PINNACLE HOLDINGS INC
LIMITED FORBEARANCE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>g72658ex10-1.txt
<DESCRIPTION>LIMITED FORBEARANCE AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.1



                          LIMITED FORBEARANCE AGREEMENT

                  THIS LIMITED FORBEARANCE AGREEMENT (this "Agreement") is dated
as of November 16, 2001, among PINNACLE TOWERS INC., a Delaware corporation (the
"Borrower"), the Parent, each of their Subsidiaries (the Borrower, the Parent
and their Subsidiaries, each a "Loan Party" and collectively, the "Loan
Parties") the several Lenders (as such term is defined in the hereinafter
described Credit Agreement) parties to this Agreement, and BANK OF AMERICA,
N.A., as Administrative Agent for the Lenders (in such capacity, the
"Administrative Agent").

                                   RECITALS:

         A.       The Borrower, the Administrative Agent, and the several
Lenders parties thereto entered into that certain Fifth Amended and Restated
Credit Agreement, dated as of September 17, 1999 (as amended through the date
hereof and as may be further amended, modified, restated, supplemented, renewed,
extended, increased, rearranged and/or substituted from time to time, the
"Credit Agreement").

         B.       The Borrower has advised the Lenders that the Defaults and
Events of Default set forth on the attached Schedule I (the "Anticipated
Defaults") will exist and be continuing upon the Borrower's delivery of a
Compliance Certificate on November 14, 2001.

         C.       The Borrower has requested that the Lenders agree to forbear
from exercising certain rights available to them as a result of the Anticipated
Defaults by the Borrower, and the Lenders have agreed to do so on the terms set
forth herein.

         NOW, THEREFORE, in consideration of the premises and the covenants,
terms, conditions, representations and warranties herein contained, the parties
hereto agree hereby as follows:

         SECTION 1.        DEFINED TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.

         SECTION 2.        LIMITED FORBEARANCE. The Borrower has requested that
the Administrative Agent and the Lenders forbear from exercising the rights and
remedies available to them as a result of the Anticipated Defaults during the
period from the date hereof to and including December 12, 2001. The
Administrative Agent and the Lenders hereby agree to forbear from exercising the
rights and remedies available to them as a result of the Anticipated Defaults,
including the right to demand default interest under Section 2.08 of the Credit
Agreement, from the Effective Date (defined in Section 10(f) below) to and
including the Termination Date (as defined below), subject to the terms of this
Agreement and subject to the occurrence of no further Default or Event of
Default either pursuant to the Sections of the Credit Agreement subject to the
Anticipated Defaults or otherwise. Upon the earlier of (i) the occurrence of any
Default or Event of Default, other than the Anticipated Defaults, (ii) the
amendment and waiver of the Anticipated Defaults by the requisite Lenders under
the terms of the Credit Agreement, or (iii) December 12, 2001 (the "Termination
Date"), the Administrative


