39,021) $(46,687)
====== ======= ======= ======== ======== ======== ======== ========
Dividends and accretion
on preferred stock..... -- -- -- 3,094 -- 683 2,930 --
------ ------- ------- -------- -------- -------- -------- --------
Loss attributable to
common stock........... $ (645) $(2,016) $(8,461) $(45,365) $(78,415) $(23,864) $(41,951) $(46,687)
====== ======= ======= ======== ======== ======== ======== ========
Basic loss per common
share:
Loss before
extraordinary item.... (6.32) (8.10) (27.29) (95.03) (1.57) (2.46) (1.41) (1.01)
Extraordinary item..... -- -- -- (13.50) (0.12) -- -- --
------ ------- ------- -------- -------- -------- -------- --------
Net loss............... $(6.32) $ (8.10) $(27.29) $(108.53) $ (1.69) $ (2.46) $ (1.41) $ (1.01)
====== ======= ======= ======== ======== ======== ======== ========
Weighted average number
of shares of common
stock.................. 102 249 310 418 46,395 9,708 29,721 46,395
Other Operating Data:
Tower Level Cash
Flow(b)................ $ 552 $ 3,707 $10,248 $ 25,853 $100,600 $ 17,162 $ 37,125 $ 78,068
Tower Level Cash Flow
Margin(c)............... 75.3% 76.6% 79.6% 80.7% 62.6% 81.2% 76.1% 63.7%
Adjusted EBITDA(b)...... $ 246 $ 2,791 $ 8,881 $ 21,678 $ 81,995 $ 14,442 $ 34,302 $ 67,289
Adjusted EBITDA
Margin(c).............. 33.6% 57.6% 68.9% 67.7% 51.0% 68.4% 70.3% 54.9%
EBITDA Before Franchise,
Excise and Minimum
Taxes(b)............... $ (123) $ 1,370 $ 5,158 $ 15,296 $ 75,613 $ 9,487 $ 28,571 $ 61,558
EBITDA Before Franchise,
Excise and Minimum
Taxes Margin(c)........ -- 28.3% 40.0% 47.8% 47.0% 44.9% 58.5% 50.2%
EBITDA(b)............... $ (123) $ 1,344 $ 5,091 $ 14,610 $ 74,927 $ 9,089 $ 27,871 $ 60,858
EBITDA Margin(c)........ -- 27.8% 39.5% 45.6% 46.6% 43.0% 57.1% 49.6%
Number of sites:(d)
Beginning of period.... 0 33 156 312 -- 312 876 --
Sites acquired during
the period............ 29 119 134 517 -- 484 2,201 --
Sites constructed
during the period..... 4 4 22 47 -- 34 23 --
End of period.......... 33 156 312 876 -- 830 3,100 3,898
</TABLE>

7
<PAGE>

<TABLE>
<CAPTION>
Pro Forma
As Adjusted
September 30, September 30,
1999 1999
------------- -------------
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents........................... $ 151,868 $ 151,868
Working capital..................................... 101,049 101,049
Tower assets, net................................... 861,753 1,019,304
Total assets........................................ 1,160,298 1,317,849
Total debt.......................................... 704,987 660,547
Common Stock........................................ 41 46
Additional Paid-in Capital.......................... 489,426 691,411
Accumulated deficit................................. (92,415) (92,415)
Stockholders' equity................................ $ 397,052 $ 599,042
</TABLE>
- --------
(a) "General and administrative" expenses represent those costs directly
related to the day-to-day management and operation of our communications
sites. "Corporate development" expenses represent costs incurred in
connection with acquisitions and the development of new business
initiatives, and consists primarily of allocated compensation, benefits and
overhead costs that are not directly related to the administration or
management of existing sites.
(b) "Tower Level Cash Flow" is defined as site rental revenue minus site
operating expenses, excluding depreciation and amortization. "Adjusted
EBITDA" represents earnings (loss) from operations before depreciation,
amortization, corporate development expenses and state franchise, excise
and minimum taxes. "EBITDA Before Franchise, Excise and Minimum Taxes"
represents earnings (loss) from operations before depreciation,
amortization and state franchise, excise and minimum taxes. "EBITDA"
represents earnings (loss) from operations before depreciation and
amortization. We have included Tower Level Cash Flow, Adjusted EBITDA,
EBITDA Before Franchise, Excise and Minimum Taxes and EBITDA in Other
Operating Data because we believe such information may be useful to you in
evaluating our ability to service our debt. Tower Level Cash Flow, Adjusted
EBITDA, EBITDA Before Franchise, Excise and Minimum Taxes and EBITDA should
not be considered as an alternative to Gross Profit, net loss or net cash
provided by operating activities (or any other measure of performance in
accordance with generally accepted accounting principles) as a measure of
our ability to meet our cash needs or as an indication of our operating
performance. Moreover, Tower Level Cash Flow, Adjusted EBITDA, EBITDA
Before Franchise, Excise and Minimum Taxes and EBITDA are not standardized
measures and may be calculated in a number of ways. Accordingly, the Tower
Level Cash Flow, Adjusted EBITDA, EBITDA Before Franchise, Excise and
Minimum Taxes and EBITDA information provided may not be comparable to
other similarly titled measures provided by other companies.
(c) Represents Tower Level Cash Flow, Adjusted EBITDA, EBITDA Before Franchise,
Excise and Minimum Taxes and EBITDA each as a percentage of site rental
revenue.
(d) Includes sites that we manage or lease, including 13 communications sites
we acquired in 1997, 17 communications sites we acquired in 1998 and 1,359
communications sites we acquired in the Motorola Antenna Site Acquisition.

8
<PAGE>

RISK FACTORS

Before you invest in our Common Stock, you should be aware that the
occurrence of any of the events described in this Risk Factors section and
elsewhere in this Prospectus could have a material adverse effect on our
business, financial condition and results of operations. You should carefully
consider these risk factors, together with all of the other information
included in this Prospectus, before you decide to purchase our Common Stock.
This Prospectus contains certain forward-looking statements that involve risks
and uncertainties.

We have a history of operating losses. We have generated losses from
operations, and we may continue to do so.

We have incurred losses from continuing operations in each of the fiscal
years since our inception. As a result, for the years ended December 31, 1997
and 1998 and the nine months ended September 30, 1999, our earnings were
insufficient to cover combined fixed charges by approximately $0.8 million,
$9.3 million and $4.8 million, respectively. We expect to continue to
experience net losses in the future, principally due to interest charges on
outstanding indebtedness and substantial charges relating to depreciation of
our existing and future assets. These net losses may be greater than the net
losses we have experienced in the past.

Our substantial indebtedness could adversely affect our financial condition;
we may incur substantially more debt.

We have now, and after this offering will continue to have, a high level of
indebtedness. As of September 30, 1999, after giving effect to this offering
and the application of the proceeds therefrom and the consummation and
financing of the pending acquisitions, we would have had $660.5 million of
indebtedness outstanding.

Our high level of indebtedness could have important consequences to you.
For example, it could:

. make it more difficult for us to satisfy our obligations with respect to
our indebtedness;

. increase our vulnerability to general adverse economic and industry
conditions;

. limit our ability to obtain additional financing;

. require the dedication of a substantial portion of our cash flow from
operations to the payment of principal of, and interest on, our
indebtedness thereby, reducing the availability of such cash flow to fund
our growth strategy, working capital, capital expenditures or other
general corporate purposes;

. limit our flexibility in planning for, or reacting to, changes in our
business and the industry; and

. place us at a competitive disadvantage relative to our competitors with
less debt.

We may incur substantial additional debt in the future. The terms of our
outstanding debt do not fully prohibit us from doing so. If new debt is added
to our current levels, the related risks described above could intensify. See
"Capitalization," "Our Selected Historical Consolidated Financial Data" and
"Description of Indebtedness."

We will require a significant amount of cash to service our indebtedness and
meet our other liquidity needs. Our ability to generate cash depends on many
factors beyond our control.

Our ability to meet our debt service and other obligations will depend on
our future performance, which is subject to general economic, financial,
competitive, legislative, regulatory and other factors that

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are, to a large extent, beyond our control. We anticipate the need for
substantial capital expenditures in connection with our future expansion plans.

If we are unable to generate sufficient cash flow from operations to service
our indebtedness and fund our other liquidity needs, we will be forced to adopt
an alternative strategy that may include reducing, delaying or eliminating
acquisitions, tower construction and other capital expenditures, selling
assets, restructuring or refinancing our indebtedness or seeking additional
equity capital. We cannot assure you that any of these alternative strategies
could be effected on satisfactory terms, if at all, and the implementation of
any of these alternative strategies could have a negative impact on our
business. We may also need to refinance all or a portion of our debt on or
before maturity. We cannot assure you that we will be able to refinance any of
our debt on commercially reasonable terms or at all. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

There are certain risks associated with the Motorola Antenna Site Acquisition.

On August 31, 1999, we acquired approximately 1,858 communications sites
from Motorola. We have never consummated a transaction as large as the Motorola
Antenna Site Acquisition and will likely face significant challenges in
integrating the 1,858 acquired communications sites into our operations. In
addition, integration of these communications sites will require substantial
attention from our management team, which has had limited experience in
integrating an acquisition of this size. Diversion of management attention from
our existing business could have an adverse impact on our revenues and
operating results. We cannot assure you that tenants on the sites obtained in
the Motorola Antenna Site Acquisition will not cancel their leases.
Additionally, Motorola's revenues decreased from $89.1 million in 1997 to $85.6
million in 1998, and from $21.7 million for the three month period ended March
28, 1998 to $21.1 million for the three month period ended April 3, 1999. The
decrease was primarily the result of a reduction in the number of
communications sites used by Nextel for its analog SMR business. We anticipate
that Nextel will continue to phase out its analog SMR business for the
forseeable future.

Due to timing, logistical and other constraints, we did not have the ability
to access, analyze and verify all information regarding title and other issues
related to the Motorola communications sites prior to closing the Motorola
Antenna Site Acquisition. Our indemnification rights under the definitive
purchase agreement between us and Motorola (the "Motorola Purchase Agreement")
and the related documents are subject to various limitations. Therefore, our
ability to obtain compensation for defects in title or other site-related and
other issues is limited.

Pinnacle Holdings Inc. is a holding company. Its only source of cash is from
distributions from its subsidiaries.

Pinnacle Holdings Inc. is a holding company with no operations of its own
and conducts all of its business through its subsidiaries. Pinnacle Holdings
Inc.'s only significant asset is the outstanding capital stock of its
subsidiaries. Pinnacle Holdings Inc. is wholly dependent on the cash flow of
its subsidiaries and dividends and distributions from its subsidiaries to it in
order to service its current indebtedness and any of its future obligations.
The ability of Pinnacle Holdings Inc.'s subsidiaries to pay such dividends and
distributions will be subject to, among other things, the terms of any debt
instruments of its subsidiaries then in effect and applicable law.

Pinnacle Holdings Inc.'s rights, and the rights of its creditors, to
participate in the distribution of assets of any of its subsidiaries upon such
subsidiary's liquidation or reorganization will by subject to the prior claims
of such subsidiary's creditors, except to the extent that Pinnacle Holdings
Inc. is itself reorganized as a creditor of such subsidiary in which case our
claims would still be subject to the claims of any secured creditor of such
subsidiary. As of September 30, 1999, after giving effect to the acquisitions
referred to in this Prospectus on a pro forma as adjusted basis, the aggregate
amount of debt

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<PAGE>

and other obligations of Pinnacle Holdings Inc.'s subsidiaries (including trade
payables current, long-term and other liabilities) would have been
approximately $718.8 million. See "Dividend Policy."

We will not be able to effect our business plan if we do not have the required
cash.

Our business plan is materially dependent upon the acquisition of additional
suitable communications sites and the construction of new towers at prices we
consider reasonable in light of the revenue we believe we will be able to
generate from such sites when acquired or constructed. We will need significant
additional capital to finance future acquisitions as well as our tower
construction plan and other capital expenditures. During 1996, 1997 and 1998,
we made capital investments aggregating approximately $42.2 million, $88.4
million and $372.1 million, respectively, in communications site acquisitions,
site upgrades and new tower construction. We estimate capital investments in
1999 were approximately $557 million and that they will be approximately $165
million in 2000. We cannot assure you that our actual cash requirements will
not materially exceed our estimated capital requirements and available capital.
We historically have financed our capital expenditures through a combination of
borrowings under bank credit facilities, a debt offering, bridge financings,
equity issuances, seller financing and cash flow from operations. Significant
additional acquisition or tower construction opportunities will create a need
for additional capital financing. If our revenue and cash flow are not as
expected, or if our borrowing base is reduced as a result of operating
performance, we may have limited ability to access necessary capital. We cannot
assure you that adequate funding will be available as needed or, if available,
on terms acceptable to us or permitted under the terms of our existing
indebtedness. The terms of additional debt financing could have important
consequences to you. See "--The terms of our indebtedness impose significant
restrictions on us." In addition, to qualify and remain qualified as a REIT, we
must distribute to our stockholders 95% of our taxable income computed without
regard to net capital gains and deductions for distributions to our
stockholders and 95% of certain foreclosure income. If made, such distributions
could reduce the amount of cash available to us to effect our business plan.
Insufficient available funds may require us to scale back or eliminate some or
all of our planned expansion. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."

The terms of our indebtedness impose significant restrictions on us.

Certain provisions of the indenture governing our 10% senior discount notes
due 2008 (the "Notes") by and between us and The Bank of New York, as trustee
(the "Indenture"), contain covenants that restrict our ability to:

. incur additional indebtedness;

. incur liens;

. make investments;

. pay dividends or make certain other restricted payments;

. consummate certain asset sales;

. consolidate with any other person; and

. sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of our assets.

In addition, our credit facility requires us to comply with certain
financial ratios and tests, under which we are required to achieve certain
financial and operating results. Our ability to meet these financial ratios and
tests may be affected by events beyond our control, and we cannot assure you
that they will be met. In the event of a default under our credit facility, the
lenders may declare the indebtedness immediately due and payable, which would
result in a default under the Indenture. We cannot assure you that we will have
sufficient assets to pay indebtedness outstanding under our credit facility and
the Notes. Any refinancing of our credit facility is likely to contain similar
restrictive covenants. See "Description of Indebtedness."

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<PAGE>

We depend on acquisitions and the integration of those acquisitions into our
business.

Our business plan is materially dependent upon the acquisition of additional
suitable communications sites at prices we consider reasonable in light of the
revenue we believe we will be able to generate from these sites when acquired.
Since our inception, however, the prices of acquisitions within the industry
have generally increased over time. Additionally, we compete with certain
wireless communications providers, site developers and other independent
communications site owners and operators for acquisitions of communications
sites, some of which have greater financial and other resources than we have.
Increased demand for acquisitions may result in fewer acquisition opportunities
for us as well as higher acquisition prices. Our inability to grow by
acquisition or to accurately estimate the amount of revenue that will be
generated from such acquisitions may affect us adversely. Although we believe
that opportunities may exist for us to grow through acquisitions, we cannot
assure you that we will be able to identify and consummate acquisitions on
terms we find acceptable. Certain provisions of our credit facility and the
Notes may limit our ability to effect acquisitions. See "--Our substantial
indebtedness could adversely affect our financial condition; we may incur
substantially more debt." Further, we cannot assure you that we will be able to
profitably manage and market the space on additional communications sites
acquired or successfully integrate acquired sites with our operations and sales
and marketing efforts without substantial costs or delays. Acquisitions involve
a number of potential risks, including the potential loss of customers,
increased leverage and debt service requirements, combining disparate company
cultures and facilities and operating sites in geographically diverse markets.
Accordingly, we cannot assure you that one or more of our past or future
acquisitions may not have a material adverse effect on our financial condition
and results of operations. See "Business--Our Acquisition Strategy."

If we fail to protect our rights against persons claiming superior rights in
our communications sites, our business may be adversely affected.

Our real property interests relating to our communications sites consist of
fee interests, leasehold interests, private easements and licenses, easements
and rights-of-way. For various reasons, we may not always have the ability to
access, analyze and verify all information regarding title and other issues
prior to completing an acquisition of communications sites. We generally obtain
title insurance on fee properties we acquire and rely on title warranties from
sellers. Our ability to protect our rights against persons claiming superior
rights in communications sites depends on our ability to:

. recover under title policies, the policy limits of which may be less than
the purchase price of the particular site;

. in the absence of insurance coverage, realize on title warranties given
by the sellers, which warranties often terminate after the expiration of
a specific period, typically one to three years; and

. realize on title covenants from landlords contained in leases.

The loss of any significant customer could adversely affect our business.

We have certain customers that account for a significant portion of our
revenue. MobileMedia Communications and its affiliates and Southern
Communications and certain of its affiliates would have accounted for
approximately 24% and 11%, respectively, of our revenue, on a run rate basis,
at December 31, 1998. As of November 15, 1999, Arch Communications (which
acquired MobileMedia Communications in 1999), Nextel and Motorola will
represent 10.8%, 9.7% and 4.8%, respectively, of our revenue, on a run rate
basis. The loss of one or more of these major customers, or a reduction in
their

12
<PAGE>

utilization of our communications site rental space due to their insolvency or
other inability or unwillingness to pay, could have a material adverse effect
on our business, results of operations and financial condition. See "Business--
Our Customers and Customer Leases."

There are significant risks associated with construction of new towers

The success of our growth strategy is dependent in part on our ability to
construct new towers. Such construction can be delayed by factors beyond our
control, including zoning and local permitting requirements, availability of
erection equipment and skilled construction personnel and weather conditions.
Certain communities have placed restrictions on new tower construction or have
delayed granting permits required for construction. In addition, as the pace of
tower construction has increased in recent years, the demand for manpower and
equipment needed to erect towers has been increasing. Additionally, we cannot
assure you that build opportunities will become available that meet our
economic criteria. Our expansion plans call for a significant increase in
construction activity. We cannot assure you that we will be able to overcome
the barriers to new construction or that the number of towers planned for
construction will be completed. Our failure to complete the necessary
construction could have a material adverse effect on our business, financial
condition and results of operations. See "Business--Our New Tower Construction
Strategy."

We compete with companies that have greater financial resources.

We face competition for customers from various sources, including:

. wireless communications providers and utility companies that own and
operate their own communications site networks and lease communications
site space to other carriers;

. site development companies that acquire space on existing communications
sites for wireless communications providers and manage new tower
construction;

. other independent communications site companies; and

. traditional local independent communications site operators.

Wireless communications providers that own and operate their own
communications site networks generally are substantially larger and have
greater financial resources than we have. We believe that site location and
capacity, price, quality of service, type of service and density within a
geographic market historically have been and will continue to be the most
significant competitive factors affecting communications site rental companies.
We believe that competition for communications site acquisitions will increase
and that additional competitors will enter the tower rental market, certain of
whom may have greater financial and other resources than we have. See
"Business--Our Competition."

Our business depends on demand for wireless communications.

Substantially all of our revenue is derived from leases of communications
site space, most of which are with wireless communications providers.
Accordingly, our future growth depends, to a considerable extent, upon the
continued growth and increased availability of cellular and other wireless
communications services. We cannot assure you that the wireless communications
industry will not experience severe and prolonged downturns in the future or
that the wireless communications industry will expand as quickly as forecasted.
The wireless communications industry, which includes paging, cellular, personal
communications services ("PCS"), fixed microwave, specialized mobile radio
("SMR"), enhanced specialized mobile radio ("ESMR") and other wireless
communications providers, has undergone significant growth in recent years and
remains highly competitive, with service providers in a variety of technologies
and two or more providers of the same service (up to seven for PCS) within a

13
<PAGE>

geographic market competing for subscribers. The demand for rental space on our
communications sites is dependent on a number of factors that are, to a large
extent, beyond our control, including the following:

. demand for wireless services;

. financial condition and access to capital of wireless communications
providers;

. strategy of wireless communications providers with respect to owning or
leasing communications sites;

. government licensing of broadcast rights;

. changes in telecommunications regulations; and

. general economic conditions.

The demand for space on our communications sites is primarily dependent on
the demand for wireless communications services. A slowdown in the growth of
the wireless communications industry in the United States would depress network
expansion activities and reduce the demand for our communications sites. In
addition, a downturn in a particular wireless segment as a result of
technological competition or other factors beyond our control could adversely
affect the demand for rental communications sites. Advances in technology could
also reduce the need for site-based transmission and reception. In addition,
wireless services providers often enter into "roaming" and "resale"
arrangements that permit providers to serve customers in areas where they do
not have facilities. In most cases, these arrangements are intended to permit a
provider's customers to obtain service in areas outside the provider's license
area or, in the case of resale arrangements, to permit a provider that does not
have any licenses to enter the wireless marketplace.

Current FCC rules, which are subject to sunset requirements that vary from
service to service and market to market, also give licensed wireless service
providers the right to enter into roaming and resale arrangements with other
providers licensed to serve overlapping service areas. Such roaming and resale
arrangements could be viewed by some wireless service providers as superior
alternatives to constructing their own facilities or leasing space on
communications sites that we own. If such arrangements were to become common,
there could be a material adverse effect on our prospects, financial condition
and results of operations. See "Business--Industry Background."

The emergence of new technologies that do not require terrestrial antenna
sites and can be substituted for those that do also could have a negative
impact on our operations. For example, the FCC has granted license applications
for four low-earth orbiting satellite systems that are intended to provide
mobile voice or data services. In addition, the FCC has issued licenses for
several low-earth orbiting satellite systems that are intended to provide
solely data services. Although such systems are currently highly capital-
intensive and technologically untested, mobile satellite systems could compete
with land-based wireless communications systems, thereby reducing the demand
for the infrastructure services we provide. The occurrence of any of these
factors could have a material adverse effect on our business, financial
condition or results of operations.

Our business requires compliance and approval with regulatory authorities.

The FCC and the Federal Aviation Administration (the "FAA") regulate towers
used for wireless communications transmitters and receivers. Such regulations
control siting, lighting and marking of towers and may, depending on the
characteristics of the tower, require registration of tower facilities.
Wireless communications equipment operating on communications sites is
separately regulated and

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<PAGE>

independently licensed by the FCC. Certain proposals to construct new towers or
to modify existing towers are reviewed by the FAA to ensure that the tower will
not present a hazard to aviation. Tower owners may have an obligation to paint
towers or install lighting to conform to FAA standards and to maintain such
painting and lighting. Tower owners may also bear the responsibility of
notifying the FAA of any tower lighting failures. Failure to comply with
existing or future applicable requirements may lead to civil penalties or other
liabilities. Such factors could have a material adverse effect on our financial
condition or results of operations.

Local regulations, including municipal or local ordinances, zoning
restrictions and restrictive covenants imposed by community developers, vary
greatly, but typically require tower owners to obtain approval from local
officials or community standards organizations prior to tower construction.
Local regulations can delay or prevent new tower construction or site upgrade
projects, thereby limiting our ability to respond to customer demand. In
addition, such regulations increase costs associated with new tower
construction. We cannot assure you that existing regulatory policies will not
adversely affect the timing or cost of new tower construction or that
additional regulations will not be adopted that increase such delays or result
in additional costs to us. Such factors could have a material adverse effect on
our future growth. Our customers may also become subject to new regulations or
regulatory policies that adversely affect the demand for tower sites. We cannot
assure you that existing regulatory policies will not adversely affect the
timing or cost of new tower construction or that additional regulations will
not be adopted that increase such delays or result in additional costs to us.
Such factors could have a material adverse effect on our future growth. Our
customers may also become subject to new regulations or regulatory policies
that adversely affect the demand for tower sites. See "Business--Our New Tower
Construction Strategy."

Our growth strategy will be affected by our ability to obtain the permits,
licenses and zoning relief necessary to build new towers. The tower rental
industry often encounters significant public resistance when attempting to
obtain the necessary permits, licenses and zoning relief for construction or
improvements of towers. We cannot assure you that we can obtain the permits,
licenses and zoning relief necessary to continue the expansion of our
communications site rental business. The failure to obtain such permits,
licenses and zoning relief would have a material adverse effect on our
business, financial condition and results of operations. See "Business--
Regulatory Matters."

Our success depends upon our retaining key executives.

Our success depends to a significant degree upon the continued contributions
of key management, engineering, sales and marketing, customer support and
finance personnel, some of whom may be difficult to replace. Although we
maintain employment agreements with certain of our employees, we cannot assure
you that the services of such personnel will continue to be available to us. We
do not maintain key man life insurance policies on our executives that would
adequately compensate us for any loss of services of such executives. The loss
of the services of these executives could have a material adverse effect on our
business.

Competing technologies and other alternatives could reduce the demand for our
services.

Most types of wireless services currently require ground-based network
facilities, including communications sites, for transmission and reception. The
extent to which wireless service providers lease such communications sites
depends on a number of factors beyond our control, including the level of
demand for such wireless services, the financial condition and access to
capital of such providers, the strategy of providers with respect to owning or
leasing communications sites, government licensing of communications services,
changes in telecommunications regulations and general economic conditions. In
addition, wireless service providers frequently enter into agreements with
competitors allowing each other to utilize one another's wireless
communications facilities to accommodate customers who are out of range of
their home provider's services. Such agreements may be viewed by wireless
service providers

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<PAGE>

as a superior alternative to leasing space for their own antenna on
communications sites we own. The proliferation of such agreements could have a
material adverse effect on our business, financial condition or results of
operations.

We are subject to environmental laws that impose liability without regard to
fault and environmental regulations that could adversely affect our operations.

Our operations are subject to federal, state and local environmental laws
and regulations regarding the use, storage, disposal, emission, release and
remediation of hazardous and nonhazardous substances, materials or wastes.
Under certain of these laws, we could be held strictly, jointly and severally
liable for the remediation of hazardous substance contamination at its
facilities or at third-party waste disposal sites and also could be held liable
for any personal or property damage related to such contamination. Although we
believe that we are in substantial compliance with and have no material
liability under all applicable environmental laws, there can be no assurance
that the costs of compliance with existing or future environmental laws and
liability related thereto will not have a material adverse effect on our
business, financial condition or results of operations.

The FCC requires tower owners subject to the agency's antenna structure
registration program to comply at the time of registration with federal
environmental rules that may restrict the location of towers. Under these
rules, tower owners are required initially to identify whether proposed sites
are in environmentally sensitive locations. If so, the tower owners must
prepare and file environmental assessments, which must be reviewed by the FCC
staff prior to registration and construction of the particular towers. See
"Business--Regulatory Matters."

If we sustain damage to our communications sites in excess of our insurance
coverage, our business could be adversely affected.

Our communications sites are subject to risks from vandalism and risks
associated with natural disasters such as tornadoes, hurricanes, fires and
earthquakes. We maintain certain insurance to cover the cost of replacing
damaged communications sites and general liability insurance to protect us in
the event of an accident involving a communications site, but we do not
maintain business interruption insurance. Accordingly, damage to a group of our
communications sites could result in a significant loss of revenue and could
have a material adverse effect on our results of operations and financial
condition. In addition, a communications site accident for which we are
uninsured or underinsured could have a material adverse effect on our financial
condition or results of operations.

Certain of our stockholders have the power to control our business. Such
stockholders' interests may not be aligned with yours.

ABRY Broadcast Partners II, L.P. ("ABRY II"), our primary stockholder, holds
approximately 15% of our outstanding voting stock, and will own approximately
9.0% of our outstanding voting stock after this offering, and holds four of
seven seats on our board of directors. Therefore, ABRY II has the power to
exercise control over our business, policies and affairs. Moreover, subject to
contractual restrictions

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<PAGE>

and general fiduciary duties, we are not prohibited from engaging in
transactions with management and principal stockholders, or with entities in
which such persons are interested. Our certificate of incorporation does not
provide for cumulative voting. See "Selling Stockholders."

We may not be able to repurchase the Notes or repay debt under our credit
facility in the event of a change of control.

Upon the occurrence of certain change of control events, holders of the
Notes may require us to offer to repurchase all of their notes. We may not have
sufficient funds at the time of the change of control to make the required
repurchases or restrictions in our credit facility may not allow such
repurchases. Additionally, a "change of control" (as defined in the Indenture)
is an event of default under our credit facility, which would permit the
lenders to accelerate the debt, which also would cause an event of default
under the indentures.

The source of funds for any repurchase required as a result of any change of
control will be our available cash or cash generated from operating or other
sources, including borrowings, sales of assets, sales of equity or funds
provided by a new controlling entity. We cannot assure you, however, that
sufficient funds will be available at the time of any change of control to make
any required repurchases of the Notes tendered and to repay debt under our
credit facility. Furthermore, the use of available cash to fund the potential
consequences of a change of control may impair our ability to obtain additional
financing in the future. Any future credit agreements or other agreements
relating to indebtedness to which we may become a party may contain similar
restrictions and provisions. See "Description of Indebtedness."

Risks concerning potential negative health effects of radio frequency
emissions.

Along with wireless communications providers that utilize our communications
sites, we are subject to government requirements and other guidelines relating
to radio frequency emissions. The potential connection between radio frequency
emissions and certain negative health effects, including some forms of cancer,
has been the subject of substantial study by the scientific community in recent
years. To date, the results of these studies have been inconclusive. Although
we have not been subject to any claims relating to radio frequency emissions,
we cannot assure you that we will not be subject to such claims in the future,
which could have a material adverse effect on our results of operations and
financial condition. See "Business--Regulatory Matters."

If we fail to qualify as a REIT, we may be subject to a variety of taxes and
penalties.

We have elected to be taxed as a REIT under Sections 856-860 of the Internal
Revenue Code of 1986 (the "Code"). We believe that we have been organized and
operated to date in such a manner as to qualify for taxation as a REIT.
However, prospective investors should be aware that the federal tax rules and
regulations relating to REITs are highly technical and complex, and that our
qualification as a REIT during each taxable year (including prior years) will
depend on our ability to meet these requirements, through actual annual
operating results, income distribution levels, stock ownership requirements and
tests relating to our assets and sources of income. Therefore, we cannot assure
you that we have operated or will operate in a manner so as to qualify or
remain qualified as a REIT. Furthermore, depending on our assessment of the
strategic importance of acquisitions which may become available to us in our
existing line of business or in complementary non-real estate based
communications site or services activities, we may acquire, operate and derive
income from assets, businesses or entities that will cause us to no longer
qualify as a REIT. In this regard, we recently acquired certain assets from
Motorola prior to determining whether such assets, and the income derived from
such assets, would permit us to continue to meet the qualification requirements
for a REIT. Subsequent to making such commitment, we structured the ownership
of the assets so acquired in a manner that we believe will ensure our continued
qualifications as a REIT. See "Business--Our Acquisition Strategy--Motorola
Antenna Site Acquisition" and "Business--REIT Status."

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<PAGE>

However, because of the restrictions imposed on our operations by seeking to
retain our qualification as a REIT, we have evaluated whether to terminate our
REIT qualification. With respect to taxable years for which we are qualified as
a REIT, we could be subject to a variety of taxes and penalties if we engage in
certain prohibited transactions, fail to satisfy REIT distribution requirements
or recognize gain on the sale or other disposition of certain types of
property. See "Business--REIT Status." If we cease to remain qualified as a
REIT and we cannot utilize any of the relief provisions which may be
applicable, or terminate our REIT election voluntarily, we will be subject to
corporate level income tax at regular corporate rates on our net income
unreduced by distributions to stockholders, together with interest and
penalties to the extent applicable to prior periods. However, because we have
not reported any net taxable income (determined before the deduction for
dividends paid) in any of our corporate income tax returns since our filing of
an election to be taxed as a REIT, unless our reported net taxable loss is
adjusted, any corporate income tax liability from a retroactive determination
by the Internal Revenue Service (the "Service") that we, to date, failed to
satisfy all of the requirements for REIT qualification during any such year
would likely be minimal. Nevertheless, with respect to any year in which we
recognize positive net taxable income, the loss of REIT status or a
determination that we did not qualify as a REIT may have a material adverse
affect on our financial condition or results from operations. In such
circumstances, we may have made distributions to our stockholders as required
to retain our REIT status but would neither be entitled to receive such
distributions back from our stockholders nor be entitled to a tax deduction for
such distributions. At the present time, we do not anticipate that we will
recognize net taxable income for the foreseeable future.

We cannot assure you that the impact of the Year 2000 date change on computer
systems will not have significant adverse effects on us.

Currently, many computer systems and software products are coded to accept
only two digit entries in the year code field. These date code fields will need
to accept four digit entries to distinguish 21st century dates from 20th
century dates. As a result, many companies' software and computer systems may
need to be upgraded or replaced in order to comply with such "Year 2000"
requirements. We and third parties with whom we do business rely on numerous
computer programs in our day-to-day operations. Due to the proximity of the
date of this Prospectus to January 1, 2000, we continue to monitor Year 2000
issues as they relate to our internal computer systems and third party computer
systems with whom we interact. We have incurred internal staff costs as well as
approximately $100,000 of consulting and other expenses related to the Year
2000 compliance program we have undertaken in order to address these issues. In
addition, the appropriate course of action may include replacement or an
upgrade of certain systems or equipment at a substantial cost to us. We cannot
assure you that our Year 2000 compliance program, or similar programs by third
parties with whom we do business, will be successful. We may incur significant
costs in resolving our Year 2000 issues. If not resolved, these issues could
have a significant adverse impact on our business, operating results and
financial condition. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Year 2000."

Virtually all of our shares will be eligible for sale after this offering,
which could result in a decline in our stock price.

If our stockholders sell substantial amounts of our Common Stock in the
public market following this offering, the market price of our Common Stock
could fall. These sales also might make it more difficult for us to sell equity
or equity-related securities in the future at a time and price that we deem
appropriate. Based on shares outstanding as of December 28, 1999, upon
completion of this offering, we will have 46,394,520 shares of Common Stock
outstanding. Of these shares, 41,026,000 shares will be freely tradeable and
5,368,520 shares will become eligible for sale in the public market as follows:

<TABLE>
<CAPTION>
Number of
Shares Date
--------- ----
<C> <S>
At various times after the date of this Prospectus pursuant to Rule
90,561 144
At various times after 90 days from the date of this Prospectus
5,277,959 pursuant to Rule 144
</TABLE>

18
<PAGE>

These shares are subject to contractual restrictions with us and in most
cases, with the Underwriters, that prevent them from being sold until 90 days
after the effective date of the registration statement for this offering
without the consent of Deutsche Bank Securities Inc.

