1
EXHIBIT 10.6
BORROWING AGREEMENT
This BORROWING AGREEMENT, dated as of June 10, 1999, is entered into by
and between AMERICAN TELECASTING, INC., a Delaware corporation (the "Borrower"),
and SPRINT CORPORATION, a Kansas corporation (the "Lender").
WHEREAS, Borrower, Lender and a wholly owned subsidiary of Lender have
entered into an Agreement and Plan of Merger dated as of April 26, 1999 (the
"Merger Agreement").
WHEREAS, Borrower desires to borrow funds from Lender in accordance
with Section 5.17 of the Merger Agreement.
NOW THEREFORE, in consideration of the agreements contained herein and
for other good and valuable consideration, the parties hereto agree as follows.
SECTION 1.
DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the respective meanings set forth below:
"Acquisition Agreement" has the meaning set forth in Section 5.6(b) of
the Merger Agreement.
"Alternative Transaction" has the meaning set forth in Section 5.6(b)
of the Merger Agreement.
"Advances" has the meaning set forth in Section 2.1 hereof.
"Bankruptcy" means, with respect to the Borrower, a "Voluntary
Bankruptcy" or an "Involuntary Bankruptcy." A "Voluntary Bankruptcy" means the
inability of the Borrower generally to pay its debts as such debts become due,
or an admission in writing by the Borrower of its inability to pay its debts
generally or a general assignment by the Borrower for the benefit of creditors;
the filing of any petition or answer by the Borrower seeking to adjudicate it
bankrupt or insolvent, or seeking for itself any liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
the Borrower or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking, consenting to, or acquiescing
in the entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for the Borrower or for any substantial
part of its property; or corporate action taken by the Borrower to authorize
any of the actions set forth above. An "Involuntary Bankruptcy" means, without
the consent or acquiescence of the Borrower, the entering of an order for relief
or approving a petition for relief or reorganization or any other petition
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or other similar relief under any present or future bankruptcy,
insolvency or similar statute, law or regulation, or the filing of any such
petition against the Borrower which petition shall not be dismissed within sixty
(60) days, or, without the consent or acquiescence of the Borrower, the entering
of an order appointing a trustee, custodian, receiver or liquidator of the
Borrower or of all or any substantial part of the property of the Borrower which
order shall not be dismissed within sixty (60) days.
2
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City.
"Effective Date" has the meaning set forth in Section 1.2 of the Merger
Agreement.
"Event of Default" is defined in Section 4 hereof.
"Maturity Date" means the day that is the first anniversary of the
termination of the Merger Agreement or, if such day is not a Business Day, the
next following Business Day, provided that if (i) the Borrower enters into an
Acquisition Agreement related to an Alternative Transaction, and (ii) the Merger
Agreement is terminated pursuant to Section 7.1(d)(i) of the Merger Agreement,
"Maturity Date" means the date of termination of the Merger Agreement or, if
such day is not a Business Day, the next following Business Day.
"Note" means the promissory note of the Borrower payable to Lender
substantially in the form of Exhibit A hereto.
SECTION 2.
ADVANCES; PAYMENTS OF PRINCIPAL AND INTEREST
Section 2.1 Advances.
(a) The Lender agrees, on the terms and conditions hereinafter set
forth, to make Advances to the Borrower from time to time on any Business Day
during the period from the date of this Agreement until the Effective Date in an
aggregate principal amount not to exceed three million five hundred thousand
dollars ($3,500,000).
(b) Each Advance shall be made on written request of the Borrower given
to the Lender not later than 11:00 A.M. (Central time) on the Business Day
prior to the date of the requested Advance. Each such request shall specify the
date of the requested Advance and the amount to be advanced.
Section 2.2 Interest.
(a) The Borrower shall pay interest on the Advances at the rate of 10%
per annum. Interest shall accrue on the basis of a year of 365 days and the
actual days elapsed. Interest shall be due and payable in arrears on an Advance
on each anniversary of such Advance or, if such day is not a Business Day, on
the next following Business Day, and on the Maturity Date.
