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EXHIBIT 10.19
CREDIT AGREEMENT
Dated as of March 2, 1999
TELECOMUNICACIONES DE PUERTO RICO, INC., a Puerto Rico corporation (the
"Borrower"), PUERTO RICO TELEPHONE COMPANY, INC., a Puerto Rico corporation
("PRTC"), and CELULARES TELEFONICA, INC., a Puerto Rico corporation ("CTI" and,
collectively with PRTC, the "Guarantors"), the banks, financial institutions and
other institutional lenders (the "Initial Lenders") listed on the signature
pages hereof, BANCO POPULAR DE PUERTO RICO ("Banco Popular"), a Puerto Rico
banking institution, as managing agent and administrative agent (in such
capacity, the "Administrative Agent") for the Lenders (as hereinafter defined),
and SCOTIABANK DE PUERTO RICO a Puerto Rico banking institution, as Co-Agent
(the "Co-Agent") agree as follows:
ARTICLE ONE
DEFINITIONS AND ACCOUNTING TERMS
1.01 SECTION .0. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Acquisition" means the acquisition by GTE Holdings (Puerto
Rico) from the Puerto Rico Telephone Authority of the Controlling
Interest, pursuant to the Purchase Documents.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at Banco
Popular with its office at 000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxxxxx
Xxxx, Account No. 1970, Attention:
Corporate Banking.
"Advance" means a Revolving Credit Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 10% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or
otherwise.
"Amended and Restated Stock Purchase Agreement" means the
Amended and Restated Stock Purchase Agreement dated as of July 21,
1998, as amended, among the Borrower, the Puerto Rico Telephone
Authority, PRTC, GTE Holdings (Puerto Rico), and GITI, relating to the
Acquisition.
"Annualized EBITDA" means, for any Person as of the last day
of the relevant fiscal quarter(s) of such Person, commencing on March
2, 1999, the product of (i) a
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fraction, the numerator of which is the sum of EBITDA of such Person
for each month (expressed as a 30-day period) through such fiscal
quarter, and the denominator of which is the number of months elapsed
during such period, and (ii) 12.
"Annualized EBITDA to Interest Ratio" of any Person on any
date means the ratio of: (a) Annualized EBITDA of such Person on such
date to (b) Annualized Interest payable on, and amortization of debt
discount in respect of, all Debt of such Person, provided that for
purposes of clause (b) of this definition, Debt shall not include the
obligations specified in clause (g) of the definition thereof set forth
below.
"Annualized Interest" means, for any Person as of the last day
of the relevant fiscal quarter(s) of such Person, commencing on March
2, 1999, the product of: (i) a fraction, the numerator of which is the
sum of interest expense on Debt of such Person actually paid or
scheduled to be paid during such fiscal quarter for each month
(expressed as a 30-day period) through such fiscal quarter, and the
denominator of which is the number of months elapsed during such
period, and (ii) 12.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or of an
affiliate of such Lender) as such Lender may from time to time specify
to the Administrative Agent and the Borrower as the office by which its
Loans of such Type are to be made and maintained.
"Applicable LIBOR Margin" means, for any Interest Period, the
margin to be applied to LIBOR Rate Advances, to be equal to the rate
per annum set forth below opposite the respective Utilization Ratio
levels set forth below, each determined as of the first day of any such
Interest Period:
Utilization Ratio Applicable Margin
less than or equal to 50% of the Commitments: 0.925%
greater than 50% of the Commitments: 1.075%
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit C hereto.
"Base Rate" means, for any day, the simple average of the
rates of interest announced publicly on such day in the Wall Street
Journal by the principal commercial banks in New York, New York as
their prime commercial lending rate, which for purposes hereof is not
intended to be the lowest or best rate of interest charged by any
Lender to a customer, with each change in such rate to be effective for
purposes hereof on the day in which any such change is announced as
herein provided, whether or not such change is notified to the Borrower
by the Administrative Agent. The Base Rate will be computed on the
basis of a 360 day year for the actual number of days elapsed occurring
in the period for which such interest is payable.
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"Base Rate Advance" means a Revolving Credit Advance that
bears interest based upon the Base Rate as provided in Section
2.07(a)(i).
"Borrower" has the meaning specified in the recital of
parties.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower at Banco Popular with its office at 000
Xxxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxxxxx Xxxx, Account No. 030-303664.
"Borrowing" means a Revolving Credit Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized by law or executive order to close in New York
City or San Xxxx, Puerto Rico, provided that, if the applicable
Business Day relates to any LIBOR Rate Advances, "Business Day" means a
day of the year on which banks are not required or authorized by law or
executive order to close in New York City or San Xxxx, Puerto Rico and
on which dealings are carried on in the London interbank market.