As of December 31, 1999, options to purchase 2,949,691 shares of Common
Stock were outstanding and shares acquired upon exercise of these option will
be eligible for sale in the public market from time to time subject to vesting
and the 90-day lockup restrictions that apply to the outstanding stock. The
possible sale of a significant number of these shares may cause the price of
our Common Stock to decline.

We expect to experience volatility in our stock price that could affect your
investment.

The stock market has from time to time experienced significant price and
volume fluctuations that have affected the market price for the common stock of
companies. In the past, certain broad market fluctuations have been unrelated
or disproportionate to the operating performance of these companies. Any
significant fluctuations in the future might result in a material decline in
the market price of our Common Stock. In the past, following periods of
volatility in the market price of a particular company's securities, securities
class action litigation has often been brought against such company. We may
become involved in this type of litigation in the future. Litigation is often
expensive and diverts management's attention and resources, which could have a
material adverse effect upon our business and operating results.

We have adopted anti-takeover provisions that could affect the sale of
Pinnacle.

Provisions of our certificate of incorporation, our bylaws and Delaware law
could make it more difficult for a third party to acquire us, even if doing so
would be beneficial to our stockholders. See "Description of Capital Stock--
Certain Provisions of Our Certificate of Incorporation and Bylaws" and
"Description of Capital Stock--Certain Provisions of Delaware Law."

19
<PAGE>

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

We make "forward-looking statements" throughout this Prospectus. Whenever
you read a statement that is not simply a statement of historical fact (such as
when we describe what we "believe," "expect" or "anticipate" will occur, and
other similar statements), you must remember that our expectations may not be
correct, even though we believe they are reasonable. We do not guarantee that
the transactions and events described in this Prospectus will happen as
described (or that they will happen at all). You should read this Prospectus
completely and with the understanding that actual future results may be
materially different from what we expect. We will not update these forward-
looking statements, even though our situation may change in the future. Whether
actual results will conform with our expectations and predictions is subject to
a number of risks and uncertainties including:

. the significant considerations discussed in this Prospectus;

. risks associated with the effect of economic conditions;

. our outstanding indebtedness and our ability to pay interest and
principal on our debt;

. future capital needs;

. restrictions imposed by the terms of our indebtedness;

. risks associated with the Motorola Antenna Site Acquisition;

. our ability to successfully identify, complete and integrate
acquisitions;

. our ability to protect our rights in our property and to insure against
losses from damage to our communications sites;

. risks associated with construction of new towers;

. risks associated with retaining our significant customers;

. the impact of competition and technological change on us;

. our dependence on the wireless communications industry;

. the impact of legislation and regulation;

. the impact of competing technologies and other alternatives on our
services;

. the loss of key employees;

. our ability to repurchase our Notes or repay debt under our credit
facility if a change of control occurs;

. our ability to maintain our REIT status.

You should read carefully the section of this Prospectus under the heading
"Risk Factors" beginning on page 9. We assume no responsibility for updating
forward looking information contained in this Prospectus.

20
<PAGE>

USE OF PROCEEDS

The net proceeds to Pinnacle from the sale of the 5,300,000 shares being
offered by us and the net proceeds to the Selling Stockholders from the sale of
the 2,700,000 shares being offered by them assuming a public offering price of
$40.00 per share, after deducting underwriting discounts, commissions and
estimated offering expenses, are estimated to be approximately $202.0 million
and $103.4 million, respectively, or $232.6 million and $118.7 million,
respectively, if the underwriters' over-allotment option is exercised in full.
We intend to use the net proceeds of this offering to repay existing debt under
our credit facility. The net proceeds of this offering received by the Selling
Stockholders will not be available to us.

The portion of our debt outstanding under our credit facility that is being
repaid from the net proceeds of this offering was drawn under the revolving
line of credit portion of our credit facility and currently bears interest at a
rate per annum of the 90-day London Interbank Offered Rate plus 2.75%.
Beginning September 30, 2001, the availability under such revolving line of
credit starts reducing by specified amounts on a quarterly basis until June 30,
2006, when it must be repaid in full. Advances under the revolving line of
credit were primarily used to finance various acquisitions of communications
sites.

21
<PAGE>

DILUTION

The net tangible book value of our Common Stock at September 30, 1999 was
$383.0 million or $9.32 per share. "Net tangible book value per share"
represents the amount of total tangible assets less total liabilities divided
by the number of shares of Common Stock outstanding, excluding all outstanding
stock options and the underwriters' over-allotment options. Without taking into
account any other changes in the pro forma net tangible book value after
September 30, 1999, other than to give effect to the receipt by us of the net
proceeds from the sale of 5,300,000 shares of Common Stock in this offering
(assuming an offering price of $40.00 per share), the pro forma net tangible
book value of our Common Stock as of September 30, 1999 would have been $12.61
per share of Common Stock. This represents an immediate increase in net
tangible book value of $3.29 per share to existing stockholders and an
immediate dilution of $27.39 per share to new investors. The following table
illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed public offering price per share........................ $40.00
------
Net tangible book value per share at September 30, 1999...... $9.32
-----
Increase per share attributable to this offering............. $3.29
-----
Pro forma net tangible book value per share after this
offering...................................................... $12.61
------
Dilution per share to new investors............................ $27.39
======
</TABLE>

DIVIDEND POLICY

In order to qualify as a REIT for federal income tax purposes, among other
things we must make distributions each taxable year (not including any return
of capital for federal income tax purposes) equal to at least 95% of our real
estate investment trust taxable income, although our board of directors, in its
discretion, may increase that percentage as it deems appropriate and 95% of
certain foreclosure income. See "Certain Federal Income Tax Considerations--
Requirements for REIT Qualification--Distribution Requirements". The
declaration of distributions is within the discretion of our board of directors
and depends upon our cash available for distribution, current and projected
cash requirements, tax considerations and other factors.

We intend to make distributions to holders of our Common Stock only in the
minimum amount necessary to satisfy the REIT distribution requirements
necessary to maintain REIT status and intend to retain available cash in excess
of such amount for future operation and expansion of our business. In this
regard, we do not expect for the foreseeable future that we will have real
estate investment trust taxable income which will be required to be distributed
in order to maintain our REIT status. See "Certain Federal Income Tax
Considerations--Requirements for REIT Qualification--Distribution
Requirements." Any determination to declare or pay dividends in the future will
be at the discretion of our board of directors and will depend upon our results
of operations, financial condition and any contractual restrictions,
considerations imposed by applicable law and other factors deemed relevant by
our board of directors.

PRICE RANGE OF COMMON STOCK

Our Common Stock began trading on the Nasdaq National Market under the
symbol "BIGT" on February 19, 1999. The following table sets forth the range of
high and low sale prices per share for our Common Stock as reported on the
Nasdaq National Market for the periods indicated:

<TABLE>
<CAPTION>
High Low
-------- ------
<S> <C> <C>
1999
First quarter................................................ $15.125 $14.00
Second quarter............................................... $24.50 $15.00
Third quarter................................................ $28.3125 $22.75
Fourth quarter (through December 29, 1999)................... $43.25 $22.00
</TABLE>

On December 29, 1999, the last sale price of our Common Stock as reported on
the Nasdaq National Market was $40.00 per share. On December 28, 1999 there
were 80 holders of record of our Common Stock.

22
<PAGE>

CAPITALIZATION

The Actual column in the following table sets forth our actual
capitalization as of September 30, 1999. The Pro Forma column gives effect to
(1) all acquisitions of communications site rental businesses completed after
September 30, 1999 through December 24, 1999; (2) all other individually
insignificant acquisitions of communications site rental businesses for which
we have entered into agreements or letters of intent to acquire as of December
24, 1999, and that we believe are probable; (3) the Motorola Antenna Site
Acquisition; (4) the financing of the acquisitions referenced in (1) through
(3) above under our credit facility; and (5) the Secondary Offering. The Pro
Forma as Adjusted column gives effect to items (1) through (5) above as well as
this offering and the application of the proceeds therefrom. The following
table does not include 3,000,000 shares reserved for issuance under our stock
option plan, 2,949,691 of which are subject to outstanding options with a
weighted average exercise price of $16.52 per share.

<TABLE>
<CAPTION>
As of September 30, 1999
--------------------------------------
Pro Forma
Actual Pro Forma as Adjusted(1)
---------- ---------- --------------
<S> <C> <C> <C>
Cash and cash equivalents.............. $ 151,868 $ 151,868 $ 151,868
========== ========== ==========
Credit facility(2)..................... $ 444,300 $ 601,851 $ 399,861
Notes.................................. 232,492 232,492 232,492
Notes payable(3)....................... 21,528 21,528 21,528
---------- ---------- ----------
Total long-term debt............... 698,320 855,871 653,881
Stockholders' equity:
Common Stock, $0.001 par value,
100,000,000 shares authorized;
41,094,520 shares issued and
outstanding........................... 41 41 46
Additional paid-in capital............. 489,426 489,426 691,411
Accumulated deficit.................... (92,415) (92,415) (92,415)
---------- ---------- ----------
Total stockholders' equity......... 397,052 397,052 599,042
---------- ---------- ----------
Total capitalization............... $1,095,372 $1,252,923 $1,252,923
========== ========== ==========
</TABLE>
- --------
(1) As adjusted to give effect to the sale of our Common Stock at an offering
price of $40.00 per share.
(2) Availability under our credit facility after giving effect to the use of
proceeds from this offering will be $244.4 million after giving effect to
$25.7 million of outstanding letters of credit, which reduce availability
thereunder.
(3) Notes payable consists of notes issued to tower sellers in our acquisition
of towers. Interest rates range from 8.5% to 13.0% and our Common Stock
payable mature at varying dates through December 2020.

23
<PAGE>

OUR UNAUDITED PRO FORMA FINANCIAL DATA

The Unaudited Pro Forma Consolidated Balance Sheet at September 30, 1999
gives pro forma effect to:

. the acquisition of individually insignificant site rental businesses
completed subsequent to September 30, 1999 through December 24, 1999;

. the Motorola Antenna Site Acquisition and transfer of rooftop
communication sites described elsewhere in this Prospectus. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations--Overview" and "Business--Our Acquisition Strategy;"

. other individually insignificant acquisitions of site rental businesses
for which we have entered into agreements or letters of intent to acquire
as of December 24, 1999, and that we believe are probable;

. the related financing of the acquisitions referred to above;

. the Secondary Offering in July 1999; and

. this offering and the application of the net proceeds therefrom as
described under "Use of Proceeds,"

as if each had occurred as of September 30, 1999.

The Unaudited Pro Forma Consolidated Statement of Operations for the year
ended December 31, 1998 and the nine months ended September 30, 1999 gives pro
forma effect to:

. all individually insignificant acquisitions completed during 1998;

. acquisitions of other communications sites completed since January 1,
1999;

. the Southern Towers Acquisition described elsewhere in this Prospectus.
See "Business--Our Acquisition Strategy;"

. the MobileMedia Acquisition described elsewhere in this Prospectus. See
"Business--Our Acquisition Strategy;"

. related financing of the acquisitions referred to above;

. our IPO in February 1999 and the Secondary Offering in July 1999
described elsewhere in this Prospectus; and

. this offering and the application of the net proceeds therefrom as
described under "Use of Proceeds,"

as if each had occurred as of January 1, 1998.

We account for our acquisitions under the purchase method of accounting. The
total cost of site rental businesses acquired including related fees and
expenses is allocated to the underlying tangible and intangible assets acquired
and liabilities assumed based on their respective fair values. The purchase
price allocations for the respective acquisitions included in the unaudited pro
forma data are preliminary.

24
<PAGE>

However, we do not expect that the final allocation of the purchase price will
be materially different from its preliminary allocation.

The unaudited pro forma financial data are provided for informational
purposes only and are not necessarily indicative of our results of operations
or financial position had the transactions assumed therein occurred, nor are
they necessarily indicative of the results of operations that may be expected
to occur in the future. There can be no assurance whether or when any of the
probable acquisitions reflected in the unaudited pro forma data will be
completed. Furthermore, the unaudited pro forma financial data are based upon
assumptions that we believe are reasonable and should be read in conjunction
with the financial statements and the accompanying notes thereto included
elsewhere in this Prospectus.

25
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

As of September 30, 1999
(in thousands)

<TABLE>
<CAPTION>
Adjustments
for
Acquisitions
Pinnacle Completed
Holdings Subsequent to Adjustments for Adjustments Pro Forma
September 30, September 30, Probable for the as
1999 1999(a) Acquisitions(a) Pro Forma Offering(b) Adjusted
------------- ------------- --------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equiva-
lents.................. $ 151,868 $ -- $ -- $ 151,868 $ -- $ 151,868
Accounts receivable.... 7,555 -- -- 7,555 -- 7,555
Prepaid expenses and
other current assets... 6,193 -- -- 6,193 -- 6,193
---------- ------- -------- ---------- -------- ----------
Total current assets... 165,616 -- -- 165,616 -- 165,616
Tower assets, net...... 861,753 28,416 129,135 1,019,304 -- 1,019,304
Leasehold interests,
net.................... 81,071 -- -- 81,071 -- 81,071
Fixed assets, net...... 3,606 -- -- 3,606 -- 3,606
Land................... 31,612 -- -- 31,612 -- 31,612
Deferred debt costs,
net.................... 14,027 -- -- 14,027 -- 14,027
Other assets........... 2,613 -- -- 2,613 -- 2,613
---------- ------- -------- ---------- -------- ----------
$1,160,298 $28,416 $129,135 $1,317,849 $ -- $1,317,849
========== ======= ======== ========== ======== ==========
Liabilities
Current liabilities:
Accounts payable....... $ 4,904 $ -- $ -- $ 4,904 $ -- $ 4,904
Accrued expenses....... 48,652 -- 48,652 -- 48,652
Deferred revenue....... 4,345 -- -- 4,345 -- 4,345
Current portion of long-
term debt............... 6,666 -- -- 6,666 -- 6,666
---------- ------- -------- ---------- -------- ----------
Total current liabili-
ties................... 64,567 -- -- 64,567 -- 64,567
Long-term debt.......... 698,320 28,416 129,135 855,871 (201,990) 653,881
Other liabilities....... 359 -- -- 359 -- 359
---------- ------- -------- ---------- -------- ----------
763,246 28,416 129,135 920,797 (201,990) 718,807
Stockholders' Equity:
Common stock............ 41 -- -- 41 5 46
Additional paid-in capi-
tal..................... 489,426 -- -- 489,426 201,985 691,411
Accumulated deficit..... (92,415) -- -- (92,415) -- (92,415)
---------- ------- -------- ---------- -------- ----------
Total stockholders' eq-
uity................... 397,052 -- -- 397,052 201,990 599,042
---------- ------- -------- ---------- -------- ----------
$1,160,298 $28,416 $129,135 $1,317,849 $ -- $1,317,849
========== ======= ======== ========== ======== ==========
</TABLE>

See accompanying Notes to Unaudited Pro Forma Consolidated Balance Sheet.

26
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

(in thousands)

(a) Reflects our preliminary allocation of purchase price in accordance with
the purchase method of accounting for individually insignificant
acquisitions of site rental assets, and the related debt financing of such
acquisitions under our credit facility, as follows:

<TABLE>
<CAPTION>
Number Aggregate
Number of of Purchase
Acquisitions Sites Price(1)
------------ ------ ---------
<S> <C> <C> <C>
Acquisitions of individually insignificant
site rental businesses that we completed in
the period October 1, 1999 through December
24, 1999.................................... 48 32 $ 28,416
Other individually insignificant acquisitions
of site rental businesses for which we have
entered into agreements or letters of intent
to acquire as of December 30, 1999, and
which we believe are probable............... 71 766 $129,135
</TABLE>
--------
(1) Includes estimated fees and expenses related to the acquisitions of
$989, and $5,033, respectively.

(b) Reflects the receipt and use of estimated net proceeds of this offering to
us of $202.0 million net of the estimated underwriting discounts and
commissions and expenses from this offering totaling $10.0 million.

27
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

Year Ended December 31, 1998
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
Pinnacle Adjustments Adjustments Adjustments Adjustments
Holdings Adjustments for Southern for for Motorola Adjustments for
December 31, for Completed Towers MobileMedia Antenna Sites for Probable Initial Public
1998 Acquisition(a) Acquisition(b) Acquisition(c) Acquisition(d) Acquisitions(e) Offering(f)
------------ -------------- -------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Site rental
revenue.......... $ 32,019 $ 19,843 $ 836 $ 8,863 $ 85,108 $14,090 $ --
Site operating
expenses,
excluding
depreciation and
amortization..... 6,166 3,143 185 836 47,582 2,247 --
-------- -------- ------- -------- -------- ------- --------
Gross profit,
excluding
depreciation and
amortization..... 25,853 16,700 651 8,027 37,526 11,843 --
Other expenses:
General and
administrative.. 4,175 -- 15 381 14,034 -- --
Corporate
development..... 6,382 -- -- -- -- -- --
State franchise,
excise and
minimum taxes... 686 -- -- -- -- -- --
Depreciation..... 22,513 17,223 955 7,636 45,370 8,609 --
-------- -------- ------- -------- -------- ------- --------
33,756 17,223 970 8,017 59,404 8,609 --
Income (loss)
from operations.. (7,903) (523) (319) 10 (21,878) 3,234 --
Interest
expense.......... 12,300 22,398 (1,969) 5,599 20,825 10,976 (10,661)(i)
Amortization of
original issue
discount and debt
issuance costs... 16,427 -- 4,138 -- -- -- --
-------- -------- ------- -------- -------- ------- --------
Income/(loss)
before
extraordinary
item............. (36,630) (22,921) (2,488) (5,589) (42,703) (7,742) 10,661
Extraordinary
loss from
extinguishment of
debt............. 5,641 -- -- -- -- -- --
-------- -------- ------- -------- -------- ------- --------
Net loss......... $(42,271) $(22,921) $(2,488) $ (5,589) $(42,703) $(7,742) $ 10,661
======== ======== ======= ======== ======== ======= ========
Payable in kind
preferred
dividends and
accretion........ 3,094 -- -- 6,438 -- -- (9,532)
-------- -------- ------- -------- -------- ------- --------
Net loss
attributable to
common
stockholders..... $(45,365) $(22,921) $(2,488) $(12,027) $(42,703) $(7,742) $ 20,193
======== ======== ======= ======== ======== ======= ========
Basic loss per
common share:
Loss before
extraordinary
item............ (95.03)
Extraordinary
item............ (13.50)
--------
Net loss......... $(108.53)
========
Weighted average
number of common
shares........... 418
<CAPTION>
Adjustments
for Adjustments Pro
Secondary Pro for the Forma as
Offering(g) Forma Offering(h) Adjusted
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Site rental
revenue.......... $ -- $160,759 $ -- $160,759
Site operating
expenses,
excluding
depreciation and
amortization..... -- 60,159 -- 60,159
----------- --------- ----------- ---------
Gross profit,
excluding
depreciation and
amortization..... -- 100,600 -- 100,600
Other expenses:
General and
administrative.. -- 18,605 -- 18,605
Corporate
development..... -- 6,382 -- 6,382
State franchise,
excise and
minimum taxes... -- 686 -- 686
Depreciation..... -- 102,306 -- 102,306
----------- --------- ----------- ---------
-- 127,979 -- 127,979
Income (loss)
from operations.. -- (27,379) -- (27,379)
Interest
expense.......... (17,469) 41,999 (17,169) 24,830
Amortization of
original issue
discount and debt
issuance costs... -- 20,565 -- 20,565
----------- --------- ----------- ---------
Income/(loss)
before
extraordinary
item............. 17,469 (89,943) 17,169 (72,774)
Extraordinary
loss from
extinguishment of
debt............. -- 5,641 -- 5,641
----------- --------- ----------- ---------
Net loss......... $17,469 $(95,584) $17,169 $(78,415)
=========== ========= =========== =========
Payable in kind
preferred
dividends and
accretion........ -- -- -- --
----------- --------- ----------- ---------
Net loss
attributable to
common
stockholders..... $17,469 $(95,584) $17,169 $(78,415)
=========== ========= =========== =========
Basic loss per
common share:
Loss before
extraordinary
item............ (2.19) (1.57)
Extraordinary
item............ (0.14) (0.12)
--------- ---------
Net loss......... $ (2.33) $ (1.69)
========= =========
Weighted average
number of common
shares........... 41,095 46,395
</TABLE>

See accompanying Notes to Unaudited Pro Forma Consolidated Statements of
Operations.

28
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

Nine months ended September 30, 1999
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
Pinnacle Adjustments Adjustments Adjustments
Holdings Adjustments for Motorola Adjustments for for Initial for Adjustments
September for Completed Antenna Site Probable Public Secondary Pro for the
30, 1999 Acquisition(j) Acquisition(k) Acquisitions(e) Offering(f) Offering(g) Forma Offering(h)
--------- -------------- -------------- --------------- ----------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Site rental
revenue.......... $ 48,816 $ 7,532 $55,663 $10,568 $ -- $ -- $122,579 $ --
Site operating
expenses,
excluding
depreciation and
amortization..... 11,691 1,105 30,030 1,685 -- -- 44,511 --
-------- ------- -------- ------- ------- -------- -------- -------
Gross profit
excluding
depreciation and
amortization..... 37,125 6,427 25,633 8,883 -- -- 78,068 --
Other expenses:
General and
administrative.. 2,823 -- 7,956 -- -- -- 10,779 --
Corporate
development..... 5,731 -- -- -- -- -- 5,731 --
State franchise,
excise and
minimum taxes... 700 -- -- -- -- -- 700 --
Depreciation.... 35,118 6,186 30,246 6,457 -- -- 78,007 --
-------- ------- -------- ------- ------- -------- -------- -------
44,372 6,186 38,202 6,457 -- -- 95,217 --
Income/(loss)
from operations.. (7,247) 241 (12,569) 2,426 -- -- (17,149) --
Interest
expense.......... 14,439 7,887 15,619 8,232 (7,995) (13,102) 25,080 (12,877)
Amortization of
original issue
discount and debt
issuance costs... 17,335 -- -- -- -- -- 17,335 --
-------- ------- -------- ------- ------- -------- -------- -------
Net loss......... $(39,021) $(7,646) $(28,188) $(5,806) $ 7,995 $ 13,102 $(59,564) $12,877
======== ======= ======== ======= ======= ======== ======== =======
Dividends and
accretion on
preferred stock.. 2,930 -- -- -- (2,930) -- -- --
-------- ------- -------- ------- ------- -------- -------- -------
Net loss
attributable to
common stock..... $(41,951) $(7,646) $(28,188) $(5,806) $10,925 $ 13,102 $(59,564) $12,877
======== ======= ======== ======= ======= ======== ======== =======
Basic and diluted
loss per common
share............ $ (1.41) $ (1.45)
Weighted average
number of shares
of common stock
outstanding...... 29,721 41,095
<CAPTION>
Pro
Forma as
Adjusted
---------
<S> <C>
Site rental
revenue.......... $122,579
Site operating
expenses,
excluding
depreciation and
amortization..... 44,511
---------
Gross profit
excluding
depreciation and
amortization..... 78,068
Other expenses:
General and
administrative.. 10,779
Corporate
development..... 5,731
State franchise,
excise and
minimum taxes... 700
Depreciation.... 78,007
---------
95,217
Income/(loss)
from operations.. (17,149)
Interest
expense.......... 12,203
Amortization of
original issue
discount and debt
issuance costs... 17,335
---------
Net loss......... $(46,687)
=========
Dividends and
accretion on
preferred stock.. --
---------
Net loss
attributable to
common stock..... $(46,687)
=========
Basic and diluted
loss per common
share............ $ (1.01)
Weighted average
number of shares
of common stock
outstanding...... 46,395
</TABLE>

See accompanying Notes to Unaudited Pro Forma Consolidated Statements of
Operations.

29
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(a) Reflects the historical, pre-acquisition results of operations (in
aggregate) for the acquisitions of rental site businesses other than the
Southern Towers Acquisition and the MobileMedia Acquisition completed by us
during 1998 and those completed in the period January 1, 1999 through their
respective date of acquisition (but no later than September 30, 1999), and
the related debt financing of such acquisitions under our credit facility,
as follows:

<TABLE>
<CAPTION>
Acquisitions Acquisitions
Completed Completed Adjustments
as of Subsequent to for
December 31, December 31, Completed
1998 1998 Acquisitions
------------ ------------- ------------
<S> <C> <C> <C>
Site rental revenues............... $ 1,699 $ 18,144 $ 19,843
Site operating expenses, excluding
depreciation and amortization..... 340 2,803 3,143
------- -------- --------
Gross profit excluding depreciation
and amortization.................. 1,359 15,341 16,700
General and administrative......... -- -- --
Depreciation....................... 1,948 15,275 17,223
------- -------- --------
Income/(loss) from operations...... (589) 66 (523)
Interest expense................... 2,922 19,476 22,398
------- -------- --------
Net income (loss).................. $(3,511) $(19,410) $(22,921)
======= ======== ========
</TABLE>

(b) Reflects the historical operating results of Southern Communications site
operations and the pro forma effect of site rental revenue, site operating
expenses and site asset depreciation, and the related financing of the
Southern Towers Acquisition under our credit facility, assuming the
transaction was completed on January 1, 1998, as follows:

<TABLE>
<CAPTION>
Southern Towers
for the Period from Adjustments
January 1, 1998 for Southern
through March 3, Towers
1998 Adjustments Acquisition
------------------- ----------- ------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Site rental revenues........ $ 178 $ 658 (1) $ 836
Site operating expenses,
excluding depreciation and
amortization............... 153 32 (1) 185
----- ------- -------
Gross profit excluding
depreciation and
amortization............... 25 626 651
General and administrative.. 15 -- 15
Depreciation................ 340 615 (2) 955
----- ------- -------
Loss from operations........ (330) 11 (319)
Interest income............. -- (1,969)(3) (1,969)
Amortization of original
issue discount and debt
issuance costs............. -- 4,138 (3) 4,138
----- ------- -------
Net loss.................... $(330) $(2,158) $(2,488)
===== ======= =======
</TABLE>
--------
(1) Represents incremental increases in pro forma site rental revenues and
operating expenses pursuant to the executed lease agreement with
Southern Communications, and related affiliates.
(2) Reflects the increase in pro forma depreciation on site assets acquired
resulting from our preliminary application of purchase accounting.
(3) Reflects the pro forma increase in net interest expense associated with
the financing of the Southern Towers Acquisition.

30
<PAGE>

(c) Reflects the historical operating results of MobileMedia and its
subsidiaries' tower operations and the pro forma effect of site rental
revenue, site operating expenses and site asset depreciation, and the
related financing of the MobileMedia Acquisition, assuming the transaction
was completed on January 1, 1998, as follows:
<TABLE>
<CAPTION>
MobileMedia for
the Period from
January 1, 1998 Adjustments for
through MobileMedia
September 2, 1998 Adjustments Acquisitions
----------------- ----------- ---------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Site rental revenues...... $1,698 $ 7,165 (1) $ 8,863
Site operating expenses,
excluding depreciation
and amortization......... 690 146 (1) 836
------ -------- --------
Gross profit excluding
depreciation and
amortization............. 1,008 7,019 8,027
General and
administrative........... 381 -- 381
Depreciation.............. 356 7,280 (2) 7,636
------ -------- --------
Loss from operations...... 271 (261) 10
Interest expense.......... -- 5,599 (3) 5,599
------ -------- --------
Net income (loss)......... 271 (5,860) (5,589)
Dividends and accretion on
preferred stock.......... -- 6,438 (4) 6,438
------ -------- --------
Net income (loss)
attributate to common
stock.................... $ 271 $(12,298) $(12,027)
====== ======== ========
</TABLE>
--------
(1) Represents incremental increases in pro forma tower revenues and
operating pursuant to the executed lease agreement with MobileMedia,
and its subsidiaries.
(2) Reflects the increase in pro forma depreciation on tower assets
acquired resulting from our preliminary application of purchase
accounting.
(3) Reflects the increase in pro forma interest expense associated with the
debt financing of the MobileMedia Acquisition under our credit
facility.
(4) Reflects dividends accrued and accretion to liquidation value on
preferred stock we previously had outstanding.
(d) Reflects the historical operating results of Motorola antenna site business
and the pro forma effect of operations, and the related financing of the
Motorola Antenna Site Acquisition under our credit facility and the
issuance of the Common Stock, assuming the transaction was completed on
January 1, 1998, as follows:
<TABLE>
<CAPTION>
Motorola for the Adjustments for
Period Ended Motorola
December 31, Antenna Site
1998 Adjustments Acquisition(1)
---------------- ----------- ---------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Site rental revenue.......................... $85,608 $ (500)(1) $ 85,108
Site operating expenses, excluding
depreciation and amortization............... 50,416 (2,834)(2) 47,582
------- -------- --------
Gross margin excluding depreciation and
amortization................................ 35,192 2,334 37,526
Other expenses:
General and administrative................... 11,516 (1,650)(3) 9,866
Allocated costs from parent.................. 4,168 -- 4,168
Depreciation and amortization................ 8,476 36,894 (4) 45,370
------- -------- --------
Income (loss) from operations................ 11,032 (32,910) (21,878)
Interest expense............................. -- 20,825 (5) 20,825
------- -------- --------
Net income (loss) before income taxes........ $11,032 $(53,735) $(42,703)
======= ======== ========
</TABLE>
--------

31
<PAGE>

(1) Represents the pro forma adjustment to site rental revenue and site
operating expense for those sites leased from us by the Motorola
antenna site business, as such amounts will be eliminated as a direct
result of the Motorola Antenna Site Acquisition.
(2) Represents the pro forma adjustment to site operating expense for those
sites leased from us by the Motorola antenna site business, as such
assets will be eliminated as a direct result of the Motorola Antenna
Site Acquisition as well as elimination of certain losses on adverse
leases that are accrued for under our preliminary application of
purchase accounting.
(3) Represents elimination of historical personnel costs related to
employees who will not continue under the Motorola Purchase Agreement
as well as certain losses on adverse leases that are accrued for under
our preliminary application of purchase accounting.
(4) Represents the increase in depreciation and amortization expense as a
result of our application of purchase accounting and our preliminary
fair value determination of acquired assets.
(5) Represents the additional pro forma interest expense associated with
the financing of the Motorola Antenna Site Acquisition under our credit
facility.

(e) Reflects the adjustment to results of operations for 71 separate
acquisitions pending as of December 28, 1999 of 766 sites, for which we
have entered into agreements or letters of intent, and which we believe are
probable, each of which is individually immaterial, assuming such
transactions were completed as of January 1, 1998.

(f) Reflects the pro forma effects of our IPO, assuming it was completed as of
January 1, 1998.

(g) Reflects the pro forma effect of the Secondary Offering.

(h) Reflects the pro forma effect of the offering of our Common Stock in this
offering.

(i) Reflects the decrease in pro forma interest expense resulting from the use
of a portion of the net proceeds from both the Notes offering and our IPO
to repay pro forma outstanding debt under our credit facility, assuming
such transactions were completed as of January 1, 1998.

(j) Reflects the historical, pre-acquisition results of operations (in
aggregate) for the acquisitions of rental tower businesses other than the
Motorola Antenna Site Acquisition that we completed in the period January
1, 1999 through their respective date of acquisition (but no later than
September 30, 1999), and the related debt financing under our credit
facility, as follows:

<TABLE>
<CAPTION>
Acquisitions Acquisitions
Completed Completed
as of Subsequent to Adjustments for
September 30, September 30, Completed
1999 1999 Acquisitions(1)
------------- ------------- ---------------
<S> <C> <C> <C>
Site rental revenues........... $ 5,762 $ 1,770 $ 7,532
Site operating expenses,
excluding depreciation and
amortization.................. 948 157 1,105
------- ------- -------
Gross profit excluding
depreciation and
amortization.................. 4,814 1,613 6,427
General and administrative..... -- -- --
Depreciation................... 4,765 1,421 6,186
------- ------- -------
Income from operations......... 49 192 241
Interest expense............... 6,075 1,812 7,887
------- ------- -------
Net loss....................... $(6,026) $(1,620) $(7,646)
======= ======= =======
</TABLE>
--------
(1) Represents the aggregate adjustment to results of operations for 160
separate acquisitions of 330 total sites completed during the period
from January 1, 1999 through December 24, 1999, other than the Motorola
Antenna Site Acquisition, each of which acquisitions were individually
immaterial, assuming such transactions were completed as of January 1,
1999.