<PAGE>
 Agent's and the Lenders' agreement herein to forbear from exercising the rights
and remedies available to them as the result of the Anticipated Defaults shall
immediately terminate, and the Administrative Agent and the Lenders shall be
entitled immediately to exercise any and all rights and remedies available under
the Credit Agreement and any other Loan Paper, at law, in equity, or otherwise,
without notice, demand, presentment, notice of dishonor, notice of acceleration,
notice of intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by the Borrower. The Borrower and the
Lenders hereby acknowledge Borrower's anticipated noncompliance with the Credit
Agreement as a result of the Anticipated Defaults and acknowledge that this
Agreement constitutes notice thereof and waive any and all further notices with
respect thereto. The agreement of the Administrative Agent and the Lenders
herein shall not constitute a waiver of any Default or Event of Default
including without limitation the Anticipated Defaults. The Borrower hereby
acknowledges that, unless and until the Anticipated Defaults are waived by the
requisite number of Lenders in accordance with the Credit Agreement, the Lenders
shall have no commitment to make Revolver Advances or issue Letters of Credit or
otherwise advance any funds to the Borrower. Notwithstanding any provision in
the Credit Agreement or any other Loan Paper to the contrary, the parties hereto
expressly acknowledge and agree that, until the Termination Date, the
Administrative Agent may renew (but not increase) Letters of Credit in existence
as of the date hereof. Notwithstanding any provision in the Credit Agreement or
any other Loan Paper, the parties hereto expressly acknowledge and agree that,
any draw under any Letter of Credit during the term of this Agreement shall
immediately and automatically result in an obligation for the Borrower to
reimburse the Administrative Agent for any such draw (which reimbursement
obligation may not be paid by the Borrower with the proceeds of a Revolver
Advance). Failure of the Borrower to reimburse the Administrative Agent in
immediately available funds for any such draw within 2 business hours after
receipt of notice of such draw shall constitute an Event of Default hereunder
and under the Credit Agreement (such reimbursement to be effected by payment in
full from the cash collateral account described in Section 4(i) hereof or by
wire transfer of immediately available funds, or any combination of the
foregoing). The parties hereto expressly acknowledge and agree that the
agreement of the Borrower in the preceding two sentences does not affect or
abrogate any of the obligations of the Lenders to the Issuing Bank to
participate in any such draws under the Letter of Credit. The parties hereto
further expressly acknowledge and agree that the agreements of the
Administrative Agent and the Lenders herein shall not in any manner restrict or
impair any rights or remedies available to them with respect to any Persons
other than the Borrower and other Persons guaranteeing the Obligations or
providing collateral security therefor.

         SECTION 3.        OTHER AGREEMENTS. To induce the Administrative Agent
and Lenders to enter into this Agreement, the Borrowers hereby agree as follows:

         (A)      During the period from the Effective Date and continuing until
the Termination Date, the Applicable Margin shall be (i) with respect to
Advances outstanding under the Term Loan A and the Revolver Loan shall be 3.75%
per annum for LIBOR Advances and 2.75% per annum for Base Advances and (ii) with
respect to Advances under the Term Loan B, 4.00% per annum for LIBOR Advances
and 3.00% per annum for Base Advances, provided that, notwithstanding the
foregoing, if there exists a Default or Event of Default other than the
Anticipated Defaults, no LIBOR borrowings shall be available to the Borrower.
During the period from the Effective Date until the Termination Date, while
interest will accrue at the rates described above with respect to the Applicable
Margin, the Borrower will pay interest at the rates


                                      -2-
<PAGE>

per annum and at the times provided in the Credit Agreement. The aggregate
additional amount of interest owed hereunder as a result of the increase in
interest rate set forth in this Section 3(a), shall be due and payable on the
Termination Date.

         (B)      On the Effective Date and continuing until the Termination
Date, all notices to be provided to the Administrative Agent shall be provided
as follows:

                                    William E. Livingstone, IV
                                    Bank of America, N.A.
                                    901 Main Street, 66th Floor
                                    Dallas, Texas 75202
                                    Telephone:       (214) 209-2023
                                    Fax:             (214) 209-3533

                                    with a copy to:

                                    Winstead Sechrest & Minick P.C.
                                    Attention: Melissa Stewart
                                    5400 Renaissance Tower
                                    1201 Elm Street
                                    Dallas, Texas 75270
                                    Telephone:       (214) 745-5200
                                    Fax:             (214) 745-5390

         (C)      On the Effective Date and continuing until the Termination
Date, the Borrower will deliver to the Administrative Agent the following
financial reports, in each case in form and detail satisfactory to the
Administrative Agent:

                  (i)      on the Business Day closest to the 15th of every
month and on the last Business Day of every month, a 13-week rolling cash flow
liquidity forecast (including forecasting of receipts and disbursements);

                  (ii)     on the last Business Day of every month, a variance
report delineating all material variances from the prior week's forecast of
receipts and disbursements; and

                  (iii)    any other information or reports from time to time
requested by Administrative Agent, its counsel or its financial advisers.

