EXHIBIT 1.0
13,500,000 SHARES
PINNACLE HOLDINGS INC.
COMMON STOCK, $.001 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
August ___, 1998
August __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxx Xxxxxx Inc.
Xxxxxxx, Xxxxx & Co.
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxx Xxxxx & Associates, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx International
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxx Xxxxx & Associates, Inc.
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
Pinnacle Holdings Inc., a Delaware corporation (the "COMPANY"), proposes to
issue and sell to the several Underwriters (as defined below), and certain
shareholders of the Company (the "SELLING SHAREHOLDERS") named in Schedule I
hereto propose to sell to the several Underwriters (as defined below), an
aggregate of 13,500,000 shares of the Common Stock, par value $.001 per share,
of the Company (the "FIRM SHARES"), of which 11,739,130 shares are to be issued
and sold by the Company (the "COMPANY SHARES") and 1,760,870 shares are to be
sold by the Selling Shareholders (the "SELLING SHAREHOLDER SHARES").
It is understood that, subject to the conditions hereafter stated,
10,800,000 Firm Shares (the "U.S. FIRM SHARES"), consisting of 9,391,304 Company
Shares and 1,408,696 Selling Shareholder Shares, will be sold to the several
U.S. Underwriters named in Schedule II hereto (the "U.S. UNDERWRITERS") in
connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement between U.S. and International Underwriters of even
date herewith), and 2,700,000 Firm Shares (the "INTERNATIONAL SHARES"),
consisting of 2,347,826 Company Shares
and 352,174 Selling Shareholder Shares, will be sold to the several
International Underwriters named in Schedule III hereto (the "INTERNATIONAL
UNDERWRITERS") in connection with the offering and sale of such International
Shares outside the United States to persons other than United States and
Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxx Xxxxxx Inc.,
Xxxxxxx, Xxxxx & Co., NationsBanc Xxxxxxxxxx Securities LLC and Xxxxxxx Xxxxx &
Associates, Inc. shall act as representatives (the "U.S. REPRESENTATIVES") of
the several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co. International Limited,
Xxxxx Xxxxxx Inc., Xxxxxxx Xxxxx International, NationsBanc Xxxxxxxxxx
Securities LLC and Xxxxxxx Xxxxx & Associates, Inc. shall act as representatives
(the "INTERNATIONAL REPRESENTATIVES") of the several International Underwriters.
The U.S. Underwriters and the International Underwriters are hereinafter
collectively referred to as the "Underwriters."
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 1,760,870 shares of the Common Stock,
par value $.001 per share, of the Company (the "ADDITIONAL COMPANY SHARES"), and
the Selling Shareholders severally propose to sell to the Underwriters not more
than an additional 264,130 shares of the Common Stock, par value $.001 per
share, of the Company (the "ADDITIONAL SELLING SHAREHOLDER SHARES," and together
with the Additional Company Shares, the "ADDITIONAL SHARES") if and to the
extent that you, as Managers of the offering, shall have determined to exercise,
on behalf of the Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 3 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES." The
shares of Common Stock, par value $.001 per share of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "COMMON STOCK." The Company and the Selling Shareholders are
hereinafter sometimes collectively referred to as the "SELLERS."
As part of the offering contemplated by this Agreement, the Underwriters
have agreed to reserve out of the Shares, up to 675,000 shares, for sale to the
Company's employees, officers, and directors and other parties associated with
the Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus under
the heading "UNDERWRITERS" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold
by the Underwriters pursuant to the Directed Share Program (the "DIRECTED
SHARES") will be sold by the Underwriters pursuant to this Agreement at the
public offering price. Any Directed Shares not orally confirmed for purchase by
any Participants by the end of the first business day after the date on which
this Agreement is executed will be offered to the public by the Underwriters as
set forth in the Prospectus.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-11 (File No. 333-59297)
relating to the Shares. The registration statement contains two prospectuses to
be used in connection with the offering and sale of the shares: the U.S.
prospectus, to be used in connection with the offering and sale of Shares in the
United States and Canada to United States and Canadian Persons, and the
international prospectus, to be used in connection with the offering and sale of
Shares outside the United States and Canada to persons other than United States
and Canadian Persons. The international prospectus is identical to the U.S.
prospectus except for the outside front cover page.