32
<PAGE>

(k) Reflects the historical operating results of the Motorola antenna site
business and the pro forma effect of operations and the related financing
of the Motorola Antenna Site Acquisition under our credit facility and the
issuance of Common Stock, assuming the transaction was completed on January
1, 1998, as follows:

<TABLE>
<CAPTION>
Motorola for the
Period from Adjustments for
January 1, 1999 Motorola
through Antenna Site
August 31, 1999 Adjustments Acquisition
---------------- ----------- ---------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Site rental revenue........ $56,108 $ (445)(1) $ 55,663
Site operating expenses,
excluding depreciation and
amortization.............. 32,031 (2,001)(2) 30,030
------- -------- --------
Gross margin, excluding
depreciation and
amortization.............. 24,077 1,556 25,633
Other expenses:
Selling, general and
administrative........... 7,011 (1,100)(3) 5,911
Allocated costs from
parent................... 2,045 -- 2,045
Depreciation and
amortization............. 5,596 24,650 (4) 30,246
------- -------- --------
Income (loss) from
operations................ 9,425 (21,994) (12,569)
Interest expense........... -- 15,619 (5) 15,619
------- -------- --------
Net income (loss) before
income taxes.............. $ 9,425 $(37,613) $(28,188)
======= ======== ========
</TABLE>
--------
(1) Represents the pro forma adjustment to site rental revenue and site
operating expense for those sites leased from us by the Motorola
antenna site business, as such amounts will be eliminated as a direct
result of the Motorola Antenna Site Acquisition.
(2) Represents the pro forma adjustments to site rental revenue for those
sites leased from us by the Motorola antenna site business, as such
amounts will be eliminated as a direct result of the Motorola Antenna
Site Acquisition as well as the elimination of certain losses on
adverse leases that are accrued for under the Registrant's preliminary
application of purchase accounting.
(3) Represents the elimination of historical corporate personnel and other
related employee benefit costs charged to the Motorola antenna site
business under Motorola corporate cost allocation policies. These
costs, comprised primarily of corporate-level treasury, legal, patent,
tax, insurance administration, payroll administration, accounting,
audit and human resources services were allocated to the Motorola
antenna site business on a budget formula and will not continue under
the Motorola Purchase Agreement. In the opinion of management, these
services are adequately performed by existing Company resources and no
additional costs are expected to be incurred.
(4) Represents the increase in depreciation and amortization expense as a
result of our application of purchase accounting and its preliminary
fair value determination of acquired assets.
(5) Represents the additional pro forma interest expense associated with
the financing of the Motorola Antenna Site Acquisition under our credit
facility.

33
<PAGE>

OUR SELECTED HISTORICAL
CONSOLIDATED FINANCIAL DATA

The following selected historical consolidated financial data for the period
of our inception (May 3, 1995) through December 31, 1995 and for each of the
three years ended December 31, 1996, 1997 and 1998 were derived from our
consolidated historical financial statements, including the related notes
thereto, which have been audited by PricewaterhouseCoopers LLP, independent
certified public accountants. The unaudited consolidated statement of
operations data for the nine months ended September 30, 1998 and 1999 are
derived from our unaudited consolidated financial statements, which are
contained elsewhere in this Prospectus. The selected historical consolidated
financial information should be read in conjunction with and are qualified in
their entirety by, the information contained in our consolidated audited
financial statements and the related notes thereto. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Our Unaudited Pro Forma Financial Data" included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
Period from
Inception
(May 3, 1995) Nine Months Ended
through Years Ended December 31, September 30,
December 31, -------------------------- ------------------
1995 1996 1997 1998 1998 1999
------------- ------- ------- -------- -------- --------
(in thousands, except per share
amounts) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Tower rental revenue.... $ 733 $ 4,842 $12,881 $ 32,019 $ 21,128 $ 48,816
Tower operating
expenses............... 181 1,135 2,633 6,166 3,966 11,691
------ ------- ------- -------- -------- --------
Gross profit............ 552 3,707 10,248 25,853 17,162 37,125
Other expenses:
General and
administrative(a)..... 306 916 1,367 4,175 2,720 2,823
Corporate
development(a)........ 369 1,421 3,723 6,382 4,955 5,731
State franchise, excise
and minimum taxes..... -- 26 67 686 398 700
Depreciation and
amortization.......... 282 2,041 6,335 22,513 13,358 35,118
------ ------- ------- -------- -------- --------
Loss from operations.... (405) (697) (1,244) (7,903) (4,269) (7,247)
Interest expense........ 181 1,155 6,925 12,300 7,276 14,439
Amortization of original
issue discount and debt
issuance costs......... 59 164 292 16,427 11,636 17,335
------ ------- ------- -------- -------- --------
Loss before
extraordinary item..... $ (645) $(2,016) $(8,461) $(36,630) $(23,181) $(39,021)
====== ======= ======= ======== ======== ========
Extraordinary loss from
extinguishment of
debt................... -- -- -- 5,641 -- --
Net loss................ $ (645) $(2,016) $(8,461) $(42,271) $(23,181) $(39,021)
====== ======= ======= ======== ======== ========
Dividends and accretion
on preferred stock..... -- -- -- 3,094 683 2,930
Loss attributable to
common stock........... $ (645) $(2,016) $(8,461) $(45,365) $(23,864) $(41,951)
====== ======= ======= ======== ======== ========
Basic loss per common
share:
Loss before
extraordinary item.... (6.32) (8.10) (27.29) (95.03) (2.46) (1.41)
Extraordinary item..... -- -- -- (13.50) -- --
------ ------- ------- -------- -------- --------
Net loss............... $(6.32) $ (8.10) $(27.29) $(108.53) $ (2.46) $ (1.41)
====== ======= ======= ======== ======== ========
Weighted average number
of shares of common
stock.................. 102 249 310 418 9,708 29,721
Other Operating Data:
Tower Level Cash
Flow(b)................ $ 552 $ 3,707 $10,248 $ 25,853 $ 17,162 $ 37,125
Tower Level Cash Flow
Margin(c).............. 75.3% 76.6% 79.6% 80.7% 81.2% 76.1%
Adjusted EBITDA(b)...... $ 246 $ 2,791 $ 8,881 $ 21,678 $ 14,442 $ 34,302
Adjusted EBITDA
Margin(c).............. 33.6% 57.6% 68.9% 67.7% 68.4% 70.3%
EBITDA Before Franchise,
Excise and Minimum
Taxes(b)............... $ (123) $ 1,370 $ 5,158 $ 15,296 $ 9,487 $ 28,571
EBITDA Before Franchise,
Excise and Minimum
Taxes Margin(c)........ -- 28.3% 40.0% 47.8% 44.9% 58.5%
EBITDA(b)............... $ (123) $ 1,344 $ 5,091 $ 14,610 $ 9,089 $ 27,871
EBITDA Margin(c)........ -- 27.8% 39.5% 45.6% 43.0% 57.1%
Number of sites(d):
Beginning of period.... -- 33 156 312 312 876
Sites acquired during
the period............ 29 119 134 517 484 2,201
Sites constructed
during the period..... 4 4 22 47 34 23
End of period.......... 33 156 312 876 830 3,100
</TABLE>

34
<PAGE>

<TABLE>
<CAPTION>
December 31,
--------------------------------- September 30,
1995 1996 1997 1998 1999
------- ------- -------- -------- -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents...... $ 31 $ 47 $ 1,694 $ 13,801 $ 151,868
Tower assets, net.............. 11,532 48,327 127,946 473,942 861,753
Total assets................... 13,972 55,566 143,178 516,148 1,160,298
Total debt..................... 5,523 30,422 120,582 433,218 704,987
Stockholders' equity........... $ 6,226 $22,220 $ 14,753 $ 40,672 $ 397,052
</TABLE>
- --------
(a) "General and administrative" expenses represent those costs directly
related to the day-to-day management and operation of our communications
sites. "Corporate development" expenses represent costs incurred in
connection with acquisitions and development of new business initiatives,
consisting primarily of allocated compensation, benefits and overhead costs
that are not directly related to the administration or management of
existing sites.
(b) "Tower Level Cash Flow" is defined as site rental revenue minus site
operating expenses, excluding depreciation and amortization. "Adjusted
EBITDA" represents earnings (loss) from operations before depreciation,
amortization, corporate development expenses and state franchise, excise
and minimum taxes. "EBITDA Before Franchise, Excise and Minimum Taxes"
represents earnings (loss) from operations before depreciation,
amortization and state franchise, excise and minimum taxes. "EBITDA"
represents loss from operations before depreciation and amortization. We
have included Tower Level Cash Flow, Adjusted EBITDA, EBITDA Before
Franchise, Excise and Minimum Taxes and EBITDA in Other Operating Data
because we believe such information may be useful to you in evaluating our
ability to service our debt. Tower Level Cash Flow, Adjusted EBITDA, EBITDA
Before Franchise, Excise and Minimum Taxes and EBITDA should not be
considered as an alternative to Gross Profit, net loss or net cash provided
by operating activities (or any other measure of performance in accordance
with generally accepted accounting principles) as a measure of our ability
to meet our cash needs or as an indication of our operating performance.
Moreover, Tower Level Cash Flow, Adjusted EBITDA, EBITDA Before Franchise,
Excise and Minimum Taxes and EBITDA are standardized measures and may be
calculated in a number of ways. Accordingly, the Tower Level Cash Flow,
Adjusted EBITDA, EBITDA Before Franchise, Excise and Minimum Taxes and
EBITDA information provided may not be comparable to other similarly titled
measures provided by other companies.
(c) Represents Tower Level Cash Flow, Adjusted EBITDA, EBITDA Before Franchise,
Excise and Minimum Taxes and EBITDA each as a percentage of tower rental
revenue.
(d) Includes communications sites that we manage or lease, which at September
30, 1999 were 1,441 communications sites.

35
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our financial condition and results of
operations for each of the three years ended December 31, 1996, 1997, 1998 and
the nine months ended September 30, 1999. The discussion should be read in
conjunction with our Financial Statements and thereto incorporated by reference
or included elsewhere in this Prospectus. The statements regarding the wireless
communications industry, our expectations regarding our future performance and
other non-historical statements in this discussion are forward-looking
statements. These forward-looking statements include numerous risks and
uncertainties, as described in "Risk Factors."

Overview

We acquire communications sites and construct rental towers and lease space
on these communications sites to a broad base of wireless communications
providers, operators of private networks, government agencies and other
customers. Our objective is to acquire or construct clusters of rental
communications sites in areas where there is significant existing and expected
continued growth in the demand for rental communications sites by wireless
communications providers. We seek to obtain a significant ownership position of
communications site assets in our targeted markets in order to offer "one-stop
shopping" to wireless communications providers who are deploying or expanding
wireless communications networks.

Our growth has come primarily from the acquisition of communications sites
and construction of towers and from adding new tenants to these towers. Our
business strategy focuses on aggressively pursuing communications site
acquisitions and selectively constructing towers in areas that complement our
existing base of rental communications sites and the expansion into additional
high growth wireless communications markets. Since commencing operations in May
1995, we have completed acquisitions and builds as follows:

<TABLE>
<CAPTION>
Acquisitions
Periods Ended Completed
December 31, September Subsequent to Pro Forma
------------------- 30, September 30, for Probable
1995 1996 1997 1998 1999 1999 Acquisitions Total
---- ---- ---- ---- --------- ------------- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Number of owned sites
acquired............... 29 119 134 517 760 32 405 1,996
Number of managed sites
acquired............... (1) (1) (1) (1) 583 -- 361 944
Number of leased sites
acquired............... (1) (1) (1) (1) 858 -- -- 858
Number of towers built.. 4 4 22 47 23 -- -- 100
--- --- --- --- ----- --- --- -----
Number of sites acquired
or built during the pe-
riod................... 33 123 156 564 2,224 32 766 3,898
=== === === === ===== === === =====
Number of acquisition
transactions complet-
ed..................... 13 49 72 82 113 16 37 382
</TABLE>
- --------
(1) Does not include 34 communications sites currently managed or leased that
were acquired between 1995 and 1998.

As of September 30, 1999, we had agreements or letters of intent to acquire
766 additional communications sites. In addition, we have identified numerous
additional acquisition candidates. We expect that internal growth related to
completed acquisitions and the business potential of pending acquisitions will
have a material impact on our future revenues and EBITDA.

36
<PAGE>

We believe that significant opportunities for growth exist by maximizing the
use of our existing and future communications sites. Because the costs of
operating a communications site are primarily fixed on owned sites, increasing
tower utilization significantly improves tower level operating margins on these
sites. We believe that "same tower" revenue growth on owned communications
sites (measured by comparing the annualized run rate revenue of our owned
communications sites at the end of a period to the annualized run rate revenue
for the same owned communications sites at the end of a prior period), is a
meaningful indicator of the quality of these sites and our ability to generate
incremental revenue on such sites. Taking into consideration new leases written
as of December 31, 1998, we experienced "same tower" revenue growth of
approximately 20% for the year ended December 31, 1998 on the base of
communications sites we owned as of December 31, 1997.

We have generated net losses since inception and at September 30, 1999, had
an accumulated deficit totaling approximately $92.4 million. Due to the nature
of our business (the leasing of cash-generating assets) and our plans to
continue to grow the business, it is expected that charges relating to
depreciation of existing and future assets and interest expense associated with
related debt balances will be substantial. Accordingly, we expect to continue
to generate losses for the foreseeable future.

Our annualized run rate revenue is calculated as of a given date by
annualizing the monthly rental rates then in effect for customer lease
contracts as of such date. We believe that growth in our annualized run rate
revenue is a meaningful indicator of our performance. As of September 30, 1999,
our annualized run rate revenue was $160.2 million.

On August 31, 1999, we completed the Motorola Antenna Site Acquisition. In
connection with that transaction, we acquired approximately 1,858
communications sites, consisting of approximately 499 owned sites, 526 managed
sites and 833 leased sites, for $255 million in cash and stock, plus fees and
expenses. For the nine months ended September 30, 1999 on a pro forma basis,
the Motorola sites generated $55.7 million in revenue, $25.6 million in tower
level cash flow and $17.7 million in EBITDA. Previously, we have not had a
significant number of managed or leased sites in our portfolio. Generally,
managed and leased sites have higher operating costs than owned towers,
primarily as a result of higher rental costs related to revenue sharing with
site owners. In addition, on leased sites, we generally have a right to lease
only a limited portion of a site, which limits total revenue potential. Higher
relative operating costs and limited revenue growth results in substantially
lower tower cash flow and EBITDA margin performance on managed and leased
sites. Accordingly, the acquisition of managed and leased sites in the Motorola
Antenna Site Acquisition or any potential future acquisitions will
substantially decrease our site level operating margins.

Following the closing of the Motorola Antenna Site Acquisition we
transferred a portion of the rooftop communication sites we acquired from
Motorola to PT III, a corporation in which we own substantially all of the
equity interests, and a $39.2 million Convertible Promissory note, in order to
minimize the risk that the ownership of or income from such assets might
negatively affect our qualification as a REIT. We also agreed to make our
personnel, facilities and general and administrative overhead available to PT
III, the cost thereof to be reimbursed to us by PT III. Certain members of our
management currently own approximately 91% of the outstanding voting stock of
PT III, which represents a very limited portion of the overall equity capital
of PT III. See "Business--Our Acquisition Strategy--Motorola Site Acquisition".

37
<PAGE>

Results of Operations

The following table sets forth, for the periods indicated, each statement of
operations item as a percentage of total site rental revenue. The results of
operations are not necessarily indicative of results for any future period. The
following data should be read in conjunction with our consolidated financial
statements and notes thereto incorporated by reference or included elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
Year Ended
December 31, Period Ended Period Ended
---------------------- September 30, September 30,
1996 1997 1998 1998 1999
----- ----- ------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Site rental revenue..... 100.0% 100.0% 100.0% 100.0% 100.0%
Site operating expenses,
excluding depreciation
and amortization....... 23.4 20.4 19.3 18.8 23.9
Gross profit............ 76.6 79.6 80.7 81.2 76.1
Expenses:
General and
administrative......... 18.9 10.6 13.0 12.9 5.8
Corporate development... 29.3 28.9 19.9 23.5 11.7
State franchise, excise
and minimum taxes...... 0.5 0.5 2.1 1.9 1.4
Depreciation............ 42.2 49.2 70.3 63.2 71.9
Loss from operations...... (14.3) (9.6) (24.6) (20.2) (14.8)
Interest expense.......... 23.9 53.8 38.4 34.4 29.6
Amortization of original
issue discount........... 3.4 2.3 51.3 55.1 35.5
Net loss before
extraordinary items...... (41.6%) (65.7%) (114.3%) (109.7%) (79.9%)
</TABLE>

Nine Months Ended September 30, 1999 compared to Nine Months Ended September
30, 1998

Site rental increased by $27.7 million, or 131%, to $48.8 million for the
nine month period ended September 30, 1999 from $21.1 million for the nine
month period ended September 30, 1998. This additional revenue is mainly
attributable to the acquisition and construction of 2,748 sites since January
1, 1998. They are as follows: 1,987 sites during third quarter, 1999; 197 sites
during first two quarters of 1999; and 564 sites during 1998. A portion of the
revenue increase is related to same-sites organic growth. Same-site organic
growth is a result of expanded marketing efforts to increase the number of
customers per site, renegotiating leases that are subject to renewal, and,
contractual price escalations for existing customers.

Direct operating expenses, excluding depreciation and amortization,
increased by $7.7 million or 195% to $11.7 million for the nine month period
ended September 30, 1999 from $4.0 million for the nine month period ended
September 30, 1998. This increase is consistent with the acquisition and
construction of the 2,748 sites discussed above. Direct operating expenses as a
percentage of revenue increased to 23.9% for the nine month period ended
September 30, 1999 from 18.8% for the nine month period ended September 30,
1998. The percentage increase is primarily a result of the change in mix of
sites. Both managed and leased sites produce lower margins than owned sites
because of their variable rent expense. Notwithstanding, these sites are
financially and strategically consistent with our objective of providing
wireless service providers a large selection of antenna site locations.

General and administrative expenses increased slightly for the nine month
period ended September 30, 1999 to $2.8 million from $2.7 million for the nine
month period ended September 30, 1998. The increases in expenses are from
additional staffing required for the increased work volume, our becoming a
public registrant, increased levels of advertising and marketing expenditures,
and other related costs associated with our growth. However, as a percentage of
revenue, it decreased to 5.8% of revenue for the nine month period ended
September 30, 1999 from 12.9% for the nine month period ended September 30,
1998 reflecting the disproportionate higher growth in revenues relative to
expenses. The

38
<PAGE>

decrease in percentage is from economies of scale realized from increases in
tower revenues as a result of our acquisitions and construction of
communications sites.

Corporate development expenses increased $0.8 million, but decreased as a
percentage of revenue from 23.5% for the nine month period ended September 30,
1998 compared to 11.7% for the nine month period ended September 30, 1999. The
increase in expense is related to the overall growth in the business and
related activity during this same period. The decrease in percentage is from
economies of scale realized from increases in tower revenues relative to direct
operating expenses as a result of the Company's acquisitions and construction
of communications sites.

State franchise, excise and minimum taxes, which represent taxes assessed in
connection with our operations in various state jurisdictions increased to $0.7
million for the nine month period ended September 30, 1999 from $0.4 million
for the nine month period ended September 30, 1998. Such taxes are calculated
using various methods such as a portion of our property within a given state,
our capital structure or based upon a minimum tax in lieu of income taxes. The
increase in 1999 is primarily attributable to our significant growth in assets
and capital, offset slightly by benefits resulting from the ability to
apportion such amounts to certain newly entered states that have no such taxes
or only minimum taxes, plus taxes to be incurred related to operations located
in Canada from the Motorola Acquisition.

Depreciation and amortization expense increased 163%, or $21.8 million, to
$35.1 million for the nine month period ended September 30, 1999 from $13.4
million for the nine month period ended September 30, 1998 as a result of the
increase in tower assets through the acquisition activities of the Company as
described above. Of the $21.8 million increase, $3.6 million was attributable
to the Motorola Acquisition.

Interest expense increased $7.2 million, or 98% for the nine month period
ended September 30, 1999 from $7.3 million for the nine month period ended
September 30, 1998. The increase in interest expenses was attributable to
higher interest rates and increased average borrowings associated with our
acquisitions during the nine month period ended September 30, 1999 as compared
to the nine month period ended September 30, 1998.

Amortization of original issue discount and debt issuance cost increased
$5.7 million to $17.3 million for the nine month period ended September 30,
1999 from $11.6 million for the nine month period ended September 30, 1998. The
prior year period included amortization of original issue discount for only six
full and one partial month, as the sale of the Notes was consummated on March
20, 1998, compared to a full nine months of amortization on the accreted
balance for the 1999 period.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Site rental revenue increased 148.6% to $32.0 million in 1998 from $12.9
million in 1997. This increase is attributable to the acquisition and
construction of 564 communications sites during the twelve month period ended
December 31, 1998. In addition, the increase is due to growth in per
communications site revenue as a result of expanded marketing efforts to
increase the number of customers per communications site, as well as regular,
contractual price escalations for existing customers.

Site operating expenses, excluding depreciation and amortization, increased
134.2% to $6.2 million in 1998 from $2.6 million in 1997. This increase is
consistent with the purchase and construction of communications sites as
discussed above.

General and administrative expenses increased to 13.0% of revenue in 1998
from 10.6% in 1997. This increase resulted from increases in staffing when we
became a public registrant and related

39
<PAGE>

increases in professional fees and travel costs, increased levels of
advertising and marketing expenditures in connection with attracting new
tenants to our communications sites and increases in rent and related costs.

Corporate development expenses increased 71.4% to $6.4 million in 1998 from
$3.7 million in 1997. The increase in corporate development expenses reflects
the higher costs associated with the expansion of our acquisition and
construction strategies. Corporate development expenses decreased as a
percentage of site rental revenue to 19.9% in 1998 from 28.9% in 1997 because
of the incremental increase in communications site rental revenue from the
comparative period in 1997 and our ability to use our personnel and
infrastructure more effectively as we grow.

State franchise, excise and minimum taxes, which represent taxes assessed in
connection with our operations in various state jurisdictions, increased to
$0.7 million in 1998 from $0.1 million in 1997. Such taxes are calculated using
various methods such as a portion of our property within a given state, our
capital structure or based upon a minimum tax in lieu of income taxes. The
increase in 1998 is primarily attributable to the significant expansion of our
geographic region primarily through acquisitions.

Interest expense, net of amortization of original issue discount, increased
77.6% to $12.3 million in 1998 from $6.9 million in 1997. The increase in
interest expense was attributable to increased borrowing associated with our
acquisitions and construction activity during the period.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Site rental revenue increased 166.0% to $12.9 million in 1997 from $4.8
million in 1996. This increase is primarily attributable to the acquisition and
construction of 156 communication towers during 1997 and, to a lesser extent,
expanded marketing efforts to increase the number of customers per tower as
well as regular, contractual price escalations for existing customers.

Site operating expenses, excluding depreciation and amortization, increased
131.9% to $2.6 million in 1997 from $1.1 million in 1996 due primarily to the
addition of 156 communication towers during the year. However, site operating
expenses, excluding depreciation and amortization, decreased as a percentage of
site rental revenue to 20.4% in 1997 from 23.4% in 1996, reflecting operating
efficiencies gained on existing communications sites as well as on new
communication towers acquired or constructed.

General and administrative expenses increased 49.2% to $1.4 million in 1997
from $0.9 million in 1996. General and administrative costs decreased as a
percentage of site rental revenue to 10.6% in 1997 from 18.9% in 1996 because
of lower overhead costs as a percentage of site rental revenue.

Corporate development expenses increased 162.0% to $3.7 million in 1997 from
$1.4 million in 1996. The increase in corporate development expenses reflects
the expansion of our acquisition and construction strategies. Corporate
development expenses remained relatively constant as a percentage of site
rental revenue at 28.9% in 1997 compared to 29.3% in 1996.

Interest expense increased 499.6% to $6.9 million in 1997 from $1.2 million
in 1996. The increase in interest expense was attributable to increased
borrowing levels associated with our acquisitions during the period.

Liquidity and Capital Resources

Our liquidity needs arise from our acquisition-related activities, debt
service obligations, working capital needs and capital expenditures. We have
historically funded our liquidity needs with proceeds

40
<PAGE>

from equity contributions and public equity offerings, bank borrowings, a debt
offering, and cash flow from operations. We had a working capital of $101.0
million and a working capital deficit of $9.3 million (inclusive of a $15.0
million bridge loan owed to ABRY II, which was repaid on February 24, 1999),
$12.8 million and $1.5 million as of September 30, 1999, December 31, 1998,
1997 and 1996, respectively. Our ratio of total debt to stockholders' equity
was 1.8 to 1.0 at September 30, 1999, 10.9 to 1.0 at December 31, 1998, 8.2 to
1.0 at December 31, 1997 and 1.4 to 1.0 as of December 31, 1996. On a pro forma
basis as of September 30, 1999, we would have had consolidated cash and cash
equivalents of $151.9 million, $653.9 million of consolidated long-term debt
outstanding, consolidated stockholders' equity of $599.0 million and a ratio of
total debt to stockholders' equity of 1.1 to 1.0.

Our credit facility provides us with a $235 million revolving line of
credit, with an uncommitted increase option which could increase the revolving
line of credit to $435 million, a $125 million term loan and a $110 million
term loan, for a total availability of up to $670 million, of which $520
million (including letter of credit) is currently committed. Under our
revolving line of credit, we may make borrowings and repayments until June 30,
2006. Under one term loan, advances must be repaid in full by June 30, 2006.
Under the other term loan, advances must be repaid in full by June 30, 2007.
Once repaid, amounts under the term loans may not be reborrowed. Advances under
the term loans may be used for refinancing certain existing indebtedness,
acquisitions, working capital, and other general corporate purposes. Advances
under our revolving line of credit are limited to acquisitions. Advances under
our credit facility have been used primarily to fund acquisitions and
construction of sites.

Beginning September 30, 2001, the availability under our revolving line of
credit and one term loan starts reducing by specified amounts on a quarterly
basis until June 30, 2006, when the availability under such credits will be
reduced to zero. Beginning June 30, 2001, the availability under the other term
loan starts reducing by specified amounts on a quarterly basis until June 30,
2007, when the term loan must be repaid in full. As of September 30, 1999,
after giving effect to the acquisitions referred to in this Prospectus on a pro
forma adjusted basis, there would have been $244.4 million available under our
credit facility, after giving effect to approximately $25.7 million of
outstanding letters of credit, which would have reduced availability under our
credit facility.

We also use seller financing to fund certain of our communications site
acquisitions. As of September 30, 1999, we had outstanding, in the aggregate
amount, $28.2 million of seller notes bearing interest at rates ranging from
8.5% to 13.0% per annum.

In March 1998, we completed the offering of the Notes. We received net
proceeds of approximately $192.8 million from that offering. The proceeds were
used to repay outstanding borrowings under our credit facility, to repay in
full and retire a $12.5 million bridge loan from ABRY II and accrued interest
thereon and a $20 million subordinated term loan and accrued interest thereon
and to pay a distribution preference to certain holders of our common stock.
The Notes were issued under the Indenture and will mature on March 15, 2008.
Cash interest is not payable on the Notes prior to March 15, 2003. Thereafter,
the Notes will require semi-annual cash interest payments of $16.25 million.

On February 19, 1999, we completed the IPO where we sold 20,000,000 shares
of our common stock and on March 19, 1999, the over-allotment options were
exercised and an additional 2,026,000 shares were sold. The initial price per
share was $14, resulting in net proceeds of approximately $290 million before
deducting the costs of our IPO.

On July 27, 1999, we completed the Secondary Offering where we sold
11,000,000 shares of our common stock (including 2,350,000 shares sold by
certain of our stockholders) at a price per share of $25.00, resulting in net
proceeds to us of approximately $206.5 million before deducting the costs of
the Secondary Offering.

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<PAGE>

Capital investments, including acquisitions, for the nine months ended
September 30, 1999 were $477 million, compared to $350.3 million in the
comparable 1998 period. We estimate that we spent approximately $80.0 million
on capital investments during the period from October 1, 1999 through December
31, 1999, including various individually immaterial acquisitions in our current
targeted acquisitions pipeline, construction and upgrading of additional
towers. Depending on availability of additional capital, we expect that we may
make substantial capital investments for acquisitions, construction and
upgrading of additional towers in 2000.

We estimate capital investments in 2000 to be approximately $165 million.

We believe that the proceeds from this offering, availability under our
credit facility, cash flow from operations and existing cash balances will be
sufficient to meet working capital requirements for existing properties and to
fund our current probable acquisitions. To the extent that we pursue additional
acquisitions, construction activity and other capital expenditures requiring
funding in excess of that then available under our credit facility, we will be
required to obtain additional financing. To the extent that we are unable to
finance future capital expenditures, we may not be able to achieve our current
business strategy.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to certain market risks inherent in our financial
instruments. These instruments arise from transactions entered into in the
normal course of business and, in some cases, relate to our acquisitions of
related businesses. We are subject to interest rate risk on our credit facility
and any future financing requirements. Our fixed rate debt consists primarily
of outstanding balances on the Notes and notes payable to former tower owners
and our variable rate debt relates to borrowings under our credit facility. See
"--Liquidity and Capital Resources."

The following table presents the future principal payment obligations and
weighted-average interest rates associated with our existing long-term debt
instruments assuming our actual level of long-term indebtedness of $329,651,613
under the Notes and our credit facility as of September 30, 1999:

<TABLE>
<CAPTION>
Expected Maturity Date
-----------------------------------------------------------------
1999 2000 2001 2002 2003 Thereafter
---- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Liabilities
Long-term Debt
Fixed Rate (10.00%).... -- -- -- -- -- $325,000,000
Variable Rate (Weighted
Average Interest Rate
of 8.58%)............. -- $10,845,000 $16,267,500 $21,690,000 $59,647,500 --
</TABLE>

Our primary market risk exposure relates to the following:

. the interest rate risk on long-term and short-term borrowings;

. our ability to refinance the Notes at maturity at market rates;

. the impact of interest rate movements on our ability to meet interest
expense requirements and exceed financial covenants; and

. the impact of interest rate movements on our ability to obtain
adequate financing to fund future acquisitions.

We manage interest rate risk on our outstanding long-term and short-term
debt through our use of fixed and variable rate debt. While we cannot predict
or manage our ability to refinance existing debt or the impact interest rate
movements will have on our existing debt, we continue to evaluate our financial
position on an ongoing basis.

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<PAGE>

Inflation

Because of the relatively low levels of inflation experienced in 1996, 1997,
1998 and 1999, inflation did not have a significant effect on our results in
such years.

Year 2000

Many computer systems in use today were designed and developed using two
digits, rather than four, to specify years. As a result, such systems will
recognize the year 2000 as "00" or 1900. This could cause many computer
applications to fail completely or to create erroneous results unless
corrective measures are taken.

We utilize management information systems and software technology that may
be affected by Year 2000 issues throughout our businesses. During 1996, we
began to implement plans to assess our systems to determine their ability to
meet our internal and external requirements. During 1998, we completed our
initial comprehensive testing of and modifications to our information systems
in response to that testing. We have developed questionnaires and contacted key
suppliers regarding their Year 2000 compliance to determine any impact on our
operations. In general, our suppliers and customers appear to have developed
plans to address Year 2000 issues. Due to the proximity of the date of this
Prospectus to January 1, 2000, we will continue to monitor and evaluate the
progress of our suppliers and customers on this matter.

Year 2000 issues are not expected to have a material impact on our current
information systems as a result of the steps already completed to try and make
our systems Year 2000 compliant. Based on the nature of our business, we
anticipate that we are not likely to experience material business interruption
due to the impact of Year 2000 compliance on our customers and vendors,
although if our customers and vendors experience Year 2000 problems, our
results of operations could be materially adversely affected. See "Risk
Factors--We cannot assure you that the impact of the Year 2000 date change on
computer systems will not have significant adverse effects on us."

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<PAGE>

BUSINESS

Company Overview

Industry Background

Communications sites are primary infrastructure components for wireless
communications services such as PCS, cellular, paging, SMR/ESMR, wireless data
transmission and radio and television broadcasting. Wireless communications
companies require specialized wireless transmission networks in

44
<PAGE>

order to provide service to their customers. Each of these networks is
configured to meet the requirements of a particular carrier to cover a
geographic area and include transmission equipment such as antenna,
transmitters and receivers placed at various locations throughout the covered
area. These locations, or communications sites, are critical to the operation
of wireless communications networks and consist of towers, rooftops and other
structures on which the equipment may be placed. Wireless communications
providers design their networks and select their communications sites in order
to optimize their transmission frequencies, taking into account the projected
geographic area the site will cover, the topography of the area and the
requirements of the technology being deployed.

The Wireless Communications Industry

The wireless communications industry is growing rapidly as:

. consumers become increasingly aware of the uses and benefits of wireless
communications services;

. the costs of wireless communications services decline; and

. new wireless communications technologies are developed.

Changes in federal regulatory laws have led to a significant increase in the
number of competitors in the wireless communications industry. This
competition, combined with an increasing reliance on wireless communications
services by consumers and businesses, has increased demand for higher quality
networks with wide reaching and reliable service. As new service carriers build
out their networks and existing carriers upgrade and expand their networks to
maintain their competitiveness, the demand for communications sites is expected
to increase dramatically.

The wireless communications industry is comprised of the following segments:

. Cellular. Currently each market in the United States has two licensed
cellular service operators. Cellular networks consist of numerous
geographic "cells" located every few miles that rebroadcast the cellular
frequency. Each cell includes a communications site consisting of
transmission equipment typically located on a wireless communications
tower. A cellular system may use analog or digital transmissions.
According to industry publications, as of December 31, 1998, there were
59.2 million cellular telephone subscribers in the United States,
estimated to have grown to 66.9 million subscribers at the end of 1999.

. PCS. PCS is an emerging wireless communications technology competing with
cellular that offers a digital signal that is clearer and offers greater
privacy than analog cellular systems. PCS companies are expected to be
substantial users of tower space primarily because:

--up to seven PCS licenses have been issued by the FCC in each market
(versus two licenses for cellular); and

--PCS technology requires more communications sites to cover the same
geographic area as cellular technology.

According to industry publications, there were approximately 7.2 million
PCS subscribers in the United States as of December 31, 1998 estimated to
have grown to 14.6 million subscribers at the end of 1999. Personal
Communications Industry Association members ("PCIA") estimate that as of
December 31, 1998 there were approximately 84,000 antenna sites (cellular
and PCS) in the United States. PCIA estimates that this number will
increase by approximately 66,000 additional antenna sites by 2005. While
some of these sites may use existing communications sites, it is expected
that a large number of new sites will be required for the deployment of
PCS networks. PrimeCo, Aerial and Sprint PCS are currently building out
PCS systems in the Southeast, and are placing their equipment on many of
our rental communications sites, rather than constructing their own
towers.