         (D)      On the Effective Date and continuing until the Termination
Date, Borrower will, and will cause each of the Parent and their Subsidiaries
(other than Subsidiaries organized under the Laws of the country other than the
United States), to grant a prior first perfected Lien on any of the assets of
the Borrower, the Parent or their Subsidiaries requested by the Administrative
Agent or the Majority Lenders for the benefit of the Administrative Agent and
the Lenders to secure the Obligations, (including, without limitation, all cash,
cash equivalents and deposit accounts of the Parent, the Borrower and their
Subsidiaries), provided that, notwithstanding the foregoing, (i) no foreign
organized Subsidiary of the Parent or the Borrower will be required to


                                      -3-
<PAGE>

grant a Lien on any of its assets, (ii) with respect to any Capital Stock owned
by the Borrower, the Parent, any of their foreign organized Subsidiaries, such
pledge will be limited to 65% of the aggregate outstanding issued amount of
Capital Stock of such foreign organized Subsidiary, (iii) the Borrower will
pledge its interest in 65% of the Capital Stock of the Canada Sub, but such
pledge will be a second Lien, and (iv) the Borrower will use its best efforts to
grant a prior first perfected Lien on twenty additional leasehold mortgages (or
leasehold deeds of trust) requested by the Administrative Agent.

         SECTION 4.        PROCEEDS OF ASSET SALES. On the Effective Date and
continuing until the Termination Date, the Borrower shall use the Net Proceeds
of sales of assets or Properties by the Borrower, the Parent or any of their
Subsidiaries (which for purposes of this Agreement shall not exclude asset sales
in the ordinary course of business, but provided that no such sales of assets or
Properties by the Parent, the Borrower or any of their Subsidiaries shall be
permitted except as set forth in Section 5 hereof) as follows: (i) first, to
establish a $2,500,000 cash collateral account to secure the Obligations,
including but not limited to any letter of credit reimbursement obligations, in
accordance with the terms of a Restricted Cash Collateral Account Agreement
executed by the parties in the form attached hereto as Exhibit A, and (ii)
second, to establish a $200,000 retainer for the benefit of Special Counsel in
connection with the continued legal expenses and legal fees and the consulting
fees of Deloitte Consulting associated with the Loans. To the extent that the
Borrower consummates the sale of certain of the St. Louis, Missouri Collocation
Facilities or any other sales of assets and Properties by the Parent, the
Borrower and their Subsidiaries, the Net Proceeds shall be applied as described
above to the extent there has not already been an asset sale or there has been
an asset sale that did not generate funds adequate to fund the referenced
account and retainer. Any additional Net Proceeds from such sale of the St.
Louis, Missouri Collocation Facilities and all other Net Proceeds from all other
sales of assets and Properties by the Borrower, the Parent or any of their
Subsidiaries will be applied in the following order: (x) to immediately prepay
the scheduled amortization of the Obligations due on December 31, 2001, such
prepayment to be in an aggregate amount equal to $7,321,864.00 (each Lender
agrees that such prepayment application in the order of maturity is specifically
permitted by the Lenders hereunder), (y) to reimburse the Borrower for all
amounts paid by the Borrower between November 1, 2001 and November 15, 2001 for
the reimbursement of the Administrative Agent for its fees and expenses of
counsel and consultants in accordance with the terms of the Credit Agreement,
and (z) to the extent of any remaining Net Proceeds, to prepay the Revolver
Loan, the Term Loan A and the Term Loan B, ratably. Such prepayment amounts
under subsection (z) above shall be applied to installments due in the inverse
order of maturity with respect to Term Loan A and Term Loan B, and shall not
affect the scheduled reductions of the Commitment required by Section 2.11(b) of
the Credit Agreement. Notwithstanding the foregoing, if (A) the Borrower sells
the Collocation Facilities located in Beaumont, Texas in accordance with the
provisions of Section 5 below, (B) all preceding requirements of this Section 4
have been satisfied except subsection (z) above and (C) amounts in the cash
collateral account described in (i) above are not less than $2,500,000, the
Borrower may retain for its own use an amount equal to 20% of the Net Proceeds
of the sale of the Collocation Facilities located in Beaumont, Texas, and the
remaining 80% of such Net Proceeds must be applied in accordance with the terms
of subsection (z) above. Any prepayment amounts applied to the Revolver Loan in
accordance with this Section 4 shall permanently reduce the Commitment.