The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
It is understood that on July 7, 1998, the Company entered into an
agreement (the "PURCHASE AGREEMENT") with MobileMedia Corporation
("MOBILEMEDIA") to acquire 163 wireless communications towers from MobileMedia
for $170 million plus fees and expenses (the "MOBILEMEDIA ACQUISITION"). It is
further understood that pursuant to the Purchase Agreement, the Company intends
to enter into a 15-year lease (the "MASTER LEASE") to provide rental tower space
to MobileMedia Communications, Inc. ("MM COMMUNICATIONS"), an affiliate of
MobileMedia. For the purposes of this agreement, all references to the "Pro
Forma Company" refer to the operations of the Company after giving effect to the
MobileMedia Acquisition.
It is also understood that on , 1998, the Company, ABRY
Broadcast Partners II, L.P. ("ABRY") and all of the Non-ABRY Selling
Shareholders (as defined herein) entered into a recapitalization agreement (the
"Recapitalization Agreement") and on August , 1998 the Company amended its
certificate of incorporation in order to convert, substantially
contemporaneously with the closing of the offering of the Shares, any and all
outstanding shares of the Company's Class A, Class B, Class C, Class D and Class
E Common Stock into shares of Common Stock and to provide for a distribution to
holders of certain classes of such common stock to satisfy certain preferential
rights and yields relating thereto (such transactions being referred to herein
as the "RECAPITALIZATION"). In connection with the Recapitalization, the
Company, ABRY II and the Non-ABRY Selling Shareholders also entered into a
registration rights agreement dated as of August , 1998 (the "REGISTRATION
RIGHTS AGREEMENT").
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iii) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
(c) The Company (i) has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, (ii) has, and after giving effect to the MobileMedia
Acquisition, will have, the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
(iii) is and, after giving effect to the MobileMedia Acquisition, will be,
duly qualified to transact business and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on either the Company and its subsidiaries, taken
as a whole, or on the Pro Forma Company and its subsidiaries, taken as a
whole.
(d) Each subsidiary of the Company (i) has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, (ii) has, and after giving effect to the
MobileMedia Acquisition, will have, the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and (iii) is and, after giving effect to the MobileMedia Acquisition, will
be, duly qualified to transact business and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, or the Pro Forma Company and its subsidiaries, taken as a whole; all
of the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The Purchase Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding obligation of, the
Company and, to the knowledge of the Company, MobileMedia; the Purchase
Agreement is in full force and effect as of the date hereof and neither the
Company, nor, to the knowledge of the Company, MobileMedia, is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under the Purchase Agreement, except for violations and defaults
which individually or in the aggregate would not be material to either the
Company and its subsidiaries, taken as a whole, or the Pro Forma Company
and its subsidiaries, taken as a whole; the U.S. Bankruptcy Court for the
District of Delaware has entered an order approving the Purchase Agreement
and the MobileMedia Acquisition, and, to the Company's knowledge (after due
inquiry), no notice of appeal in respect of such approval has been filed by
any party.
(g) Each of the Recapitalization Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by the
Company, and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
(h) After giving effect to the Recapitalization, upon the Closing of
the offering, the authorized, issued and outstanding capital stock of the
Company will be as set forth in the Prospectus under the caption
"Capitalization" in the column entitled "Pro Forma As Adjusted," and the
authorized capital stock of the Company will conform as to legal matters in
all material respects to the description thereof contained in the
Prospectus.
(i) The shares of Common Stock outstanding prior to the issuance of
the Shares to be sold by the Company (including the shares of Common Stock
to be exchanged pursuant to the Recapitalization for the Shares to be sold
by the Selling Shareholder), have been duly authorized and are and, after
giving effect to the Recapitalization, will be, as of the Closing Date,
validly issued, fully paid and non-assessable.
(j) The Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights.
(k) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Purchase
Agreement, the
Recapitalization Agreement and the Registration Rights Agreement will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or the Pro
Forma Company and its subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, the Purchase Agreement, the Recapitalization
Agreement or the Registration Rights Agreement, except as described in the
Prospectus and such as may be required by the securities or Blue Sky laws
of, the various states in connection with the offer and sale of the Shares.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change in the
MobileMedia Acquisition or in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, or the Pro Forma Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement).
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject or, to the Company's knowledge (after due inquiry), to which the
Pro Forma Company or any of its subsidiaries is a party or to which any of
the Pro Forma Company's properties is subject, that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(n) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The Company is not and, after giving effect to the Mobile Media
Acquisition, the Recapitalization and the offering and sale of the Shares
and the application of the proceeds thereof as described in the Prospectus,
will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(p) The Company and its subsidiaries (i) are and, to the Company's
knowledge (after due inquiry), after giving effect to the MobileMedia
Acquisition, will be, in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
and, after giving effect to the MobileMedia Acquisition, will have,
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are and, to the Company's knowledge (after due inquiry), after giving
effect to the MobileMedia Acquisition, will be, in compliance with all
terms and conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole or on the Pro Forma Company and its
subsidiaries, taken as a whole.