"Citibank Indebtedness" means those certain revolving credit
facilities in a maximum aggregate principal amount of up to
$1,000,000,000 extended to the Borrower pursuant to that certain
364-Day Credit Agreement dated as of March 2, 1999, among the Borrower,
Citibank, N.A., as administrative agent, the Lenders party thereto,
Bank of America National Trust and Savings Association, as syndication
agent, and The Chase Manhattan Bank and Xxxxxx Guaranty Trust Company
of New York, as documentation agents, and those certain revolving
credit facilities in a maximum aggregate principal amount of up to
$500,000,000 extended to the Borrower pursuant to that certain
Five-Year Credit Agreement dated as of March 2, 1999 among the
Borrower, Citibank, N.A., as administrative agent, the Lenders party
thereto, Bank of America National Trust and Savings Association, as
syndication agent, and The Chase Manhattan Bank and Xxxxxx Guaranty
Trust Company of New York, as documentation agents, to finance a
portion of the Special Dividend and for working capital and other
general corporate purposes of the Borrower.
"Commission" shall mean the Securities and Exchange Commission
or any governmental agency substituted therefor.
"Commitment" has the meaning specified in Section 2.01.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Contribution Agreement" means that certain Contribution
Agreement dated as of March 2, 1999, between PRTC and CTI.
"Controlling Interest" means (a) ownership of at least 40%
plus one share of the Voting Stock of the Borrower and (b) the ability
to appoint a majority of the Board of Directors of the Borrower.
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"Convert", "Conversion" and "Converted" each refers to a
conversion of Revolving Credit Advances of one Type into Revolving
Credit Advances of the other Type pursuant to Section 2.07 or 2.08.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services
(other than trade payables incurred in the ordinary course of such
Person's business for which collection proceedings have not been
commenced, provided that trade payables for which collection
proceedings have commenced shall not be included in the term "Debt" so
long as the payment of such trade payables is being contested in good
faith and by proper proceedings and for which appropriate reserves are
being maintained), (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all
obligations of such Person created or arising under any conditional
sale or other similar title retention agreement with respect to
property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all
obligations of such Person as lessee under leases that have been, in
accordance with GAAP, recorded as capital leases, (f) all obligations
of such Person in respect of acceptances, letters of credit or similar
extensions of credit, (g) all net obligations of such Person in respect
of Hedge Agreements, (h) all Debt of others referred to in clauses (a)
through (g) above or clause (i) below guaranteed directly, or
indirectly through a Subsidiary, by such Person, or in effect
guaranteed directly, or indirectly through a Subsidiary, by such Person
through a written agreement either (1) to pay or purchase such Debt or
to advance or supply funds for the payment or purchase of such Debt or
(2) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such Debt or to assure the holder of such
Debt against loss and (i) all Debt referred to in clauses (a) through
(h) above secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.
"Debt to Annualized EBITDA Ratio" of any Person at any date
means the ratio of (a) Debt of the types that, in accordance with GAAP,
would be classified as indebtedness on a Consolidated balance sheet of
such Person on such date to (b) Annualized EBITDA of such Person for
the relevant period being referred to, provided that for purposes of
clause (a) of this definition, Debt shall not include (i) the
obligations specified in clause (g) of the definition thereof set forth
above, or (ii) with respect to the Borrower, any obligations which may
be assumed by the Borrower for guaranties of any indebtedness of the
Borrower's employee stock ownership plan up to a maximum aggregate
principal amount of $26,100,000.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Disclosed Litigation" has the meaning specified in Section
3.01(c).
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"EBITDA" of any Person as at any date, means the sum,
determined on a Consolidated basis, of (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,
and (vii) non-cash charges relating to the contribution to an employee
stock ownership plan in an aggregate amount not to exceed $23,100,000
in calendar year 1999.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender that is a financial institution and is majority-owned by such
Lender or such Lender's holding company; (iii) a commercial bank
organized under the laws of the Commonwealth of Puerto Rico, the United
States, or any State thereof, and having total assets in excess of
$3,000,000,000; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof,
and having total assets in excess of $3,000,000,000; or (v) any other
Person approved by the Administrative Agent and the Borrower, such
approval not to be unreasonably withheld; provided, however, that
neither the Borrower nor any Affiliate of the Borrower shall qualify as
an Eligible Assignee.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, Environmental Permit or Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the
environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any governmental or
regulatory authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment,
decree or judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, health, safety
or natural resources, including, without limitation, those relating to
the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title
IV of ERISA is a member of the Loan Parties' controlled group, or under
common control with the Borrower, within the meaning of Section 414 of
the Internal Revenue Code.
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"ERISA Event" means (a) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has
been waived by the PBGC; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator
of any Plan of a notice of intent to terminate such Plan pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to
a plan amendment referred to in Section 4041(e) of ERISA); (d) the
cessation of operations at a facility of any of the Loan Parties or any
ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; (e) the withdrawal by any of the Loan Parties or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the imposition of a lien under Section 302(f) of ERISA with respect
to any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that is reasonably
expected to result in the termination of, or the appointment of a
trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Rate Reserve Percentage" for any Interest Period
for all LIBOR Rate Advances comprising part of the same Borrowing means
the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on LIBOR Rate Advances is determined) having a term
equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"GAAP" means (a) in the case of the preparation of all
financial reporting requirements, generally accepted accounting
principles in the United States, as in effect from time to time, and
(b) in the case of the calculation, certification and compliance with
all financial tests and covenants, generally accepted accounting
principles in the United
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States, as in effect on the date of the financial statements delivered
to each Lender in accordance with Section 4.01(e), in each case applied
on a consistent basis both as to classification of items and amounts.