(b) Notwithstanding the provisions set forth in (a) above, beginning
upon the occurrence and during the continuance of any Event of Default
hereunder, interest on Advances shall accrue and be payable by the Borrower at a
rate per annum equal to twelve percent (12%).
Section 2.3 Notes. Contemporaneously herewith, the Borrower shall
execute and deliver to Lender a Note payable to the order of Lender,
substantially in the form of Exhibit A hereto.
Section 2.4 Payments. All payments of principal and interest on the
Note shall be made exclusively in U.S. dollars and immediately available funds,
without any setoff, deduction, or
2
3
counterclaim, at the account of the Lender at Citicorp, N.A., in New York City
or at such other payment location as Lender may designate in writing to
Borrower.
Section 2.5 Prepayment. The Borrower may at its option, and without any
penalty whatsoever, prepay Advances at any time in whole or in part. Prepayments
shall be applied first to pay all accrued and unpaid interest, then to the
outstanding principal balance.
Section 2.6 Security. The Advances shall be secured by a pledge of the
capital stock of American Telecasting of Michiana, Inc., a Delaware corporation
and a subsidiary of Borrower. Contemporaneously herewith, the Borrower shall
execute and deliver to Lender a Stock Pledge Agreement (the "Stock Pledge
Agreement") substantially in the form of Exhibit B hereto, the certificates
representing the capital stock of American Telecasting of Michiana, Inc., and a
stock power duly executed in blank.
Section 2.7 Use of Proceeds. The proceeds of the Advances shall be used
by the Borrower to pay to the holders of the Bond Appreciation Rights ("BARs")
relating to the Borrower's Senior Discount Notes due 2004 the value of the BARs
upon the exercise of the BARs.
SECTION 3.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows;
(a) The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Note, and the consummation of the transactions contemplated
hereby, are within the Borrower's corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene (i) the Borrower's charter
or bylaws or (ii) any law or any contractual restriction binding on or affecting
the Borrower, which contravention in the case of item (ii) would reasonably be
expected to have a material adverse effect on the financial condition of the
Borrower or the ability of the Borrower to perform the transactions contemplated
by this Agreement and the Stock Pledge Agreement.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other third
party is required for the due execution, delivery and performance by the
Borrower of this Agreement or the Note.
(d) (i) This Agreement has been duly executed and delivered by the
Borrower; (ii) this Agreement is the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms; and
(iii) the Note when delivered hereunder will have been duly executed and
delivered by the Borrower and will be the legal, valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its terms
(except in items (ii) and (iii), in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity).
3
4
SECTION 4.
EVENTS OF DEFAULT
The occurrence and continuance of any of the following events shall
constitute an event of default ("Event of Default") under this Agreement
(whatever the reason for such event and whether or not it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree, order, rule or regulation of any governmental authority): (a) the
Borrower uses the proceeds of the Advances for any purpose other than the
purposes set forth in Section 2.7; or (b) the Borrower fails to make any payment
of principal or interest on the Advances when the same is due and payable; (c)
the Bankruptcy of the Borrower; or (d) any representation or warranty made by
the Borrower in this Agreement proves to have been incorrect in any material
respect when made.
SECTION 5.
REMEDIES
(a) Upon the occurrence and during the continuation of an Event of
Default (other than an Event of Default described in Section 4(c)), the Lender
may, in its sole discretion, declare the Note, including, without limitation,
principal, accrued interest and costs of collection (including, without
limitation, reasonable attorneys' fees and disbursements if collected by or
through an attorney at law or in bankruptcy, receivership or other judicial
proceedings) immediately due and payable.
(b) Upon the occurrence of an Event of Default described in Section
4(c), the Note, including, without limitation, principal, accrued interest and
costs of collection (including, without limitation, reasonable attorneys' fees
if collected by or through an attorney at law or in bankruptcy, receivership or
other judicial proceedings) shall become immediately due and payable, without
presentment, demand, protest, or any other notice of any kind, all of which are
expressly waived.