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<PAGE>

. Paging. Paging has also enjoyed dramatic growth over the last 10 years.
According to industry publications, there were 54.2 million pagers at the
end of 1998, representing a compound annual growth rate of 23% since
1993. This growth was spurred by declining prices, wider geographic reach
and increasing demand by consumers. While network construction by the
paging industry appears to be reaching a level of maturity, even at the
current subscriber levels it is expected that additional transmission
frequencies and, in-turn, additional transmitter equipment will be
required both to service existing paging customers and deploy new paging
technologies. Paging companies have historically relied heavily on rental
towers and are expected to continue to do so.

. SMR/ESMR. SMR companies provide two-way radio communications primarily
for commercial purposes. Two-way private business radio is used primarily
for businesses engaged in dispatching personnel or equipment to work
sites with users including construction and trucking companies, courier
services, hospitals and taxicabs. Each service provider holds an FCC
radio license that allows it to transmit over a particular frequency, and
most lease space on a local communications sites for transmission
purposes. As a result of advances in digital technology, some wireless
communications providers have begun to design or modify networks that
utilize SMR frequencies by deploying advanced digital technologies called
ESMR. ESMR increases the capacity of radio networks allowing more
efficient use of allocated frequencies. These efficiencies and
improvements allow ESMR to provide wireless telephone service that can
compete with cellular and PCS. As more commercial users are attracted to
enhanced SMR services, the demand for communications site space to
support this broader use should also increase. Nextel and Southern
Communications are currently the leading ESMR providers in the United
States.

. Government Agencies. Federal, state and local government agencies are
major users of wireless communications services and typically operate on
their own dedicated frequencies. These government agencies often find it
easier to lease rather than own communications site space. As new
technologies are developed in law enforcement, emergency and other
government services, various municipalities and government agencies are
becoming more significant users of wireless communications services.
Examples of government customers of communications site space include the
Federal Bureau of Investigation, U.S. Coast Guard, U.S. Secret Service
and various municipal agencies.

. Broadcast and Wireless Cable. Broadcasters transmit AM/FM radio signals
and VHF and UHF television signals in order to obtain the broadest and
clearest coverage available. A broadcast station's coverage is one of the
primary factors that influences the station's ability to attract
advertising revenue. Once a communications site location is chosen,
broadcasters rarely change sites because of complex regulatory
requirements, high switching costs and business disruption. Although the
U.S. broadcasting industry is generally mature in its demand for
transmission communications site capacity, a significant increase in
demand for communications site space may occur when digital transmissions
are used to deliver high definition television or digital multi-casting,
i.e., multiple "normal" definition television channels. Additionally,
wireless cable television is being developed and positioned as a
potential alternative to traditional cable television. Wireless cable
operates by receiving programming from a satellite which is then
retransmitted from an antenna on a communications site to an antenna on a
subscriber's residence. Several wireless cable companies are now in the
process of constructing their systems in our regions.

. Emerging Technologies and Availability of FCC Spectrum. Several new
entrants in the wireless communications industry are emerging as new
technology becomes available and as additional radio spectrum is
authorized for use by the FCC. While currently in its earliest stages,
wireless internet access may result in substantial increases in
utilization of available spectrum. We believe this is likely to result in
demand for additional site rental space. Wireless local loop systems
provide non-mobile telecommunications services to users by transmitting
voice and data over radio waves from the public switched network to the
customer location. This technology allows competition for non-mobile
telephone revenue (primarily commercial customers in office building

46
<PAGE>

environments) via the utilization of fixed wireless technology, which is
typically installed on building rooftops. Wireless data transmission is
also widely viewed as being in its infancy as several companies endeavor
to build national wireless data transmission networks including,
Nationwide Wireless Network (an affiliate of MTEL), RAM Mobile Data (10%
owned by BellSouth), and Racotek's SMR based data networks. Automatic
Vehicle Monitoring/Location and Monitoring Services such as "Lo Jack" also
require a minimum of three towers to provide their services in a
particular coverage area. In addition to their current uses, we believe
that monitoring/tracking service providers will use this technology to
provide fleet tracking, rail and container transportation monitoring,
security and access control, etc.

These recent developments in the wireless communications industry indicate
continuing opportunities for growth in the communications site rental industry.
Industry analysts project rapid and continued growth in the major wireless
communications industry segments and these projections all share a common
outcome: more equipment needs to be installed on a limited supply of
communications sites.

The Communications Site Rental Industry

A typical tower site consists of a fenced area containing a tower and an
equipment shelter that houses a variety of transmitting, receiving and
switching equipment. There are three types of towers:

. Guyed towers (which can reach heights of up to 2,000 feet) gain their
support from a series of cables attached at different levels on the tower
to anchor foundations in the ground;

. Lattice towers (which can reach heights of up to 1,000 feet) are self-
supporting structures usually tapered from the bottom up, with either
three or four legs; and

. Monopoles (which range in height from 50 to 200 feet) are self-supporting
tubular structures, which typically accommodate fewer tenants. Monopoles
are often used as single purpose towers or in locations where there are
space constraints or a need to address aesthetic concerns.

In addition to towers, wireless communications equipment can also be placed
on building rooftops. Rooftop sites are common in urban downtown areas where
tall buildings are available and multiple communications sites are required
because of the high volume of wireless traffic. At September 30, 1999, our
tower portfolio consisted of 1,764 guyed, 629 self supporting lattices, 106
monopoles and 601 rooftop sites.

The value of a rental communications site is principally determined by the
desirability of its location to customers and the amount of equipment that can
be located at a particular site. Multiple customers can share one tower through
"vertical separation" with each type of customer (i.e., cellular, PCS or
paging) located at a different height on the tower, while multiple customers
can share a single rooftop communications site through "horizontal separation"
of each type of customer. Additionally, although many existing towers and
rooftops were not originally built with the capacity to support multiple
customers, these communications sites can often be upgraded or reinforced to
support additional equipment.

Historically, wireless communications providers and broadcasters built,
owned and operated their own towers, which were typically constructed and
designed for their exclusive use. There have been a number of changes in the
communications industry, however, that have resulted in communications sites
becoming available for multiple uses and for acquisition by independent
communications site operators:

. As new technologies emerged, much of the transmission equipment located
on many communications sites became obsolete. For example, fiber optic
cables have largely replaced transmission traffic traditionally carried
by wireless microwave networks.

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<PAGE>

. Paging and SMR providers traditionally owned their own networks and
transmission towers. As these industries have consolidated over the past
10 years, the service providers consolidated their equipment, resulting
in unutilized or underutilized towers.

. Wireless communications providers today are generally more focused on
developing their subscriber base and less focused on building and owning
proprietary tower networks.

During the mid-to-late 1980s, a number of independent communications site
owners began to emerge, marking the beginning of the site rental industry.
These independent tower owners focused on owning and managing towers and
rooftops with multiple customers. We believe the majority of these operators
were individuals with a small number of local rental towers offering very
limited coverage areas. Since 1995, however, several larger independent
communications site owners have emerged as demand for wireless communications
services has continued to grow and as additional high frequency licenses were
awarded for new wireless communications services. Both trends led to a need for
networks with an extensive tower infrastructure. Rental communications sites in
many parts of the United States are still largely owned by many different
companies and individuals, even though the consolidation of communications site
ownership has begun to accelerate as larger independent owners acquire small
local owners. As the demand for communications sites has been increasing, there
has been a growing trend by municipalities to slow the proliferation of towers.
These trends have contributed to an increasing need for strategically located
towers that can accommodate multiple wireless communications providers.

Our Business and Growth Strategy

Our objective is to create value by rapidly growing cash flow. We believe we
can do this by aggressively marketing existing communications sites, as well as
new site inventory we obtain primarily through acquisition, and also by
selectively constructing new towers. In order to achieve this objective, we
have designed and implemented a three-tiered growth strategy that includes:

. increasing our revenue per tower by aggressively marketing available
space;

. continuing to acquire towers in key markets; and

. implementing a selective tower construction program designed to
complement our acquisition strategy.

Our Marketing and Development Strategy

We aggressively market rental space on our communications sites to leverage
our fixed costs over a broad base of customers. Our customers are generally
responsible for the installation of their own equipment and the utility costs
associated with operating their equipment. In addition, adding customers to an
existing communications site does not increase our monitoring, maintenance or
insurance costs. Accordingly, when customers are added to an existing site,
there is little expense and the additional revenue increases our cash flow
margins. The key elements of our marketing and development strategy include the
following:

. We Offer Strategically Located Clusters of Communications Sites. By
owning and assembling clusters of towers in high growth regions, we
believe that we are able to offer our customers the ability to rapidly
and efficiently fulfill their network expansion plans across a particular
market or region, which we believe provides us with a significant
competitive advantage. We also believe that the management and leasing
contracts we acquired in the Motorola Antenna Site Acquisition will
enhance our competitive position by allowing us to make more
communications sites, in more locations, available to our customers.

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<PAGE>

. We Target a Diversified Customer Base. The number of antennas a tower can
accommodate varies depending on the type of tower (guyed, self-supporting
lattice or self-supporting monopole), the height of the tower and the
nature of the services provided by such antennas. The substantial
majority of our towers are self-supporting lattice and guyed towers that
can support a large number of antennas and therefore enable us to market
our tower space to a diverse group of wireless communications providers.
In addition, rooftop sites allow us to further diversify our customer
base by providing us with an inventory of high altitude sites suitable
for newer LMDS and HDTV technologies.

. We Take Advantage of Our Strong Customer Relationships. We believe that
we have established a reputation among our customers as a highly
professional and reliable tower space provider. This reputation has been
achieved through ongoing investment in the development of relationships
at multiple levels of our customers' organizations. We believe that
important factors in generating interest in our towers are the customer's
awareness of the quality of a particular site, the ease of doing business
with one lessor, the location of our other towers and our ability to
acquire and construct new towers. We also use our strong customer
relationships to understand our customers' future construction plans to
guide our acquisition and new construction programs.

. We Use Expansion Information Obtained From Our Customers. We use
information obtained from our customers concerning their future expansion
plans to guide our acquisition and new construction programs.

. We Pre-Market Site Rental Space by Tracking FCC Filings. All FCC
licensees must file applications for site locations. As part of a
disciplined approach to acquisitions and new tower construction
activities, we track these filings, which enable us to pre-market
communications site rental space to existing and new wireless
communications providers.

Our Acquisition Strategy

We are focused on acquiring cluster of communications sites in high growth
markets. We target tall towers that have existing tenants with capacity for
more. We believe that growth through acquisition is an attractive strategy
because it allows us to:

. choose the location of our communications sites in key urban and other
desired locations;

. acquire communications sites with existing tenants and the capacity to
add multiple, additional tenants;

. not seek "build-to-suit" mandates from customers, which may result in
towers being built in unprofitable locations; and

. lower our risk as cash flow from communications sites with existing
tenants is predetermined and immediate.

Our acquisition strategy continues to focus on:

. rapidly acquiring communications sites in key markets as a means to
quickly gain critical mass which discourages other site consolidators
from entering our markets;

. completing follow-on acquisitions to enhance our coverage in selected
wireless communications markets; and

. entering new markets as a platform for future growth.

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In executing our acquisition strategy, we generally target strategically
located individual communications sites or small groups of communications
sites. Our focus on individual communications sites or small groups of
communications sites, however, does not preclude potential acquisitions of a
large number of sites in a single transaction, as is the case with the Southern
Towers Acquisition, the MobileMedia Acquisition, and the Motorola Antenna Site
Acquisition.

The key elements of our acquisition strategy are set forth below:

. We Target High Growth Wireless Communications Markets. We target
population centers and key transportation corridors in high growth
wireless communications markets. We have established a portfolio of
communications site clusters in high growth markets such as Atlanta,
Birmingham, Boston, Chicago, Houston, Los Angeles, New Orleans, New York,
Orlando and Tampa.

. We Target Tall Communications Site Structures. We seek to acquire tall
communications site structures that can accommodate a diversified
customer base that uses different types of wireless technologies with
different height requirements.

. We Focus on the Compatibility with Our Existing Communications Site
Network. We consider many factors when evaluating a potential
acquisition. In particular, we consider whether an acquisition will
enhance or create a cluster of communications sites in a given area,
thereby providing us with a stronger market position and competitive
advantage. We also consider whether the communications sites in a
particular acquisition meet previously identified customer demand for
enhanced coverage. In some instances, we may acquire, as part of a group
of communications sites being purchased, an individual communications
site that falls outside of normal acquisition parameters. Such
acquisitions occur only when we have determined that the overall
transaction is attractive.

. We Employ a Disciplined Valuation Process. We seek to acquire
communications sites that have existing cash flow and identified
potential for significant future cash flow growth from additional
tenants. Prior to acquiring a communications site we consider each of the
following factors:

--current population coverage of each communications site to be
acquired;

--nature and quality of the existing and potential customer base;

--coverage of current and future transportation corridors; and

--location and desirability of competing communications sites.

. We Commit Significant Personnel to Identifying, Negotiating and Closing
Communications Site Acquisitions. We conduct extensive due diligence
prior to consummating an acquisition, leveraging what we believe to be
our competitive advantage in terms of our experience in, and knowledge
of, the communications site rental industry. We utilize 15 full-time
communications site buyers who spend substantially all of their time in
the field identifying, evaluating and generating acquisition
opportunities using a standardized process that we have developed to
ensure that acquisitions are evaluated, documented and rapidly processed.
In order to execute and ensure the integrity and quality of this process,
we use outside independent professionals to verify certain accounting,
legal and engineering data. We believe that this approach has proven
effective in permitting us to more accurately predict the performance of
acquired assets and reduce the risks associated with our acquisitions.
However, acquisitions involve a number of potential risks, including the
potential loss of customers and unanticipated events or liabilities.
Because of such risks, there can be no assurance that we will be able to
successfully implement our acquisition strategy. See "Risk Factors--We
depend on acquisitions and the integration of those acquisitions into our
business."

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<PAGE>

We also make an assessment of potential cash flow growth and estimate
whether additional capital expenditures will be required to add capacity to
accommodate future growth. As a result of this strategy, we believe we have
among the highest cash flow margins with the lowest level of risk on invested
capital in the communications site business.

While we have completed an average of 6.2 acquisitions a month since our
formation in May 1995, consistent with our acquisition criteria and strategy,
we have completed the following major acquisitions since March 1998:

Southern Towers Acquisition. In March 1998, we acquired 201 towers from
Southern Communications for approximately $83.5 million plus fees and expenses
(the "Southern Towers Acquisition"). Southern Communications is a subsidiary of
Southern Company, one of the largest utility holding companies in the United
States and an ESMR provider. Substantially all of the towers, which are located
in Georgia, Alabama, Mississippi and Florida, were constructed within the past
five years.

In connection with the Southern Towers Acquisition, we entered into leases
with Southern Communications and its affiliates to provide communications site
space for their ESMR network. The leases provide for an initial 10-year term
with five optional renewal periods of five-years each exercisable at the
customer's option on the same terms as the original leases. In addition, we
have entered into an option agreement with Southern Communications where
Southern Communications could require us to use commercially reasonable efforts
to supply, acquire or construct an additional 80 towers for rental to Southern
Communications or its affiliates. We have initiated construction on
approximately half of the tower opportunities presented by Southern
Communications to date.

Prior to the Southern Towers Acquisition, these towers were principally for
the use of Southern Communications and its affiliates and had only a limited
number of third party tenants. The towers were generally constructed with
capacity that significantly exceeded Southern Communications' specific capacity
requirements. Accordingly, we believe that there is substantial potential for
additional revenue from these towers.

MobileMedia Acquisition. In September 1998, we acquired 166 towers from
MobileMedia and its affiliates for approximately $170 million (the "MobileMedia
Acquisition"). MobileMedia recently merged with Arch Communications, Inc.,
making it part of the second largest paging company in the United States.

In connection with this acquisition, we entered into a lease arrangement to
provide rental tower space to MobileMedia Communications, an affiliate of
MobileMedia. This lease provides for an initial 15 year noncancellable term
with one five-year renewal period, exercisable at the customer's option. Under
this lease, MobileMedia Communications secured communications site space for
its currently existing 683 transmitters on the acquired towers at a monthly
rental rate of $1,300 per transmitter or $888,000 per month. In connection with
the lease, we have also given MobileMedia Communications the right to a defined
pricing discount for additional communications site space on our tower
portfolio that MobileMedia Communications may lease in the future as it
continues to expand its paging network. We believe that the discount
arrangement is an incentive for MobileMedia Communications to use us as a
preferred provider of rental communications site space for new communications
site locations they may require in the future.

Motorola Antenna Site Acquisition. On August 31, 1999, we completed the
acquisition of approximately 1,858 communications sites, including 499 owned
sites, 526 managed sites, and 833 leased sites from Motorola for $255 million
in cash and stock, plus fees and expenses. The Motorola communications sites
that we acquired are largely clustered in urban areas throughout the United
States and Canada with over 50% of the owned sites overlapping with our
existing communications site portfolio. We believe that the Motorola Antenna
Site Acquisition greatly enhances our ability to offer our customers attractive
tower clusters in high growth markets and transportation corridors. In
addition, the Motorola managed sites that we acquired enable us to provide our
customers with urban rooftop sites such as the World Trade Center in New York,
Sears Tower in Chicago and the Allied Bank Building in

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<PAGE>

Houston. We believe these sites will allow us to further diversify our
customer base by providing us with an inventory of high altitude sites in
urban areas. For the nine months ended September 30, 1999, the Motorola
communications sites generated $55.7 million and $17.7 million in revenue and
EBITDA on a pro forma basis, respectively.

In order to minimize the risk that the ownership of or income from certain
of the rooftop communications sites acquired from Motorola (the "Transferred
Assets") might negatively affect the Company's qualification as a REIT,
effective September 29, 1999 the Transferred Assets were transferred to PT III
for $49,000,000. A subsidiary of the Company owns approximately 9% of PT III's
common stock. Certain officers of the Company own the remaining outstanding
common stock of PT III. In September 1999, a subsidiary of the Company
purchased $49,000,000 of convertible preferred stock issued by PT III. PT III
used the proceeds from the sale of such preferred stock to acquire the
Transferred Assets. In connection with such transfer, a subsidiary of the
Company and PT III entered into a services agreement whereby such subsidiary
agreed to service the assets of PT III and take certain related actions.
Subsequent to September 30, 1999, PT III exchanged a portion of the
convertible preferred stock it issued for a $39,200,000 convertible promissory
note issued by it to a subsidiary of the Company and amended certain terms of
the remaining convertible preferred stock. In addition, the aforementioned
services agreement was replaced with a cost and expense sharing and
reimbursement agreement. PT III has guaranteed our credit facility and has
pledged all of its assets to secure such guarantee.

The $39,200,000 convertible promissory note issued by PT III to a
subsidiary of the Company accrues interest at the rate of 13%, with interest
payable quarterly and all principal and accrued interest due and payable
within 30 days upon demand. The $9,800,000 of outstanding PT III convertible
preferred stock accrues dividends at 18% per annum, payable quarterly. The
terms of PT III's certificate of incorporation limit PT III's ability to
borrow money, pledge its assets, issue additional securities, make
distributions to its shareholders, purchase and sell assets, enter into
transactions with affiliates and take certain actions without seeking approval
from its common shareholders, and its ability to issue or redeem certain
securities, make certain distributions, enter into certain transactions with
its affiliates or to sell, lease or dispose of a majority of its assets
without the approval of the holders of the convertible preferred stock is
limited. Should all of the PT III convertible preferred stock and the
convertible promissory note be fully converted to common stock of PT III, a
subsidiary of the Company would own in excess of 99.9% of the outstanding
common stock of PT III.

Our New Tower Construction Strategy

An additional element of our growth strategy is to selectively construct
new towers in and around major markets where we already have a presence to
enhance our existing communications site clusters. Additionally, we also
intend to build new towers to expand the capacity of, or otherwise improve,
existing sites. In both cases, we adhere to our own requirements of return on
invested capital. Tower construction is only initiated after at least one
anchor tenant is identified and after we have determined, based on market
research, that the capital outlay for the construction project would exceed
our minimum required return on invested capital. We do not engage in
speculative construction projects or pursue large "build-to-suit" mandates.
During 1997, 1998 and 1999, we constructed 22, 47 and 23 towers, respectively.
As a result of opportunities generated through our marketing efforts, we
estimate that we will identify 80 to 100 new tower build opportunities this
year.

Our Strengths

We believe the following to be the strengths of our business:

. We Focus on the Communications Site Rental Business. We focus on the
rental of wireless communications site space as opposed to other lower
margin segments of the tower industry such as site acquisition services
or tower construction services. Furthermore, we do not engage in large
scale "build-to-suit" programs, preferring instead to focus on our core
acquisition strategy and complimentary selective construction strategy
designed to enhance coverage in targeted markets.

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<PAGE>

. We Target and Acquire Clusters of Communications Sites. We believe that
the location, size and capacity of our portfolio create significant
competitive advantages by enabling us to provide our diverse wireless
customers with clusters of sites in a given area.

. We are a Disciplined and Efficient Acquirer of Communications Site
Assets. At September 30, 1999 we had a network of approximately
3,100 communications sites (excluding 32 sites we acquired subsequent to
September 30, 1999, and 766 communications sites to be acquired pursuant
to probable acquisitions). Through our acquisition process we identify
communications sites that typically have existing cash flow and enhance
our existing portfolio. We have demonstrated the ability to identify and
successfully negotiate the purchase of what we believe to be value en-
hancing acquisitions.

. We Have the Ability to Successfully Increase Communications Site Rental
Revenue. Because of our aggressive marketing efforts to all major wire-
less communications providers we have signed a significant number of new
tenants over the last four years. Additional tenants increase the operat-
ing leverage of our communications site portfolio and generally increase
our overall cash flow margins. In order to measure the revenue growth
performance of acquired communications sites, we track the cumulative in-
crease in monthly revenue from communications sites acquired during dif-
ferent periods. We have generated a cumulative increase in total monthly
revenues for the 29 communications sites acquired in 1995 of approxi-
mately 133% through December 31, 1998. Taking into consideration new
leases for new tenants, we experienced same tower revenue growth of ap-
proximately 20% for the year ended December 31, 1998, on our base of com-
munications sites as of December 31, 1997.

In addition to the above strengths, we believe that our business will be
characterized by the following:

. Consolidation Opportunities in a Highly Fragmented Industry. The
communications site rental industry remains highly fragmented. Based on
an industry analyst's report, we estimate that there are over 20,000
communications sites in the U.S. that are not owned by the largest
independent operators and carriers. This creates a significant
opportunity for well capitalized companies, such as Pinnacle, to acquire
small, independent operators. Since commencing operations in May 1995,
through December 24, 1999, we have successfully completed 345
acquisitions through which we have acquired 3,032 communications sites.

. Attractive Growth Prospects. Our rental communications sites provide
basic infrastructure components for all major wireless communications
services, including cellular, PCS, paging, two-way radio, broadcast
television, microwave, wireless data transmission and SMR. As a result,
we believe that we can achieve a level of growth in our communications
site rental revenue that will in general reflect the growth of our
customer base over the next several years.

. Stable and Predictable Cash Flow. We believe that our business is
characterized by predictable and stable monthly, prepaid recurring
revenue. Additionally, because a significant proportion of our site
rental revenue is received from large companies such as Nextel, Arch
Communications and the Southern Company and because the communications
sites and services we provide are mission critical to our customers'
operations (service can be terminated by us if rent is not paid), we
generally experience low levels of bad debt expense.

. Barriers to Entry. Communications sites are subject to a variety of
federal and local regulations that make the construction of towers
difficult and increase the time and expense associated with their
construction, especially in highly populated or high transmission areas.
As a result, we believe that in areas where we have established a
critical mass of rental communications site inventory, construction of
alternative communications sites will be less attractive to others due to
the likelihood of lower returns on those towers. Other independent
communications site companies with large build-to-suit contracts, as well
as wireless communications providers seeking to construct their own
proprietary, limited use towers face continued opposition by
municipalities, which are reducing the opportunities for such new
communications sites to be built and supporting the trend toward co-
location on rental communications sites.

53
<PAGE>

Our Operations

Through our centralized management structure, we are designed to be an
efficient consolidator and operator of rental communications sites. This is
reflected in the methods and processes that we employ in managing our day-to-
day operations, including the rapid integration of acquisition, tower
construction and sales and marketing data into our proprietary management
information systems. This approach ensures that communications site management
is coordinated across our functional areas and that the information is
accurate, timely and easily available. We have invested heavily in our
information systems and believe that our investments in these areas will
accommodate significant additional growth. As we seek to expand our
communications site portfolio, we will continue to evaluate the need to
supplement our current workforce.

The key components of our operations include:

. effective integration of communications site assets into our existing
portfolio;

. ongoing monitoring of our portfolio of communications site assets; and

. customer sales and support.

Integration. The pace and level of activity that characterize our
acquisition, construction and marketing strategies create certain operational
challenges, including the efficient integration of the due diligence data and
other accounting, legal, regulatory, real estate, engineering and lease
information. In response to these challenges, over the past four years we
committed substantial resources to the development of our proprietary
management information systems to accommodate our overall acquisition,
construction and marketing strategies. As a result, we have developed the
capability to rapidly integrate new acquisitions and tower construction
activity and initiate sales and marketing efforts immediately upon closing or
completion.

Ongoing Monitoring. Our operations personnel perform routine, ongoing site
monitoring to ensure the maintenance of accurate data with regard to our
communications site inventory. Inventory management includes radio frequency
audits and regulatory compliance. We seek to maintain accurate information
with regard to customers' equipment that is installed on our communications
sites. We believe that this area is overlooked by many rental communications
site owners, resulting in erroneous information about the availability of
communications site space and payments owed by some existing customers. To
minimize errors, we conduct radio frequency audits and match each customer's
equipment (which includes base stations, frequencies, coaxial lines and
antennas) to those allowed under the customer's lease. Discrepancies are
identified and customers are informed of required modifications to the lease
terms in order to provide for additional rent. In addition, we use this
information to facilitate future capacity calculations and predict where and
when capital expenditures may be required to provide additional space to new
customers. Regulatory compliance and respect for the needs of the communities
in which we operate are essential to us as well as to our customers.
Operations personnel ensure that all sites are in compliance with all FAA and
FCC regulations and other local requirements. Regulatory data is integrated
into our management information systems and is provided to current and
potential customers as part of equipment installation support efforts.

Customer Sales and Support. Our customer sales support group is dedicated
to responding to the needs of current and potential customers. Support is
offered to customers in connection with assessing a selected tower's capacity,
determining the potential for radio frequency interference from new equipment
and providing required documentation as to ownership and other property
issues. This service function seeks to facilitate the customer's decision to
initiate installation on our communications sites and, we believe, has
enhanced our reputation as a full-service and responsive provider of rental
communications site space.

Our Customers and Customer Leases

As of September 30, 1999, we had over 15,231 separate communications site
leases. We have a diversified base of over 3,600 customers. MobileMedia
Communications and certain of its affiliates and

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<PAGE>

Southern Communications and certain of its affiliates accounted for
approximately 24% and 11% of our revenues, respectively, at December 31, 1998
on a run rate basis. As of November 15, 1999, Arch Communications, Nextel and
Motorola will represent 10.8%, 9.7% and 4.8%, respectively, of our revenue, on
a run rate basis. See "Risk Factors--The loss of any significant customer would
adversely affect our business" and "Risk Factors--There are certain risks
associated with the Motorola Antenna Site Acquisition."

We have a diverse mix of customers representing the various technologies and
segments of the wireless communications industry. As a result, we believe that
we are not dependent on any one segment of the wireless communications industry
for future revenue growth. Our diverse mix of customers will continue following
the consummation of the Motorola Antenna Site Acquisition, although we
anticipate the percentage of revenue we derive from paging customers will
decrease while the percentage of revenue we derive from SMR customers and
private business customers will increase. The following is a summary of our
approximate percentage of annualized run rate revenue by customer type (without
giving effect to any pending acquisitions) as of September 30, 1999:

<TABLE>
<CAPTION>
Percentage
Customer Type of Revenue
------------- ----------
<S> <C>
Land Mobile..................................................... 31.6%
Paging.......................................................... 31.1%
SMR............................................................. 15.4%
PCS............................................................. 9.1%
Cellular........................................................ 6.2%
Data............................................................ 3.3%
Broadcasting.................................................... 2.5%
Other........................................................... 0.8%
----
Total......................................................... 100%
====
</TABLE>

In connection with the Southern Towers Acquisition, we entered into leases
with Southern Communications providing that Southern Communications or one of
its affiliates would be a customer on each of the 201 towers acquired. Under
these leases, Southern Communications and its affiliates pay annual initial
aggregate rents of $5.5 million. The leases have initial terms of 10 years with
five optional renewal periods of five years, each of which is exercisable at
the customer's option on the same terms as the original leases. Southern
Communications has also indicated a desire to lease space on these towers in
addition to the space covered by the leases referred to above. We also entered
into a 10 year option agreement with Southern Communications whereby Southern
Communications may require us to use commercially reasonable efforts to supply,
acquire or construct an additional 80 sites within Alabama, Florida, Georgia or
Mississippi at locations designated by Southern Communications, for rental of
sites thereon by Southern Communications or its affiliates. Any of these
additional sites would be rented under the same terms as the original leases
for the 201 towers described above.

In connection with the MobileMedia Acquisition, we entered into a lease with
affiliates of MobileMedia leasing the "site spaces" at the towers that were
previously utilized by MobileMedia and its affiliates for the installation and
operation of transmitter systems. The lease has a 15-year term with one five-
year renewal term exercisable at the option of the customer. Rent under the
lease during the initial 15-year term is $1,300 per month per site space.
During the renewal term, rent will be determined based on then existing market
rental rates.

Upon consummation of the Motorola Antenna Site Acquisition, we assumed a
substantial number of tenant leases for the owned communications sites we
acquired from Motorola. Most of these leases are cancelable by either party on
short-term notice. See "Risk Factors--There are certain risks associated with
the Motorola Antenna Site Acquisition."

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<PAGE>

Our Properties

The following is a summary of our communications sites, as of December 24,
1999:

<TABLE>
<CAPTION>
Number of Number of
Communications Communications Sites Total Number of
State/Province Sites Owned Managed/Leased Communications Sites
- -------------- -------------- -------------------- --------------------
<S> <C> <C> <C>
Florida................. 251 117 368
Georgia................. 220 55 275
Texas................... 121 44 165
Alabama................. 125 34 159
Louisiana............... 134 13 147
California.............. 66 73 139
Illinois................ 19 107 126
North Carolina.......... 81 38 119
South Carolina.......... 74 40 114
Tennessee............... 81 31 112
Ontario, Canada......... 9 96 105
Ohio.................... 17 65 82
New York................ 37 43 80
Mississippi............. 66 13 79
Quebec, Canada.......... 25 50 75
Michigan................ 8 66 74
Virginia................ 43 17 60
Pennsylvania............ 12 42 54
Indiana................. 4 49 53
Wisconsin............... 11 37 48
Maryland................ 24 18 42
Alberta, Canada......... 22 16 38
Kentucky................ 18 20 38
Washington.............. 27 10 37
British Columbia,
Canada................. 6 29 35
New Jersey.............. 11 23 34
Missouri................ 7 23 30
Colorado................ 14 14 28
Oklahoma................ 9 17 26
Massachusetts........... 11 14 25
Arizona................. 9 16 25
Oregon.................. 10 12 22
Kansas.................. 7 15 22
Minnesota............... 3 19 22
Nebraska................ 6 14 20
Arkansas................ 11 8 19
Hawaii.................. 5 14 19
Iowa.................... 2 16 18
New Mexico.............. 13 3 16
Connecticut............. 8 8 16
North Dakota............ 5 11 16
South Dakota............ 5 10 15
New Hampshire........... 12 2 14
West Virginia........... 2 12 14
Maine................... 3 9 12
Nevada.................. 5 6 11
Nova Scotia, Canada..... 5 4 9
Delaware................ 4 5 9
Saskatchewan, Canada.... 4 5 9
Utah.................... 5 3 8
Alaska.................. 4 3 7
Wyoming................. 3 4 7
Montana................. 7 7
Rhode Island............ 5 1 6
Idaho................... 1 5 6
New Brunswick, Canada... 6 6
Washington, DC.......... 1 3 4
Manitoba, Canada........ 4 4
New Foundland, Canada... 1 1
Vermont................. 1 1
----- ----- -----
1,691 1,441 3,132
</TABLE>

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<PAGE>

Most of our sites are located on small parcels in urban areas. In rural
areas, a site typically consists of a three to five acre tract that supports
the tower, equipment shelter and guy wires that stabilize the tower. Less than
2,500 square feet are needed for a self-supporting tower that is typically used
in metropolitan areas. Our existing leases (other than those acquired in the
Motorola Antenna Site Acquisition) generally have 10 to 25 year terms, with
options for us to renew the leases for an average of approximately 10 years.
Most of the leases we acquired in the Motorola Antenna Site Acquisition are
cancelable by either party on short-term notice. Pursuant to our credit
facility, the senior lenders have liens on, among other things, tenant leases,
equipment, inventory and interests in certain of our real property on which
communications sites are located or which constitute a site.

A significant portion of the ground leases assumed in connection with the
MobileMedia Acquisition are subject to renewal within the next five years. In
the event that we are not satisfied with the renewal terms with respect to such
leases, we have the right to put back these properties to MobileMedia and
MobileMedia will still be obligated to pay its rent on these properties. We may
incur significant additional operating expenses in connection with the renewal
of such leases. There can be no assurance regarding the extent of such
increases or whether such increases could have an adverse effect on our results
of operations.

In order to meet our expanding office space needs, we have entered into a
lease for a new corporate headquarters in Sarasota, Florida. We anticipate
moving to the new headquarters in Spring 2000. The rentable area of the new
headquarters is approximately 33,000 square feet, and rental payments for the
new headquarters in 2000 will be approximately $50,000 per month. The new
headquarters lease has a ten year term, with two five year renewal options. We
lease our current corporate headquarters in Sarasota, Florida. The aggregate
square footage of office space under this lease is approximately 14,000, and we
paid rent of approximately $270,201 in 1999. The lease term for our current
headquarters ends on September 30, 2000, but we anticipate an earlier
termination due to our move into the new headquarters.