(q) All licenses, permits, consents, certificates of need,
authorizations, certifications, accreditations, franchises, approvals,
grants of rights by, or filings or registrations with, any federal, state,
local or foreign court or governmental or public body, authority, or other
instrumentality or third person (including without limitation the Federal
Communications Commission (the "FCC") and the Federal Aviation Authority
("FAA")) (any of the foregoing a "LICENSE") necessary for either the
Company and its subsidiaries or the Pro Forma Company and its subsidiaries
to own, build, maintain or operate their respective businesses or
properties have been duly authorized and obtained, and are in full force
and effect, except where the failure to so be obtained or in effect would
not, individually or in the aggregate, have a material adverse effect on
the Company or on the Pro Forma Company; and the Company and its
subsidiaries are and, after giving effect to the MobileMedia Acquisition,
will continue to be in compliance in all material respects with all
provisions thereof; no event has occurred which permits (or with the
passage of time would permit) the revocation or termination of any License,
or which could result in the imposition of any restriction thereon, which
is of such a nature or the effect of which would reasonably be expected to
have a material adverse effect on the Company or on the Pro Forma Company;
no material License is the subject of any pending or, to the best of the
Company's knowledge, threatened challenge or revocation which, if such
License were revoked, would reasonably be expected to have a material
adverse effect on the Company or on the Pro Forma Company; the Company and
its subsidiaries are not, and after giving effect to the MobileMedia
Acquisition will not be, required to obtain any material License that has
not already been obtained from, or effect any material filing or
registration that has not already been effected with, the FCC, the FAA or
any other federal, state or local regulatory authority in connection with
the
execution and delivery of this Agreement, the Purchase Agreement, the
Registration Rights Agreement or the Recapitalization Agreement.
(r) The Company and its subsidiaries have, and after giving effect to
the MobileMedia Acquisition, will have, duly and timely filed all reports,
statements and filings that are required to be filed by any of them under
the Communications Act and the rules and regulations promulgated
thereunder, and are in all material respects in compliance therewith,
including without limitation the rules and regulations of the FCC and FAA;
the Company is not aware of any event or circumstance constituting
noncompliance (or any person alleging noncompliance) with any rule or
regulation of the FAA which such event or circumstance would reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or on the Pro Forma Company and its
subsidiaries, taken as a whole.
(s) There does not exist and to the Company's knowledge (after due
inquiry), after giving effect to the MobileMedia Acquisition, there will
not exist, any costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole or on the Pro
Forma Company and its subsidiaries, taken as a whole.
(t) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(u) The Company has, since its inception, been organized and
operated, and as of the Closing Date and after giving effect to the
Recapitalization and the offering and upon consummation of the MobileMedia
Acquisition, will continue to be organized and to operate, in a manner so
as to qualify as a "real estate investment trust" ("REIT") under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the
"CODE").
(v) The Company has and, after giving effect to the MobileMedia
Acquisition, will have, good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by it
which is material to the business of
either the Company or the Pro Forma Company, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as could not reasonably be expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole and do
not materially interfere with the use made and proposed to be made of such
property by the Company or the Pro Forma Company; and any real property and
buildings held under lease by the Company are and, after giving effect to
the MobileMedia Acquisition, will be, held by the Company under valid,
subsisting and enforceable leases with such exceptions as could not
reasonably be expected to have a material adverse effect on the Company and
its subsidiaries taken as a whole or on the Pro Forma Company and its
subsidiaries taken as a whole and which are not material and do not
materially interfere with the use made and proposed to be made of such
property and buildings by the Company or the Pro Forma Company, except as
described in or contemplated by the Prospectus.
(w) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company and
its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (iii) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as described
in or contemplated by the Prospectus.
(x) (A) There are no administrative or judicial proceedings pending
before, or threatened by, the FCC with respect to the Company, MobileMedia
or any subsidiary of either the Company or MobileMedia, or any towers owned
or operated by the Company or MobileMedia or any such subsidiaries which,
if determined adversely, individually or in the aggregate, could reasonably
be expected to have a material adverse effect upon the Company and its
subsidiaries taken on a whole, or the Pro Form Company and its
subsidiaries, taken as a whole and (B) the registration with the FCC of
such towers is in full force and effect and is not subject to any special
conditions (other than those conditions of a type customarily imposed under
the general rules, regulations and policies of the FCC) that would
materially and adversely affect the operation of such towers, taken as a
whole.