"GITI" means GTE International Telecommunications
Incorporated, a Delaware corporation.
"GTE" means GTE Corporation, a New York corporation, or its
successor.
"GTE Holdings (Puerto Rico)" shall mean GTE Holdings (Puerto
Rico) LLC, a limited liability company organized under the laws of the
State of Delaware and a Wholly Owned Subsidiary of GITI.
"Guaranteed Obligations" has the meaning specified in Section
7.01.
"Guarantors" has the meaning specified in the recital of
parties to this Agreement.
"Guaranty" has the meaning specified in Section 7.01.
"Hazardous Materials" means (a) petroleum and petroleum
products, byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Interest Period" means, for each LIBOR Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such LIBOR Rate Advance or the date of the Conversion of any
Base Rate Advance into such LIBOR Rate Advance and ending on the last
day of the period selected by the Borrower pursuant to the provisions
below and, thereafter, with respect to LIBOR Rate Advances, each
subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be one, two or three months, as the
Borrower may, upon notice received by the Administrative Agent not
later than 11:00 A.M. (Atlantic Standard Time) on the third Business
Day prior to the first day of such Interest Period, select; provided,
however, that:
(i) the Borrower may not select any Interest Period
that ends after the Termination Date;
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(ii) Interest Periods commencing on the same date for
LIBOR Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(iv) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Internal Revenue Code" means the United States Internal
Revenue Code of 1986, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"Lenders" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Section 9.07.
"LIBOR Rate" means, with respect to any LIBOR Rate Advance for
any Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes
of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 A.M., Atlantic
Standard Time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBOR Rate" with
respect to such LIBOR Rate Advance for such Interest Period shall be
the average of the rates (rounded upward to the nearest whole multiple
of 1/16 of 1%) per annum at which dollar deposits approximately equal
in principal amount to the aggregate principal amount of such Advance
and for a maturity comparable to such Interest Period are quoted to the
Administrative Agent by at least three (3) major international
commercial banks in immediately available funds in the London interbank
market at approximately 11:00 A.M., Atlantic Standard Time, two
Business Days prior to the commencement of such Interest Period, for
delivery on the date of commencement of such Interest Period.
"LIBOR Rate Advance" means a Revolving Credit Advance that
bears interest based upon the LIBOR Rate as provided in Section
2.06(a)(ii).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind.
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"Loan Party" means each of the Borrower and the Guarantors.
"Management Agreement" means, collectively, that certain
Management Agreement dated as of March 2, 1999, among the Borrower,
PRTC, and GTE Services Puerto Rico Corporation, and that certain US
Management Agreement dated as of March 2, 1999, among the Borrower,
PRTC and GTE Investments Incorporated, each as amended, forming part of
the Purchase Documents.
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, Property or prospects of any Loan Party or any Loan Party
and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Borrower and its Subsidiaries
taken individually or as a whole, (b) the ability of any Loan Party to
perform its obligations hereunder or under the Notes, (c) the validity
or enforceability of this Agreement or the Notes, (d) the rights and
remedies of the Lenders and the Administrative Agent under this
Agreement or the Notes or (e) the timely payment of the principal of or
interest on the Advances or other amounts payable in connection
therewith.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than such Loan Party and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"Note" means a Revolving Credit Note.
"Notice of Revolving Credit Borrowing" has the meaning
specified in Section 2.02(a).
"Other Taxes" has the meaning specified in Section 2.13(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means, with respect to any Person, (a) Liens
for taxes, assessments and governmental charges and levies to the
extent not required to be paid under Section 5.01(b) hereof; (b)
pledges or deposits to secure obligations under workers' compensation
laws or similar legislation; (c) pledges or deposits to secure
performance in connection with bids, tenders, contracts (other than
contracts for the payment of money) or leases to which such Person is a
party; (d) deposits to secure public or statutory
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obligations of such Person; (e) materialmen's, mechanics', carriers',
workers', repairmen's or other like Liens in the ordinary course of
business, or deposits to obtain the release of such Liens to the extent
such Liens, in the aggregate, would not have a Material Adverse Effect;
(f) deposits to secure surety and appeal bonds to which such Person is
a party; (g) other pledges or deposits for similar purposes in the
ordinary course of business; (h) Liens created by or resulting from any
litigation or legal proceeding which at the time is currently being
contested in good faith by appropriate proceedings; (i) leases made, or
existing on property acquired, in the ordinary course of business; (j)
landlord's Liens under leases to which such Person is a party; (k)
zoning restrictions, easements, licenses, and restrictions on the use
of real Property or minor irregularities in title thereto, which do not
materially impair the use of such Property in the operation of the
business of such Person or the value of such Property for the purpose
of such business; and (l) banker's liens, right of set off or analogous
rights granted or arising by operation of law to any deposits held by
or other indebtedness owing by any lender or any affiliate thereof to
or for the credit or account of such Person.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Property" means with respect to any Person, any right or
interest in or to property of any kind whatsoever, whether real,
personal (including, without limitation, cash) or mixed and whether
tangible or intangible of such Person.
"Puerto Rico Telephone Authority" means the Puerto Rico
Telephone Authority, a public corporation and government
instrumentality of the Commonwealth of Puerto Rico.
"Purchase Documents" means, collectively, the Amended and
Restated Stock Purchase Agreement and all documents executed thereunder
or pursuant thereto which constitute all of the agreements entered into
among the parties thereto relating to the Acquisition listed in
Schedule 1.01(i) hereto, including, but not limited to the Management
Agreement, the Share Option Agreement, the Payment Bond (Stock Purchase
Agreement), the Payment Bond (Option Agreement), the Guaranty (Stock
Purchase Agreement), the Guaranty (Option Agreement), the Guaranty
(Non-Competition Agreement), the Guaranty (Shareholders Agreement), the
Technology Transfer Agreement, and any and all documents, certificates,
etc., issued, executed or delivered in connection therewith.
"Quarterly Dates" means the last Business Day of March, June,
September and December of each year.
"Register" has the meaning specified in Section 9.07(d).
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"Required Lenders" means as at any time, Lenders having at
least 66% of the sum of (a) the aggregate unused amount, if any, of the
Commitments as at such time plus (b) the aggregate outstanding
principal amount of the Revolving Credit Advances at such time.
"Requisite Amount" has the meaning specified in Section
6.01(f).
"Revolving Credit Advance" means an advance by a Lender to the
Borrower as part of a Revolving Credit Borrowing and refers to a Base
Rate Advance or a LIBOR Rate Advance (each of which shall be a "Type"
of Revolving Credit Advance).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of
the Lenders pursuant to Section 2.01.
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Lender, in substantially the form
of Exhibit A-1 hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Revolving Credit Advances
made by such Lender.
"Shareholders Agreement" means the Shareholders Agreement as
defined in the Amended and Restated Stock Purchase Agreement, as
amended from time to time.
"Share Option Agreement" means that certain Share Option
Agreement dated as of March 2, 1999, among the Borrower, GTE Holdings
(Puerto Rico), GITI, and the Puerto Rico Telephone Authority, forming
part of the Purchase Documents.
"Significant Subsidiary" means at any time any Subsidiary, the
assets of which, in the aggregate, exceed $30,000,000, determined in
accordance with GAAP.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has
been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the Property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the Property of such Person is
not less than the amount that will be required to pay the probable
liability of such Person on its Debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur Debts or liabilities beyond such Person's ability to pay
such Debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's Property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all
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the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability after taking into account any indemnification pursuant to the
terms of the Amended and Restated Stock Purchase Agreement and any
other agreements entered into in connection therewith.
"Special Dividend" shall mean a one time special dividend
payment to effectuate the Acquisition by the Borrower to the Puerto
Rico Telephone Authority, which immediately prior to the Effective Date
will be the holder of record of 100% of the issued and outstanding
shares of capital stock of the Borrower.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such limited liability
company, partnership or joint venture or (c) the beneficial interest in
such trust or estate, is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"Taxes" has the meaning specified in Section 2.13(a).
"Technology Transfer Agreement" means that certain Technology
Transfer Agreement dated as of March 2, 1999, among the Borrower, GTE
and GTE Investments Incorporated, forming part of the Purchase
Documents.
"Termination Date" means, the earlier of the date that is 364
days after the date of the initial Borrowing (but in no event later
than March 30, 2000) and the date of termination in whole of the
Commitments pursuant to Section 2.04 or 6.01.
"Utilization Ratio" shall mean, with respect to the
determination of the Applicable LIBOR Margin for any LIBOR Rate
Advance, as of any date, the ratio of (i) the aggregate principal
amount of all Revolving Credit Advances outstanding on such date, to
(ii) the aggregate Commitments on such date.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"Wholly Owned Subsidiary" means, with respect to any Person,
any corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors qualifying shares) are directly or indirectly
owned or controlled by such Person or one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly
Owned Subsidiaries of such Person.
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1.02 SECTION .0. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each mean "to but excluding".
1.03 SECTION .0. Accounting Terms; Interest. All terms of an
accounting or financial nature not specifically defined herein shall be
construed in accordance with GAAP. All interest payable hereunder shall be
computed on the basis of a 360 day year and the actual number of days elapsed.