                                      -4-
<PAGE>

         SECTION 5.        PERMITTED ASSET SALES. On the Effective Date and
continuing until the Termination Date, so long as (a) there exists no Default or
Event of Default both before and after giving effect to such sale (except the
Anticipated Defaults), (b) the gross proceeds of each such sale of assets are in
cash only, the Net Proceeds are distributed in accordance with the terms of
Section 4 hereof and the Borrower is in full compliance with the terms of
Section 4 hereof and this Agreement, and (c) all gross proceeds and other monies
from the buyer of any such assets and Properties are wired directly to the
Administrative Agent (and not to the Borrower, the Parent, any of their
Subsidiaries or any other Person) pursuant to instructions from the Borrower and
its Subsidiaries whereupon the Administrative Agent shall distribute such funds
as set forth in Section 4 hereof,

                   (i) the Borrower may consummate the sale of its Collocation
         Facilities in St. Louis, Missouri, described on Schedule II hereof,
         provided that, (x) gross cash proceeds related to such asset sale are
         not less than $21,000,000 and (y) such asset sale is consummated in
         strict accordance with the terms of that certain Purchase and Sale
         Agreement executed by the Borrower and the buyer, dated as of October
         4, 2001, as amended by that certain First Amendment to Purchase and
         Sale Agreement, dated as of November 7, 2001, as in effect on November
         8, 2001 and

                   (ii) the Borrower may consummate the sale of its Collocation
         Facilities owned by the Borrower in Beaumont, Texas, as described on
         Schedule III hereto, provided that, (x) gross proceeds related to such
         asset sale are not less than $300,000, and (y) such asset sale is
         consummated in strict accordance with the terms of that certain
         Purchase and Sale Agreement, executed by the Borrower and the buyer,
         dated as of September 17, 2001.

In connection with any asset sale permitted by this Section 5 or otherwise
consented to by the Lenders in accordance with the terms of the Credit
Agreement, the Administrative Agent is hereby authorized by each Lender to (i)
execute any and all releases deemed appropriate by it to release such assets of
the Borrower, the Parent and their Subsidiaries constituting Collateral from all
Liens and security interests securing all or any portion of the Obligations,
(ii) return to the Borrower any such Collateral in the possession of the
Administrative Agent, and (iii) take such other action as the Administrative
Agent deems necessary or appropriate in connection with such transaction and in
furtherance of the effectuation thereof.

         SECTION 6.        PROHIBITED ACTIONS. On the Effective Date and
continuing until the Termination Date, the Borrower shall not, and shall not
permit the Parent or any of their Subsidiaries to (a) make any Restricted
Payment, except scheduled payments on seller Debt made by the Borrower, and only
as described and in such amounts as set forth on Schedule IV hereto, (b) make
any new Investments other than Investments permitted under Sections 8.04(a)
through (d), Section 8.04(f), Section 8.04(i)(B) and Section 8.04(j) of the
Credit Agreement, or


                                      -5-
<PAGE>

Investments constituting Capital Expenditures permitted by subsection (i) of
this Section 6, (c) incur any additional Debt, except Debt incurred in the
ordinary course of business by the Borrower in the form of accounts payable and
accrued expenses, (d) grant or otherwise permit any new Liens to exist (except
Liens described in subsections (a) through (f) of the definition of Permitted
Liens in the Credit Agreement), (e) sell, transfer or otherwise dispose of any
assets other than as permitted under Section 5 hereof without the consent of
each Lender, (f) enter into any Affiliate transactions, (g) enter into any
Synthetic Leases, (h) merge or consolidate with any Person or (i) make any
Capital Expenditure or acquisition, except the purchase of immaterial office
supplies and equipment from time to time and other Capital Expenditures made
during the term of this Agreement in an amount not more than $4,500,000 in the
aggregate.

         SECTION 7.        RELEASE.

         (A)      Borrower, the Parent, and each of their Subsidiaries
(collectively, the "Borrower Parties") hereby unconditionally and irrevocably
remises, acquits, and fully and forever releases and discharges the
Administrative Agent and the Lenders and all respective Affiliates, Bank
Affiliates and Subsidiaries of the Administrative Agent and the Lenders, their
respective officers, servants, employees, agents, attorneys, financial advisors,
principals, directors and shareholders, and their respective heirs, legal
representatives, successors and assigns (collectively, the "Released Lender
Parties") from any and all claims, demands, causes of action, obligations,
remedies, suits, damages and liabilities of any nature whatsoever, whether now
known, suspected or claimed, whether arising under common law, in equity or
under statute, which any Borrower Party ever had or now has against the Released
Lender Parties which may have arisen at any time on or prior to the date of this
Agreement and which were in any manner related to any of the Loan Papers or the
enforcement or attempted enforcement by the Administrative Agent or the Lenders
of rights, remedies or recourses related thereto (collectively, the "Borrower
Claims").

         (B)      Each Borrower Party covenants and agrees never to commence,
voluntarily aid in any way, prosecute or cause to be commenced or prosecuted
against any of the Released Lender Parties any of the Borrower Claims which may
have arisen at any time on or prior to the date of this Agreement and were in
any manner related to any of the Loan Papers.

         (C)      The agreements of each Borrower Party set forth in this
Section 7 shall survive termination of this Agreement and the other Loan Papers.

         SECTION 8.        CONDITIONS PRECEDENT. The parties hereto agree that
this Agreement shall not be effective until (a) the Administrative Agent shall
have received a copy of this Agreement executed and delivered by each of the
Loan Parties made signatory hereto and by each Lender, (b) the Administrative
Agent shall have received an opinion of counsel to the Parent, the Borrower and
their Subsidiaries in form and substance satisfactory to the Administrative
Agent and Lenders (such opinion to include, without limitation, enforceability
of this Agreement and no conflict with Parent's, Borrower's and their
Subsidiaries' material agreements), and (c) all fees and expenses in connection
with the Loan Papers, including this Agreement, including legal and other
professional fees and expenses incurred on or prior to the


                                      -6-
<PAGE>

date of this Agreement by Administrative Agent, including, without limitation,
the fees and expenses of Winstead Sechrest & Minick P.C.and Deloitte Consulting,
shall have been paid.

         SECTION 9.        REPRESENTATIONS AND WARRANTIES. To induce the
Administrative Agent and the several Lenders parties hereto to enter into this
Agreement and to grant the forbearance contained herein, the Parent and the
Borrower jointly and severally represent and warrant to the Administrative Agent
and the Lenders as follows:

         (A)      AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Loan Parties of this Agreement have been duly authorized by
all necessary partnership, corporate or limited liability company action, as
applicable, and do not and will not (i) contravene the terms of any charter
documents of any Loan Party, (ii) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing any
contractual obligation to which any Loan Party is a party or any order,
injunction, writ or decree of any governmental authority to which any Loan Party
is a party or its property is subject, or (iii) violate any requirement of Law.

         (B)      GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization or other action by, or notice to, or filing with or approvals
required under state blue sky securities laws or by any governmental authority
is necessary or required in connection with the execution, delivery, performance
or enforcement of this Agreement.

         (C)      NO DEFAULT. Other than the Anticipated Defaults, no Default or
Event of Default exists under any of the Loan Papers. No Loan Party is in
default under or with respect to (i) its charter documents or (ii) any material
contractual obligation of such Person. The execution, delivery and performance
of this Agreement shall not result in any default under any contractual
obligation of any Loan Party in any respect.

         (D)      BINDING EFFECT. This Agreement constitutes the legal, valid
and binding obligations of the Loan Parties that are parties thereto,
enforceable against such Loan Parties in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles of general applicability.

         (E)      REPRESENTATIONS AND WARRANTIES. Except with respect to the
existence of the Anticipated Defaults, the representations and warranties set
forth in the Credit Agreement and the other Loan Papers are true and correct in
all material respects on and as of the Effective Date, as if such
representations and warranties were being made on and as of the Effective Date.

         SECTION 10.       MISCELLANEOUS.

         (A)      RATIFICATION AND CONFIRMATION OF LOAN PAPERS. Except as
specifically modified by this Agreement, the terms, provisions, conditions and
covenants of the Credit Agreement and the other Loan Papers remain in full force
and effect and are hereby ratified and confirmed, and the execution, delivery
and performance of this Agreement shall not in any manner operate as a waiver
of, consent to or amendment of any other term, provision, condition


                                      -7-
<PAGE>

or covenant of the Credit Agreement or any other Loan Paper. Without limiting
the generality of the foregoing, the forbearance provided by this Agreement
shall not be deemed to constitute a waiver of compliance or consent to
noncompliance by any of the Loan Parties with respect to any other term,
provision, condition or covenant of the Credit Agreement or other Loan Papers.

         (B)      AFFIRMATION OF GUARANTEES. Notwithstanding that such consent
is not required thereunder, the Parent, the Borrower and the Subsidiaries of the
Parent and the Borrower hereby consent to the execution and delivery of this
Agreement by the parties hereto and reaffirm their respective obligations under
each of their respective Guaranties.

         (C)      LIENS. The Parent, the Borrower and the Subsidiaries agree
hereby that all Liens, security interests, assignments, superior titles, rights,
remedies, powers, equities and priorities securing the Obligations including but
not limited to those under the Loan Papers are hereby ratified and confirmed as
valid, subsisting and continuing to secure the Obligations, and this Agreement
shall not affect the priority of such Liens. Nothing in this Agreement shall in
any manner diminish, impair or extinguish any of the Liens securing the
Obligations, the Guaranties, or the other Loan Papers or be construed as a
novation in any respect.

         (D)      HEADINGS. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.

         (E)      APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

         (F)      COUNTERPARTS AND EFFECTIVE DATE. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Agreement shall become
effective as against all signatories hereto on the date when all of the
conditions precedent set forth in Section 8 of this Agreement have been
satisfied in full (the "Effective Date").

         (G)      FINAL AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE CREDIT
AGREEMENT AND OTHER LOAN PAPERS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]


                                      -8-
<PAGE>


                  IN WITNESS WHEREOF, the parties hereto have caused this
Limited Forbearance Agreement to be duly executed and delivered by their proper
and duly authorized officers effective as of the day and year first above
written.

         THE BORROWER:

                                      PINNACLE TOWERS INC.


                                      ----------------------------------------
                                      By: /s/ Decker Todd
                                         -------------------------------------
                                      Its: Vice President, Treasurer and
                                           Assistant Secretary

<PAGE>


                                      ADMINISTRATIVE AGENT:


                                      BANK OF AMERICA, N.A.,
                                      as Administrative Agent

                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      LENDERS:

                                      BANK OF AMERICA, N.A., individually as a
                                      Lender


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      FLEET NATIONAL BANK (f/k/a
                                      BANKBOSTON, N.A.)


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------



<PAGE>


                                      BANKERS TRUST COMPANY


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      SOCIETE GENERALE


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      UNION BANK OF CALIFORNIA, N.A.


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      KEY CORPORATE CAPITAL INC.


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------



<PAGE>


                                      COBANK, ACB


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      CREDIT LYONNAIS NEW YORK BRANCH


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      THE BANK OF NOVA SCOTIA


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      DRESDNER BANK AG NEW YORK & GRAND CAYMAN
                                      BRANCHES


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                      U.S. BANK NATIONAL ASSOCIATION (f/k/a
                                      FIRSTAR BANK, N.A. f/k/a MERCANTILE BANK
                                      NATIONAL ASSOCIATION)


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------





<PAGE>


                                       DEXIA CREDIT LOCAL (f/k/a CREDIT LOCAL
                                       DE FRANCE - NEW YORK AGENCY)


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------


<PAGE>


                                       IBM CREDIT CORPORATION


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>


                                       THE CIT GROUP/EQUIPMENT FINANCING, INC.