(y) The Company and its subsidiaries possess and, after giving effect
to the Mobile Media Acquisition, will possess, all certificates,
authorizations, permits and licenses issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse effect on the business or
operations of the Company and its subsidiaries, taken as a whole, or the
Pro Forma Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(z) The pro forma financial statements of the Company, and the related
notes thereto, included in the Prospectus present fairly in all material
respects the pro forma financial position of the Company, as of the dates
indicated and the results of their operations for the periods specified;
the pro forma combined financial information, and the related notes
thereto, included in the Prospectus has been prepared in accordance with
the applicable requirements of the Exchange Act and is based upon good
faith estimates and assumptions believed by the Company to be reasonable.
(aa) The Company is and, after giving effect to the Mobile Media
Acquisition, will be, insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which the Company is engaged;
the Company has not been refused any insurance coverage sought or applied
for; and the Company has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition, financial or otherwise, or the earnings, business or
operations of the Company or the Pro Forma Company, except as described in
or contemplated by the Prospectus.
(ab) None of the Shares distributed in connection with the Directed
Share Program will be offered or sold outside of the United States.
(ac) The Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business
with the Company, or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
(ad) The Company has obtained all consents and waivers under the
Company's Senior Credit Facility (as defined in the Prospectus) necessary
to consummate the Offering and the Recapitalization.
(ae) Pinnacle Towers Inc., Tower Systems, Inc. and Coverage Plus
Antennae Systems, Inc. are the only subsidiaries of the Company.
2. Representations and Warranties of the Selling Shareholders. Each of the
Selling Shareholders, severally and not jointly, represents and warrants to and
agrees with each of the Underwriters, on behalf of itself only, and not with
respect to any other Selling Shareholder, that:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, this
Agreement, the Recapitalization Agreement, the Registration Rights
Agreement, the Custody Agreement signed by such Selling Shareholder and
First Union National Bank, as Custodian, relating to the deposit of the
Shares to be sold by such Selling Shareholder (the "CUSTODY AGREEMENT")
and, as applicable, the Power of Attorney appointing certain individuals
as such Selling Shareholder's attorneys-in-fact to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement (the "POWER OF ATTORNEY") will not contravene any
provision of applicable law, or the certificate of incorporation or by-laws
of such Selling Shareholder (if such Selling Shareholder is a corporation),
or the agreement of limited partnership of such Selling Shareholder (if
such Selling Shareholder is a limited partnership), or any agreement or
other instrument binding upon such Selling Shareholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such Selling Shareholder of its
obligations under this Agreement, the Recapitalization Agreement, the
Registration Rights Agreement or the Custody Agreement or Power of Attorney
of such Selling Shareholder, except such as may be required by the
Securities Act of 1933 and the securities or Blue Sky laws of the various
states or foreign jurisdictions in connection with the offer and sale of
the Shares.
(c) Such Selling Shareholder has, and on the Closing Date will have,
valid title to the Shares to be sold by such Selling Shareholder and the
legal right and power, and all authorization and approval required by law,
to enter into this Agreement, the Recapitalization Agreement, the
Registration Rights Agreement, the Custody Agreement and, as applicable,
the Power of Attorney and to sell, transfer and deliver the Shares to be
sold by such Selling Shareholder.
(d) The Custody Agreement and, as applicable, the Power of Attorney
have been duly authorized, executed and delivered by such Selling
Shareholder and are valid and binding agreements of such Selling
Shareholder.
(e) Delivery of the Shares to be sold by such Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear of
any security interests, claims, liens, equities and other encumbrances.
(f) Each of the Recapitalization Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by each of the
Selling Shareholders that is a party thereto, and constitutes a valid and
binding obligation of each such party and is enforceable against each such
party in accordance with its terms.
(g) All information in the Registration Statement under the caption
"Principal and Selling Stockholders", when such Registration Statement
became effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and all such information in the
Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. Agreements to Sell and Purchase. Each of the Company and the
Selling Shareholders, severally and not jointly, hereby agrees to sell to the
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from such
seller at $______ a share (the "PURCHASE PRICE") the number of Firm Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the number of Firm Shares to be
sold by such Seller as the number of Firm Shares set forth in Schedule II or
Schedule III hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each of the Company and the
Selling Shareholders, severally and not jointly, agree to sell to the U.S.