Our Competition

The markets in which we operate are highly competitive. We compete with
wireless communications providers who own and operate their own communications
site networks, site development companies that acquire space on existing
towers, rooftops and other sites, other independent communications site
companies and traditional local independent communications site operators.
Wireless communications providers who own and operate their own communications
site networks generally are larger and have greater financial resources than we
have. We believe that communications site location and capacity, price, quality
of service and density within a geographic market historically have been and
will continue to be the most significant competitive factors affecting tower
rental companies. We believe that competition for tower acquisitions will
increase and that additional competitors will enter the communications site
rental market, some of which may have greater financial and other resources
than we have. See "Risk Factors--We compete with companies that have greater
financial resources."

Regulatory Matters

Federal Regulations. Both the FCC and FAA promulgate regulations relative to
towers used for wireless communications. Such regulations primarily relate to
the siting, lighting and marking of towers. Most proposed antenna structures
that are higher than 200 feet above ground level or that may interfere with the
flight path of a nearby airport must be studied by the FAA and registered with
the FCC. Upon notification to the FAA of a potential new tower or a proposed
change in the height or location of certain existing towers, the FAA assigns a
number and conducts an aeronautical study. Upon the finding that a proposed
tower, new or modified, does not constitute a hazard to air navigation, the FAA
will require certain painting and lighting requirements to be met to maximize
the visibility of the tower. All

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<PAGE>

towers subject to the FAA notification process must be registered by the tower
owner with the FCC. At FCC registration, the FCC generally requires the
painting and lighting requirements of the FAA to be met. Tower owners may also
bear the responsibility of notifying the FAA of any tower lighting outage. The
FCC enforces the tower painting and lighting requirements. Failure to maintain
applicable requirements may lead to civil liabilities. Wireless communications
devices operating on towers and other communications sites are separately
regulated by the FCC and independently licensed based upon the particular
frequently used. See "Risk Factors--Our business requires compliance and
approval with regulatory authorities."

The Telecommunications Act of 1996 (the "Telecom Act") amended the
Communications Act of 1934 to prevent the FCC preemption of local and state
land use decisions and preserves the authority of state and local governments
over zoning and land use matters concerning the construction, modification and
placement of towers, except in limited circumstances. The Telecom Act prohibits
any action that would (i) discriminate between different wireless
communications providers or (ii) ban altogether the construction, modification
or placement of radio communications towers. However, the Telecom Act provides
a mechanism for judicial relief from zoning decisions that fail to comply with
certain provisions of the Telecom Act. For example, the Telecom Act prohibits
any state or local government action that would (i) discriminate between
different wireless communications providers or (ii) ban altogether the
construction, modification or placement of radio communication towers. The
Telecom Act requires the federal government to establish procedures to make
available on a fair, reasonable and nondiscriminatory basis property rights-of-
way and easements under federal control for the placement of new
telecommunications services. This may require that federal agencies and
departments work directly with licensees to make federal property available for
tower facilities.

All towers must comply with the National Environmental Policy Act of 1969 as
well as other federal environmental statutes. The FCC's environmental rules
place responsibility on each applicant to investigate any potential
environmental effect of tower placement and operations and to disclose any
significant effects on the environment in an environmental assessment prior to
constructing a tower. In the event the FCC determines the proposed tower would
have significant environmental impact based on the standards the FCC has
developed, the FCC would be required to prepare an environmental impact
statement. This process could significantly delay the licensing of a particular
tower site. See "Risk Factors--We are subject to environmental laws that impose
liability without regard to fault and environmental regulations that could
adversely affect our operations."

Local Regulations. Local regulations include city, county and other local
ordinances, zoning restrictions and restrictive covenants imposed by community
developers. These regulations vary greatly, but typically require tower owners
to obtain approval from local officials prior to tower construction.

Environmental Regulations. In addition to the FCC's environmental
regulations, we are subject to various other federal, state and local health,
safety and environmental laws and regulations. The current cost of complying
with those laws is not material to our financial condition or results of
operations.

Our Employees

As of September 30, 1999, we had approximately 153 full-time employees, of
which 97 work in our Sarasota, Florida headquarters office. None of our
employees are unionized, and we consider our relationship with our employees to
be good.

REIT Status

We have elected to be treated as a REIT. A REIT is generally not subject to
federal corporate income taxes on that portion of its ordinary income or
capital gain for a taxable year that is distributed to stockholders within such
year. To qualify and remain qualified as a REIT, we are required for each
taxable year to satisfy certain requirements pertaining to organization,
sources of income, distributions and asset

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<PAGE>

ownership, among others. Among the numerous requirements that must be satisfied
with respect to each taxable year in order to qualify and remain qualified as
such, a REIT generally must:

. distribute to stockholders 95% (90% beginning January 1, 2001) of its
taxable income computed without regard to net capital gains and
deductions for distributions to stockholders and 95% (90% beginning
January 1, 2001) of certain foreclosure income;

. maintain at least 75% of the value of its total assets in real estate
assets (generally real property and interests therein), cash, cash items
and government securities;

. derive at least 75% of its gross income from investments in real property
or mortgages on real property; and

. derive at least 95% of its gross income from real property investments
described above and from dividends, interest and gain from the sale or
disposition of stock and securities and certain other types of gross
income.

Income tax regulations provide that the term "real property" for the
foregoing requirements means land or improvements thereon, such as buildings or
other inherently permanent structures thereon, including items that are
structural components of such buildings or structures. The Service has ruled in
a revenue ruling that transmitting and receiving communications towers built
upon pilings or foundations similar to our towers as well as ancillary
buildings, heating and air conditioning systems and fencing constitute
inherently permanent structures and are therefore real estate assets. However,
depending on our assessment of the strategic importance of acquisitions which
may become available to us in our existing line of business or in complementary
non-real estate based communication site or services activities, we may
acquire, operate and derive income from assets businesses or entities that will
cause us to no longer qualify as a REIT. In this regard we transferred certain
of the assets we acquired from Motorola to PT III, in which we own
substantially all of the equity interest in the form of nonvoting, convertible
preferred stock, as well as approximately 9% of the voting common stock in
order to minimize the risk that the ownership of or income from such assets
might negatively affect our qualification as a REIT. The transferred assets
consisted of substantially all of the rooftop sites acquired from Motorola as
well as equipment related thereto. Due to the lack of relevant authority to
confirm that the rooftop sites and related equipment and the income therefrom
will constitute qualifying assets and income for REIT purposes, we transferred
such assets to PT III in order to reduce the risk that our direct ownership of
such assets, and our direct receipt of income produced by such assets, might
adversely impact our qualification as a REIT.

In addition to REIT qualification requirements applicable to the nature of
assets owned or income received, certain other REIT qualification requirements
limit the nature and amount of stock or securities of another corporation owned
by a REIT unless such other corporation is itself qualified as a REIT. PT III
intends to request a private letter ruling from the Service that the ownership
of, and receipt of income from, the rooftop sites and related equipment will be
considered qualifying assets and income for REIT purposes, and intends to elect
to be taxed as a REIT, although such election may not be made with respect to
the short period year of 1999. With respect to years for which PT III is itself
qualified and has elected to be taxed as a REIT, our ownership of stock and
securities therein will not be subject to the aforementioned limitations
applicable to the ownership of, and receipt of income from, securities in a
corporation which is not a REIT. If PT III receives a favorable ruling from the
Service with respect to the ownership of, and income received from, rooftop
sites, then we currently expect to acquire it in a merger or other similar
transaction. However, if PT III does not receive a favorable ruling from the
Service concerning the foregoing matters or is not itself qualified as a REIT
for some other reason, it may remain as a separate entity indefinitely, and the
aforementioned limitations, as well as limitations the

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<PAGE>

subject of recent legislative enactments will apply to our ownership of stock
and other securities of PT III. See "--Recent REIT Legislation." If those
limitations are exceeded, such could result in a loss of our qualification as a
REIT. While we have structured our stock ownership in PT III in a manner which
we believe satisfies the currently applicable percentage limitations
aforementioned, due to the lack of relevant authority addressing certain
matters involving the interpretation or application of such percentage
limitations, there is a risk that future judicial or administrative
interpretations addressing such matters with respect to the REIT provisions of
the Code could adversely impact our ability to satisfy those percentage
limitations, with possible retroactive effect. Furthermore, due to legislative
changes enacted on December 17, 1999, for our taxable year beginning January 1,
2001, unless PT III will then be separately qualified as a REIT, it will be
necessary for an election to be made that such corporation be a "taxable REIT
subsidiary" or for us to otherwise restructure or dispose of our investment in
PT III in order to maintain our REIT qualification. See "Federal Income Tax
Considerations--Recent REIT Legislation."

Legal Proceedings

We are from time to time involved in ordinary litigation incidental to the
conduct of our business. We believe that none of our pending litigation will
have a material adverse effect on our business, financial condition or results
of operations.

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MANAGEMENT AND DIRECTORS

Set forth below is certain information concerning our directors, executive
officers and key employees as of December 31, 1999. All of the directors have
served as our directors since our inception, except for Steven Day who has
served since February 1997 and G. Peter O'Brien who has served since October
1999.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Robert Wolsey........... 48 Director, President and Chief Executive Officer
Steven Day.............. 46 Director, Vice President, Secretary and Chief Financial Officer
Ben Gaboury............. 48 President of Pinnacle Towers Inc.
James Dell'Apa.......... 41 Manager of Acquisitions
David Zahn.............. 34 Vice President of Operations of Pinnacle Towers Inc.
Martin Alvarez.......... 45 Chief Information Officer
David Koehler........... 41 Vice President of Finance
Christine Shirley....... 37 Vice President and Treasurer
Andrew Banks............ 45 Director
Peni Garber............. 36 Director
Peggy Koenig............ 43 Director
G. Peter O'Brien........ 54 Director
Royce Yudkoff........... 44 Director
</TABLE>

Robert Wolsey is primarily responsible for the overall direction of our
acquisitions and operations and has substantial experience in consolidating
fragmented industries. From 1990 to 1994, Mr. Wolsey, as Chief Executive
Officer of Pittencrieff Communications, Inc. ("PCI"), a regional consolidator
of SMR operators, spearheaded the acquisition of 28 SMR businesses and related
assets (including over 100 towers) for a purchase price of over $30 million.
During Mr. Wolsey's tenure at PCI, revenue increased from $100,000 to over $28
million. In June 1993, PCI raised over $74 million in its initial public
offering of its common stock. At the time of Mr. Wolsey's departure from PCI in
April 1994, PCI had a market capitalization in excess of $200 million. From
1983 to 1989, Mr. Wolsey, as President of Pittencrieff PLC and a predecessor
company, negotiated and acquired over $30 million in oil and gas assets in 16
separate transactions. He has a Bachelor of Science (Honors) degree in Color
Physics from the University of Manchester.

Steven Day is primarily responsible for our financial, legal and
administrative affairs and for the integration of acquired properties. Mr. Day
was a partner in the accounting firm of Price Waterhouse LLP until joining us
in February 1997. Since 1986, he has been involved with high-growth companies,
principally in technology-based industries and, for the last several years,
worked with large venture capital and leveraged buyout firms in his role in the
Price Waterhouse Mergers and Acquisitions Group. Mr. Day has substantial
experience in dealing with companies that have filed initial public offerings.
Mr. Day earned a Masters of Business Administration at Loyola University of
Chicago and a Bachelor of Arts degree at the University of West Florida.

Ben Gaboury is primarily responsible for our sales and marketing operations.
Mr. Gaboury was employed for 17 years with Motorola in various sales and sales
management positions. Before joining us in October 1996, Mr. Gaboury was
responsible for planning the strategy that Motorola employed in connection with
the build out of its SMR network in New York and the New England area. He then
executed the plan to market SMR services as well as related rental towers. Mr.
Gaboury holds a Masters Degree from Jersey City State College and a Bachelors
Degree from Fairleigh Dickinson University.

James Dell'Apa is principally responsible for managing the initiation and
negotiation of acquisitions. Prior to November 1999, he was the Executive Vice
President and Chief Executive Officer of the Company, as well as a director of
the Company. Mr. Dell'Apa has brokered SMR, tower, paging, and two-way
businesses since 1991 and has had various levels of involvement with over 250
transactions with a

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<PAGE>

combined valuation of over $650 million. Before his acquisitions work, he was a
technical consultant in Washington, D.C. responsible for planning large-scale
military networks for government consulting firms, under the employment of Booz
Allen & Hamilton and Advanced Technology (later Planning Research Corporation
and Black and Decker). Mr. Dell'Apa also worked for Georgetown University's
International Law Institute developing long-term, intensive training programs
on Negotiation and Policy for Developing Telecommunications Infrastructures for
senior level government ministers. He has a law degree from American University
in Washington, D.C., a technical Masters degree in Telecommunications from the
University of Colorado (Boulder), and a liberal arts/bachelors degree from the
University of Northern Colorado.

David Zahn is primarily responsible for the ongoing maintenance of our
existing communications site inventory, new site construction, capacity
augmentation and new customer equipment integration. He joined us in September
1996. From 1987 to 1996, Mr. Zahn worked for 360(degrees) Communications
(formerly Sprint Cellular and Centel Cellular) where he held a variety of
positions including Project Manager, Transmission Engineer, Radio Frequency
Engineering Supervisor and Traffic Engineering Manager. His most recent
management position was Director of Engineering where he was responsible for a
$50 million capital program related to the construction of cellular
transmission towers and the associated communications network. Mr. Zahn earned
his degrees in Bachelor of Science in Electrical Engineering Technology and an
Associate in Applied Electronic Communications Engineering Technology from the
Milwaukee School of Engineering.

Martin Alvarez is primarily responsible for our Information Technology and
Services. Prior to joining us in June 1997, Mr. Alvarez was a Senior Manager in
the Management Consulting Services division of Price Waterhouse LLP. Mr.
Alvarez has been involved with the growth and management of Information
Technology and Services at Pinnacle since April of 1996. His experience
includes work for a variety of industries that include telecommunications,
entertainment, manufacturing and utilities, among other industries. Mr.
Alvarez's experience includes management of various technology areas, systems
development and implementation, systems programming, effectiveness evaluation
and strategic planning. Mr. Alvarez earned his degree in Bachelor of Science in
Engineering Science, Computer Science Option from the University of South
Florida.

David Koehler is primarily responsible for capital raising, investor
relations, budget and planning, and acquisition integration. Prior to joining
the company in September 1999, Mr. Koehler was the Chief Financial Officer of a
Virginia based commercial bank from 1994 to 1999. Before his commercial banking
experience, he was an investment banker specializing in mergers and acquisition
and asset-backed securitization. Additionally, he worked in Price Waterhouse's
and Ernst & Young's consulting practices. He graduated in 1984 with a Bachelor
of Science from Old Dominion University with majors in accounting, finance and
management information services. He is a Certified Public Accountant in
Virginia.

Christine Shirley is primarily responsible for administering the Company's
treasury, tax and risk management affairs. She joined the Company in October
1999 after providing consulting services to the Company since March 1999. Prior
to joining the Company, Mrs. Shirley was Chief Financial Officer of Spartan
Premier, Inc., a staffing firm, from 1998 to 1999. From 1991 to 1998, Mrs.
Shirley served in a variety of financial and operational management capacities
for RISCORP, Inc., a managed care workers' compensation company. Her background
includes audit, mergers and acquisitions, financial analysis, budgeting and
planning, and operations experience with a variety of industries. Mrs. Shirley
graduated summa cum laude with a Bachelor of Science in Business Administration
from Youngstown State University.

Andrew Banks is Chairman of ABRY Holdings Inc. Previously, Mr. Banks was
affiliated with Bain & Company, an international management consulting firm. At
Bain, where he was a partner from 1986 until 1988, he shared significant
responsibility for the firm's media practice. Mr. Banks is presently a director

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<PAGE>

(or the equivalent) of DirecTel. Mr. Banks is a graduate of Harvard Law School,
a Rhodes Scholar holding a Master's degree from Oxford University and a
graduate of the University of Florida.

Peni Garber is a principal and secretary of ABRY Partners, Inc. She joined
ABRY Partners, Inc. in 1990 from Price Waterhouse LLP where she served as
Senior Accountant in the Audit Division from 1985 to 1990. Ms. Garber is
presently a director (or the equivalent) of Nexstar Broadcasting Group LLC,
Network Music Holdings LLC, Quorum Broadcast Holdings Inc. and Audio
Communications Network, LLC. Ms. Garber graduated summa cum laude from Bryant
College.

Peggy Koenig is a partner in ABRY Partners, Inc. She joined ABRY Partners,
Inc. in 1993. From 1988 to 1992, Ms. Koenig was a Vice President, partner and
member of the Board of Directors of Sillerman Communications Management
Corporation, a merchant bank, which made investments principally in the radio
industry. Ms. Koenig was the Director of Finance from 1986 to 1988 for Magera
Management, an independent motion picture financing company. She is presently a
director (or the equivalent) of Connoisseur Communications Partners, L.P.,
Avalon Cable Holdings LLC and Network Music Holdings LLC. She received her MBA
from the Wharton Business School and received an undergraduate degree from
Cornell University.

G. Peter O'Brien recently retired as a managing director of Merrill Lynch,
Pierce, Fenner & Smith Incorporated after working in the Equity Capital Markets
area for 28 years. Mr. O'Brien is presently a member of the Board of Directors
of the Legg Mason Family of Mutual Funds and a member of the Colgate University
Board of Trustees. Mr. O'Brien is a graduate of the Columbia Business School
and a graduate from Colgate University.

Royce Yudkoff is President and Managing Partner of ABRY Partners, Inc.
Previously, Mr. Yudkoff was affiliated with Bain & Company, an international
management consulting firm. At Bain, where he was a partner from 1985 through
1988, he shared significant responsibility for the firm's media practice. Mr.
Yudkoff is presently a director (or the equivalent) of Quorum Broadcast
Holdings Inc., Nexstar Broadcasting Group, LLC, Audio Communications Network,
LLC and Metrocall. He graduated as a Baker Scholar from the Harvard Business
School and is an honors graduate of Dartmouth College.

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<PAGE>

SELLING STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of the Selling Stockholders, as of December 29, 1999, and as adjusted
as of that date to reflect the sale of Common Stock in this offering. Except as
otherwise noted, the address of each person listed in the table is c/o Pinnacle
Holdings Inc., 1549 Ringling Boulevard, Third Floor, Sarasota, Florida 34236.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC") and includes voting and investment
power with respect to shares. To our knowledge, except under applicable
community property laws or as otherwise indicated, the Selling Stockholders
named in the table have sole voting and sole investment control with respect to
all shares beneficially owned. The applicable percentage of ownership for each
Selling Stockholder is based on 41,094,520 million shares of Common Stock
outstanding as of December 29, 1999, and 46,394,520 shares outstanding after
this offering. Shares of Common Stock issuable upon exercise of options and
other rights beneficially owned are deemed outstanding for the purpose of
computing the percentage ownership of the person holding those options and
other rights, but are not deemed outstanding for computing the percentage
ownership of any other person.

<TABLE>
<CAPTION>
Before Offering After Offering
-------------------- Number of --------------------
Number of Shares Number of
Name of Beneficial Owner Shares Percentage Offered Shares Percentage
- ------------------------ --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
ABRY II(a)................. 6,081,983 14.8% 1,926,683 4,155,300 9.0%
Robert Wolsey(b)........... 559,400 1.4% 122,142 437,258 *
James M. Dell Apa(c)....... 378,196 * 75,588 302,608 *
Steven Day(d).............. 327,624 * 64,262 263,362 *
David Zahn(e).............. 56,482 * 10,271 46,211 *
Ben Gaboury(f)............. 56,482 * 10,271 46,211 *
Martin Alvarez(g).......... 40,812 * 10,271 30,541 *
Shirley Putnam............. 30,812 * 10,271 20,541 *
James Bokish............... 30,812 * 10,271 20,541 *
Slade Lindsay(h)........... 124,351 * 41,450 82,901 *
Royce Yudkoff(i)........... 6,082,533 14.8% 1,926,683 4,155,850 9.0%
Motorola, Inc.(j).......... 418,520 1.0% 418,520 -- --
</TABLE>
- --------
* Indicates less than 1 percent
(a) ABRY Holdings, Inc., the general partner of ABRY Capital, which is the
general partner of ABRY II, is wholly owned by Mr. Yudkoff.
(b) Includes 5,774 shares of Common Stock held by Pantera, Inc. and 288,682
shares of common stock held by Pantera Partnership Ltd. Includes 30,505 of
692,525 shares of Common Stock that are subject to stock options held by
Mr. Wolsey, as the option to acquire such 30,505 shares are exercisable
within sixty days.
(c) Includes 25,670 of 352,526 shares of Common Stock that are subject to stock
options held by Mr. Dell Apa, as the option to acquire such 25,670 shares
are exercisable within sixty days.
(d) Includes 67,863 shares of Common Stock held by Mr. Day's spouse, 7,143
shares of Common Stock held by South Creek, Inc. and 214,304 shares of
Common Stock held by South Creek Partnership Ltd. Includes 10,000 of
325,000 shares of Common Stock that are subject to stock options held by
Mr. Day, as the option to acquire such 10,000 shares are exercisable within
sixty days.
(e) Includes 25,670 of 30,812 shares of Common Stock that are subject to stock
options held by Mr. Zahn, as the option to acquire such 25,670 shares are
exercisable within sixty days.
(f) Includes 25,670 of 30,812 shares of Common Stock that are subject to stock
options held by Mr. Gaboury, as the option to acquire such 25,670 shares
are exercisable within sixty days.
(g) Includes 10,000 of 30,812 shares of Common Stock that are subject to stock
options held by Mr. Alvarez, as the option to acquire such 10,000 shares
are exercisable with in sixty days.
(h) Includes 132,820 shares of Common Stock held by Lindsay Investments, L.P.
and 550 shares of Common Stock held by Mr. Lindsay's spouse.
(i) Mr. Yudkoff is deemed the beneficial owner of the Common Stock held by ABRY
II. See note (a) above. Also includes 550 shares of Common Stock held by
Mr. Yudkoff's spouse.
(j) 1301 East Algonquin Road, Schaumburg, Illinois 60196-1065.

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<PAGE>

DESCRIPTION OF INDEBTEDNESS

Credit Facility

We have entered into the Fifth Amended and Restated Credit Agreement dated
as of September 17, 1999 (as amended by the First Amendment to Fifth Amended
and Restated Credit Agreement dated as of October 29, 1999 and the Second
Amendment to Fifth Amended and Restated Credit Agreement dated as of December
6, 1999) with Bank of America, N.A. (formerly known as NationsBank, N.A.) and
certain other lenders that provides one $235 million revolving line of credit
with an uncommitted increase option which could increase the revolving line of
credit to $435 million (the "Revolver"), a $125 million term loan ("Term Loan
A"), and a $110 million term loan ("Term Loan B"). The Revolver is subject to
reduction by the amount of a loan from Bank of America Canada to our Canadian
subsidiary in the amount of up to approximately US $11 million and a swingline
subfacility in the maximum amount of $5 million provided by Bank of America,
N.A. Under the Revolver, we may make borrowings and repayments until June 30,
2006. Under Term Loan A, advances must be repaid in full by June 30, 2006.
Under Term Loan B, advances must be repaid in full by June 30, 2007. Once
repaid, advances under Term Loan A and Term Loan B may not be re-drawn.
Advances under Term Loan A and Term Loan B may be used for refinancing certain
existing indebtedness, acquisitions, working capital, and other general
corporate purposes. Advances under the Revolver are limited to acquisitions.
Advances under our credit facility have been used primarily to fund
acquisitions and construction of towers.

Beginning September 30, 2001, the availability under the Revolver and Term
Loan A starts reducing by specified amounts on a quarterly basis until June 30,
2006 when the availability under such credits will be reduced to zero.
Beginning September 30, 2001, the availability under Term Loan B starts
reducing by specified amounts on a quarterly basis until June 30, 2007, when
Term Loan B must be repaid in full. Advances under the Revolver and Term Loan A
bear interest at a rate per annum, at the borrower's request, equal to the
agent bank's prime rate plus a margin of up to 1.5% or the 90-day London
Interbank Offered Rate plus a margin of up to 2.75%. Advances under Term Loan B
bear interest at a rate per annum, at the borrower's request, equal to the
agent bank's prime rate plus a margin of up to 1.75% or the 90-day London
Interbank Offered Rate plus a margin of up to 3.0%. Currently, all outstanding
advances under our credit facility bear interest at the maximum margins above
the applicable base rates. Those margins decrease under certain circumstances
if our leverage, as calculated in our credit facility, decreases. Aggregate
outstanding borrowings under our credit facility were $444.3 million at
September 30, 1999. In addition, at September 30, 1999 we had an additional
$25.7 million of letters of credit issued under our credit facility.

As of September 30, 1999, after giving effect to the acquisitions referenced
in this Prospectus on a pro forma as adjusted basis, there would have been
$244.4 million available under our credit facility, after giving effect to
approximately $25.7 million of outstanding letters of credit, which reduce
availability under our credit facility.

Our credit facility is secured by a lien on substantially all of our assets
and a pledge of substantially all of the capital stock of our subsidiaries and
we have guaranteed the obligations of the borrower, Pinnacle Towers Inc., under
our credit facility. The credit facility contains customary covenants such as
limitations on our ability to incur indebtedness, to incur liens or
encumbrances on assets, to make certain investments, to make distributions to
stockholders, or to prepay subordinated debt. A "change of control" (as defined
in our credit facility) constitutes an event of default under our credit
facility and includes the acquisition by a person or group of related persons
(other than Mr. Wolsey and his affiliates) of control of in excess of 30% of
the ordinary voting power of our common stock. A further event of default
includes any one of the President, Chief Executive Officer, Chief Operating
Officer or Chief Financial Officer of the borrower failing to perform the
primary roles and functions of such positions on our behalf (whether pursuant
to death, extended disability, termination, resignation or otherwise) and we do
not replace such executive officer with a new employee reasonably acceptable to
51% of the lending banks within 60 days of such failure. In addition, we may
not permit the Leverage Ratio (as defined in our credit facility) to exceed
certain amounts.

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<PAGE>

10% Senior Discount Notes

The Notes were initially issued in aggregate principal amount at maturity of
$325 million, are senior unsecured obligations and will mature on March 15,
2008. Cash interest is not payable on the Notes prior to March 15, 2003.
Thereafter, interest on the Notes will be payable at a rate of 10% per annum,
semi-annually in arrears on March 15 and September 15 of each year, commencing
September 15, 2003.

The Notes are redeemable at our option, in whole or in part, at any time on
or after March 15, 2003 at a redemption price equal to 105% of the principal
amount thereof during the twelve-month period beginning March 15, 2003,
103.333% of the principal amount thereof during the twelve-month period
beginning March 15, 2004, 101.667% of the principal amount thereof during the
twelve-month period beginning March 15, 2005 and 100% of the principal amount
thereof on or after March 15, 2006, together with accrued and unpaid interest
to the redemption date. In addition, we have the option to redeem up to 35% of
the original principal amount of the Notes at any time on or before March 15,
2001, at a redemption price equal to 110% of the Accreted Value (as defined in
the Indenture) thereof with the net proceeds of one or more Public Equity
Offerings (as defined in the Indenture); provided, however, that at least 65%
of the original principal amount remains outstanding and that such redemption
occurs within 60 days following the closing any such Public Equity Offering.

In the event of a Change of Control (as defined in the Indenture) we will be
required to make an offer to purchase all outstanding notes at a price equal to
101% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages (as defined in the Indenture) to the date of purchase. If
such offer to purchase is to be consummated prior to March 15, 2003, the
purchase price will be equal to 101% of the Accreted Value thereof on the date
of purchase plus accrued and unpaid Liquidated Damages thereon to the date of
purchase. A "Change of Control" under the Indenture includes the acquisition by
a person or group of related persons (other than ABRY II, Mr. Wolsey and their
affiliates) of control of a majority of the ordinary voting power of our common
stock.

The Indenture contains covenants for the benefit of the holders of the Notes
that, among other things, and subject to certain exceptions, restrict our
ability and our Restricted Subsidiaries (as defined in the Indenture) to:

. incur additional indebtedness;

. guarantee payment of debt;

. pay dividends and make distributions;

. restrict dividend or other payments of Restricted Subsidiaries;

. create liens;

. issue stock of subsidiaries;

. enter into transactions with affiliates;

. merge or consolidate Pinnacle; and

. transfer and sell assets.

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

General

We are authorized to issue 100,000,000 shares of Common Stock, $.001 par
value per share, and 5,000,000 shares of undesignated preferred stock, $.001
par value per share.

Common Stock

Each holder of our Common Stock will be entitled to one vote for each share
held. Stockholders will not have the right to cumulate their votes in elections
of directors. Accordingly, holders of a majority of the issued and outstanding
common stock will have the right to elect all of our directors and otherwise
control us, subject to any voting rights of the then outstanding preferred
stock, if any.

Holders of our Common Stock will be entitled to dividends on a pro rata
basis upon declaration of dividends by our board of directors. Dividends will
be payable only out of unreserved and unrestricted surplus that is legally
available for the payment of dividends. Any determination to declare or pay
dividends in the future will be at the discretion of our board of directors and
will depend on our results of operations, financial condition, contractual or
legal restrictions and other factors deemed relevant by our board of directors.
In order to maintain our REIT status, however, we are required to distribute to
stockholders 95% of our taxable income. See "Certain Federal Income Tax
Considerations--Requirements for REIT Qualification" and "Risk Factors--If we
fail to qualify as a REIT, we will be subject to a variety of taxes and
penalties." Our credit facility and the Indenture currently prohibit us from
paying any dividends other than those required to be paid to maintain our REIT
Status. See "Dividend Policy."

Upon our liquidation, holders of our Common Stock will be entitled to a pro
rata distribution of our assets, after payment of all amounts owed to our
creditors, and subject to any preferential amount payable to holders of our
preferred stock, if any.

Preferred Stock

Our certificate of incorporation permits our board of directors to issue
shares of preferred stock in one or more series, and to fix the relative
rights, preferences, and limitations of each series. Among such rights,
preferences and limitations are divided rights and rates, provisions for
redemption, rights upon liquidation, conversion privileges and voting powers.
Any issuance of preferred stock with a dividend preference over our Common
Stock could adversely affect the dividend rights of holders of our Common
Stock. Our board of directors currently has no plans to issue any shares of
preferred stock. We would expect to redeem any such preferred stock that may be
issued with proceeds from this offering.

Certain Provisions of Our Certificate of Incorporation and Bylaws

Restrictions on Transfer. Because we wish to retain our status as a REIT, no
holder of Common Stock may transfer any such share or interest, if as a result,
either (1) beneficial ownership of all shares of Common Stock would be held by
less than 100 persons, if beneficial ownership of all shares of Common Stock
was held by 100 or more persons prior to such transfer or (2) a violation of
the percentage ownership limit would occur.

Under the percentage ownership limit test, no share of any series of our
capital stock may be sold or otherwise transferred to any individual if such
transfer would result in the ownership of such individual in combination with
four or fewer individuals of more than 50% of the aggregate value of all shares
of all classes of our capital stock.

Such restrictions may delay or make more difficult acquisitions or changes
of control of the Company.

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<PAGE>

Preferred Stock and Additional Common Stock. Under our certificate of
incorporation, our board of directors has the authority to provide by board
resolution for the issuance of shares of one or more series of preferred stock.
Our board of directors is authorized to fix by resolution the terms and
conditions of each such series.

We believe that the availability of additional preferred stock, issuable in
series, and additional shares of Common Stock could facilitate certain
financings and acquisitions and provide a means for meeting other corporate
needs that might arise. The authorized shares of preferred stock, as well as
authorized but unissued shares of Common Stock, will be available for issuance
without further action by our stockholders, unless stockholder action is
required by applicable law or by the rules of any stock exchange on which any
series of our stock may then be listed.

These provisions give our board of directors the power to approve the
issuance of a series of preferred stock, or additional shares of Common Stock,
that could, depending on its terms, either impede or facilitate the completion
of a merger, tender offer or other takeover attempt.

Limitation of Liability and Indemnification. As permitted by the Delaware
General Corporation Law, our certificate of incorporation provides that our
directors shall not be personally liable to us or our stockholders for monetary
damages for breach of fiduciary duty as a director. In addition, our Bylaws
provide that we shall, to the fullest extent authorized under Delaware law,
indemnify all directors and officers and all persons serving at our request as
director, trustee, officer, employee, or agent of another corporation or of a
partnership, trust or other enterprise. Insofar as indemnification for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"), may be permitted to directors, officers or persons
controlling us pursuant to the foregoing provisions, we have been informed
that, in the opinion of the SEC, such indemnification is against public policy
as expressed in the Securities Act and, therefore, is unenforceable.

Certain Provisions of Delaware Law

Section 203 of the Delaware General Corporation Law prohibits a publicly
held Delaware corporation, such as us, from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date that the person became an interested stockholder unless, subject to
exceptions, the business combination or the transaction in which the person
became an interested stockholder is approved in a prescribed manner. Generally,
a "business combination" includes a merger, asset or stock sale, or other
transaction resulting in a financial benefit to the stockholder. Generally an
"interested stockholder" is a person who, together with affiliates and
associates owns, or within three years prior, did own, 15% or more of the
corporation's voting stock. These provisions may have the affect of delaying,
defining, or preventing a change in central of Pinnacle without further action
by the stockholders.

The provisions of Section 203 may encourage companies interested in
acquiring Pinnacle to negotiate in advance with our board of directors to avoid
obtaining our stockholders approval if a majority of the directors then in
office approve either the business combination or the transaction that results
in the stockholder becoming an interested stockholder. Such provisions also may
have the effect of preventing changes in management. It is possible that such
provisions could make it more difficult to accomplish transactions that
stockholders may otherwise deem to be in their best interests.

Transfer Agent and Registrar

The transfer agent and registrar for our Common Stock is First Union.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have outstanding 47,194,520 shares
of Common Stock, including the 6,100,000 shares sold by us in this offering
(assuming the full exercise of the Underwriters' over-allotment option). A
total of 42,226,000 of the shares will be freely tradable without restriction
under the Securities Act unless purchased by our "affiliates," which generally
includes officers, directors or 10% stockholders as that term is defined in
Rule 144 under the Securities Act.

The remaining 5,368,520 shares outstanding are "restricted securities"
within the meaning of Rule 144 under the Securities Act. These shares may be
sold in the public market only if registered or if they qualify for an
exemption from registration under Rules 144, 144(k) or 701 promulgated under
the Securities Act, which are summarized below. Sales of the restricted shares
in the public market, or the availability of these shares for sale, could
adversely affect the market price of our Common Stock.

Certain of our stockholders have entered into lock-up agreements generally
providing that they will not offer, sell, contract to sell or grant any option
to purchase or otherwise dispose of our Common Stock or any securities
exercisable for or convertible into our Common Stock owned by them for a period
of 90 days after the effective date of the registration statement filed in
connection with this offering without the prior written consent of Deutsche
Bank Securities Inc. This consent may be given at any time without public
notice. We have entered into a similar lock-up agreement with Deutsche Bank
Securities Inc. As a result of these contractual restrictions, notwithstanding
possible earlier eligibility for sale under the provisions of Rules 144, 144(k)
and 701, shares subject to lock-up agreements will not be salable until these
agreements expire or are waived by the designated underwriters' representative.
Taking into account the lock-up agreements, and assuming Deutsche Bank
Securities Inc. does not release stockholders from these agreements, the
following shares will be eligible for sale in the public market at the
following times (assuming the full exercise of the Underwriters' over-allotment
option):

. Beginning 90 days after the effective date of this offering,
approximately 4,877,959 shares will be eligible for sale pursuant to
Rules 144, 144(k) and 701.

. An additional 90,561 shares will become eligible for sale pursuant to
Rule 144 at various times after the date of this Prospectus. Shares
eligible to be sold by affiliates pursuant to Rule 144 are subject to
volume restrictions as described below.

In general, under Rule 144 as currently in effect, and beginning after the
expiration of the lock-up agreements, which is 90 days after the effective date
of the registration statement, a person, or persons whose shares are
aggregated, who has beneficially owned restricted securities for at least one
year would be entitled to sell within any three-month period a number of shares
that does not exceed the greater of: (1) one percent of the number of shares of
common stock then outstanding, which will equal approximately 471,945 shares
immediately after this offering; or (2) the average weekly trading volume of
the common stock during the four calendar weeks preceding the sale. Sales under
Rule 144 are also subject to manner of sale provisions and notice requirements
and to the availability of current public information about Pinnacle. Under
Rule 144(k), a person who is not deemed to have been an affiliate of Pinnacle
at any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, is entitled to
sell these shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.

The Company has agreed to indemnify the underwriters in connection with this
offering against some specified types of liabilities, including liabilities
under the Securities Act.

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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain material federal income tax
considerations that may be relevant to you. The summary does not address all
aspects of taxation that may be relevant to particular stockholders in light of
their personal investment or tax circumstances, or to certain types of
stockholders (including insurance companies, tax-exempt organizations (except
as described herein), financial institutions or broker-dealers, foreign
corporations and persons who are not citizens or residents of the United States
(except as described herein), persons who hold Common Stock through
partnerships or other pass-through entities, and persons who acquired their
common stock pursuant to the exercise of an employee stock option or otherwise
as compensation) subject to special treatment under the federal income tax
laws. This summary discusses only common stock which is held as a capital asset
within Section 1221 of the Code. The summary is based on current provisions of
the Code, existing, temporary, and currently proposed Treasury Regulations
promulgated under the Code, the legislative history of the Code, existing
administrative rulings and practices of the Service, and judicial decisions. No
assurance can be given that future legislative, judicial, or administrative
actions or decisions, which may be retroactive in effect, will not affect the
accuracy of statements in the summary as applicable to transactions entered
into or contemplated prior to the effective date of such changes.

THE FOLLOWING DISCUSSION IS FOR GENERAL INFORMATION ONLY. YOU ARE ADVISED TO
CONSULT YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU OF
THE ACQUISITION, OWNERSHIP AND SALE OF THE COMMON STOCK AND OF OUR ELECTION TO
BE TAXED AS A REIT, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX
CONSEQUENCES OF SUCH ACQUISITION, OWNERSHIP, SALE, AND ELECTION, AND OF
POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

Taxation of Pinnacle

We currently have in effect an election to be taxed as a REIT under Sections
856 through 860 of the Code. We believe that since our inception we have been
organized and operated in such a manner as to qualify for taxation as a REIT
under the Code. Our continued qualification as a REIT will depend upon our
qualification as a REIT in prior years. We cannot assure you that we will
qualify or remain qualified as a REIT. Depending on our assessment of the
strategic importance of acquisitions which may become available to us in our
existing line of business or in complementary non-real estate based
communication site or services activities, we may acquire, operate and derive
income from assets, businesses or entities that will cause us to no longer
qualify as a REIT. In this regard we have previously committed to acquire
certain assets before determining whether such assets, and the income derived
from such assets, would permit us to continue to meet the qualification
requirements for a REIT, but subsequently structured our ownership of the
assets so acquired in a manner which we believe satisfied then applicable and
currently applicable REIT qualification requirements. However, REIT
qualification requirements which will become applicable on January 1, 2001 by
virtue of legislation enacted on December 17, 1999 may require that we
restructure or dispose of our investment in order to continue to satisfy such
then applicable REIT qualification requirements (see "Recent REIT
Legislation").

In the opinion of Holland & Knight LLP, we have been organized and operated
in conformity with the requirements for qualification as a REIT under the Code
through December 31, 1998. It must be emphasized that such opinion of counsel
as to REIT qualification is based on certain customary assumptions and factual
representations regarding, among other things, the ownership of our stock, the
nature of our assets, the conduct of our business, the sources of our revenues,
the amounts distributed by it to stockholders and other matters germane to the
requirements for qualification as a REIT. In addition, Holland & Knight LLP
will not review our compliance with these requirements on an ongoing basis, and
there can be no assurance that we, the sources of our income, the composition
of our assets, the level of our dividends or the diversity of our share
ownership for any given year will satisfy the

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requirements for qualification and taxation as a REIT. As stated above, we may
undertake acquisitions which may have the effect of terminating our REIT
qualification. Prospective investors also should be aware that an opinion of
counsel is not binding on the Service or any court, but merely represents
counsel's best judgment with respect to the probable outcome on the merits
based on counsel's review and analysis of existing law, regulations and
interpretations, which include no controlling precedent. In certain instances,
due to the lack of relevant precedent, counsel's opinion is based on
administrative policies and practices of the Service as indicated in existing
private letter rulings (which rulings are not binding on the Service) or
authority considered by counsel to be analogous. There can be no assurance that
a position contrary to the opinion of counsel will not be taken by the Service,
or that any court considering the issues would not hold contrary to such
opinion.

The sections of the Code relating to qualification and operation as a REIT
are highly technical and complex, and only limited judicial or administrative
interpretations are available. The following discussion sets forth the material
aspects of the Code sections that govern the federal income tax treatment of a
REIT and its stockholders. The discussion is qualified in its entirety by the
applicable Code provisions, Treasury Regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all of which are subject
to change prospectively or retroactively.

If we qualify for taxation as a REIT, we generally will not be subject to
federal corporate income tax on our net income that is distributed currently to
its stockholders. That treatment substantially eliminates the "double taxation"
(i.e., taxation at both the corporate and stockholder levels) that generally
results from investment in a corporation. However, we will be subject to
federal income tax in the following circumstances. First, we will be taxed at
regular corporate rates on any undistributed REIT taxable income, including
undistributed net capital gains. Second, under certain circumstances, we may be
subject to the "alternative minimum tax" on undistributed items of tax
preference, if any. Third, if we have (i) net income from the sale or other
disposition of "foreclosure property" that is held primarily for sale to
customers in the ordinary course of business or (ii) other nonqualifying income
from foreclosure property, it will be subject to tax at the highest corporate
rate on such income. Fourth, if we have net income from prohibited transactions
(which are, in general, certain sales or other dispositions of property (other
than foreclosure property) held primarily for sale to customers in the ordinary
course of business), such income will be subject to a 100% tax. Fifth, if we
should fail to satisfy the 75% gross income test or the 95% gross income test
(as discussed below), and nonetheless have maintained our qualification as a
REIT because certain other requirements have been met, we will be subject to
tax in an amount equal to (a) the gross income attributable to the greater of
the amount by which it fails the 75% or 95% gross income test, multiplied by
(b) a fraction intended to reflect its profitability. Sixth, if we should fail
to distribute during each calendar year at least the sum of (i) 95% (90%
beginning January 1, 2001) of our REIT ordinary income for such year, (ii) 95%
(90% beginning January 1, 2001) of our REIT capital gain net income for such
year, and (iii) any undistributed taxable income from prior periods, we would
be subject to a 4% excise tax on the excess of such required distribution over
the amounts actually distributed. If we elect to retain and pay income tax on
our net long-term capital gain in a taxable year, any retained amounts would be
treated as having been distributed for purposes of the 4% excise tax. See "--
Requirements for REIT Qualification--Distribution Requirements." Seventh, if we
acquire any asset from a C corporation (i.e., a corporation generally subject
to full corporate-level tax) in a transaction in which the basis of the asset
in our hands is determined by reference to the basis of the asset (or any other
asset) in the hands of the C corporation and we recognize gain on the
disposition of such asset during the 10-year period beginning on the date on
which such asset was acquired by us, then to the extent of such asset's "built-
in-gain" (i.e., the excess of the fair market value of such asset at the time
of acquisition by us over the adjusted basis in such asset at such time), such
gain will be subject to tax at the highest regular corporate rate applicable
(as to be provided in Treasury Regulations that have not yet been promulgated).
The results described above with respect to the recognition of "built-in-gain"
assume that we have made an election pursuant to IRS Notice 88-19 as to such
acquisitions and will do so as to any future such acquisition.

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Requirements for REIT Qualification

The Code defines a REIT as a corporation, trust, or association (i) that is
managed by one or more trustees or directors; (ii) the beneficial ownership of
which is evidenced by transferable shares, or by transferable certificates of
beneficial interest; (iii) that would be taxable as a domestic corporation, but
for sections 856 through 860 of the Code; (iv) that is neither a financial
institution nor an insurance company subject to certain provisions of the Code;
(v) the beneficial ownership of which is held by 100 or more persons; (vi) not
more than 50% in value of the outstanding shares of which is owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of each taxable year (the "5/50 Rule");
(vii) that makes an election to be a REIT (or has made such election for a
previous taxable year) and satisfies all relevant filing and other
administrative requirements established by the Service that must be met in
order to elect and maintain REIT status; (viii) that uses a calendar year for
federal income tax purposes and complies with the recordkeeping requirements of
the Code and Treasury Regulations promulgated thereunder; and (ix) that meets
certain other tests, described below, regarding the nature of its income and
assets. The Code provides that conditions (i) to (iv), inclusive, must be met
during the entire taxable year and that condition (v) must be met during at
least 335 days of a taxable year of 12 months, or during a proportionate part
of a taxable year of less than 12 months. For purposes of determining stock
ownership under the 5/50 Rule, a supplemental unemployment compensation
benefits plan, a private foundation, or a portion of a trust permanently set
aside or used exclusively for charitable purposes generally is considered an
individual. A trust that is a qualified trust under Code section 401(a),
however, generally is not considered an individual and beneficiaries of such
trust are treated as holding shares of a REIT in proportion to their actuarial
interests in such trust for purposes of the 5/50 Rule.

Our certificate of incorporation contains restrictions regarding transfer of
its shares that are intended to assist us in continuing to satisfy the share
ownership requirements described in clauses (v) and (vi) above. Such transfer
restrictions are described in "Description of Capital Stock--Certain Provisions
of Our Certificate of Incorporation and Bylaws."

In connection with the Offering, our executive officers, directors and the
Selling Stockholders will own in the aggregate approximately 11.4% of our stock
outstanding after the completion of the Offering have entered into agreements
(the "Lock-Up Agreements") not to, without prior written consent of the
Underwriters, sell, offer, contract to sell, pledge, grant any option to
purchase, or otherwise transfer or dispose of any such shares for a period of
90 days after the date of this Prospectus. See "Underwriting." These same
persons were subject to the same restriction in connection with the IPO and the
Secondary Offering (the "Prior Lock-Up Agreements"). In addition, since the
time we were organized, an agreement among us and our major stockholders has
imposed certain restrictions on the transfers of shares our stock under certain
circumstances (the "Stockholders Agreement"). Furthermore, in connection with
the issuance of certain classes of its stock, we have imposed certain
restrictions on the transferability of such shares (the "Restrictive Legends").
As described above, one of the REIT qualification requirements is that the
shares of a REIT be transferable. The opinion of Holland & Knight LLP is based
in part on the conclusion that none of the Lock-Up Agreements, the Prior Lock-
Up Agreements, the Stockholders Agreement or the Restrictive Legends will
render the shares of stock restricted thereby to be deemed other than
transferable for purposes of such REIT qualification requirement. Investors
should be aware that there is no relevant authority involving transfer
restrictions similar to those contained in any of the Lock-Up Agreements, the
Prior Lock-Up Agreements, the Stockholders Agreement or the Restrictive Legends
or that discuss whether such restrictions may violate such transferability
requirement. Therefore, the opinion of Holland & Knight LLP with respect to the
transferability requirement is based upon the plain language of the REIT
provisions of the Code and authorities addressing transferability in situations
that are considered to be analogous, certain of which authorities have been
rendered obsolete for unrelated reasons by more recent administrative
pronouncements. Opinions of counsel are not binding upon the Service or the
courts, and there can be no assurance that the Service will not assert

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successfully a contrary position. If any of the Lock-Up Agreements, Prior Lock-
Up Agreements, Stockholders Agreement or the Restrictive Legends is deemed to
be a transfer restriction contrary to the transferability requirement for REIT
qualification, we may not currently qualify as a REIT or may, in connection
with the completion of the Offering, may lose our REIT status and possibly
incur other adverse tax consequences. See "Risk Factors--If we fail to qualify
as a REIT, we will be subject to a variety of taxes and penalties."

We currently have wholly-owned corporate subsidiaries (the "Corporate
Subsidiaries"). We may have additional corporate subsidiaries in the future.
Code section 856(i) provides that a corporation that is a "qualified REIT
subsidiary" will not be treated as a separate corporation, and all assets,
liabilities, and items of income, deduction, and credit of a "qualified REIT
subsidiary" will be treated as assets, liabilities, and items of income,
deduction, and credit of the REIT. For taxable years beginning after December
31, 1997, a "qualified REIT subsidiary" is a corporation all of the capital
stock of which is owned by the REIT. However, for taxable years beginning
before January 1, 1998, a "qualified REIT subsidiary" was a corporation, all of
the capital stock of which was owned by the REIT at all times during the period
such corporation was in existence. Legislative history provided, however, that
an existing corporation acquired by a REIT would be deemed to satisfy this
requirement if a Section 338 election was made by the corporation. Thus, in
applying the requirements described herein, any of our "qualified REIT
subsidiaries" will be ignored, and all assets, liabilities, and items of
income, deduction, and credit of such subsidiaries will be treated as our
assets, liabilities, and items of income, deduction, and credit. We believe our
current Corporate Subsidiaries are "qualified REIT subsidiaries" and will
continue to be "qualified REIT subsidiaries", such that no Corporate Subsidiary
will be subject to federal corporate income taxation (although it may be
subject to state and local taxation).

In addition, in order to become qualified and remain qualified as a REIT, as
of the close of each taxable year, a REIT must not have any accumulated
"earnings and profits" attributable to a non-REIT year, including for this
purpose any such accumulated "earnings and profits" carried over or deemed
carried over to it from a C corporation. We believe that neither we have, nor
any acquisition by us of a C corporation has resulted in our having, any such
accumulated "earnings and profits." However, an adjustment of our earnings and
profits for a prior year, resulting from an audit adjustment of the Service or
otherwise, could cause us to fail to satisfy such requirement effective for the
year of such adjustment and subsequent years.

In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to be entitled to the gross
income of the partnership attributable to such share. In addition, the assets
and gross income of the partnership will retain the same character in the hands
of the REIT for purposes of section 856 of the Code, including satisfying the
gross income and asset tests described below.

Income Tests

In order for us to qualify and to maintain our qualification as a REIT, two
requirements relating to gross income must be satisfied annually. First, at
least 75% of its gross income (excluding gross income from prohibited
transactions) for each taxable year must consist of defined types of income
derived directly or indirectly from investments relating to real property or
mortgages on real property (including "rents from real property" and, in
certain circumstances, interest) or from certain types of temporary
investments. Second, at least 95% of its gross income (excluding gross income
from prohibited transactions) for each taxable year must be derived from such
real property or temporary investments, and from dividends, other types of
interest, and gain from the sale or disposition of stock or securities, or from
any combination of the foregoing. The specific application of these tests to us
is discussed below.

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The rent received by us from our tenants ("Rent") will qualify as "rents
from real property" in satisfying the gross income requirements for a REIT
described above only if several conditions are met. First, the amount of Rent
must not be based, in whole or in part, on the income or profits of any person.
However, an amount received or accrued generally will not be excluded from the
term "rents from real property" solely by reason of being based on a fixed
percentage or percentages of receipts or sales. Second, the Code provides that
rents received from a tenant of us will not qualify as "rents from real
property" in satisfying the gross income tests if we or a direct or indirect
owner of 10% or more of us directly or constructively owns 10% or more of the
ownership interests in such tenant (a "Related Party Tenant"). Third, if rent
attributable to personal property, leased in connection with a lease of real
property, is greater than 15% of the total rent received under the lease, then
the portion of rent attributable to such personal property will not qualify as
"rents from real property." Finally, for the Rent to qualify as "rents from
real property," we generally must not operate or manage our properties or
furnish or render services to the tenants of such properties, other than
through an "independent contractor" who is adequately compensated and from whom
we derive no revenue. The "independent contractor" requirement, however, does
not apply to the extent the services provided by us are "usually or customarily
rendered" in connection with the rental of space for occupancy only and are not
otherwise considered "rendered to the occupant." In addition, beginning with
our 1998 taxable year, we may render a de minimis amount of "noncustomary"
services to the tenants of a property other than through an independent
contractor as long as the amount we receive with respect to such services does
not exceed 1% of its total receipts from the property. For that purpose, the
amount attributable to such services will be at least equal to 150% of our
direct cost of providing the services.

We do not charge Rent for any portion of any property that is based, in
whole or in part, on the sales, receipts, income or profits of any person. In
addition, we have not received and do not anticipate receiving any Rent from a
Related Party Tenant. Also, the Rent attributable to personal property leased
in connection with any lease (a "Lease") of real property by us does not exceed
15% of the total Rent received under the Lease. Finally, subject to the 1% de
minimis exception, we provide no noncustomary services to its tenants, other
than through an independent contractor.

If any portion of the Rent does not qualify as "rents from real property"
because the Rent attributable to personal property leased in connection with
any Lease of real property exceeds 15% of the total Rent received under the
Lease for a taxable year, the portion of the Rent that is attributable to
personal property will not be qualifying income for purposes of either the 75%
or 95% gross income test. Thus, if the Rent attributable to personal property,
plus any other income received by us during a taxable year that is not
qualifying income for purposes of the 95% gross income test, exceeds 5% of its
gross income during such year, it is likely we would lose our REIT status. If,
however, any portion of the Rent received under a Lease does not qualify as
"rents from real property" because either (i) the Rent is considered based on
the income or profits of any person or (ii) the tenant is a Related Party
Tenant, none of the Rent received by us under such Lease would qualify as
"rents from real property." In that case, if the Rent received by us under such
Lease, plus any other income received by it during the taxable year that is not
qualifying income for purposes of the 95% gross income test, exceeds 5% of its
gross income for such year, we likely would lose our REIT status. Finally,
subject to the 1% de minimis exception, if any portion of the Rent does not
qualify as "rents from real property" because we furnish noncustomary services
with respect to a property other than through a qualifying independent
contractor, none of the Rent received by us with respect to such property would
qualify as "rents from real property." In that case, if the Rent received by us
with respect to such property, plus any other income received by it during the
taxable year that is not qualifying income for purposes of the 95% gross income
test, exceeds 5% of its gross income for such year, we would lose our REIT
status.

In addition to the Rent, certain of our tenants may be required to pay
additional charges, such as late fees. To the extent that such charges
represent either (i) reimbursements of amounts a tenant is obligated to pay to
third parties or (ii) penalties for nonpayment or late payment of such amounts,
such

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charges should qualify as "rents from real property." To the extent that
additional charges represent interest that is accrued on the late payment of
the Rent or such additional charges, such should be treated as interest that
qualifies for the 95% gross income test, but not the 75% gross income test.

From time to time, we have entered into hedging transactions with respect to
one or more of our assets or liabilities, and we may continue to enter into
such hedging transactions. Such transactions include or may include interest
rate swap contracts, interest rate cap or floor contracts, futures or forward
contracts, and options. To the extent that we have entered or do enter into an
interest rate swap or cap contract, option, futures contract, forward rate
agreement, or similar financial instrument to reduce the interest rate risk
with respect to any indebtedness incurred or to be incurred to acquire or carry
real estate assets, any periodic income or gain from the disposition of such
contract will be qualifying income for purposes of the 95% gross income test,
but not the 75% gross income test. To the extent that we hedge with other types
of financial instruments or in other situations, it is not entirely clear how
the income from those transactions will be treated for purposes of the income
tests that apply to REITs under the Code. We have structured, and for so long
as we otherwise remain qualified as a REIT we intend to structure in the
future, any hedging transactions in a manner that will not jeopardize our
status as a REIT.

If we fail to satisfy one or both of the 75% or 95% gross income tests for
any taxable year, we nevertheless may qualify as a REIT for such year if we are
entitled to relief under certain provisions of the Code. Those relief
provisions generally will be available if our failure to meet such tests is due
to reasonable cause and not due to willful neglect, we attach a schedule of the
sources of our income to our return, and any incorrect information on the
schedule was not due to fraud with intent to evade tax. It is not possible,
however, to state whether in all circumstances we would be entitled to the
benefit of those relief provisions. As discussed above in "Certain Federal
Income Tax Considerations--Taxation of Pinnacle," even if those relief
provisions apply, we will be subject to a tax in an amount equal to (a) the
gross income attributable to the greater of the amount by which the 75% and 95%
gross income tests are failed, multiplied by (b) a fraction intended to reflect
profitability.

Asset Tests

At the close of each quarter of each taxable year, we also must satisfy two
tests relating to the nature of our assets. First, at least 75% of the value of
our total assets must be represented by cash or cash items (including certain
receivables), government securities, "real estate assets," or, in cases where
it raises new capital through stock or long-term (at least five-year) debt
offerings, temporary investments in stock or debt instruments during the one-
year period following its receipt of such capital. The term "real estate
assets" includes interests in real property, interests in mortgages on real
property to the extent the principal balance of a mortgage does not exceed the
value of the associated real property, and shares of other REITs. For purposes
of the 75% asset test, the term "interest in real property" includes an
interest in land and improvements thereon, such as buildings or other
inherently permanent structures (including items that are structural components
of such buildings or structures), a leasehold of real property, and an option
to acquire real property (or a leasehold of real property). The Service has
ruled in a revenue ruling that transmitting and receiving communications towers
built upon pilings or foundations similar to those which we presently own as
well as ancillary buildings, heating and air conditioning systems and fencing
constitute inherently permanent structures and are therefore real estate
assets. Based on this ruling and limited authorities bearing on the issue, our
communication sites will be regarded as real estate assets for this purpose,
and the opinion of Holland & Knight LLP is based in part on its conclusion that
such authorities are so applicable.

Second, of the investments not included in the 75% asset class, the value of
any one issuer's securities owned by us may not exceed 5% of the value of our
total assets and we may not own more than 10% of any one issuer's outstanding
voting securities (except for an interest in any qualified REIT

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subsidiary). However, securities owned by us in another REIT are not subject to
the limitations of the preceding sentence. We currently own a significant
investment in non-voting convertible preferred stock, 9% of the voting common
stock, and convertible debt issued by PT III which ownes and derives income
from rooftop communication sites and related equipment. We currently intend to
submit a private letter ruling request to the Service that the ownership of,
and income received from, such rooftop sites and related equipment will be
considered qualifying income and assets for REIT purposes. If a favorable
ruling is received, we currently intend to cause a REIT election to be made for
PT III, but such election may not be made for the initial short taxable year of
PT III ending in 1999. Under law currently in effect, except for securities of
another REIT, a REIT may not own securities constituting more than ten percent
of the voting securities of another corporation or more than five percent of
the value of the assets of the REIT, and the aggregate value of all securities
owned by a REIT must not exceed 25% of the value of the total assets of the
REIT. We believe that our ownership of securities in PT III satisfies the
percentage limitations currently applicable to investments by a REIT in the
securities of corporations which are neither a REIT nor a qualified REIT
subsidiary. However, recent legislative changes enacted on December 17, 1999
and effective on January 1, 2001 will require that, in order to maintain our
REIT status, either we and PT III jointly elect to treat PT III as a "taxable
REIT subsidiary" or we otherwise restructure or dispose of our investment in PT
III if PT III has not made or does not then have in effect a REIT election for
2001 and subsequent taxable years or is unable to satisfy or continue to
satisfy the REIT qualification requirements. In addition, due to a lack of
relevant authority addressing certain matters involving the interpretation or
application of the percentage limitations currently applicable, there is a risk
that future judicial or administrative interpretations addressing such matters
with respect to the REIT provisions of the Code could negatively impact our
compliance with those percentage limitations, with possible retroactive effect.
If as a result of the ownership structure of PT III we fail to satisfy such
currently applicable percentage limitations as of the end of any calendar
quarter in 1999 or any subsequent year, then our REIT election will terminate
for such year, and unless such failure is established to the satisfaction of
the Service as due to reasonable cause and not wilful neglect, we will be
unable to be treated as a REIT for the four succeeding taxable years as well.

If we should fail to satisfy the asset tests at the end of a calendar
quarter, such a failure would not cause us to lose our REIT status if (i) we
satisfied the asset tests at the close of the preceding calendar quarter and
(ii) the discrepancy between the value of our assets and the asset test
requirements was not wholly or partly caused by an acquisition of non-
qualifying assets and arose from changes in the market values of our assets. If
the condition described in clause (ii) of the preceding sentence were not
satisfied, we still could avoid disqualification by eliminating any discrepancy
within 30 days after the close of the calendar quarter in which it arose.

Distribution Requirements

In order to qualify as a REIT, we are required to distribute with respect to
each taxable year dividends (other than capital gain dividends or retained
capital gains) to our stockholders in an aggregate amount at least equal to (i)
the sum of (A) 95% (90% beginning January 1, 2001) of our "REIT taxable income"
(computed without regard to the dividends paid deduction and its net capital
gain) and (B) 95% (90% beginning January 1, 2001) of the net income (after
tax), if any, from foreclosure property, minus (ii) the sum of certain items of
noncash income. Such distributions must be paid in the taxable year to which
they relate, or in the following taxable year if declared before we timely file
our federal income tax return for such year and if paid on or before the first
regular dividend payment date after such declaration. To the extent that we do
not distribute all of our net capital gain or distribute at least 95%, (90%
beginning January 1, 2001) but less than 100%, of our "REIT taxable income," as
adjusted, we will be subject to tax thereon at capital gains and regular
ordinary corporate tax rates, as the case may be. Furthermore, if we should
fail to distribute during each calendar year at least the sum of (i) 95% (90%
beginning January 1, 2001) of our REIT ordinary income for such year, (ii) 95%
(90% beginning January 1, 2001) of our REIT capital gain income for such year,
and (iii) any undistributed taxable income from prior periods, we would be
subject to a 4% nondeductible excise tax on the excess of such

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required distribution over the amounts actually distributed. To the extent that
we elect to retain and pay income tax on its long-term capital gain in a
taxable year, as described in "--Taxation of Taxable U.S. Stockholders," such
retained amount will be treated as having been distributed for purposes of the
4% excise tax. To the extent that we are required to include items in "REIT
taxable income" in advance of the receipt of cash payments associated with such
income or are required to expend cash for the repayment of debt or in any other
manner for which no current deduction is available in computing our "REIT
taxable income," we may find it necessary to arrange for short-term (or
possibly long-term) borrowings, raise funds through the issuance of additional
shares of Common or Preferred Stock, or pay dividends in the form of taxable
share dividends in order to meet the 95% distribution requirement necessary to
maintain our REIT qualification.

Under certain circumstances, we may be able to rectify a failure to meet the
distribution requirements for a year by paying "deficiency dividends" to our
stockholders in a later year, which may be included in its deduction for
dividends paid for the earlier year. Although we may be able to avoid being
taxed on amounts distributed as deficiency dividends, we will be required to
pay to the Service interest based upon the amount of any deduction taken for
deficiency dividends.

Recordkeeping Requirements

Pursuant to applicable Treasury Regulations, in order to qualify as a REIT,
we must maintain certain records. In addition, to avoid a monetary penalty
(with respect to our 1998 and later tax years) or disqualification as a REIT
(with respect to our 1997 and earlier tax years), we must have requested and
continue to request on an annual basis certain information from its
stockholders designed to disclose the actual ownership of its outstanding
shares.

Failure to Qualify

If we fail to qualify for taxation as a REIT in any taxable year, and the
relief provisions do not apply, we will be subject to tax (including any
applicable alternative minimum tax) on our taxable income at regular corporate
rates. Distributions to stockholders in any year in which we fail to qualify
will not be deductible nor will they be required to be made. In such event, to
the extent of current and accumulated earnings and profits, all distributions
to stockholders will be taxable as ordinary income and, subject to certain
limitations of the Code, corporate distributees may be eligible for the
dividends received deduction. Unless entitled to relief under specific
statutory provisions, we also will be disqualified from taxation as a REIT for
the four taxable years following the year during which it ceased to qualify as
a REIT. It is not possible to predict whether in all circumstances we would be
entitled to such statutory relief. Unless we are qualified as a REIT at the
time of any sale of our assets, we will not be able to distribute such proceeds
as a dividend distribution to stockholders as a means of avoiding the
incurrence of a corporate level income tax at regular corporate rates on any
gain on sale of such assets. Although a corporate level tax consequence could
be avoided if substantially all our assets were disposed of in a transaction
qualifying for non-recognition under the reorganization provisions of the Code,
due to the carryover basis provisions of the Code applicable to such
transactions and the acquiror's inability to "step-up" the basis of those
assets to then current value for federal income tax purposes, the consideration
offered in such a transaction to us or our stockholders would likely be less in
a purchase of assets described in the preceding sentence.

Recent REIT Legislation

Legislation was enacted on December 17, 1999 which made several changes to
the REIT provisions of the Code effective January 1, 2001. A REIT's ownership
of securities in another corporation which is not a REIT will be subject to the
additional percentage limitation that the value of such securities must not
represent more than 10% of the value of the assets of such corporation. Certain
debt securities issued by individuals, a partnership in which the REIT owns at
least a 20% profits interest, and nonconvertible "straight debt" securities are
exempt from such additional percentage limitation.

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Also effective on January 1, 2001, a REIT may own up to 100% of the
securities of a "taxable REIT subsidiary" subject only to the limitations that
the securities of all "taxable REIT subsidiaries" owned by the REIT do not
represent an amount in excess of 20% of the value of the assets of the REIT,
and the value of all securities of the REIT (including the securities of all
taxable REIT subsidiaries) do not represent an amount in excess of 25% of the
value of the assets of the REIT. A "taxable REIT subsidiary" is any corporation
(other than another REIT and corporations involved in certain lodging,
healthcare and franchising activities) owned by a REIT with respect to which
the REIT and such corporation jointly elect that such corporation shall be
treated as a taxable REIT subsidiary. The amount of deductions for interest
made by a "taxable REIT subsidiary" to its affiliated REIT will be subject to
limitations. In addition, a 100% excise tax will be imposed to the extent that
certain transactions between a "taxable REIT subsidiary" and its affiliated
REIT or the tenants of that REIT are not conducted on an arm's length basis.
Under the new legislation, a corporation may convert tax-free into a "taxable
REIT subsidiary" prior to January 1, 2004.

Such legislation also changes the income distribution requirement so that
beginning in 2001, a REIT will be required to distribute 90% (rather than 95%)
of its "REIT taxable income" and 90% (rather than 95%) of its net income (after
tax), if any, from foreclosure property. Such legislation also makes technical
changes in the manner of computing pre-REIT accumulated C-Corporation earnings
and profits that must be distributed to shareholders in order to retain REIT
status.

Taxation of Taxable U.S. Stockholders

As used herein, the term "U.S. Stockholder" means a holder of Common Stock
that for U.S. federal income tax purposes is (i) a citizen or resident of the
United States, (ii) a corporation created or organized in or under the laws of
the United States or any political subdivision thereof, (iii) an estate whose
income from sources without the United States is includable in gross income for
U.S. federal income tax purposes regardless of its connection with the conduct
of a trade or business within the United States, or (iv) any trust with respect
to which (A) a U.S. court is able to exercise primary supervision over the
administration of such trust and (B) one or more U.S. fiduciaries have the
authority to control all substantial decisions of the trust.