(c) Upon the occurrence and during the continuation of an Event of
Default and acceleration of the Notes as provided in (a) or (b) above, the
Lender may pursue any remedy available under this Agreement or the Stock Pledge
Agreement or available at law or in equity, all of which shall be cumulative.
The order and manner in which the rights and remedies of the Lender under this
Agreement, the Stock Pledge Agreement, and otherwise may be exercised shall be
determined by the Lender in its sole discretion.
(d) For the purpose of computing the obligations hereunder, all
payments with respect to the Note received by the Lender after the occurrence of
an Event of Default and acceleration of the Note (regardless of how the Lender
may treat the payments for the purpose of its own accounting) shall be applied
first; to the costs and expenses (including attorneys' fees and disbursements)
incurred by the Lender as a result of the Event of Default, as set forth above,
second, to the payment of accrued and unpaid interest on the Note, to and
including the date of such application, and third, to the payment of the unpaid
principal of the Note. Until payment in full of all obligations due by Borrower
to Lender under this Agreement and the Stock Pledge Agreement, no application of
partial payments will cure any Event of Default or prevent acceleration, or
continued acceleration, of additional amounts payable under this Agreement, the
Stock Pledge Agreement or the Note or prevent the exercise, or continued
exercise, of rights or remedies of the Lender hereunder or under applicable law.
4
5
SECTION 6.
MISCELLANEOUS
Section 6.1 Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of Kansas (without
giving effect to the principles of conflict of laws in such jurisdiction).
Section 6.2 Waiver. The Borrower hereby waives presentment, protest,
notice of dishonor and any other formality with respect to the Note.
Section 6.3 Binding Effect. This Agreement shall be binding upon the
Borrower and its successors and assigns, except that the Borrower may not
delegate its obligations under this Agreement or the Note without the prior
written consent of Lender. The Lender may at any time assign or otherwise
transfer or sell the Note or any of its rights with respect thereto.
Section 6.4 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given by delivery in
person, by telecopy or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses, or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 6.4. All such notices and communications shall,
when delivered, mailed or telecopied, be effective when delivered, deposited in
the mail or telecopied, except that written requests pursuant to Section 2.1(b)
shall not be effective until received by the Lender.
If to the Lender:
Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx 00000
Telecopier: (000) 000-0000
Attention: Director, Capital Markets
If to the Borrower:
American Telecasting, Inc.
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN TELECASTING, INC., Borrower SPRINT CORPORATION, Lender
By: /s/ XXXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXX
----------------------------- -----------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxx
--------------------------- ---------------------------------
Title: Sr. Vice President & CFO Title: Vice President - Capital
--------------------------- --------------------------------
Markets and Assistant
--------------------------------
Treasurer
--------------------------------
5
6
EXHIBIT A
FORM OF PROMISSORY NOTE
Principal Amount: Date: June __, 1999
Up to U.S. $3,500,000
FOR VALUE RECEIVED, the undersigned AMERICAN TELECASTING, INC., a
corporation organized under the laws of the State of Delaware (hereinafter the
"Borrower"), does hereby promise to pay to the order of Sprint Corporation, a
corporation formed under the laws of the State of Kansas (hereinafter the
"Lender"), on the Maturity Date (as defined in the Borrowing Agreement referred
to below), in lawful money of the United States of America, the principal amount
of the Advances (as defined in the Borrowing Agreement) made by Lender to the
Borrower pursuant to the terms of the Borrowing Agreement, dated as of June 10,
1999, by and between the Borrower and the Lender (the "Borrowing Agreement"),
together with accrued interest thereon.
Executed and delivered as of the date first above written by the duly
authorized officer of Borrower.
AMERICAN TELECASTING, INC.
By:
-------------------------------------
Name:
Title:
