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Exhibit 10.18
EXECUTION COPY
LETTER AMENDMENT TO
FIVE-YEAR CREDIT AGREEMENT
Dated as of May 7, 1999
To the banks, financial institutions
and other institutional lenders
(collectively, the "Lenders")
parties to the Credit Agreement
referred to below and to Citibank,
N.A., as administrative agent (the
"Agent") for the Lenders
Ladies and Gentlemen:
We refer to the Five-Year Credit Agreement dated as of March
2, 1999 ("Credit Agreement") among the undersigned and you. Capitalized terms
not otherwise defined in this Letter Amendment have the same meanings as
specified in the Credit Agreement.
It is hereby agreed by you and us as follows:
The Credit Agreement is, effective as of the date of this
Letter Amendment, hereby amended as follows:
(a) The definition of "Guarantors" in the recital of parties
to the Credit Agreement is amended by deleting the parenthetical
"("Wireless" and, collectively with Wireline, the "Guarantors")" and
substituting therefor the parenthetical "("Wireless" and, collectively
with Wireline and each Significant Subsidiary (as hereinafter defined)
that shall become a guarantor hereunder in accordance with Section
5.01(j), the "Guarantors")".
(b) The definition of "EBITDA" in Section 1.01 is amended in
full to read as follows:
"EBITDA" means the sum, determined on a Consolidated
basis, of the Borrower's (i) net income (or net loss), (ii)
interest expense, (iii) income tax expense, (iv) depreciation
expense, (v) amortization expense, (vi) non-cash severance
charges in an aggregate amount not to exceed $120,000,000 in
calendar year 1999, $30,000,000 in calendar year 2001 and
$40,000,000 in calendar year 2002, and (vii) non-cash charges
related to a contribution to the Borrower's employee stock
ownership plan in an aggregate amount not to exceed
$26,100,000 in calendar year 1999.
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(c) The following definitions are added in appropriate
alphabetical order:
"Permitted Receivables Financing" means any
financing pursuant to which the Borrower or any Subsidiary of
the Borrower may sell, convey, or otherwise transfer to a
Receivables Subsidiary or any other Person (in the case of
transfer by a Receivables Subsidiary), or grant a security
interest in, any accounts receivable (and related assets) of
the Borrower or such Subsidiary, provided that such financing
shall be on customary market terms and shall be non-recourse
to the Borrower and its Subsidiaries (other than the
Receivables Subsidiary) except to a limited extent customary
for such transactions. The grant of a security interest in any
accounts receivable of the Borrower or any Subsidiary of the
Borrower (other than a Receivables Subsidiary) to secure Debt
under any credit facility shall not be deemed a Permitted
Receivables Financing.
"Receivables Subsidiary" means a bankruptcy-remote,
special-purpose wholly owned Subsidiary formed in connection
with a Permitted Receivables Financing.
"Significant Subsidiary" means at any time any
Subsidiary, other than a Receivables Subsidiary, the assets of
which, in the aggregate, exceed $30,000,000, determined in
accordance with GAAP.
(d) Section 5.01(e) is amended by deleting therefrom the
proviso in its entirety.
(e) A new Section 5.01(j) is added to read as follows:
(j) Certain Obligations Respecting Subsidiaries. The
Borrower will take such action, and will cause each of its
Significant Subsidiaries and any Significant Subsidiary formed
with the intent of merging with or into a Person that will be
a Significant Subsidiary subject to this provision to take
such action, from time to time as shall be necessary to ensure
that all Significant Subsidiaries of the Borrower are party
to, as Loan Parties, the Guaranty provided in Article VII
hereof. Without limiting the generality of the foregoing, in
the event that the Borrower or any of its Significant
Subsidiaries shall form or acquire any new Significant
Subsidiary, the Borrower or the respective Significant
Subsidiary will cause such new Significant Subsidiary to (i)
become a party hereto and to the Guaranty pursuant to a
written instrument in from and substance satisfactory to the
Agent, and (ii) deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other
documents relating to the foregoing as is consistent with
those delivered by each Loan Party pursuant to Section 3.01
hereof, or as any Lender or the Agent shall have reasonably
requested.
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(f) Section 5.02(a) is amended by (i) deleting from the end of
clause (v) the word "and", (ii) replacing the period at the end of
clause (vi) with the word "; and" and (iii) adding a new clause (vii)
to read "(vii) Liens on property of a Receivables Subsidiary created in
connection with a Permitted Receivables Financing".
(g) Section 5.02(d) is amended by (i) deleting from the end of
clause (iv) the word "and", (ii) replacing the period at the end of
clause (v) with the word "; and" and (iii) adding a new clause (vi) to
read "(vi) Debt incurred by a Receivables Subsidiary created in
connection with a Permitted Receivables Financing".
(h) Section 5.02(d)(ii) is amended by deleting the phrase
"existing on the Effective Date" and substituting therefor the phrase
"which may be borrowed and outstanding from time to time under the
credit agreements existing on and as of the Effective Date".
(i) Section 6.01(c)(i) is amended by deleting the phrase
"Section 5.01(d), (e), (h), (i)(iii) and (i)(v), 5.02 or 5.03" and
substituting therefor the phrase "Section 5.01(d), (e), (h), (i)(iii),
(i)(v) and (j), 5.02 or 5.03".
(j) Schedule 5.02(d) is amended in full to read as set forth
on Schedule A to this Letter Amendment.
This Letter Amendment shall become effective as of the date
first above written when, and only when (a) the Agent shall have received
counterparts of this Letter Amendment executed by the undersigned and the
Required Lenders or, as to any of the Lenders, advice satisfactory to the Agent
that such Lender has executed this Letter Amendment and (b) the Borrower shall
have paid all invoiced fees and expenses of the Agent and the Lenders (including
the invoiced fees and expenses of counsel to the Agent). This Letter Amendment
is subject to the provisions of Section 9.01 of the Credit Agreement.
On and after the effectiveness of this Letter Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
the Notes to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended by this Letter Amendment.
The Credit Agreement and the Notes, as specifically amended by
this Letter Amendment, are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed. The execution, delivery and
effectiveness of this Letter Amendment shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of any Lender or the
Agent under the Credit Agreement nor constitute a waiver of any provision of the
Credit Agreement.
If you agree to the terms and provisions hereof, please
evidence such agreement by executing and returning at least two counterparts of
this Letter Amendment to Xxxxx Xxxxxx at Xxxxxxxx & Sterling, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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This Letter Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Letter Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this Letter
Amendment.
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This Letter Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
TELECOMUNICACIONES DE PUERTO
RICO, INC., as Borrower
By _________________________________
Title:
PUERTO RICO TELEPHONE
COMPANY, INC., as Guarantor
By _________________________________
Title:
CELULARES TELEFONICA, INC.,
as Guarantor
By _________________________________
Title:
Agreed as of the date first above written:
____________________________________
[Type or print name of institution]
By _________________________________
Title:
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SCHEDULE A
1. U.S. $200,000,000 Credit Agreement dated as of March 2, 1999
among Telecomunicaciones de Puerto Rico, Inc, as Borrower, Puerto Rico Telephone
Company, Inc. and Celurares Telefonica, Inc., as Guarantors, the lenders parties
thereto, Banco Popular de Puerto Rico, as Managing Agent and Administrative
Agent, and ScotiaBank de Puerto Rico, as Co-Agent.
2. U.S. $1,000,000,000 364-Day Credit Agreement dated as of March 2,
1999 among Telecomunicaciones de Puerto Rico, Inc, as Borrower, Puerto Rico
Telephone Company, Inc. and Celurares Telefonica, Inc., as Guarantors, the
lenders parties thereto, Citibank, N.A., as Administrative Agent, Bank of
America National Trust and Savings Association, as Syndication Agent, The Chase
Manhattan Bank and Xxxxxx Guaranty Trust Company of New York, as Documentation
Agents, and Xxxxxxx Xxxxx Barney Inc., as Lead Arranger and Book Manager.