                                      ----------------------------------------
                                      By:
                                         -------------------------------------
                                      Its:
                                         -------------------------------------




<PAGE>
                                             ALLFIRST BANK


                                             --------------------------
                                             By:
                                                ------------------------
                                             Its:
                                                 -----------------------




<PAGE>


                                             RAYMOND JAMES BANK, FSB


                                             --------------------------
                                             By:
                                                ------------------------
                                             Its:
                                                 -----------------------




<PAGE>


                                             HELLER FINANCIAL, INC.


                                             ---------------------------
                                             By:
                                                ------------------------
                                             Its:
                                                 -----------------------




<PAGE>


                                             PILGRIM PRIME RATE TRUST

                                             By:    ING Pilgrim Investments,
                                                    as its investment manager


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 ------------------------------




<PAGE>


                                             PILGRIM AMERICA HIGH INCOME



                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 ------------------------------


<PAGE>


                                             PPM SPYGLASS FUNDING TRUST


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 ------------------------------




<PAGE>


                                             MORGAN STANLEY DEAN WITTER PRIME
                                               INCOME TRUST


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 ------------------------------



<PAGE>


                                             KZH ING-1 LLC


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 ------------------------------



<PAGE>
                                             KZH ING-2 LLC


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------




<PAGE>


                                             SEQUILS-ING I (HBDGM), LTD.

                                             By: ING Capital Advisors LLC,
                                                 Collateral Manager and
                                                 Authorized signatory



                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------



<PAGE>


                                             TORONTO DOMINION (NEW YORK), INC.




                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------



<PAGE>

                                             SEQUILS PILGRIM I, LTD.

                                             By:    ING Pilgrim Investments,
                                                    as its investment manager

                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 ------------------------------




<PAGE>


                                             WEBSTER BANK



                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------




<PAGE>


                                             ARCHIMEDES FUNDING III, Ltd.

                                             By:    ING Capital Advisors LLC,
                                                    as Collateral Manager



                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------




<PAGE>


                                             CITIZENS BANK OF MASSACHUSETTS




                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------



<PAGE>


                                             Accepted and Agreed as
                                             of September,      , 2001:


                                             PINNACLE HOLDINGS INC.




                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------


                                             COVERAGE PLUS ANTENNA SYSTEMS, INC.


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------



                                             TOWER SYSTEMS, INC.


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------


                                             RADIO STATION WGLD, INC.

                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------

<PAGE>
                                             ICB TOWERS, LLC

                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------


                                             AIRCOMM OF AVON, LLC


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------


                                             HIGH POINT MANAGEMENT CO., INC.


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------



                                             TOWER TECHNOLOGY CORPORATION OF
                                             JACKSONVILLE, INC.


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------

<PAGE>


                                             INTERSTATE TOWER COMMUNICATIONS,
                                             INC.


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------



                                             BROADCAST TOWERS, INC.


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------



                                             PINNACLE TOWERS III INC.


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------


                                             SHAFFER & ASSOCIATES, INC.


                                             ----------------------------------
                                             By:
                                                -------------------------------
                                             Its:
                                                 -------------------------------


<PAGE>
                                    PINNACLE ST. LOUIS LLC

                                    By:  Pinnacle Towers Inc., sole member


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------



                                    SIERRA TOWERS, INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------


                                    QTI, INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------


<PAGE>


                                    INTRACOASTAL CITY TOWERS, INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------



                                    PINNACLE TOWERS IV INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------



                                    PINNACLE TOWERS V INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------


<PAGE>


                                    PINNACLE SAN ANTONIO L.L.C.

                                    By:  Pinnacle Towers Inc., sole member


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------


                                    PINNACLE TOWERS EUROPE L.L.C.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------



                                    COASTAL ANTENNAS, INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------



                                    TOWER VENTURES II, LLC

                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------


<PAGE>


                                    PINNACLE TOWERS LTD.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------



                                    PINNACLE TOWERS CANADA INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------


<PAGE>


                                    PINNACLE TOWERS III CANADA, INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------



                                    SHORE COMMUNICATIONS, INC


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------



                                    WEST SHORE COMMUNICATIONS, INC.