Underwriters the Additional Shares, and the U.S. Underwriters shall have a one-
time right to purchase, severally and not jointly, up to 2,025,000 Additional
Shares at the Purchase Price. If the Underwriters elect to purchase less than
all of the
Additional Shares, then the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) to be purchased
from each Seller shall bear the same proportion to the total number of
Additional Shares purchased as the number of Company Shares or Selling
Shareholder Shares sold by such Seller (as the case may be) bears to the total
number of Firm Shares. If you, on behalf of the Underwriters, elect to exercise
such option, you shall so notify the Company and the Selling Shareholders in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each U.S.
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased as the number of Firm Shares set forth in
Schedule II hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) the issuance by the Company of shares of
Common Stock pursuant to the Recapitalization, (C) the issuance of shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing or (D) the grant of options to purchase shares of Common
Stock under the Company's Stock Incentive Plan provided such options do not vest
prior to the expiration of the 180-day period referenced herein, and provided
further, that in the case of subclause (C) of this paragraph, the recipient of
any such shares agrees to execute a lock-up agreement in the form of Exhibit A
hereof.
In addition, each Selling Shareholder, agrees that, without the prior
written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 180 days after the date of
the Prospectus, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at $___
a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by you at
a price that represents a concession not in excess of $____ a share under the
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $___ a share, to any Underwriter or to
certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company and to the Selling Shareholders in Federal or other funds
immediately available in New York City against delivery of such Firm Shares for
the respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on August __, 1998, or at such other time on the same or such other date,
not later than August __, 1998, as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company and to the
Selling Shareholders in Federal or other funds immediately available in New York
City against delivery of such Additional Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section 3 or at such other time on the same
or on such other date, in any event not later than September __, 1998, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."Certificates for the Firm
Shares and Additional Shares shall be in definitive form and registered in such
names and in such denominations as you shall request in writing not later than
one full business day prior to the Closing Date or the Option Closing Date, as
the case may be. The certificates evidencing the Firm Shares and Additional
Shares shall be delivered to you on the Closing Date or the Option Closing Date,
as the case may be, for the respective accounts of the several Underwriters,
with any transfer taxes payable in connection with the transfer of the Shares to
the Underwriters duly paid, against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 4:00 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change in the MobileMedia Acquisition, or, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or
the Pro Forma Company and its subsidiaries taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by Xxxxxx X. Xxxxxx, in his
capacity as the Chief Executive Officer of the Company and by Xxxxxx Xxx,
in his capacity as the Chief Financial Officer of the Company, to the
effect set forth in Section 6(a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date.
The officers signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received a certificate from or on
behalf of each Selling Shareholder, dated the Closing Date and signed by or
on behalf of such Selling Shareholder, to the effect that the
representations and warranties of such Selling Shareholder contained in
this Agreement are true and correct as of the Closing Date and that such
Selling Shareholder has complied with all of the agreements and satisfied
all of the conditions on its part to be preferred or satisfied hereunder on
or before the Closing Date.
(d) The Underwriters shall have received on the Closing Date an
opinion of Holland & Knight LLP, outside counsel for the Company, dated the
Closing Date,
confirming the consummation of the Recapitalization and to the effect set
forth in Exhibit B hereto.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx & Xxxxx, counsel for ABRY II, dated the Closing Date,
to the effect that:
(i) the execution and delivery by ABRY II of, and the
performance by ABRY II of its obligations under, this Agreement, the
Recapitalization Agreement, the Registration Rights Agreement and the
Custody Agreement will not violate any provision of applicable law,
except as rights to indemnity and contribution may be limited by
applicable law, or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over ABRY II, which judgment, order or decree is
specifically applicable to ABRY II, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by ABRY II of its
obligations under this Agreement, the Custody Agreement, the
Registration Rights Agreement or the Recapitalization Agreement,
except such as may be required by the Securities Act of 1933 and the
securities or Blue Sky laws of the various states and foreign
jurisdictions in connection with the offer and sale of the Shares. In
rendering the opinion expressed in this paragraph (i) as to violations
of applicable law, such counsel may assume that none of the
Registration Statement, the Prospectus or any preliminary prospectus
contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in the light
of the circumstances under which they were made not misleading;
(ii) ABRY II is the sole registered owner of the Shares to be
sold by ABRY II;
(iii) each of the Custody Agreement, the Recapitalization
Agreement and the Registration Rights Agreement is a valid and binding
agreement of ABRY II and enforceable against ABRY II in accordance
with its terms; and
(iv) upon payment of the purchase prices specified in this
Agreement and delivery to the Underwriters of the certificates
representing the Shares to be sold by ABRY II pursuant to this
Agreement, the Underwriters will have acquired ownership of such
Shares free of any adverse claims (as defined under the New York
Uniform Commercial Code).
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for ABRY II, dated the
Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by ABRY II;
(ii) the execution and delivery by ABRY II of, and the
performance by ABRY II of its obligations under, this Agreement, the
Custody Agreement, the Recapitalization Agreement and the Registration
Rights Agreement will not contravene the agreement of limited
partnership of ABRY II, or, to the best of such counsel's knowledge,
any agreement or other instrument binding upon ABRY II;
(iii) ABRY II is a limited partnership duly formed under the
laws of [ ]; ABRY II has the legal right and
partnership power, and all authorization and approval required by law,
to enter into this Agreement, the Custody Agreement, the
Recapitalization Agreement and the Registration Rights Agreement; and
(iv) the Custody Agreement, the Recapitalization Agreement and
the Registration Rights Agreement have been duly authorized, executed
and delivered by ABRY II.
(g) The Underwriters shall have received on the Closing Date an
opinion of Holland & Knight, counsel for the Selling Shareholders other
than ABRY II (the "NON-ABRY SELLING SHAREHOLDERS"), dated the Closing Date,
to the effect set forth in Exhibit C hereto.
(h) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the
Closing Date, in a form satisfactory to the Underwriters.
With respect to Section 6(e), Section 6(f) and Section 6(g) above,
Xxxxxxxx & Ellis, Testa, Xxxxxxx & Xxxxxxxxx, LLP and Holland & Knight may
rely upon an opinion or opinions of counsel for any Selling Shareholders
and, with respect to factual matters
and to the extent such counsel deems appropriate, upon the representations
of each Selling Shareholder contained herein and in the Custody Agreement
and Power of Attorney of such Selling Shareholder and in other documents
and instruments; provided that (A) each such counsel for the Selling
Shareholders is satisfactory to your counsel, (B) a copy of each opinion so
relied upon is delivered to you and is in form and substance satisfactory
to your counsel, (C) copies of such Custody Agreements and Powers of
Attorney and of any such other documents and instruments shall be delivered
to you and shall be in form and substance satisfactory to your counsel and
(D) Xxxxxxxx & Xxxxx and Xxxxxxx & Xxxxxx shall state in their opinion that
they are justified in relying on each such other opinion.
The opinions of Holland & Knight, Kirkland & Xxxxx and Xxxxx, Xxxxxxx
and Xxxxxxxxx, LLP described in Sections 6(d), 6(e), 6(f) and 6(g) above
(and any opinions of counsel for any Selling Shareholder referred to in the
immediately preceding paragraph) shall be rendered to the Underwriters at
the request of the Company or one or more of the Selling Shareholders, as
the case may be, and shall so state therein.
(i) The Underwriters shall have received, on each of the date hereof
and the Closing Date, letters dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to the Underwriters,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus, from each of the following
independent public accountants: (i) Xxxxxx Xxxxxxxx LLP (with respect to
the financial statements and certain financial information of the tower
operations of Southern Communications Services, Inc., (ii) Ernst & Young
(with respect to the financial statements and certain financial information
of the tower operations of MobileMedia Corporation and its affiliates), and
(iii) Pricewaterhouse Coopers LLP (with respect to the financial statements
and certain financial information of the Company, Shore Communications,
Inc., Tidewater Communications, and Majestic Communications, Inc.);
provided that the letters delivered on the Closing Date shall use a "cut-
off date" not earlier than the date hereof.
(j) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the Closing
Date.
(k) The Recapitalization as described in the Prospectus shall have
been consummated; the Recapitalization Agreement shall be in full force and
effect and no amendment thereto shall have been entered into except with
the consent of the Underwriters;.
(l) The Purchase Agreement shall be in full force and effect and no
amendment thereto shall have been entered into and none of the conditions
to closing set forth thereon shall have been waived (except in either case
with the consent of the Underwriters); the U.S. Bankruptcy Court for the
District of Delaware shall have entered an order approving the Purchase
Agreement and the MobileMedia Acquisition, and no notice of appeal in
respect of such approval shall have been filed by any party.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
7. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to you, without charge, 8 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 7(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on behalf
of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-
month period ending September 30, 1999 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required
by the National Association of Securities Dealers, Inc. or the rules of
such association from sale, transfer, assignment, pledge or hypothecation
for a period of three months following the date of the effectiveness of the
Registration Statement, and Xxxxxx Xxxxxxx & Co. Incorporated will notify
the Company as to which Participants will need to be so restricted. At the
request of Xxxxxx Xxxxxxx & Co. Incorporated, the Company will direct the
transfer agent to place stop transfer restrictions upon such securities for
such period of time; the Company will pay all fees and disbursements of
counsel reasonably incurred by the Underwriters in connection with the
Directed Share Program and stamp duties, similar taxes or duties or other
taxes, if any, incurred by the Underwriters in connection with the Directed
Share Program.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of each
Seller's obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's accountants
and counsel for the Selling Shareholders in connection with the registration and
delivery of the Shares under the Securities Act and all other fees or expenses
in connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Shares under
state securities laws and all expenses in connection with the qualification of
the Shares for offer and sale under state securities laws as provided in Section
7 hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing
fees and the reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and expenses
incident to listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) certain costs and expenses
of the Sellers relating to investor presentations on any "road show" undertaken
in connection with the marketing of the offering of the Shares, including, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Sellers and any such
consultants, and one half of the cost of any aircraft chartered or limosines
rented in connection with the road show, and (ix) all other costs and expenses
incident to the performance of the obligations of any of the Sellers hereunder
for which provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 9 entitled "Indemnity
and Contribution", and the last paragraph of Section 11 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements of
their counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
The provisions of this Section shall not supersede or otherwise affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
9. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section [ ] hereof.
(b) The Company also agrees to indemnify and hold harmless Xxxxxx Xxxxxxx
& Co. Incorporated ("Xxxxxx Xxxxxxx") and each person, if any, who controls
Xxxxxx Xxxxxxx within the meaning of either Section 15 of the Act, or Section 20
of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments incurred as a result of Xxxxxx Xxxxxxx'x participation
as a "qualified independent underwriter" within the meaning of Rule 2720 of the
National Association of Securities Dealers' Conduct Rules in connection with the
offering of the Shares, except for any losses, claims, damages, liabilities, and
judgments resulting from Xxxxxx Xxxxxxx'x, or such controlling person's, willful
misconduct.
(c) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Selling Shareholder furnished in writing by or on behalf of
such Selling Shareholder expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto;
provided, that with respect to any untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus the indemnity
agreement contained in this subsection (b) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased any Shares, to the extent that a prospectus relating to
such Shares was required to be delivered by such Underwriter under the Act in
connection with such purchase and any such loss, claim, damage or liability of
such Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Shares to
such person, a copy of the Prospectus if the Company had previously furnished
copies thereof to such Underwriter.
(d) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(e) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 9, 9 or 9, such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company within the meaning of either such Section and
(iii) the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Shareholders and all persons, if any, who control
any Selling Shareholder within the meaning of either such Section, and that all
such reasonable fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the
Underwriters and such control persons of any Underwriters, such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated. In the case of any
such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
In the case of any such separate firm for the Selling Shareholders and such
control persons of any Selling Shareholders, such firm shall be designated in
writing by the persons named as attorneys-in-fact for the Selling Shareholders
under the Powers of Attorney.
Notwithstanding anything contained herein to the contrary, if indemnity may
be sought pursuant to Section 6(a) or Section 6(b) hereof in respect of such
action or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local counsel)
for Xxxxxx Xxxxxxx in its capacity as a "qualified independent underwriter" and
all persons, if any, who control Xxxxxx Xxxxxxx within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(f) To the extent the indemnification provided for in Section 9, 9 or 9 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 9 above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause 9
above but also the relative fault of the indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by each Seller and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Sellers on the one hand and the Underwriters on the other hand shall be
determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Sellers or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
(g) The Sellers and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 9. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any reasonable legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(h) The indemnity and contribution provisions contained in this Section 9
and the representations, warranties and other statements of the Company and the
Selling Shareholders contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, any Selling Shareholder or any person controlling
any Selling Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
10. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses 10
through 10, such event, singly or together with any other such event, makes it,
in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I and Schedule II bears to the
aggregate number of Firm Shares set forth opposite the names of all such non-
defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you, the
Company and the Selling Shareholders for the purchase of such Firm Shares are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Shareholders. In any such case either you or the relevant Sellers
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. If, on the Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than one-
tenth of the aggregate number of Additional Shares to be purchased, the non-
defaulting Underwriters shall have the option to (i) terminate their obligation
hereunder to purchase Additional Shares or (ii) purchase not less than the
number of Additional Shares that such non-defaulting Underwriters would have
been obligated to purchase in the absence of such default. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of any Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
reasonable out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
PINNACLE HOLDINGS INC.
