EXHIBIT 10.17
CAPITAL CONTRIBUTION AGREEMENT
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THIS CAPITAL CONTRIBUTION AGREEMENT is dated as of the 26th day of
February, 1998 (as amended, restated or otherwise modified from time to time,
this "Agreement"), and entered into among ABRY Broadcast Partners II, L.P., a
Delaware limited partnership ("ABRY"), Pinnacle Towers Inc., a Delaware
corporation (the "Company") and wholly-owned subsidiary of Pinnacle Holdings
Inc., a Delaware corporation (the "Parent"), the Parent, the Lenders signatory
hereto, and NationsBank of Texas, N.A., a national banking association,
individually and as Administrative Lender (in such latter capacity, the
"Administrative Lender").
BACKGROUND:
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The Company, the Lenders and the Administrative Lender entered into a
Second Amended and Restated Credit Agreement, dated as of February 26, 1998 (as
amended, restated, or otherwise modified from time to time, the "Credit
Agreement");
The Parent has guaranteed the obligations of the Company under the Credit
Agreement;
It is a condition precedent to making Advances (as that term is defined in
the Credit Agreement) that the parties hereto execute, deliver, and perform this
Agreement;
NOW, THEREFORE, for valuable consideration hereby acknowledged, ABRY, the
Company, the Parent, the Lenders and the Administrative Lender agree as follows:
SECTION 1. Definitions. Unless specifically defined or redefined below,
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capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement.
SECTION 2. Capital Contributions.
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(a) No later than the fortieth (40th) day following each Quarterly
Date throughout the term of this Agreement, or if later for any quarterly
period, the twelfth (12th) Business Day after receipt by ABRY of the report
referred to in the next two sentences for such quarterly period, ABRY
agrees to make a capital contribution to the Parent in immediately
available funds in an amount equal to 100% of the amount of the General and
Administrative Expenses for the fiscal quarter ending on such Quarterly
Date, as specified in the report described in the following two sentences,
and the Parent agrees in turn immediately to make a capital contribution to
the Company (in immediately available funds) in the amount so contributed
by ABRY; provided that this Agreement shall not require ABRY to make any
capital contributions in an amount which would cause the aggregate amount
of the capital contributions made by ABRY to the Parent or the Company to
exceed $50,000,000, including capital contributions previously made, except
that notwithstanding the foregoing, ABRY shall at all times until the
refinancing of the Credit Agreement maintain a commitment, and does hereby
commit, to fund to the Parent at least $10,000,000 in the aggregate of
additional capital in immediately available funds for the purpose of
funding General and Administrative Expenses. No later than
the 20th day immediately following each Quarterly Date throughout the term
of this Agreement, the Company shall deliver to the Parent and ABRY (with a
copy to the Administrative Lender) a written report of the amount of
General and Administrative Expenses for the fiscal quarter ending on such
Quarterly Date as specified in the consolidated financial statements of the
Company for such fiscal quarter. In the event that the Company fails to
deliver to ABRY and the Parent the report specified in the preceding
sentence, then the Administrative Lender shall have the right to deliver
the consolidated financial statements of the Company for the fiscal quarter
ending on such Quarterly Date to ABRY and the Parent, and ABRY and the
Parent shall make the capital contributions required to be made by them by
this Section 2(a) based upon the amount of General and Administrative
Expenses set forth in such financial statements, and such financial
statements shall constitute the "report" referred to in the first sentence
of this Section 2(a) for such fiscal quarter. The Company shall confirm
with the Administrative Lender to its satisfaction that each such
contribution has been made in full.
(b) Upon the occurrence and continuation of an Event of Default under
Section 9.01(a) of the Credit Agreement, the Administrative Lender may
demand that ABRY, upon twelve (12) Business Days' notice, make a capital
contribution to the Parent in an amount sufficient to enable the Company
(after the Parent contributes such amount to the Company) to make all
payments necessary to cure the breaches thereunder, and the Parent agrees
in turn immediately to make a capital contribution to the Company (in
immediately available funds) in the amount so contributed by ABRY; provided
that this Agreement shall not require ABRY to make any capital
contributions in an amount which would cause the aggregate amount of the
capital contributions made by ABRY to the Parent or the Company to exceed
$50,000,000, including capital contributions previously made. Upon the
occurrence and continuation of an Event of Default under Section 9.01(c) of
the Credit Agreement with respect to the financial covenants set forth in
Sections 8.01(a), (b), (c), and (d), the Administrative Lender may demand
that ABRY, upon twelve (12) Business Days' notice, make a capital
contribution to the Parent in an amount equal to the amount sufficient to
cause the Company to be in compliance with all of the financial covenants
set forth in Sections 8.01(a), (b), (c), and (d) immediately following such
contribution, and the Parent agrees in turn immediately to make a capital
contribution to the Company (in immediately available funds) in the amount
so contributed by ABRY; provided that this Agreement shall not require ABRY
to make any capital contributions in an amount which would cause the
aggregate amount of the capital contributions made by ABRY to the Parent or
the Company to exceed $50,000,000, including capital contributions
previously made. The Company agrees to use all funds received pursuant to
the second sentence of this Section with respect to the financial covenant
set forth in Section 8.01(a) to permanently reduce the Available
Commitment. The amount required to cure the financial covenants in
Sections 8.01(b), (c), and (d) shall be equal to the amount which, assuming
that the Debt for Borrowed Money under the Credit Agreement had been
reduced by such amount, and the ratios referred to therein were recomputed
on a pro forma basis giving effect to such reduction (as if such
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reduction had occurred (i) on the first day of the twelve-month period
referred to in clause (b) of Section 8.01(b), for purposes of Section
8.01(b), (ii) on the last day of the fiscal quarter referred to in Section
8.01(c) for purposes of Section 8.01(c), and (iii) on the first day of the
twelve-month period referred to in clause (b) of Section 8.01(d) for
purposes of Section 8.01(d), would cause the Company to be in compliance
with such covenants.
(c) On each Quarterly Date throughout the term of this Agreement, or
if later, when ABRY receives the requisite report or notice for the
quarterly period in question, ABRY agrees to make a capital contribution to
the Parent in immediately available funds in an amount equal to 100% of the
amount equal to the difference between any cash distribution of 95% of
taxable income required to maintain the Parent's REIT Status minus the
amount of the maximum tax liability of ABRY and its partners (determined as
if each such partner were a corporation subject to United States federal
income tax and any state tax which would be applicable to a non-exempt
corporation) as a result of such operations of the Parent, the Company, and
its Subsidiaries on a consolidated basis, taking into account all tax
benefits available to such Persons as a result of such operations; provided
that this Agreement shall not require ABRY to make any capital
contributions in an amount which would cause the aggregate amount of the
capital contributions made by ABRY to the Parent or the Company to exceed
$50,000,000, including capital contributions previously made.
(d) Parent agrees to contribute to the capital of the Company (in
immediately available funds) all amounts contributed to the Parent by ABRY.
(e) In consideration for each capital contribution made by ABRY to
the Parent, the Parent shall issue to ABRY shares of the Parent's Class E
Common Stock in accordance with Stockholders Agreement. Each capital
contribution by ABRY to the Parent or by the Parent to the Company required
under any of the Sections 2(a), (b) and (c) hereunder shall not be subject
to any repayment obligation by the Company to the Parent or by the Parent
to ABRY (other than the obligation of the Parent or the Company, as the
case may be, to make distributions in respect of its capital stock (if and
when such distributions are made) in the manner provided in its certificate
of incorporation). Any Subordinated Debt issued to ABRY (including without
limitation the $12,500,000 Subordinated Debt described in Section 3(l) of
this Agreement) shall not be deemed to be a capital contribution for
purposes of this Agreement.
SECTION 3. Representations and Warranties. Each of ABRY, the Parent, and
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the Company represents and warrants, as to itself, to the Lenders and the
Administrative Lender that:
(a) Each of ABRY and the Parent is a limited partnership or
corporation, respectively, duly organized, validly existing, and in good
standing under the Laws of the State of Delaware;
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(b) Each of ABRY and the Parent is qualified to do business in all
jurisdictions where the nature of its business or properties require such
qualification except where the failure to so qualify would not cause a
Material Adverse Change;
(c) Each of ABRY, the Parent, and the Company has duly authorized the
execution, delivery, and performance of this Agreement;
(d) no consent of the partners of ABRY or stockholders of the Parent
or the Company (except any consent already obtained) is required as a
prerequisite to the validity and enforceability of this Agreement to be
executed by ABRY, the Parent, or the Company;
(e) Each of ABRY, the Parent, and the Company has full legal right,
power, and authority to execute, deliver, and perform under this Agreement;
(f) this Agreement constitutes the legal, valid, and binding
obligations of ABRY, Parent, and the Company enforceable in accordance with
the terms hereof (subject as to enforcement of remedies to any applicable
Debtor Relief Laws);
(g) the execution and delivery of this Agreement, and performance
hereunder, do not conflict with, or result in a breach of the terms,
conditions, or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any properties
of ABRY, the Parent or the Company under, or require any consent (other
than consents already obtained), approval, or other action by, notice to,
or filing with any Tribunal or Person pursuant to, the governance documents
of ABRY, the Parent, or the Company, any award of any arbitrator, or any
agreement, instrument, or Law to which ABRY, the Parent, the Company or any
of its properties is subject;
(h) ABRY is Solvent;
(i) the value of the consideration received and to be received by
ABRY is reasonably worth at least as much as the liability and obligation
of ABRY hereunder, and such liability and obligation may reasonably be
expected to benefit ABRY directly or indirectly;
(j) ABRY is familiar with, and has independently reviewed books and
records regarding, the financial condition of the Company and the Parent;
(k) neither the Lenders nor any of its officers or agents has made
any representation, warranty or statement to ABRY regarding the financial
condition of the Company or the Parent in order to induce ABRY to execute
this Agreement; and
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(l) on or prior to the Closing Date, ABRY has made capital
contributions to the Parent equal in the aggregate to $34,000,000 and has
funded $12,500,000 in the form of Subordinated Debt to the Parent.
SECTION 4. Breach of this Agreement. In the event of a breach by the
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Company, ABRY, or the Parent of this Agreement, the Administrative Lender shall
have all rights and remedies afforded to it at law or in equity, including the
right to demand specific performance. In addition, this Agreement shall be
deemed to be a Loan Paper, and a breach of any covenant by the Company, ABRY, or
the Parent of any of its respective obligations hereunder shall be an Event of
Default under the Credit Agreement.
SECTION 5. Further Assurances. Each of ABRY, the Company, and the Parent
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shall execute and deliver such further agreements, documents, instruments, and
certificates in form and substance satisfactory to the Administrative Lender, as
the Administrative Lender or any Lender may reasonably deem necessary in
connection with this Agreement.
SECTION 6. Miscellaneous.
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(a) ABRY and the Parent each hereby agrees that its obligations under
the terms of this Agreement shall not be released, diminished, impaired,
reduced, or affected by the occurrence of any one or more of the following
events: (i) the taking or accepting of any other security or guaranty for
any or all of the Obligations; (ii) any release, surrender, exchange,
subordination, or loss of any security at any time existing in connection
with any or all of the Obligations; (iii) the modification of, amendment
to, or waiver of compliance with any terms of the Credit Agreement or any
other Loan Paper without the notification of ABRY or the Parent (the right
to such notification being herein specifically waived by ABRY and the
Parent); provided, ABRY and the Parent do not waive their right to notice
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and consent to any amendment or modification of, the Credit Agreement,
which modification or amendment could increase the amount of the liability,
or the likelihood that ABRY or the Parent will be required to make any
capital contribution, pursuant hereto (it being expressly understood that
nothing herein shall be construed to refer to course of dealing by the
Administrative Lender or the Lenders); (iv) the insolvency, bankruptcy, or
lack of corporate or other power of the Company, whether now existing or
hereafter occurring; (v) pursuant to this Agreement, any renewal or
extension of the payment of any or all of the Obligations, either with or
without notice to or consent of ABRY and the Parent, or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by the
Lenders to the Company, ABRY, the Parent, or any other Person liable for
the Obligations provided, ABRY and the Parent do not waive their right to
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notice and consent to any renewal or extension of the Credit Agreement,
which could increase the amount of the liability of ABRY or the Parent or
the likelihood that ABRY or the Parent will be required to make a capital
contribution hereunder (it being expressly understood that nothing herein
shall be construed to refer to course of dealing by the Administrative
Lender or the Lenders); (vi) any neglect, delay, omission, failure, or
refusal of the Lenders to take or prosecute any action for the
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collection of any of the Obligations or to foreclose or take or prosecute
any action in connection with any instrument or agreement evidencing or
securing all or any part of the Obligations; (vii) any failure of the
Lenders to notify ABRY or the Parent of any renewal, extension, or
assignment of the Obligations or any part thereof (provided that, any
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renewal or extension of the Obligations to the extent the same could
increase the amount of the liability, or the likelihood that ABRY and the
Parent will be required to make any capital contribution pursuant to, this
Agreement will require the consent of ABRY), or the release of any
security, or of any other action taken or refrained from being taken by the
Lenders, it being understood that (except as specifically provided in this
Agreement) the Lenders shall not be required to give ABRY and the Parent
any notice of any kind under any circumstances whatsoever with respect to
or in connection with the Obligations (it being expressly understood that
nothing herein shall be construed to refer to course of dealing by the
Administrative Lender or the Lenders); (viii) the unenforceability of all
or any part of the Obligations against the Company or any other Person by
reason of the fact that the Obligations, and/or the interest paid or
payable with respect thereto, exceeds the amount permitted by Law, the act
of creating the Obligations, or any part thereof, is ultra xxxxx, or the
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officers creating same acted in excess of their authority, or the Note
being nonrecourse as to the Company, or for any other reason; or (ix) any
payment by the Company or any other Person to the Lenders is held to
constitute a preference under any Debtor Relief Law or if for any other
reason any Lender is required to refund such payment or pay the amount
thereof to another Person.
(b) This Agreement shall be an absolute and continuing obligation of
payment of ABRY and the Parent, and the circumstances that at any time or
from time to time the Obligations under the Credit Agreement may be paid in
full shall not affect the obligation of ABRY or the Parent to make any
capital contribution which may be required hereby, subject to the terms of
this Agreement.
(c) If ABRY or the Parent becomes liable for any indebtedness owing
by the Company to the Lenders by endorsement or otherwise, other than this
Agreement, such liability shall not be in any manner impaired or affected
hereby, and the rights of the Lenders hereunder shall be cumulative of any
and all other rights which the Lenders may ever have against ABRY or the
Parent. The exercise by the Lenders of any Right or remedy hereunder or
under any other instrument shall not preclude the concurrent or subsequent
exercise of any other Right or remedy.
(d) It shall not be necessary for the Lenders, in order to enforce
the right to require ABRY or the Parent to make a capital contribution
pursuant to this Agreement, first to institute suit or exhaust their
remedies against the Company, or other Persons liable for the Obligations,
or to enforce their Rights against any security which shall ever have been
given to secure the Obligations, this Agreement being in no way conditional
or contingent.
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(e) ABRY and the Parent each hereby waives all rights by which it
might be entitled to require suit on an accrued right of action in respect
of any of the Obligations or require suit against the Company or any other
Person, whether arising pursuant to Section 34.02 of the Texas Business and
Commerce Code, as amended, Section 17.001 of the Texas Civil Practice and
Remedies Code, as amended, and Rule 31 of the Texas Rules of Civil
Procedure, as amended, or otherwise.
(f) The Obligations shall not be reduced, discharged, or released
because or by reason of any existing or future offset, claim or defense of
the Company or any other Person against the Lenders or against payment of
the Obligations, whether such offset, claim, or defense arises in
connection with the Obligations or otherwise.
SECTION 7. Waiver of Subrogation.
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(a) ABRY and the Parent shall not assert, enforce, or otherwise exercise
(a) any right of subrogation to any of the rights or liens of the Lenders or any
other beneficiary against the Company or any other Person obligated to the
Lenders or any collateral or other security, or (b) any right of recourse,
reimbursement, contribution, indemnification, or similar right against the
Company or any other Person on all or any part of the Obligations or any
guarantor thereof, and ABRY hereby waives any and all of the foregoing rights
and the benefit of, and any right to participate in, any collateral or other
security given to the Lenders or any other beneficiary to secure payment of the
Obligations. The provisions of this Section 7 shall survive for a period of a
year and one day following the termination of this Agreement, and any
satisfaction and discharge of the Company by virtue of any payment, court order,
or Law.
(b) The provisions of this Section 7 shall be valid and effective if and
to the extent that as a result of a final, non-appealable decision by a court of
competent jurisdiction, it is determined that (i) ABRY or the Parent is an
"insider" (as that term is used in 11 U.S.C. (S) 547) of any other Person (which
other Person is the subject of a proceeding under a Debtor Relief Law), and (ii)
a transfer of an interest in property of such other Person to the Lenders is an
avoidable transfer under 11 U.S.C. (S) 547 (or other applicable Debtor Relief
Law) and recoverable under 11 U.S.C. (S) 550 (or other applicable Debtor Relief
Law) and such transfer otherwise would not have been so avoidable and so
recoverable but for the determination under clause (i) above that ABRY and the
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Parent is an "insider" of such other Person.
SECTION 8. Termination of this Agreement. This Agreement shall terminate
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when all Obligations of the Company under the Credit Agreement are paid in full
and no commitments remain outstanding thereunder. As of the date hereof, the
Capital Contribution Agreement dated as of June 11, 1997 between ABRY, the
Company, and the Administrative Lender is hereby terminated.
SECTION 9. Counterparts. This Agreement may be executed in any number
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of counterparts, all of which taken together shall constitute one and the same
instrument. In
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making proof of any such agreement, it shall not be necessary to produce or
account for any counterpart other than one signed by the party against which
enforcement is sought.
SECTION 10. ENTIRE AGREEMENT. THIS AGREEMENT REPRESENTS THE FINAL
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AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 11. GOVERNING LAW. (A) THIS AGREEMENT SHALL BE DEEMED A CONTRACT
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MADE UNDER THE LAWS OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF TEXAS, EXCEPT TO THE EXTENT FEDERAL LAWS GOVERN
THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF ALL OR ANY PART OF
THIS AGREEMENT. WITHOUT EXCLUDING ANY OTHER JURISDICTION, EACH OF ABRY, THE
PARENT, AND THE COMPANY AGREES THAT THE COURTS OF TEXAS WILL HAVE JURISDICTION
OVER PROCEEDINGS IN CONNECTION HEREWITH.
(B) EACH OF THE COMPANY, THE PARENT, AND ABRY HEREBY WAIVES PERSONAL
SERVICE OF ANY LEGAL PROCESS UPON IT. IN ADDITION, EACH OF THE COMPANY, THE
PARENT, AND ABRY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE COMPANY, THE PARENT,
OR ABRY AT ITS ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED UPON RECEIPT BY IT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE LENDER OR ANY LENDER TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 12. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
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THE COMPANY, THE PARENT, ABRY AND EACH LENDER HEREBY WAIVES ANY RIGHT THAT IT
MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT,
EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, OR ANY
RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE
SITTING WITHOUT A JURY.
SECTION 13. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered to it, at the address or number listed below such Person set
forth on the signature page. All such notices and other communications shall,
when mailed, telecopied, telegraphed, telexed or cabled, be effective when
received.
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SECTION 14. Assignment. This Agreement is not assignable, except that
either the Parent or the Company may assign its rights to the Administrative
Lender for the benefit of the Lenders, and the Administrative Lender and each of
the Lenders may assign or otherwise transfer all or any portion of its rights
and obligations hereunder in connection with an assignment under the Credit
Agreement to any other person or entity, and such other person or entity shall
thereupon become vested with all the rights in respect thereof granted to the
Administrative Lender and the Lenders herein or otherwise.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first set
forth above.
COMPANY: PINNACLE TOWERS INC.
0000 Xxxxxxxx Xxxxxxxxx
0xx Xxxxx ______________________________________
Xxxxxxxx, Xxxxxxx 00000 By:
Telephone: (000) 000-0000 Its:
Telecopy: (000) 000-0000
PARENT: PINNACLE HOLDINGS INC.
0000 Xxxxxxxx Xxxxxxxxx
0xx Xxxxx _______________________________________
Xxxxxxxx, Xxxxxxx 00000 By:
Telephone: (000) 000-0000 Its:
Telecopy: (000) 000-0000
ABRY BROADCAST PARTNERS II, L.P.
00 Xxxxxxx Xxxxxx By ABRY Capital, L.P.
Xxxxxx, XX 00000 Its General Partner
Telephone: By ABRY Holdings, Inc.,
Telecopy: Its General Partner
_______________________________________
By:
Its:
NATIONSBANK OF TEXAS N.A., as
Administrative Lender, and individually
as a Lender
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxx _______________________________________
Telephone: (000) 000-0000 By: Xxxxxxx Xxxx
Telecopy: (000) 000-0000 Its: Vice President
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XXXXXXX XXXXX CREDIT PARTNERS
Address: L.P.
00 Xxxxx
00xx Xxxxx ______________________________
Xxx Xxxx, Xxx Xxxx 00000 By:
Its:
Attn.: Xxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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