(a) SECTION .0. Construction. () Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"assets" and "Property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
(b) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall (unless otherwise disclosed to the Lenders in
writing at the time of delivery thereof in the manner described in subsection
(b) below) be prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with those used in the preparation of
the latest financial statements furnished to the Lenders hereunder. All
calculations made for the purposes of determining compliance with this Agreement
shall (except as otherwise expressly provided herein) be made by application of
generally accepted accounting principles applied on a basis consistent with
those used in the preparation of the latest annual or quarterly financial
statements furnished to the Lenders pursuant to Section 5.01(i) hereof unless
(i) the Borrower shall have objected to determining such compliance on such
basis at the time of delivery of such financial statements or (ii) the Required
Lenders shall so object in writing within 30 days after delivery of such
financial statements, in either of which events such calculations shall be made
on a basis consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made.
(c) The Borrower shall deliver to the Lenders at the same
time as the delivery of any annual or quarterly financial statement under
Section 5.01(i) hereof (i) a description in reasonable detail of any material
variation between the application of accounting principles employed in the
preparation of such statement and the application of accounting
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principles employed in the preparation of the next preceding annual or quarterly
financial statements as to which no objection has been made in accordance with
the last sentence of subsection (a) above and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.
(d) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 5.03 hereof, the Borrower
will not, without the prior consent of the Required Lenders, change the last day
of its fiscal year from December 31 of each year, or the last days of the first
three fiscal quarters in each of its fiscal years from March, June and September
of each year, respectively.
(e) Revolving Credit Advances hereunder are distinguished
by "Type." The "Type" of a Revolving Credit Advance refers to whether such
Advance is a Base Rate Advance or LIBOR Rate Advance, each of which constitutes
a Type.
ARTICLE TWO
AMOUNTS AND TERMS OF THE ADVANCES
2.01 SECTION .0. The Revolving Credit Advances. Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
Revolving Credit Advances to the Borrower from time to time on any Business Day
during the period from the Effective Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding the amount set forth
opposite such Lender's name on the signature pages hereof or, if such Lender has
entered into any Assignment and Acceptance, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 9.07(d), as
such amount may be reduced pursuant to Section 2.04 (such Lender's
"Commitment"). Each Revolving Credit Borrowing shall be in an aggregate amount
of $1,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Revolving Credit Advances of the same Type made on the same day by
the Lenders ratably according to their respective Commitments. Within the limits
of this Section 2.01, the Borrower may borrow under this Section 2.01, prepay
pursuant to Section 2.09, reborrow under this Section 2.01 and may Convert
Borrowings of one Type into Borrowings of another type (as provided in Section
2.08).
(a) SECTION .0. Making the Revolving Credit Advances. ()
Each Revolving Credit Borrowing shall be made on notice, given not later than
11:00 A.M. (Atlantic Standard Time) on the third Business Day prior to the date
of the proposed Revolving Credit Borrowing in the case of a Revolving Credit
Borrowing consisting of LIBOR Rate Advances, or the Business Day of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Base Rate Advances, by the Borrower to the Administrative Agent,
which shall give to each Lender prompt notice thereof by telecopier or telex.
Each such notice of a Revolving Credit Borrowing (a "Notice of Revolving Credit
Borrowing") shall be by telephone, confirmed immediately in writing, or
telecopier or telex in substantially the form of Exhibit B-1 hereto, specifying
therein the requested (i) date of such Revolving Credit Borrowing, (ii) Type of
Advances comprising such Revolving Credit Borrowing, (iii) aggregate amount of
such Revolving Credit Borrowing, and (iv) in the case of a Revolving Credit
Borrowing
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consisting of LIBOR Rate Advances, initial Interest Period for each such
Revolving Credit Advance. Each Lender shall, before 12:00 noon (Atlantic
Standard Time) on the date of such Revolving Credit Borrowing, make available
for the account of its Applicable Lending Office to the Administrative Agent at
the Administrative Agent's Account, in same day funds, such Lender's ratable
portion of such Revolving Credit Borrowing. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds available to
the Borrower at the Borrower's Account.
(b) Anything in subsection (a) above to the contrary
notwithstanding, the Borrower may not select LIBOR Rate Advances for any
Revolving Credit Borrowing if the aggregate obligation of the Lenders to make
LIBOR Rate Advances shall then be suspended pursuant to Section 2.07 or 2.12.
(c) Each Notice of Revolving Credit Borrowing shall be
irrevocable and binding on the Borrower. In the case of any Revolving Credit
Borrowing that the related Notice of Revolving Credit Borrowing specifies is to
be comprised of LIBOR Rate Advances, the Borrower shall indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Revolving
Credit Borrowing for such Revolving Credit Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund the Revolving Credit Advance to be made by such Lender as part of such
Revolving Credit Borrowing when such Revolving Credit Advance, as a result of
such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the time of any Revolving Credit Borrowing that
such Lender will not make available to the Administrative Agent such Lender's
ratable portion of such Revolving Credit Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent on the date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Revolving Credit Advances
comprising such Revolving Credit Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Lender's
Revolving Credit Advance as part of such Revolving Credit Borrowing for purposes
of this Agreement and the Borrower shall be relieved of its obligations to repay
such amount under this Section 2.02(d).
(e) The failure of any Lender to make the Revolving
Credit Advance to be made by it as part of any Revolving Credit Borrowing shall
not relieve any other Lender of
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its obligation hereunder to make its Revolving Credit Advance on the date of
such Revolving Credit Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Revolving Credit Advance to be made by
such other Lender on the date of any Revolving Credit Borrowing.
2.02 SECTION .0. (a) Commitment Fee. The Borrower shall pay to
the Administrative Agent for account of each Lender a commitment fee on the
daily average unused amount of such Lender's Commitment, for the period from and
including the Effective Date, to but not including the Termination Date, at a
rate per annum equal to 0.175%. Accrued commitment fees shall be payable in
arrears on each Quarterly Date and on the Termination Date. All fees payable
under this Section 2.03(a) shall be computed based on a year of 360 days and the
actual number of days elapsed during the relevant period for which such fees are
being computed.
(b) Up-Front Fee. On the Effective Date, the Borrower
shall pay to the Administrative Agent for the ratable account of the Lenders an
up-front fee in an amount equal to 0.25% of the aggregate amount of the
Commitments.
(a) SECTION .0. Termination or Reduction of the
Commitments. () The Borrower shall have the right, upon at least three Business
Days' notice to the Administrative Agent, to terminate in whole or reduce
ratably in part the unused portions of the respective Commitments of the
Lenders, provided that each partial reduction shall be in the aggregate amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) The aggregate amount of the Commitments shall be
automatically reduced to zero on the Termination Date.
(c) The Commitments once terminated or reduced may
not be reinstated.
2.03 SECTION .0. Repayment of Revolving Credit Advances. The
Borrower shall repay to the Administrative Agent for the ratable account of the
Lenders on the Termination Date the aggregate principal amount of the Revolving
Credit Advances then outstanding.
(a) SECTION .0. Interest. () Scheduled Interest. The
Borrower shall pay interest on the unpaid principal amount of each Revolving
Credit Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such
Revolving Credit Advance is a Base Rate Advance, a rate per annum equal
at all times to the Base Rate in effect from time to time, payable in
arrears on each Quarterly Date, and on the date such Base Rate Advance
shall be Converted or paid in full.
(ii) LIBOR Rate Advances. During such periods as such
Revolving Credit Advance, as the case may be, is a LIBOR Rate Advance,
a rate per annum equal at all times during each Interest Period for
such Revolving Credit Advance to the sum of (x) the LIBOR Rate for such
Interest Period for such Revolving Credit
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Advance, plus (y) the Applicable LIBOR Margin in effect from time to
time, payable in arrears on the last day of such Interest Period, and
on the date such LIBOR Rate Advance shall be Converted, continued or
paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default under Section 6.01, the Borrower shall pay
interest on (i) the unpaid principal amount of each Revolving Credit Advance
owing to each Lender, payable in arrears on the dates referred to in clause
(a)(i) or (a)(ii) above, at a rate per annum equal at all times to two (2)
percentage points above the rate per annum required to be paid on such Revolving
Credit Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable hereunder that is not paid when due, from the date such amount shall be
due until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to two (2) percentage points above the rate per annum required to be paid
on Base Rate Advances pursuant to clause (a)(i) above.
(c) SECTION .0. Interest Rate Determination. () The
Administrative Agent shall give prompt notice to the Borrower and the Lenders of
the applicable interest rate determined by the Administrative Agent for purposes
of Section 2.06(a)(i) or (ii).
(d) If, with respect to any LIBOR Rate Advances, the
Required Lenders notify the Administrative Agent that the LIBOR Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Required Lenders of making, funding or maintaining their respective LIBOR Rate
Advances for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon (i) each LIBOR Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to
make, or to Convert Revolving Credit Advances into, LIBOR Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
(e) If the Borrower shall fail to select the duration of
any Interest Period for any LIBOR Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders and
such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
(f) On the date on which the aggregate unpaid principal
amount of LIBOR Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $1,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(g) Upon the occurrence and during the continuance of any
Event of Default under Section 6.01, (i) each LIBOR Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
continue or to Convert Advances into, LIBOR Rate Advances shall be suspended.
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(h) If on any date the Administrative Agent is unable to
determine the LIBOR Rate for any LIBOR Rate Advances to be made on such date,
(i) the Administrative Agent shall forthwith notify the
Borrower and the Lenders that the interest rate cannot be
determined for such LIBOR Rate Advances,
(ii) with respect to LIBOR Rate Advances, each such
Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate
Advance (or if such Advance is then a Base Rate Advance, will
Continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make LIBOR Rate
Advances or to Convert Revolving Credit Advances into LIBOR
Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
2.04 SECTION .0. Optional Conversion of Revolving Credit
Advances. The Borrower may on any Business Day, upon notice given to the
Administrative Agent not later than 11:00 A.M. (Atlantic Standard Time) on the
third Business Day prior to the date of the proposed Conversion and subject to
the provisions of Sections 2.08 and 2.12, Convert all Revolving Credit Advances
of one Type comprising the same Borrowing into Revolving Credit Advances of the
other Type; provided, however, that any Conversion of LIBOR Rate Advances into
Base Rate Advances shall be made only on the last day of an Interest Period for
such LIBOR Rate Advances and any Conversion of Base Rate Advances into LIBOR
Rate Advances shall be in an amount not less than $1,000,000. Each such notice
of a Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Revolving Credit Advances to be Converted and
(iii) if such Conversion is into LIBOR Rate Advances, the duration of the
initial Interest Period for each such Advance. Each notice of Conversion shall
be irrevocable and binding on the Borrower.
2.05 SECTION .0. Prepayments of Revolving Credit Advances. The
Borrower may, upon written notice given to the Administrative Agent not later
than 11:00 A.M. (Atlantic Standard Time) for Base Rate Advances and upon at
least two Business Days' for LIBOR Rate Advances stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amount of the Revolving Credit
Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount of $1,000,000 or an integral multiple of
$1,000,000 in excess thereof and (y) in the event of any such prepayment of a
LIBOR Rate Advance, the Borrower shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 9.04(c).
(a) Increased Costs. () If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any written guideline or request from any
central bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of agreeing to
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make or making, funding or maintaining LIBOR Rate Advances (excluding for
purposes of this Section 2.10 any such increased costs resulting from (i) Taxes
or Other Taxes (as to which Section 2.13 shall govern) and (ii) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost (whether or not
such increased costs arise prior to the receipt of written notification from
such central bank or other governmental authority); provided that the Borrower
shall not be required to pay any such increased costs to the extent such
increased costs accrued prior to the date that is six months prior to such
notice. A certificate as to the amount of such increased cost, submitted to the
Borrower and the Administrative Agent by such Lender, shall be conclusive and
binding for all purposes, absent error in the calculation of such amount.
(b) If any Lender determines that compliance with any law
or regulation or any written guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender (excluding any reserves
included in the computation of the LIBOR Rate) and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type, then, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), the Borrower
shall pay to the Administrative Agent for the account of such Lender, from time
to time as specified by such Lender, additional amounts sufficient to compensate
such Lender or such corporation (whether or not such amounts arise prior to the
receipt of written notification from such central bank or other governmental
authority) in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable (in the
proportion that such Lender's Commitment hereunder bears to all of such Lender's
commitments of this type) to the existence of such Lender's commitment to lend
hereunder; provided that the Borrower shall not be required to compensate such
Lender to the extent such amounts arose prior to the date that is six months
prior to such notice. A certificate as to such amounts submitted to the Borrower
and the Administrative Agent by such Lender shall be conclusive and binding for
all purposes, absent error in the calculation of such amounts.
(c) Any Lender claiming any additional amounts payable
pursuant to this Section 2.10 agrees to use reasonable efforts (subject to its
internal policy in that regard and legal and regulatory restrictions) to
minimize such additional amounts and to change, to the extent such Lender has at
such time additional lending offices in existence, its Applicable Lending Office
(provided that for the purposes of this Section 2.10(c) only, the term
"Applicable Lending Office" shall not include the lending office of any
affiliate of such Lender) if the making of such a change would avoid the need
for, or reduce the amount of, any additional amounts that may thereafter accrue
and would not, in the reasonable judgment of such Lender, be otherwise notably
disadvantageous to such Lender. The Borrower shall reimburse such Lender for
such Lender's reasonable expenses incurred in connection with such change or in
considering such a change in an amount not to exceed the Borrower's pro rata
share of such
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expenses based on such Lender's Commitment and Advances and the total lending
commitments and loans of such Lender to its similarly situated customers.
2.06 Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority having relevant jurisdiction asserts that it is unlawful, for any
Lender or its Applicable Office to perform its obligations hereunder to make
LIBOR Rate Advances or to fund or maintain LIBOR Rate Advances hereunder, (i)
each LIBOR Rate Advance made by such Lender will automatically, upon such
demand, Convert into a Base Rate Advance, as the case may be, and (ii) the
obligation of such Lender to make LIBOR Rate Advances or to Convert Revolving
Credit Advances into LIBOR Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
(a) Payments and Computations. () The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (Atlantic
Standard Time) on the day when due in U.S. dollars to the Administrative Agent
at the Administrative Agent's Account in same day funds. The Administrative
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or facility fees ratably (other than
amounts payable pursuant to Sections 2.11, 2.14 or 9.04(c)) to the Lenders for
the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 9.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) All computations of interest based on the Base Rate,
LIBOR Rate and Federal Funds Rate and of the facility fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or facility fees are payable.
Each determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent error in the
calculation of such interest rate.
(c) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or facility fee,
as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of LIBOR Rate Advances to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.