Taxation of Stockholders on Distributions

As long as we qualify as a REIT, distributions made to taxable U.S.
Stockholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends or retained capital gains) will be taken
into account by such U.S. Stockholders as ordinary income and will not be
eligible for the dividends received deduction generally available to
corporations. Distributions that are designated as capital gain dividends will
be taxed as long-term capital gains (to the extent they do not exceed our
actual net capital gain for the taxable year) without regard to the period for
which the stockholder has held his shares. However, corporate stockholders may
be required to treat up to 20% of certain capital gain dividends as ordinary
income. Beginning with our 1998 taxable year, we may elect to retain and pay
income tax on its net long-term capital gains. In that case, our stockholders
would include in income as long-term capital gain their proportionate share of
its undistributed long-term capital gains. In addition, the stockholders would
be deemed to have paid their proportionate share of the tax paid by us, which
would be credited or refunded to the stockholders. Each stockholder's basis in
his shares would be increased by the amount of the undistributed long-term
capital gains included in the stockholder's income, less the stockholder's
share of the tax paid by us.

Distributions in excess of current and accumulated earnings and profits will
not be taxable to a stockholder to the extent that they do not exceed the
adjusted basis of the stockholder's shares, but rather will reduce the adjusted
basis of such shares. To the extent that such distributions in excess of
current and accumulated earnings and profits exceed the adjusted basis of a
stockholder's shares, such

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distributions will be included in income as long-term capital gain (or short-
term capital gain if such shares have been held for one year or less), assuming
that such shares are capital assets in the hands of the stockholder. In
addition, any distribution declared by us in October, November, or December of
any year and payable to a stockholder of record on a specified date in any such
month shall be treated as both paid by us and received by the stockholder on
December 31 of such year, provided that the distribution is actually paid by us
during January of the following calendar year. We may be required to withhold a
portion of capital gain distributions to stockholders who fail to certify their
nonforeign status to us.

Stockholders may not include in their individual income tax returns any net
operating losses or capital losses. Instead, such losses would be carried over
by us for potential offset against our future income (subject to certain
limitations). Taxable distributions made by us and gain from the disposition of
Common Stock will not be treated as passive activity income and, therefore,
stockholders generally will not be able to apply any "passive activity losses"
(such as losses from certain types of limited partnerships in which a
stockholder is a limited partner) against such income. In addition, taxable
distributions from us generally will be treated as investment income for
purposes of the investment interest limitations. Capital gains from the
disposition of Common Stock or distributions treated as such (or any portion of
either), however, will be treated as investment income only if the stockholder
so elects, in which case such capital gains will be taxed at ordinary income
rates. We will notify stockholders after the close of our taxable year as to
the portions of the distributions attributable to that year that constitute
ordinary income, return of capital, and capital gain.

Taxation of Stockholders on the Disposition of Common Stock

In general, any gain or loss realized upon a taxable disposition of shares
of Common Stock by a stockholder who is not a dealer in securities will be
treated as long-term capital gain or loss if the shares have been held for more
than one year and otherwise as short-term capital gain or loss. However, any
loss upon a sale or exchange by a shareholder who has held such shares for six
months or less (after applying certain holding period rules), will be treated
as a long-term capital loss to the extent that a distribution made by us is
required to be treated by such stockholder as long-term capital gain. All or a
portion of any loss realized upon a taxable disposition of shares of Common
Stock may be disallowed if other shares of the same Common Shares are purchased
within 30 days before or after the disposition.

Capital Gains and Losses

A capital asset generally must be held for more than one year in order for
gain or loss derived from its sale or exchange to be treated as long-term
capital gain or loss. The highest marginal individual income tax rate is 39.6%.
For taxable years ending after 1997, the maximum tax rate on net capital gains
applicable to noncorporate taxpayers is 20% for sales and exchanges of assets
held for more than one year. The maximum tax rate on long-term capital gain
applicable to noncorporate taxpayers from the sale or exchange of "section 1250
property" (i.e., depreciable real property) is 25% to the extent that such gain
would have been treated as ordinary income if the property were "section 1245
property."

With respect to distributions designated by us as capital gain dividends and
any retained capital gains that we are deemed to distribute in taxable years
beginning on and after January 1, 1998, we may designate (subject to certain
limits) whether such a dividend or distribution is taxable to its noncorporate
stockholders at a 20% or 25% rate. Thus, the tax rate differential between
capital gain and ordinary income for individuals may be significant. In
addition, the characterization of income as capital or ordinary may affect the
deductibility of capital losses. Capital losses not offset by capital gains may
be deducted against an individual's ordinary income only up to a maximum annual
amount of $3,000, and capital losses not currently deductible due to such
limitation may be carried forward indefinitely. All net

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capital gain of a corporate taxpayer is subject to tax at ordinary corporate
rates. A corporate taxpayer can deduct capital losses only to the extent of
capital gains, with unused losses being carried back three years and forward
five years.

Information Reporting Requirements and Backup Withholding

We will report to its U.S. Stockholders and to the Service the amount of
distributions paid during each calendar year, and the amount of tax withheld,
if any. Under the backup withholding rules, a stockholder may be subject to
backup withholding at the rate of 31% with respect to distributions paid unless
such holder (i) is a corporation or comes within certain other exempt
categories and, when required, demonstrates this fact or (ii) provides a
taxpayer identification number, certifies as to no loss of exemption from
backup withholding, and otherwise complies with the applicable requirements of
the backup withholding rules. A stockholder who does not provide us with his
correct taxpayer identification number also may be subject to penalties imposed
by the Service. Any amount paid as backup withholding will be creditable
against the stockholder's income tax liability Taxation of Tax-Exempt
Stockholders

Tax-exempt entities, including qualified employee pension and profit sharing
trusts and individual retirement accounts ("Exempt Organizations"), generally
are exempt from federal income taxation. However, they are subject to taxation
on their unrelated business taxable income ("UBTI"). While many investments in
real estate generate UBTI, the Service has issued a published ruling that
dividend distributions from a REIT to an exempt employee pension trust do not
constitute UBTI, provided that the shares of the REIT are not otherwise used in
an unrelated trade or business of the exempt employee pension trust. Based on
that ruling, amounts distributed by us to Exempt Organizations generally will
not constitute UBTI, provided that (i) the Exempt Organization has not financed
its acquisition of shares of Common Stock with acquisition indebtedness within
the meaning of the Code and (ii) the shares of Common Stock are not otherwise
used by the Exempt Organization in an unrelated trade or business. Furthermore,
social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts, and qualified group legal services plans that are
exempt from taxation under paragraphs (7), (9), (17), and (20), respectively,
of Code section 501(c) are subject to different UBTI rules, which generally
will require them to characterize distributions from us as UBTI. In addition,
in certain circumstances, a pension trust that owns more than 10% of our stock
(by value) may be required to treat a percentage of the dividends received with
respect to our shares as UBTI (the "UBTI Percentage"). The UBTI Percentage
equals the gross income derived by us from an unrelated trade or business
(determined as if we were a pension trust) divided by our total gross income
for the year in which the dividends are paid. The UBTI rule applies to a
pension trust holding more than 10% of our outstanding stock (by value) only if
(i) the UBTI Percentage is at least 5%, (ii) we qualify as a REIT by reason of
the modification of the 5/50 Rule that allows the beneficiaries of the pension
trust to be treated as holding shares of us in proportion to their actuarial
interests in the pension trust, and (iii) either (A) one pension trust owns
more than 25% of the value of our shares or (B) a group of pension trusts
individually holding more than 10% of the value of our shares collectively owns
more than 50% of the value of our shares.

Taxation of Non-U.S. Stockholders

The rules governing U.S. federal income taxation of nonresident alien
individuals, foreign corporations, and other foreign holders of Common Stock
(collectively, "Non-U.S. Stockholders") are complex and no attempt will be made
herein to provide more than a summary of such rules. NON-U.S. STOCKHOLDERS
SHOULD CONSULT WITH THEIR OWN TAX ADVISORS TO DETERMINE THE IMPACT OF FEDERAL,
STATE, AND LOCAL INCOME TAX LAWS WITH REGARD TO AN INVESTMENT IN COMMON STOCK,
INCLUDING ANY REPORTING REQUIREMENTS.

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Taxation of Stockholders on Distributions

Distributions to Non-U.S. Stockholders that are not attributable to gain
from sales or exchanges of U.S. real property interests and are not designated
by us as capital gains dividends or retained capital gains (i.e., undistributed
capital gains to the extent so designated by us) will be treated as dividends
of ordinary income to the extent that they are made out of our current or
accumulated earnings and profits. Such distributions ordinarily will be subject
to a withholding tax equal to 30% of the gross amount of the distribution
unless an applicable tax treaty reduces or eliminates that tax. However, if
income from the investment in Common Stock is treated as effectively connected
with the Non-U.S. Stockholder's conduct of a U.S. trade or business, the Non-
U.S. Stockholder generally will be subject to federal income tax at graduated
rates, in the same manner as U.S. Stockholders are taxed with respect to such
distributions (and also may be subject to the 30% branch profits tax in the
case of a Non-U.S. Stockholder that is a non-U.S. corporation). We expect to
withhold U.S. income tax at the rate of 30% on the gross amount of any such
distributions made to a Non-U.S. Stockholder unless (i) a lower treaty rate
applies and any required form evidencing eligibility for that reduced rate is
filed with us or (ii) the Non-U.S. Stockholder files an IRS Form 4224 or its
successor form with us claiming that the distribution is effectively connected
income. The Service has issued regulations that modify the manner in which we
must comply with the withholding requirements. Those regulations are effective
for distributions made after December 31, 2000.

Distributions in excess of our current and accumulated earnings and profits
will not be taxable to a Stockholder to the extent that such distributions do
not exceed the adjusted basis of the Stockholder's Common Stock but rather will
reduce the adjusted basis of such shares. To the extent that distributions in
excess of current and accumulated earnings and profits exceed the adjusted
basis of a Non-U.S. Stockholder's Common Stock, such distributions will give
rise to tax liability if the Non-U.S. Stockholder would otherwise be subject to
tax on any gain from the sale or disposition of his Common Stock, as described
below. Because it generally cannot be determined at the time a distribution is
made whether or not such distribution will be in excess of our current and
accumulated earnings and profits, the entire amount of any distribution
normally will be subject to withholding at the same rate applicable to dividend
distributions. However, amounts so withheld are refundable to the extent it is
determined subsequently that such distribution was, in fact, in excess of our
current and accumulated earnings and profits.

For any year in which we qualify as a REIT, to the extent that a
distribution is attributable to gain from sales or exchanges of U.S. real
property interests, the distribution will be taxed to a Non-U.S. Stockholder
under the provisions of the Foreign Investment in Real Property Tax Act of 1980
("FIRPTA"). Under FIRPTA, distributions attributable to gain from sales of U.S.
real property interests are taxed to a Non-U.S. Stockholder as if such gain
were effectively connected with a U.S. business without regard to whether we
designate such distribution as capital gain dividends. Non-U.S. Stockholders
thus would be taxed at the normal capital gain rates applicable to U.S.
Stockholders (subject to applicable alternative minimum tax and a special
alternative minimum tax in the case of nonresident alien individuals).
Distributions subject to FIRPTA also may be subject to the 30% branch profits
tax in the hands of a non-U.S. corporate shareholder not entitled to treaty
relief or exemption. We are required to withhold 35% of any distribution that
is designated or could be designated by it as a capital gains dividend. The
amount withheld is creditable against the Non-U.S. Stockholder's FIRPTA tax
liability.

Taxation of Stockholders on the Disposition of Common Stock

Gain recognized by a Non-U.S. Stockholder upon a sale of his Common Stock
generally will not be taxed under FIRPTA if we are a "domestically controlled
REIT," defined generally as a REIT in which at all times during a specified
testing period less than 50% in value of the stock was held directly or
indirectly by non-U.S. persons. We believe that we are currently a
"domestically controlled REIT" and, therefore, the sale of Common Stock will
not be subject to taxation under FIRPTA, but such may not be the case in

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future years (see "--Taxation of Pinnacle") and therefore no assurance can be
given that we will continue to be a "domestically controlled REIT."
Furthermore, gain not subject to taxation under FIRPTA will be taxable to a
Non-U.S. Stockholder if (i) investment in Common Stock is effectively connected
with the Non-U.S. Stockholder's U.S. trade or business, in which case the Non-
U.S. Stockholder will be subject to the same treatment as U.S. Stockholders
with respect to such gain, or (ii) the Non-U.S. Stockholder is a nonresident
alien individual who was present in the U.S. for 183 days or more during the
taxable year and certain other conditions apply, in which case the nonresident
alien individual will be subject to a 30% tax on the individual's capital
gains. If we were not a "domestically controlled REIT," gain recognized upon
the sale of Common Stock by a Non-U.S. Stockholder generally will not be
subject to tax under FIRPTA provided that (a) the Common Stock is regularly
traded, as defined in applicable Treasury Regulations, on an established
securities market and (b) the Non-U.S. Stockholder held 5% or less of our
Common Stock at all times within a specified testing period. If the gain on the
sale of Common Stock were to be subject to taxation under FIRPTA, the Non-U.S.
Stockholder would be subject to the same treatment as U.S. Stockholders with
respect to such gain (subject to applicable alternative minimum tax, a special
alternative minimum tax in the case of nonresident alien individuals, and the
possible application of the 30% branch profits tax in the case of non-U.S.
corporations). In addition, the purchaser would be required to withhold 10% of
the purchase price and remit such amount to the Service.

Information Reporting Requirements and Backup Withholding

We will report to our Non-U.S. Stockholders and to the Service the amount of
distributions paid during each calendar year, and the amount of tax withheld,
if any. Under the backup withholding rules, a Non-U.S. Stockholder may be
subject to backup withholding at the rate of 31% with respect to distributions
paid unless such holder certifies as to its Non-U.S. status under penalties of
perjury or otherwise establishes an exemption (provided that neither we nor our
paying agent has actual knowledge that the holder is a U.S. person or that the
conditions of any other exemption are not, in fact, satisfied). The Service has
issued final regulations regarding the backup withholding rules that apply to
Non-U.S. Stockholders. Those regulations alter the current system of backup
withholding compliance and are effective for distributions made after December
31, 2000. Such regulations do not significantly alter the substantive
withholding and information reporting requirements but rather unify current
certification procedures and forms and clarify reliance standards.

Estate Tax

Common stock held (or treated as held) by an individual who is not a citizen
or resident (as specially defined for U.S. Federal estate tax purposes) of the
United States at the time of his or her death will be includable in the
individual's estate for U.S. Federal estate tax purposes unless an applicable
estate tax treaty provides otherwise. Such individual's estate may be subject
to U.S. Federal estate tax on the property includable in the estate for U.S.
Federal estate tax purposes.

Possible Legislative or Other Actions Affecting Tax Consequences

Prospective holders of Common Stock should recognize that the present
federal income tax treatment of us and an investment in us may be modified by
legislative, judicial or administrative action at any time, and that any such
action may affect us and investments and commitments previously made. The rules
dealing with federal income taxation are constantly under review by persons
involved in the legislative process and by the Service and Treasury Department,
resulting in revisions of regulations and revised interpretations of
established concepts as well as statutory changes. Revisions in federal tax
laws and the interpretations thereof could adversely affect the tax
consequences to us or of an investment in us.

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Other Tax Consequences

We, our Corporate Subsidiaries, or our stockholders may be subject to state
or local taxation in various state or local jurisdictions, including those in
which it or they own property, transact business, or reside. The state and
local tax treatment of us and our stockholders may not conform to the federal
income tax consequences discussed above. CONSEQUENTLY, YOU SHOULD CONSULT YOUR
OWN TAX ADVISORS REGARDING THE EFFECT OF STATE AND LOCAL TAX LAWS ON AN
INVESTMENT IN PINNACLE.

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UNDERWRITING

Subject to the terms and conditions of the underwriting agreement (the
"Underwriting Agreement"), the underwriters named below (the "Underwriters"),
through their representatives Deutsche Bank Securities Inc., Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Raymond James &
Associates, Inc., Salomon Smith Barney Inc. and Banc of America Securities LLC.
(the "Representatives") have severally agreed to purchase from the Company and
the Selling Stockholders the following respective numbers of shares of Common
Stock at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus.

<TABLE>
<CAPTION>
Number
Underwriter of Shares
----------- ---------
<S> <C>
Deutsche Bank Securities Inc. ....................................... --
Goldman, Sachs & Co. ................................................ --
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................ --
Raymond James & Associates, Inc. .................................... --
Salomon Smith Barney Inc. ........................................... --
Banc of America Securities LLC....................................... --
---------
Total.............................................................. 8,000,000
=========
</TABLE>

In the Underwriting Agreement, the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all of the shares of
Common Stock being sold pursuant to the Underwriting Agreement if any of the
shares of Common Stock being sold pursuant to the Underwriting Agreement are
purchased. In the event of a default by an Underwriter, the Underwriting
Agreement provides that, in certain circumstances, the commitments of non-
defaulting Underwriters may be increased or the Underwriting Agreement may be
terminated.

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase the shares of Common Stock offered hereby are subject
to conditions. The Underwriters are obligated to purchase all of the shares of
Common Stock offered hereby, other than those covered by the over-allotment
option described below, if any of these shares are purchased.

The Company has been advised by the Representatives of the Underwriters that
the Underwriters propose to offer the shares of Common Stock to the public at
the public offering price set forth on the cover page of this Prospectus and to
dealers at a price that represents a concession not in excess of $ per share
under the public offering price. The Underwriters may allow, and these dealers
may re-allow, a concession not in excess of $ per share to other dealers. The
expenses of this offering, all of which are being paid by the Company, are
estimated to be $ million.

The Company and the Selling Stockholders have granted to the Underwriters an
option, exercisable not later than 30 days after the date of this Prospectus,
to purchase up to 1,200,000 additional shares of Common Stock at the public
offering price less the underwriting discounts and commissions set forth on the
cover page of this Prospectus. The Underwriters may exercise this option only
to cover over-allotments made in connection with the sale of the Common Stock
offered hereby. To the extent that the Underwriters exercise the option, each
of the Underwriters will become obligated, subject to conditions, to purchase
approximately the same percentage of additional shares of Common Stock as the
number of shares of Common Stock to be purchased by it in the above table bears
to 8,000,000. The Company and the Selling Stockholders will be obligated,
pursuant to the option, to sell these shares to the Underwriters to the extent
the option is exercised. If any additional shares of Common Stock are
purchased, the Underwriters will offer additional shares on the same terms as
those on which the 8,000,000 shares are being offered.

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The Company has agreed to indemnify the Underwriters against some specified
types of liabilities, including liabilities under the Securities Act.

Certain of the Company's officers, directors and stockholders have agreed
not to offer, sell, contract to sell or otherwise dispose of, or enter into any
transaction that is designed to, or could be expected to, result in the
disposition of any portion of, any common stock for a period of 90 days after
the effective date of the registration statement of which this Prospectus is a
part without the prior written consent of Deutsche Bank Securities Inc. This
consent may be given at any time without public notice. The Company has entered
into a similar agreement with Deutsche Bank Securities Inc.

Deutsche Bank Securities Inc., Raymond James & Associates, Inc., Salomon
Smith Barney Inc. and Banc of America Securities LLC, each a Representative,
and certain of their affiliates acted as representatives of the underwriters in
connection with the IPO and the Secondary Offering. Merrill Lynch, Pierce,
Fenner & Smith Incorporated, a Representative, and its affiliate acted as
representatives of the underwriters in connection with the Secondary Offering.
Goldman, Sachs & Co., a Representative, was an initial purchaser of the Notes.
In addition, Banc of America Securities LLC was an initial purchaser of the
Notes and its affiliate is a lender and agent under our credit facility.

In order to facilitate the offering of the Common Stock, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
market price of the Common Stock. Specifically, the Underwriters may over-allot
shares of the Common Stock in connection with this offering, thus creating a
short position in the Common Stock for their own account. Additionally, to
cover these over-allotments or to stabilize the market price of the Common
Stock, the Underwriters may bid for, and purchase, shares of the Common Stock
in the open market. Finally, the Representatives, on behalf of the
Underwriters, also may reclaim selling concessions allowed to an Underwriter or
dealer if the underwriting syndicate repurchases shares distributed by that
Underwriter or dealer. Any of these activities may maintain the market price of
the Common Stock at a level above that which might otherwise prevail in the
open market. The Underwriters are not required to engage in these activities
and, if commenced, may end any of these activities at any time.

85
<PAGE>

LEGAL MATTERS

The validity of our shares of common stock offered hereby will be passed
upon for Pinnacle by Holland & Knight LLP, Tampa, Florida. Some legal matters
related to this offering will be passed upon for the underwriters by Cahill
Gordon & Reindel (a partnership including a professional corporation), New
York, New York.

EXPERTS

The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K of Pinnacle Holdings Inc. for the year ended
December 31, 1998 have been so incorporated in Reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The financial statements of the Tower Operations of Southern Communications
Services, Inc., as of December 31, 1997 and 1996 and for the years then ended,
that have been incorporated by reference in this Prospectus, have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.

The financial statements of the Tower Operations of MobileMedia, Inc. and
Subsidiaries for the years ending December 31, 1997 and 1996, appearing in
Pinnacle Holdings Inc. Current Report on Form 8-K dated September 3, 1998,
filed with the Securities and Exchange Commission on September 18, 1998, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.

The financial statements of the North American Antenna Site Business of
Motorola, Inc. as of December 31, 1997 and 1998 and for each of the years in
the three-year period ended December 31, 1998, that have been incorporated by
reference herein in reliance upon the report of KPMG LLP, independent auditors,
and upon the authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the Commission. Those reports, proxy statements and other
information may be obtained:

. At the Public Reference Room of the Commission, Room 1024--Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;

. At the public reference facilities at the Commission's regional offices
located at Seven World Trade Center, 13th Floor, New York, New York 10048
or Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661;

. From the Commission, Public Reference Section, Judiciary Plaza, 450 Fifth
Street, N.W. Washington, D.C. 20549;

. From the Internet site maintained by the Commission at
http://www.sec.gov, which contains reports, proxy and information
statements and other information regarding issuers that file
electronically with the Commission.

Some locations may charge prescribed or modest fee for copies.

86
<PAGE>

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this Prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act
until we sell all of the securities.

. Annual Report on Form 10-K for the year ended December 31, 1998.

. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999.

. Current Report on Form 8-K filed with the SEC on September 18, 1998.

. Current Report on Form 8-K filed with the SEC on September 14, 1999, as
amended on November 15, 1999.

. Current Report on Form 8-K filed with the SEC on January 4, 2000.

. The description of the Common Stock contained in the Registrant's
Registration Statement on Form 8-A, dated August 11, 1998, filed pursuant
to Section 12(g) of the Securities and Exchange Act of 1934.

On request we will provide at no cost to each person, including any
beneficial owner, who receives a copy of this Prospectus, a copy of any or all
of the documents incorporated in this Prospectus by reference. We will not
provide exhibits to any of such documents, however, unless such exhibits are
specifically incorporated by reference into those documents. Written or
telephone requests for such copies should be addressed to our principal
executive offices, attention: Steven Day, Chief Financial Officer, 1549
Ringling Boulevard, Third Floor, Sarasota, Florida 34236, telephone number
(941) 364-8886.

87
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
PINNACLE HOLDINGS INC. (Unaudited Interim Consolidated Financial
Statements--September 30, 1999 and 1998)
Condensed Consolidated Balance Sheets as of September 30, 1999 and
December 31, 1998........................................................ F-2
Condensed Consolidated Statements of Operations for the nine months ended
September 30, 1998 and 1999.............................................. F-3
Condensed Consolidated Statement of Changes in common stockholders' Equity
for the three months ended September 30, 1999............................ F-4
Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 1998 and 1999.............................................. F-5
Notes to Condensed Consolidated Financial Statements...................... F-6
</TABLE>

F-1
<PAGE>

PINNACLE HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
------------ --------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents....................... $ 13,801,190 $ 151,868,363
Accounts receivable, net........................ 1,679,390 7,555,110
Prepaid expenses and other current assets....... 1,432,428 6,192,589
------------ --------------
Total current assets............................ 16,913,008 165,616,062
Tower assets, net................................ 473,942,309 861,753,326
Leasehold interests, net......................... -- 81,071,025
Fixed assets, net................................ 2,476,666 3,606,803
Land............................................. 14,613,365 31,611,851
Deferred debt issue costs, net................... 6,686,683 14,026,548
Other assets..................................... 1,516,070 2,612,601
------------ --------------
$516,148,101 $1,160,298,216
============ ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable................................ $ 3,280,809 $ 4,903,801
Accrued expenses................................ 5,761,016 48,652,128
Deferred revenue................................ 1,448,432 4,344,308
Current portion of long-term debt............... 15,692,912 6,666,384
------------ --------------
Total current liabilities....................... 26,183,169 64,566,621
Long-term debt................................... 417,524,802 698,320,176
Other liabilities................................ 125,152 359,145
------------ --------------
443,833,123 763,245,942
------------ --------------
Redeemable stock:
Series A senior preferred stock, Class B common
stock, and
Class D common stock........................... 31,643,338 --
Warrants........................................ 1,000,000 --
------------ --------------
32,643,338 --
------------ --------------
Stockholders' equity:
Series B junior preferred stock................. 59,928,980 --
Common stock:
Class A common stock, 202,500 and 0 shares
issued and outstanding at December 31, 1998 and
September 30, 1999, respectively............... 203 --
Class E common stock, 174,766 and 0 shares
issued and outstanding at December 31, 1998 and
September 30, 1999, respectively............... 175 --
Common Stock, $.001 par value, 100,000,000
shares authorized; 0 and 41,094,520 shares
issued and outstanding at December 31, 1998 and
September 30, 1999, respectively............... -- 41,095
Additional paid-in capital....................... 33,136,302 489,426,399
Accumulated deficit.............................. (53,394,020) (92,415,220)
------------ --------------
39,671,640 397,052,274
------------ --------------
$516,148,101 $1,160,298,216
============ ==============
</TABLE>

The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.

F-2
<PAGE>

PINNACLE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1998 1999
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
Revenues $ 21,127,633 $ 48,816,143
Direct operating expenses, excluding depreciation
and amortization................................ 3,965,511 11,691,067
------------ ------------
Gross margin, excluding depreciation and
amortization.................................... 17,162,122 37,125,076
Other expenses:
General and administrative....................... 2,720,097 2,822,760
Corporate development............................ 4,955,121 5,731,059
State franchise, excise and minimum taxes........ 398,730 699,836
Depreciation and amortization.................... 13,357,626 35,118,413
------------ ------------
21,431,574 44,372,068
------------ ------------
Loss from operations............................... (4,269,452) (7,246,992)
Interest expense................................... 7,276,265 14,439,470
Amortization of original issue discount and debt
issuance costs.................................... 11,635,619 17,334,738
------------ ------------
Net loss........................................... $(23,181,336) $(39,021,200)
============ ============
Payable-in-kind preferred dividends and accretion.. 683,304 2,930,338
============ ============
Net loss attributable to common shareholders....... $(23,864,640) $(41,951,538)
Basic loss per common share(a)..................... $ (2.46) $ (1.41)
------------ ------------
Weighted average number of common shares
outstanding....................................... 9,708,457 29,721,466
============ ============
</TABLE>
- --------
(a) Basic loss per common share in 1999 and 1998 have been computed based on
the weighted average number of common shares outstanding during the
periods, after giving retroactive effect for the conversion of the
Company's common stock outstanding prior to the Company's initial public
offering in accordance with the recapitalization effected contemporaneously
with the completion of the initial public offering (Note 3). Diluted loss
per common share would be anti-dilutive and therefore is not applicable.

The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.

F-3
<PAGE>

PINNACLE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
Series B Junior Class A
preferred Stock Common Stock common stock
-------------------- ------------------ ----------------
Shares Amount Shares Amount Shares Amount
------ ------------ ---------- ------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1998................... 60.40 $ 59,928,980 -- -- 202,500 $ 203
Unaudited:
Dividends and accretion
on Preferred Stock..... 1.27 1,767,106 -- --
Issuance of common
stock, net of issuance
costs, and conversion
(Note 3)............... 41,094,520 $41,095 (202,500) (203)
Liquidation of Series B
Junior Preferred
Stock.................. (61.67) (61,696,086)
Distribution of
contributed capital and
yield on various
classes of common
stock..................
Net Loss................
------ ------------ ---------- ------- -------- -----
Balance at September 30,
1999................... -- $ -- 41,094,520 $41,095 -- $ --
====== ============ ========== ======= ======== =====
</TABLE>

<TABLE>
<CAPTION>
Class E
common stock Additional
---------------- paid-in Accumulated Stockholders'
Shares Amount capital deficit equity
-------- ------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31,
1998................... 174,766 $ 175 $ 33,136,302 $(53,394,020) $ 39,671,640
Unaudited:
Dividends and accretion
on Preferred Stock..... (2,930,338) (1,163,232)
Issuance of common
stock, net of issuance
costs, and conversion
(Note 3)............... (174,766) (175) 502,968,169 503,008,886
Liquidation of Series B
Junior Preferred....... (61,696,086)
Distribution of contrib-
uted capital and yield
on various classes of
common stock........... (43,747,734) (43,747,734)
Net Loss................ (39,021,200) (39,021,200)
-------- ----- ------------ ------------ ------------
Balance at September 30,
1999................... -- $ -- $489,426,399 $(92,415,220) $397,052,274
======== ===== ============ ============ ============
</TABLE>

The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.

F-4
<PAGE>

PINNACLE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Nine Months Ended September
30,
----------------------------
1998 1999
------------- -------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss........................................ $ (23,181,336) $ (39,021,200)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation.................................... 13,357,626 35,118,413
Amortization of original issue discount and
debt issuance costs............................ 11,635,619 17,334,738
Provision for doubtful accounts................. 286,905 568,000
(Increase) decrease in:
Accounts receivable, gross..................... (855,026) (3,077,230)
Prepaid expenses and other current assets...... 4,828 (758,769)
Other assets................................... (609,486) (1,096,531)
Increase (decrease) in:
Accounts payable............................... 647,258 (430,522)
Accrued expenses............................... 4,279,009 4,041,112
Deferred revenue............................... 399,402 296,130
Other liabilities.............................. 7,077 233,993
------------- -------------
Total adjustments............................. 29,153,212 52,229,334
------------- -------------
Net cash provided by operating activities.... 5,971,876 13,208,134
------------- -------------
Cash flows from investing activities:
Payments made in connection with acquisitions:
Tower assets.................................... (310,721,207) (383,216,262)
Leasehold interests............................. -- (83,387,340)
Land............................................ (7,010,921) (16,998,487)
Net current liabilities acquired................ -- 36,135,378
Capital expenditures:
Tower assets.................................... (31,312,021) (27,706,463)
Fixed assets.................................... (1,244,500) (1,833,704)
------------- -------------
Net cash used in investing activities......... (350,288,649) (477,006,878)
------------- -------------
Cash flows from financing activities:
Borrowings under long-term debt, net............ 474,736,382 556,080,721
Repayment of long-term debt..................... (204,138,000) (317,963,299)
Proceeds from issuance of common stock, net..... 10,767,709 501,237,846
Proceeds from issuance of PIK preferred stock
and warrants, net.............................. 61,669,647 --
Liquidation of PIK preferred stock and
warrants....................................... -- (93,741,617)
Distribution of contributed capital and payment
of accretion on various classes of common
stock.......................................... (412,888) (43,747,734)
------------- -------------
Net cash provided by financing activities........ 342,622,850 601,865,917
------------- -------------
Net increase (decrease) in cash and cash
equivalents..................................... (1,693,923) 138,067,173
Cash and cash equivalents, beginning of period... 1,693,923 13,801,190
------------- -------------
Cash and cash equivalents, end of period......... $ -- $ 151,868,363
------------- -------------
Supplemental disclosure of cash flows:
Cash paid for interest........................... $ 7,840,878 $ 16,498,833
============= =============
Non-Cash Transactions:
Seller debt issued in acquisitions.............. $ 2,347,107 $ 8,998,250
Payable-in-kind preferred dividends and
accretion...................................... $ 683,304 $ 2,930,338
Stock issued for acquisitions................... $ -- $ 8,804,163
</TABLE>

The accompanying notes to Condensed Consolidated Financial Statements are an
integral part of these condensed financial statements.

F-5
<PAGE>

PINNACLE HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Financial Statements

The accompanying condensed consolidated financial statements reflect the
financial position and results of operations and cash flows of Pinnacle
Holdings Inc. and its wholly owned subsidiaries: Pinnacle Towers Inc., Pinnacle
Towers Canada Inc., Coverage Plus Antenna Systems, Inc. and Tower Systems, Inc.
At the time of the August 31, 1999 Motorola site acquisition (as defined
herein), the Company invested $49 million in convertible preferred stock of PT
III, a newly formed entity, most of the common stock of which is owned by two
members of management of the Company. These proceeds were utilized by PT III to
acquire the ownership of certain rooftop communication site leases previously
owned by Motorola. The Company and Part III modified certain aspects of those
relationships subsequent to September 30, 1999. See Part II, Item 5, Other
Information. In addition, PT III entered into a service agreement with the
Company to manage these assets. As a result of these transactions and
significant operating relationships with PT III, the assets and liabilities of
PT III, together with the results of operations from the date of the Motorola
acquisition, have been included in the Company's consolidated financial
statements as of September 30, 1999. These entities are collectively referred
to as the "Company". See Part II, Item 5, Other Information. All significant
intercompany balances and transactions have been eliminated. Preparation of the
consolidated financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements.
Actual results may vary from estimates used.

Results of operations for any interim period are not necessarily indicative
of results of any other periods or for the year. The consolidated statements as
of September 30, 1999 and for the nine month and three month periods ended
September 30, 1999 and 1998 are unaudited, but in the opinion of management
include all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation of results for such periods. These consolidated
financial statements should be read in conjunction with the Company's financial
statements and notes thereto for the year ended December 31, 1998.

The Company's Condensed Consolidated Statements of Operations for the nine
month and three month periods ended September 30, 1999, reflect all components
of Comprehensive Income as defined by SFAS No. 130, "Reporting Comprehensive
Income." Accordingly, no separate Consolidated Statement of Comprehensive
Income is presented as would otherwise be required.