                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                    Its:
                                        ---------------------------------------


<PAGE>


                                   SCHEDULE I

                              ANTICIPATED DEFAULTS


1.       Noncompliance as of September 30, 2001 with the financial covenants
         set forth in Section 8.01 of the Credit Agreement as follows:

         a)       Leverage Ratio, section 8.01(a);

         b)       Consolidated Interest Coverage Ratio, section 8.01(c); and

         c)       Consolidated Pro Form Debt Service Coverage Ratio, section
                  8.01 (d).

2.       Noncompliance with the requirement to deliver third quarter
         consolidating financial statements on November 15, 2001 as required by
         Section 7.01 of the Credit Agreement, which financial statements will
         be delivered no later than November 20, 2001.

3.       Noncompliance with certain collateral covenants set forth in Section
         2.16 of the Credit Agreement, including the following:

                  schedules to certain Security Agreements and Pledge
                  Agreements

                  corporate reinstatements of Coastal Antenna's Inc. and
                  Shaffer & Associates, Inc.

                  dissolution for Pinnacle Towers Europe LLC

                  mortgages/deeds of trust for approximately 30 out of
                  approximately 580 fee owned sites

                  leasehold mortgage amendments for approximately 20 leasehold
                  sites to name record owners of leasehold sites


<PAGE>


                                  SCHEDULE II

                DESCRIPTION OF ST. LOUIS COLLOCATION FACILITIES



<PAGE>


                                  SCHEDULE III

             DESCRIPTION OF BEAUMONT, TEXAS COLLOCATION FACILITIES



<PAGE>


                                  SCHEDULE IV

                   PERMITTED SCHEDULED SELLER DEBT REPAYMENTS


              PINNACLE TOWERS INC. SELLER PROMISSORY NOTES PAYABLE
-------------------------------------------------------------------------------


<TABLE>
<CAPTION>
   PROFORMA PRINCIPAL PAYMENT                                               NOV-01             DEC-01
                                                                            ------             ------

<S>                                                                     <C>                <C>
 1 Rock & Withers                                                                              886.71
 2 Maurer                                                                                    1,848.05
 4 Lennon                                                                                      611.92
 5 Central Telephone                                                    320,000.00
 6 HV Towers                                                                                 6,298.32
12 Hardin                                                                                    3,884.86
28 Frank Hicks (Atlanta/Hicks)                                                               6,431.01
30 Azzarelli Development Corporation (Tampa Azzarelli)                                       5,353.55
33 Woodfin-Hirsch                                                                           23,544.51
34 Johnny & Jacklon Howard (Marianna Land)                                                     212.64
37 J & D Trunking-Greenville Rushing Deal                                                    5,807.82
38 Henry & Jacquelyn Flowers                                                                12,631.19
40 John H. Abrams and Helen Dale Abrams                                                      2,138.71
41 H. Stanley Hines                                                                             64.14
41 H. Stanley Hines, as Trustee                                                              3,809.82
41 H. Stanley Hines                                                                          6,223.58
46 Donald N. Woodward                                                                       16,157.06
55 Marguerite Atcher                                                                           315.88
58 S&R Communications Partnership (Flint MI Rice Acq)                                        2,426.60
59 Cyril E. Vetter                                                                         104,429.73
64 Tower Investments Inc (KS Motorola Deal)                                                  2,166.26
65 Stanley C. & Diana M. Norman                                                              1,768.45
69 Dorothy Ferguson Combee                                                                     153.67
                                                                     --------------------------------
                                                                        320,000.00         207,164.48
                                                                     ================================

-----------------------------------------------------------------------------------------------------
               TOTAL PAYMENTS 11/12/01 - 12/31/01                                          527,164.48
-----------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


                                   EXHIBIT A

                  RESTRICTED CASH COLLATERAL ACCOUNT AGREEMENT

</TEXT>
</DOCUMENT>