By: _____________________________
Name:
Title:
ABRY BROADCAST PARTNERS, L.P.
By: ABRY Capital, L.P.
General Partner
By: ABRY Holdings, Inc.
General Partner
By: ____________________________
Name:
Title:
The Non-ABRY Selling Shareholders named in
Schedule I hereto, acting severally
By:___________________________________________
Xxxxxx X. Xxxxxx
Attorney-in-Fact
By:___________________________________________
Xxxxxx Xxx
Attorney-in-Fact
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXX XXXXXX INC.
XXXXXXX XXXXX & CO.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXX XXXXX &
ASSOCIATES, INC.
Acting severally on behalf of themselves and the several
U.S. Underwriters named in Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:___________________________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
XXXXX XXXXXX INC.
XXXXXXX XXXXX INTERNATIONAL
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXX XXXXX &
ASSOCIATES, INC.
Acting severally on behalf of themselves and the several
International Underwriters named in Schedule III hereto.
By: Xxxxxx Xxxxxxx & Co.
International Limited
By:___________________________________________
Name:
Title:
SCHEDULE I
SELLING SHAREHOLDERS
NUMBER OF FIRM SHARES NUMBER OF ADDITIONAL
SELLING SHAREHOLDER TO BE SOLD SHARES TO BE SOLD
----------------------------------------------------------------------- --------------------
ABRY Broadcast Partners II, L.P.............. 1,451,371 217,705
Xxxxxx Xxxxxx................................ 108,553 16,283
Xxxxx Dell'Apa............................... 78,837 11,825
Xxxxxx Xxx................................... 65,191 *** 9,779 ***
Xxxxxxxx X. Day.............................. -- --
Xxx Xxxxxxx.................................. 6,324 949
Xxxxx Xxxx................................... 6,324 949
Xxxxx Xxxxxxx................................ 25,297 3,794
Xxxxx Xxxxxx................................. 6,324 949
Xxxxxxx Xxxxxx............................... 6,324 949
Xxxxxx Xxxxxxx............................... 6,324 949
--------- -------
Total Selling Shareholder Shares:.. [1,760,870] * [264,130] **
========= =======
_______________
* Adds to 1,760,869
** Adds to 264,131
*** Needs to be broken down between Mr. and Mrs. Day.
SCHEDULE II
U.S. UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
-------------------------------------------------- ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated.................
Xxxxx Xxxxxx Inc..................................
Xxxxxxx, Xxxxx & Co...............................
NationsBanc Xxxxxxxxxx Securities LLC.............
Xxxxxxx Xxxxx & Associates, Inc...................
[ ]..
----------
Total U.S. Firm Shares:................ 10,800,000
==========
SCHEDULE III
INTERNATIONAL UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
-------------------------------------------------- ---------------------
Xxxxxx Xxxxxxx & Co. International Limited........
Xxxxx Xxxxxx Inc..................................
Xxxxxxx Xxxxx International.......................
NationsBanc Xxxxxxxxxx Securities LLC.............
Xxxxxxx Xxxxx & Associates, Inc...................
[ ]..
---------
Total International Shares:............ 2,700,000
=========
EXHIBIT A
August __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx International
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxx Xxxxx & Associates, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxx Xxxxxx Inc.
Xxxxxxx Xxxxx International
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxx Xxxxx & Associates, Inc.
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX
XXXXXXX") proposes to enter into an Underwriting Agreement (the "UNDERWRITING
AGREEMENT") with Pinnacle Holdings Inc., a Delaware corporation (the "COMPANY"),
providing for the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including Xxxxxx Xxxxxxx (the "UNDERWRITERS"), of shares (the
"SHARES") of Common Stock, par value $.001 per share of the Company (the "COMMON
STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. In addition, the undersigned agrees
that, without the prior written consent of Xxxxxx Xxxxxxx on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 180 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
________________________________________
(Name)
________________________________________
(Address)
[insert Exhibit B]
[insert Exhibit C]