2. Acquisitions

The Company actively acquires communications sites and related real estate
assets.

On March 4, 1998, the Company completed the acquisition of 201
communications sites from Southern Communications Services, Inc. ("Southern
Communications"), a subsidiary of Southern Company. The Company paid
$83,500,000 for these communications sites, located in Georgia, Alabama,
Mississippi, and Florida.

On September 3, 1998, the Company acquired from MobileMedia Corporation
("MobileMedia") and several of its affiliates 166 communications sites for an
aggregate purchase price of approximately $170 million (the "MobileMedia
Acquisition"). MobileMedia assigned its existing tenant leases on the sites to
the Company. The Company entered into a lease (the "Lease") with MobileMedia
Communications, Inc., an affiliate of MobileMedia, providing such affiliate of
MobileMedia the non-exclusive right to install a certain amount of its
equipment on the acquired communications sites for aggregate rent of $10.7
million per year. The Lease has an initial term of 15 years and one five-year
renewal term exercisable at

F-6
<PAGE>

PINNACLE HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

the option of the lessee. Prior to this acquisition, space on the sites was
primarily for the exclusive use of MobileMedia and its affiliates. The Company
has integrated these communications sites into its rental tower business and is
leasing space on these sites to other third party wireless communications
providers. The communications sites are located in the Southeastern United
States, Southern California and New England.

In addition to the Southern Communications and MobileMedia transactions
described above, the Company completed 80 acquisitions of 526 communications
sites and related assets, all of which were individually insignificant to the
Company, from various sellers during the year ended December 31, 1998 for an
aggregate purchase price of $331,204,262, consisting of $328,789,297 in cash
and $2,414,965 of notes payable to the former tower owners.

On August 31, 1999, the Company acquired 1858 communications sites and
related assets from Motorola, Inc. ("Motorola") for $254 million, comprised of
$245 million in cash and $9 million in the Company's common stock, plus fees
and expenses of approximately $17 million (the "Motorola Antenna Site
Acquisition"). The purchase price allocations related to this transaction are
preliminary. However, we do not expect that the final allocation of the
purchase price will be materially different from its preliminary allocation.
This acquisition results in the Company having sites in all fifty States and
nine Canadian Provinces. The Company transferred certain of the rooftop
communication sites it acquired from Motorola to PT III. See Part II, Item 5,
Other Information.

In addition to the Motorola Antenna Site Acquisition, during the nine months
ended September 30, 1999 the Company completed 108 acquisitions of 295
communications sites and related assets, all of which were individually
insignificant to the Company, from various sellers for an aggregate purchase
price of $211 million consisting of $202 million in cash and $9 million of
notes payable to the former tower owners.

The Company accounts for its acquisitions using the purchase method of
accounting. The results of operations of the acquired assets are included with
those of the Company from the dates of the respective acquisitions. The pro
forma results of operations listed below reflect purchase accounting and pro
forma adjustments as if all of the transactions completed during 1998 and the
nine months ended September 30, 1999 occurred as of January 1, 1998. The
unaudited pro forma condensed consolidated financial information are not
necessarily indicative of the results that would have occurred if the assumed
transactions had occurred on the dates indicated and are not necessarily
indicative of the expected results of operations in the future.

<TABLE>
<CAPTION>
Pro Forma
--------------------------
September September
30, 1998 30, 1999
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
Revenue......................................... $100,368,428 $110,241,230
Gross margin, excluding depreciation............ 57,896,990 67,573,289
Net loss........................................ (88,939,174) (72,603,977)
Net loss attributable to common shareholders.... (89,622,478) (75,534,315)
Basic net loss per common share................. (9.23) (2.54)
</TABLE>

F-7
<PAGE>

PINNACLE HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

3. Public Offerings and Stockholders' Equity

On February 19, 1999, the Company completed its initial public offering of
common stock ("the IPO") whereby the Company sold 20,000,000 shares of a new
class of common stock (the "Common Stock"). In addition, on March 19, 1999, the
Underwriters over-allotment option was exercised to the extent that an
additional 2,026,000 shares were sold. The initial price per share was $14,
resulting in net proceeds from the IPO of approximately $288 million.

In connection with the IPO, pursuant to a recapitalization agreement between
the Company, its largest stockholder, ABRY Broadcast Partners II, L.P. ("ABRY
II"), and certain members of the Company's management that are stockholders of
the Company, the Company converted all outstanding shares of each class of the
Company's five classes of common stock into shares identical to the Common
Stock sold in the IPO and paid to the holders of certain of such classes of
common stock preferential amounts and yields. The certificate of incorporation
of the Company was amended immediately prior to the consummation of the IPO to
eliminate the multiple classes of the Company's common stock and create the now
single class of Common Stock, and all of the outstanding shares of all the
classes of common stock of the Company other than Class D Common Stock were
converted into approximately 8,571,309 shares of Common Stock and all shares of
Class D common Stock were converted into approximately 1,428,691 shares of
Common Stock.

The holders of the Company's outstanding (prior to the above described
conversion) shares of Class A Common Stock, Class B Common Stock and Class E
Common Stock were collectively paid approximately $38.9 million by the Company
from proceeds of the IPO, which amount equaled the amount of preferences such
shares were entitled to over the other classes of the Company's common stock
pursuant to the Company's certificate of incorporation before giving effect to
the amendment relative to the conversion of those shares as described above. In
addition, the holders of the Company's outstanding (prior to the above
described conversion) shares of Class A Common Stock were collectively paid
approximately $4.8 million by the Company from proceeds of the IPO, which
amount equaled the amount of yield such shares had accrued from the date of
their issuances through June 30, 1997 pursuant to the Company's certificate of
incorporation before giving effect to the amendment relative to the conversion
of those shares as described above.

Other uses of proceeds from the IPO were: (1) approximately $32.0 million
redeemed the outstanding shares of the Company's Series A Senior Preferred
Stock (the "Senior Preferred Stock"); (2) approximately $61.7 million redeemed
the outstanding shares of the Company's Series B Junior Preferred Stock (the
"Junior Preferred Stock"); (3) approximately $15.7 million repaid in full and
retired a loan from ABRY II; (4) approximately $123.8 million repaid
outstanding borrowings under the Company's Senior Credit Facility (as defined
herein); and, (5) $11.4 million was used to fund the closing of pending
acquisitions proximate to the date the funds were available from the IPO.

On July 22, 1999, the Company completed a secondary offering of common stock
(the "Secondary Offering") whereby the Company sold 8,650,000 shares of its
Common Stock. The price per share was $25, resulting in net proceeds from the
Secondary Offering of approximately $206 million. Certain stockholders of the
Company also sold 2,350,000 shares of common stock, the net proceeds of which
are not available to the Company. The proceeds from the Secondary Offering were
invested initially in short-term liquid securities and will be used in
conjunction with the Company's availability of senior debt under its amended
Senior Credit Facility to fund acquisitions and development of communications
sites. Approximately $55 million of this cash had been used as of September 30,
1999, $20 million of which was used to consummate the Motorola Antenna Site
Acquisition.

F-8
<PAGE>

PINNACLE HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Also in conjunction with the Motorola Antenna Site Acquisition the Company
issued 418,520 shares of its common stock to Motorola as part of the
consideration given for the acquisition. These shares were recorded at the fair
value of the securities when the terms of the acquisition were agreed to and
announced.

4. Long-term Debt

As of June 25, 1999, the Company amended its Senior Credit Facility to
provide $520 million of financing, of which $470 million was committed.
Advances under the Senior Credit Facility accrue interest at the Company's
option of either LIBOR plus a margin of up to 3.00%, as defined in the related
agreement, or at the greater of the Federal Funds Effective Rate plus 0.50% or
the prime rate, plus a margin of up to 1.75%. Additionally, certain financial
covenants were modified.

As of September 17, 1999, the Company again amended its Senior Credit
Facility to provide $670 million of financing, of which $470 million was
committed and utilized at September 30, 1999.

The Senior Credit Facility is secured by a lien on substantially all of the
Company's assets and a pledge of substantially all of the capital stock of the
Company's subsidiaries. The Senior Credit Facility contains customary covenants
such as limitations on the Company's ability to incur indebtedness, to incur
liens or encumbrances on assets, to make certain investments, to make
distributions to shareholders, or prepay subordinated debt. Under the Senior
Credit Facility, the Company may not permit the ratio of senior debt to
annualized EBITDA as defined in the agreement to exceed certain amounts.

5. Commitments

As of and subsequent to September 30, 1999, the Company entered into several
letters of intent with various third parties to purchase 512 additional
communications sites and related assets, reflecting an aggregate commitment to
pay approximately $105 million, all of which are subject to consummation of
transactions pending completion of due diligence efforts and any further
negotiation that may result therefrom.

6. Subsequent Events

During October 1999, the Company increased the committed amount of its
Senior Credit Facility from $470 million to $520 million, $50 million of which
remains available for use in making acquisitions as of November 11, 1999.

F-9
<PAGE>

[LOGO]
<PAGE>

You may rely only on the information contained in this Prospectus. We have not
authorized anyone to provide information different from that contained in this
Prospectus. Neither the delivery of this Prospectus nor sale of Common Stock
means that information contained in this Prospectus is correct after the date
of this Prospectus. This Prospectus is not an offer to sell or solicitation of
an offer to buy these shares of Common Stock in any circumstances under which
the offer or solicitation is unlawful.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 9
Disclosure Regarding Forward-Looking Statements.......................... 20
Use of Proceeds.......................................................... 21
Dilution................................................................. 22
Dividend Policy.......................................................... 22
Price Range of Common Stock.............................................. 22
Capitalization........................................................... 23
Our Unaudited Pro Forma Financial Data................................... 24
Our Selected Historical Consolidated Financial Data...................... 34
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 36
Business................................................................. 44
Management and Directors................................................. 61
Selling Stockholders..................................................... 64
Description of Indebtedness.............................................. 65
Description of Capital Stock............................................. 67
Shares Eligible for Future Sale.......................................... 69
Certain Federal Income Tax Considerations................................ 70
Underwriting............................................................. 84
Legal Matters............................................................ 86
Experts.................................................................. 86
Where You Can Find More Information...................................... 86
Incorporation of Certain Documents by Reference.......................... 87
Index to Financial Statements............................................ F-1
</TABLE>
--------------------------------------

[Pinnacle Holdings Inc. Logo appears here]

Pinnacle Holdings Inc.

8,000,000 Shares

Common Stock

Deutsche Banc Alex. Brown

Goldman, Sachs & Co.

Merrill Lynch & Co.

Raymond James & Associates, Inc.

Salomon Smith Barney

Banc of America Securities LLC

Prospectus

, 2000
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. 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 undersigned registrant (the
"Company").

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 98,063
NASD filing fee................................................. $ +
Nasdaq listing fee.............................................. $ +
Printing and engraving expenses................................. $ +
Accounting fees and expenses.................................... $ +
Legal fees and expenses......................................... $ +
Blue Sky fees and expenses...................................... $ +
Transfer Agent's fees and expenses.............................. $ +
Miscellaneous................................................... $ +
----------
Total......................................................... $1,000,000*
==========
</TABLE>
- --------
*Estimated
+To be filed by amendment.

Item 15. Indemnification of Directors and Officers.

The Company'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 Company's Certificate of
Incorporation and Bylaws also contain provisions making indemnification of its
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
has obtained 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 of
1933, as amended (the "Securities Act").

II-1
<PAGE>

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits

<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
1.1 Form of 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*

4.3 Specimen Stock Certificate**

4.4 Registration Agreement**

4.5 Recapitalization Agreement**

5.1 Opinion of Holland & Knight LLP+

8.1 Tax Opinion of Holland & Knight LLP+

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

23.5 Consent of KPMG LLP, independent public accountants

24.1 Powers of Attorney (included on signature page of Registration
Statement)
</TABLE>
- --------
+ To be filed by amendment
* Incorporated by reference to the Company's Registration Statement on Form
S-4 (SEC file no. 333-49147), as amended, filed with the Securities and
Exchange Commission on April 1, 1998.
** Incorporated by reference to the Company's Registration Statement on Form
S-11 (SEC file no. 333-59297), as amended, filed with the Securities and
Exchange Commission on July 17, 1998.

Item 17. Undertakings.

The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement 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. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions described in Item 15, or otherwise, the Company 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 and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or

II-2
<PAGE>

paid by a director, officer or controlling person of the Company 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 Company 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 and will be governed by the final
adjudication of such issue.

The Company hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act,
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 Company pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act 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, 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-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
PINNACLE HOLDINGS INC., a Delaware corporation, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Sarasota, State of Florida, on January 4, 2000.

Pinnacle Holdings Inc.

/s/ Steven Day
By: _________________________________
Steven Day
Chief Financial Officer

POWER OF ATTORNEY

Each of the undersigned officers and directors of Pinnacle Holdings Inc.
(the "Company"), a Delaware corporation, for himself and not for one another,
does hereby constitute and appoint Robert Wolsey and Stevey Day, and each and
any of them and their substitutes, a true and lawful attorney in their name,
place and stead, in any and all capacities, to sign their name to any and all
amendments to this registration statement, including post-effective amendments,
and any registration statement for the same offering covered by this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) of the Securities Act, and to cause the same to be filed with the
Securities and Exchange Commission, granting unto said attorneys and each of
them full power of substitution and full power and authority to do and perform
any act and thing necessary and proper to be done in the premises, as fully to
all intents and purposes as the undersigned could do if personally present, and
each of the undersigned for himself hereby ratifies and confirms all that said
attorneys or any one of them shall lawfully do or cause to be done by virtue
hereof.

<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Robert Wolsey Chief Executive Officer, January 4, 2000
______________________________________ President, Chief
Robert Wolsey Operating Officer and
Director

/s/ Steven Day Vice President, Chief January 4, 2000
______________________________________ Financial Officer,
Steven Day Secretary and Director

/s/ G. Peter O'Brien Director January 4, 2000
______________________________________
G. Peter O'Brien

/s/ Andrew Banks Director January 4, 2000
______________________________________
Andrew Banks

/s/ Peni Garber Director January 4, 2000
______________________________________
Peni Garber

/s/ Peggy Koenig Director January 4, 2000
______________________________________
Peggy Koenig

/s/ Royce Yudkoff Director January 4, 2000
______________________________________
Royce Yudkoff
</TABLE>

II-4
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
1.1 Form of 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*

4.3 Specimen Stock Certificate**

4.4 Registration Agreement**

4.5 Recapitalization Agreement**

5.1 Opinion of Holland & Knight LLP+

8.1 Tax Opinion of Holland & Knight LLP+

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

23.5 Consent of KPMG LLP, independent public accountants

24.1 Powers of Attorney (Included on signature page of Registration
Statement)
</TABLE>
- --------
+ To be filed by amendment
* Incorporated by reference to the Company's Registration Statement on Form
S-4 (SEC file no. 333-49147), as amended, filed with the Securities and
Exchange Commission on April 1, 1998.
** Incorporated by reference to the Company's Registration Statement on Form
S-11 (SEC file no. 333-59297), as amended, filed with the Securities and
Exchange Commission on July 17, 1998.

II-5

<PAGE>

EXHIBIT 1.1

[FORM OF UNDERWRITING AGREEMENT]

PINNACLE HOLDINGS INC.

COMMON STOCK

------------------------------
UNDERWRITING AGREEMENT
------------------------------

, 2000

Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Raymond James & Associates, Inc.
Salomon Smith Barney Inc.
Banc of America Securities LLC
As representatives of the several
Underwriters named in Schedule II
hereto
c/o Deutsche Bank Securities Inc. 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 II hereto (the "Underwriters") an aggregate of
5,300,000 shares (the "Firm Shares") and, at the election of the Underwriters,
up to 800,000 additional shares (the "Optional Shares") of common stock, par
value $.001 per share, of the Company (the "Stock"), and the selling
stockholders named in Schedule I hereto (the "Selling Stockholders"),
severally, propose, subject to the terms and conditions stated herein, to sell
to the Underwriters an aggregate of 2,700,000 Firm Shares and up to 400,000
Optional Shares in the respective amounts set forth in Schedule I (the Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 3 hereof being called the "Shares").

1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the Underwriters that:

(a) A registration statement on Form S-3 (File No. 333- ) (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

1
<PAGE>

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 be-comes 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;" the Company meets all of the
requirements for filing on Form S-3; and all references in this Agreement
to amendments or supplements to the Registration Statement, the Preliminary
Prospectus or the Prospectus shall be deemed to mean and include the filing
of any document under the Securities Ex-change Act of 1934, as amended (the
"1934 Act"), that is or is deemed to be incorporated by reference therein.

(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
Deutsche Bank Securities Inc. ("Deutsche Bank") 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 Deutsche Bank 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,
consolidated 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");

2
<PAGE>

(f) Each of Pinnacle Towers III, Inc. ("PT III"), the Company and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation;
each of PT III, 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 PT III, the Company and its subsidiaries is duty
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
nonassessable 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 nonassessable 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
nonassessable 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 the
compliance by the Company with all of the provisions of this Agreement and
the consummation of the transactions herein 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 transactions
contemplated by this 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;

(j) The Company and its subsidiaries are in compliance in all material
respects with all of the provisions of their respective certificates 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

3
<PAGE>

"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 adverse 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
(the "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 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) Each of PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, KPMG LLP, who
have certified certain financial statements of the North American Antenna
Sites Business of Motorola, Inc., Ernst & Young LLP, who have certified
certain financial statements of the Tower Operations of MobileMedia
Communications, Inc. and its subsidiaries, and Arthur Andersen LLP, who
have certified certain financial statements of the Tower

4
<PAGE>

Operations of Southern Communications Services, Inc., 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;

(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
have a Material Adverse Effect or result in any material loss or
interference with the Company's business or operations; as of the date
hereof, the Company has no knowledge of the occurrence of any such material
event related to the Year 2000 Problem. 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; and

(s) Each of the representations and warranties of the Company and, to
the best of the knowledge of the Company after due inquiry, each of the
representations and warranties of Motorola, Inc. set forth in the Purchase
and Sale Agreement by and between the Company and Motorola, Inc. dated June
29, 1999 (the "Acquisition Agreement") are true and correct in all material
respects on the date hereof; the Company has no reasonable basis to believe
that the transactions contemplated by the Acquisition Agreement will not be
consummated in accordance with its terms.

2. Representations and Warranties of the Selling Stockholders. Each Selling
Stockholder listed on Schedule I severally represents and warrants to each
Underwriter and the Company that:

(a) Such Selling Stockholder has full right, power and authority to
enter into this Agreement and to sell, assign, transfer and deliver the
Firm Shares to be sold by such Selling Stockholder hereunder. This
Agreement and the Power of Attorney attached hereto as Exhibit A have been
duly executed and delivered by such Selling Stockholder.

(b) Such Selling Stockholder will convey good and valid title to the
Stock to be delivered by such Selling Stockholder hereunder, free and clear
of all liens, encumbrances, equities and claims whatsoever. Certificates in
negotiable form for the aggregate number of Shares to be sold by such
Selling Stockholder have been placed in custody, under a custody agreement
with the Company as custodian in the form attached hereto as Exhibit B.

(c) The information with respect to such Selling Stockholder included in
the Registration Statement and the Prospectus under the captions "Selling
Stockholders" and "Underwriting" does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.

(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transaction contemplated herein, except such as
may have been obtained under the Act or otherwise and such as may be
required under state securities or the "Blue Sky" laws.

5
<PAGE>

(e) The performance of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms and provisions of or constitute a
default under or result in the creation or imposition of any lien, charge,
or encumbrance upon the assets or properties of such Selling Stockholder,
pursuant to any indenture, mortgage, deed or trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or
under and statute or under any order, rule or regulation applicable to such
Selling Stockholder or of any court or other governmental body.

(f) To the extent that any statement or omission in the Registration
Statement, the Prospectus or any post-effective amendment or supplement
thereto is made in reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder expressly for use
therein, the Registration Statement, the Prospectus and all post-effective
amendments and supplements thereto will (when they become effective or are
filed with the Commission, as the case may be) conform in all material
respects to the requirements of the Act and the rules and regulations
promulgated thereunder and not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.

3. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell, and each of the Selling Stockholders agrees,
severally and not jointly, to sell, to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Company and each of the Selling Stockholders, at a purchase price per share of
$ , the number of Firm Shares set forth opposite the name of such Underwriter
in Schedule II 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, and each of the Selling
Stockholders agrees, severally and not jointly, to sell, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company
and each of the Selling Stockholders, 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 and each Selling Stockholder hereby grant to the Underwriters
the right to purchase at their election up to 1,200,000 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 5 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.

4. 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.

5. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Deutsche Bank may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholders, shall be delivered by or on
behalf of the Company and the Selling Stockholders to Deutsche Bank, for the
account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by

6
<PAGE>

wire transfer of Federal (same-day) funds to the account specified by the
Company or such Selling Stockholder, as the case may be, to Deutsche Bank 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 Deutsche Bank Securities Inc., 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 , 2000 or such other time and date as Deutsche Bank 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 Deutsche Bank in the
written notice given by Deutsche Bank of the Underwriters' election to purchase
such Optional Shares, or such other time and date as Deutsche Bank 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 9 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 9(l) hereof, will be delivered at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, NY 10005 (the "Closing Location"),
and the Shares will be delivered at the Designated Office, all at such Time of
Delivery, such Time of Delivery being herein referred to as the "Closing Date."
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 5, "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.

6. 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 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;

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<PAGE>

(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 earning 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 90 days after the date of the Prospectus (the "Lock-
up Period"), not to offer, sell, contract to sell or otherwise dispose of,
except as provided under this 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);

8
<PAGE>

(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this 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 National Market"); and

(j) 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) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.

7. Covenants of Selling Stockholders. Each Selling Stockholder agrees with
the several Underwriters as follows:

(a) Such Selling Stockholder will cooperate to the extent necessary to
cause the Registration Statement or any post-effective amendment thereto to
become effective at the earliest possible time.

(b) Such Selling Stockholder will use such Selling Stockholder's
reasonable best efforts to do or perform all things required to be done or
performed by it prior to the Closing Date to satisfy all conditions
precedent to the delivery of the Shares.

(c) Except for the sale of Shares, such Selling Stockholder will not
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or any interests therein, or any
securities convertible into, or exchangeable for, shares of Stock or rights
to acquire the same, prior to the expiration of the Lock-up Period without
the prior written consent of the Underwriters.

(d) Such Selling Stockholder will not take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares in violation of the 1934 Act or
any applicable rules of the Nasdaq National Market.

(e) Each Selling Stockholder agrees to notify the Underwriters promptly
of any information that comes to such Selling Stockholder's attention that
would cause such Selling Stockholder to have reason to believe that his or
its representations, warranties and statements in this Agreement are not
accurate in all material respects.

(f) Except as herein contemplated with respect to the Shares to be
included in the Registration Statement, each Selling Stockholder agrees to
waive any registration rights to which such Selling Stockholder may be
entitled in connection with the public offering herein contemplated.

8. 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 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 6(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

9
<PAGE>

National Market; (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 that are not otherwise specifically provided for in this Section 8.

It is understood, however, that, except as provided in this Section 8, and
Sections 10 and 12 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. Each Selling Stockholder shall pay the costs and expenses
incident to the performance by it of its obligations hereunder and in
connection with the offer, sale and delivery of the Shares to be sold by it,
including any stock transfer taxes payable upon the sale of the Shares to the
Underwriters, the fees and expenses of any counsel retained by it and the
underwriting discounts and communications payable to the Underwriters.

9. 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 6(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;

(b) Cahill Gordon & Reindel, 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
I 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;

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<PAGE>

(iii) Each of the subsidiaries of the Company and PT III is a
corporation incorporated and validly existing as a corporation in good
standing under the laws of its respective jurisdiction of incorporation;

(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 have been duly and validly authorized and, when
issued and delivered against payment therefor as provided in this
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 the compliance by the Company with
all of the provisions of this Agreement and the consummation of the
transactions herein 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 filed as an Exhibit to the Registration
Statement that is material to the Company and its subsidiaries 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
respective 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;

(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 has been duly authorized, executed and delivered
by the Company;

11
<PAGE>

(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," and under the caption "Underwriting,"
insofar as they purport to de-scribe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all
material respects;

(xii) The Company is not an "investment company," as such term is
defined in the Investment Company Act;

(xiii) Each document filed pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act") (other than the financial
statements and supporting schedules included therein, as to which no
opinion need be rendered), and incorporated or deemed to be
incorporated by reference in the Prospectus complied when so filed as
to form in all material respects with the 1934 Act and the regulations
promulgated thereunder; and

(xiv) 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 9(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
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.

(d) The Selling Stockholders shall have furnished to you the opinion of
Holland & Knight LLP and Testa, Hurwitz & Thibeault, LLP, counsel for the
Selling Stockholders, or of such other counsel to the Selling Stockholders
as shall be satisfactory to Cahill Gordon & Reindel, counsel for the
Underwriters, dated such Time of Delivery, to the effect that:

(i) This Agreement has been duly executed and delivered by the
Selling Stockholders

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<PAGE>

(ii) Each Selling Stockholder immediately prior to the Closing Date
will be the sole registered owner of the Shares to be sold by it and
will have the power and authority to sell, transfer and deliver in the
manner provided in this Agreement the Shares being sold by such Selling
Stockholders hereunder.

(iii) The delivery by the Selling Stockholders to the several
Underwriters of certificates for the Shares being sold hereunder by the
Selling Stockholders against payment therefor as provided herein,
assuming the Underwriters purchased the Shares in good faith without
knowledge of any adverse claim, will pass good and valid title to such
Shares to the several Underwriters, free and clear of all liens,
encumbrances, equities and claims whatsoever.

(e) 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 comfort letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you and each of KPMG LLP, Ernst & Young LLP and
Arthur Andersen LLP shall have furnished to you a comfort letter, dated the
date of the Prospectus, in form and substance satisfactory to you;

(f) (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 material adverse 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, consolidated 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, the effect of which, in any such case de-scribed 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;

(g) 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;

(h) 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 National Market;
(ii) a suspension or material limitation in trading in the Company's
securities on the Nasdaq National Market; (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 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;

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<PAGE>

(i) The Shares to be sold at such Time of Delivery shall have been duly
listed for quotation on the Nasdaq National Market;

(j) The Company has obtained and delivered to the Underwriters executed
copies of a "lock-up" agreement from each of the directors and executive
officers and ARBY II substantially to the effect set forth in Section 6(e)
hereof in form and substance satisfactory to you;

(k) The Company shall have complied with the provisions of Section 6(c)
hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement;

(l) 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 (f) of this Section 9 and as to such other matters
as you may reasonably request;

(m) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct in all material
respects on and as of the date hereof and on and as of such Time of
Delivery as if made on and as of such date, and you shall have received
certificates, dated as of such Time of Delivery and signed by or on behalf
of the Selling Stockholders to the effect set forth in this Section 9(m);
and

(n) The Selling Stockholders shall not have failed at or prior to such
Time of Delivery to have performed or complied with any of their agreements
herein contained and required to be performed or complied with by them
hereunder at or prior to such Time of Delivery.

10. (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 be-come 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 in-formation furnished to the Company by any
Underwriter through Deutsche Bank expressly for use therein.

(b) Each Selling Stockholder will, severally but not jointly, indemnify and
hold harmless the Company, each Underwriter and each person, if any, who
controls the Company or any Underwriter within the meaning of Section 15 of the
Act of Section 20 of the 1934 Act against any losses, claims, damages or
liabilities to which the Company, underwriter or controlling person may become
subject under the Act, the 1934 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

14
<PAGE>

the 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 only to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by any Selling Stockholder
through the Company (but only in its capacity as custodian of the Selling
Stockholders) specifically for use therein; and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or Underwriter or
controlling person in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, that each Selling
Stockholder shall not be liable under this Section 10 for any amounts in excess
of the product of the purchase price per share set forth in Section 3 hereof
and the number of shares being sold by such Selling Stockholder hereunder.

(c) 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 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 Deutsche Bank
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.

(d) 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 re-lease 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.

(e) If the indemnification provided for in this Section 10 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,

15
<PAGE>

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 (d) 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 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 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 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 (e) 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 (e). 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 (e) 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 (e), 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 (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.

(f) The obligations of the Company under this Section 10 shall be in
addition to any liability that 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 10 shall be in addition to any liability that
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.

11. (a) If any Underwriter shall default in its obligation to purchase the
Shares that 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 ar-range 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

16
<PAGE>

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
11 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 that
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 Under-writer 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 that
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 and the Selling
Stockholders 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 8 hereof and the indemnity and contribution agreements in Section 10
hereof; but nothing herein shall relieve a de-faulting Underwriter from
liability for its default.

12. 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.

13. If this Agreement shall be terminated pursuant to Section 11 hereof, the
Company shall not then be under any liability to any Underwriter except as
provided in Sections 8 and 10 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 8 and 10 hereof.

14. Information Supplied by the Underwriters and Selling Stockholders.

(a) The statements set forth in the last paragraph on the front cover
page of the Prospectus relating to the Shares and paragraphs nine and ten
under the heading "Underwriting" in the Prospectus relating to the
Securities (to the extent such statements relate to the Underwriters)
constitute the only information furnished by the Under-writers to the
Company and the Selling Stockholders for the purposes of Sections 2(b),
10(a) and 10(b) hereof. Each Underwriter confirms

17
<PAGE>

that such statements, to the extent such statements related to each such
Underwriter, are correct in all material respects.

(b) The number of shares of Common Stock beneficially owned by the
Selling Stockholders prior to and after the offering of the Securities and
footnotes in the Table under the heading "Selling Stockholders" in the
Prospectus constitute the only information furnished by the Selling
Stockholders to the Company and the Underwriters for the purposes of
Section 10(a) and 10(b) hereof. Each Selling Stockholder confirms that such
information, to the extent such statements relate to such Selling
Stockholder, is correct in all material respects.

15. In all dealings hereunder, you shall act on be-half 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 Deutsche
Bank Securities Inc., 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 10(d) hereof shall be de-
livered 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.

16. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 10
and 12 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 per-son 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.

17. 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.

18. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

19. 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.

18
<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:

Selling Stockholders, named in
Schedule I to this Agreement,
acting severally and not jointly

By___________________________________
Name: Title: Attorney-in-Fact

As Attorney-in-Fact acting on behalf
of each of the Selling Stockholders
named in Schedule I to this
Agreement.

Accepted as of the date hereof:

DEUTSCHE BANK SECURITIES INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
RAYMOND JAMES & ASSOCIATES, INC.
SALOMON SMITH BARNEY INC.
BANC OF AMERICA SECURITIES LLC
As representatives of the several Underwriters

By: Deutsche Bank Securities Inc.

By___________________________________
Name:
Title:

19
<PAGE>

SCHEDULE I

Selling Stockholders

<TABLE>
<CAPTION>
Number of Optional
Total Number of Shares to be
Firm Shares Purchased if Maximum
Name of Beneficial Owner to be Purchased Option Exercised
- ------------------------ --------------- --------------------
<S> <C> <C>
ABRY II (a)................................ 1,926,683
Motorola, Inc. ............................ 418,520
Robert J. Wolsey........................... 122,142
James M. Dell'Apa.......................... 75,588
Steven R. Day.............................. 64,262
David Zahn................................. 10,271
Ben Gaboury................................ 10,271
Martin Alvarez............................. 10,271
Shirley Putnam............................. 10,271
James Bokish............................... 10,271
Slade Lindsay.............................. 41,450
--------- -------
Total.................................... 2,700,000 400,000
========= =======
</TABLE>
- --------
(a) Royce Yudkoff is deemed the beneficial owner of the Shares offered by ABRY
II.

20
<PAGE>

SCHEDULE II

<TABLE>
<CAPTION>
Number of
Optional Shares
Total Number to be Purchased
of Firm Shares if Maximum Option
Underwriter to be Purchased Exercised
- ----------- --------------- -----------------
<S> <C> <C>
Deutsche Bank Securities Inc................
Goldman, Sachs & Co. .......................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...............................
Raymond James & Associates, Inc.............
Salomon Smith Barney Inc....................
Banc of America Securities LLC..............
--------- ---------
Total..................................... 8,000,000 1,200,000
========= =========
</TABLE>

<PAGE>

Exhibit 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 11, 1999 relating to the
consolidated financial statements of Pinnacle Holdings Inc. We also consent to
the references to us under the headings "Experts" and "Selected Financial Data"
in such Registration Statement. However, it should be noted that
PricewaterhouseCoopers LLP has not prepared a certified such "Selected
Financial Data."

PRICEWATERHOUSECOOPERS LLP

Tampa, Florida
December 30, 1999

<PAGE>

Exhibit 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference of our report dated February 20, 1998 on the Tower Operations of
Southern Communications Services, Inc. and to all references to our Firm
included in or made a part of this Registration Statement.

/s/ Arthur Andersen LLP

Atlanta, Georgia
January 4, 2000

<PAGE>

Exhibit 23.4

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in this
Registration Statement (Form S-3) and related Prospectus of Pinnacle Holdings
Inc. for the registration of 9,200,000 shares of its common stock and to the
incorporation by reference therein of our report dated July 13, 1998, with
respect to the financial statements of the Tower Operations of MobileMedia
Communications, Inc. and Subsidiaries for the years ended December 31, 1997 and
1996, included in Pinnacle Holdings Inc. Current Report on From 8-K dated
September 3, 1998 filed with the Securities and Exchange Commission on
September 18, 1998.

/s/ Ernst & Young LLP

MetroPark, New Jersey
December 28, 1999

<PAGE>

Exhibit 23.5

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report dated June 16, 1999, with respect to the financial
statements of The North American Antenna Sites Business of Motorola, Inc. which
appears in Pinnacle Holdings Inc.'s Form 8-k/A dated November 15, 1999 and to
the reference to our firm under the heading "Experts" in the prospectus.

KPMG LLP

Chicago, Illinois
December 30, 1999