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(d) Unless the Administrative Agent shall have received
notice from the Borrower prior to the time on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
(e) Taxes. () Subject to the provisions of this Section
2.13, any and all payments by the Borrower hereunder or under the Notes shall be
made, in accordance with Section 2.12 free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding in the case of
each Lender and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Notes being hereinafter referred to
as "Taxes"). Subject to subsections (e) and (f) below, if the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender or the Administrative Agent, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.13) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. Within 30 days after the
date of any payment of Taxes, the Borrower shall furnish to the Administrative
Agent, at its address referred to in Section 9.02, the original or a certified
copy of a receipt evidencing payment thereof.
(f) In addition, the Borrower agrees to pay any stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, performing under, or otherwise with
respect to, this Agreement or the Notes as a result of the introduction of or
any change in or in the interpretation of any law or regulation after the
Effective Date (hereinafter referred to as "Other Taxes").
(g) Subject to subsection (d) below, the Borrower shall
indemnify each Lender and the Administrative Agent for the full amount of Taxes
or Other Taxes (to the extent not previously paid under subsection (a) or (b)
above) imposed on or paid by such Lender or the Administrative Agent (as the
case may be) and any liability (including penalties, interest and expenses but
excluding any taxes imposed by any jurisdiction on amounts payable under this
Section 2.13) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender or the Administrative
Agent (as the case may be) makes written demand therefor.
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(h) Notwithstanding anything else contained in this
Section 2.13, the Borrower shall only be required to pay additional sums with
respect to Taxes to a Lender (or the Administrative Agent, as the case may be)
pursuant to subsection (a), (b) or (c) above if and to the extent that the
obligation to pay such Taxes results from such Lender being subject to any Taxes
as a result of: (i) any amendment to the laws (or any regulations thereunder),
or any amendment to, or change in, an interpretation or application of any such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority adopted or enacted after the date hereof (or in the case of
an entity that becomes a Lender after the date hereof, the date such entity
becomes a Lender), (ii) an amendment, modification or revocation of any existing
applicable tax treaty ratified, enacted or amended after the date hereof (or in
the case of an entity that becomes a Lender after the date hereof, the date such
entity becomes a Lender), or (iii) the ratification of a new tax treaty ratified
after the date hereof (or in the case of an entity that becomes a Lender after
the date hereof, the date such entity becomes a Lender).
(i) In the event that the Borrower makes an additional
payment under Section 2.13(a) or 2.13(c) for the account of any Lender and such
Lender, in its sole opinion, determines that it has finally and irrevocably
received or been granted a credit against, or relief or remission from, or
repayment of, any tax paid or payable by it in respect of or calculated with
reference to the deduction or withholding giving rise to such additional
payment, such Lender shall, to the extent that it determines that it can do so
without prejudice to the retention of the amount of such credit, relief,
remission or repayment, pay to the Borrower such amount as such Lender shall, in
its sole opinion, have determined is attributable to such deduction or
withholding and will leave such Lender (after such payment) in no worse position
than it would have been had the Borrower not been required to make such
deduction or withholding. Nothing contained herein shall (i) interfere with the
right of a Lender to arrange its tax affairs in whatever manner it thinks fit or
(ii) oblige any Lender to claim any tax credit or to disclose any information
relating to its tax affairs or any computations in respect thereof or (iii)
require any Lender to take or refrain from taking any action that would
prejudice its ability to benefit from any other credits, reliefs, remissions or
repayments to which it may be entitled. Each Lender and the Administrative Agent
shall reasonably cooperate with the Borrower at the Borrower's written request
and sole expense, in contesting any Taxes or Other Taxes the Borrower would bear
pursuant to this Section 2.13, provided however, that (i) no tax return of such
Lender or the Administrative Agent is or would be held open as a result of such
contest, (ii) neither such Lender nor the Administrative Agent is required to
reopen a tax year that has already closed and (iii) such Lender and the
Administrative Agent shall, in the sole opinion of such Lender and the
Administrative Agent , respectively, have determined that such contest will
leave such Lender and the Administrative Agent , respectively, in no worse
position than it would have been in had it not contested such Taxes or Other
Taxes. Nothing contained herein shall interfere with the right of a Lender or
the Administrative Agent to arrange its tax affairs in whatever manner it thinks
fit, if in the sole judgment of such Lender or the Administrative Agent , such
contest would be disadvantageous to such Lender or the Administrative Agent . In
pursuing a contest in the Lender's or the Administrative Agent 's name, such
Lender or the Administrative Agent will be represented by counsel of such
Lender's or the Administrative Agent 's choice, and will defend against, settle
or otherwise control the contest and will not relinquish control or decision
making over the contest.
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(j) Any Lender claiming any additional amounts payable
pursuant to this Section 2.13 agrees to use reasonable efforts (subject to its
internal policy in that regard and legal and regulatory restrictions) to
minimize such additional amounts and to change, to the extent such Lender has at
such time additional lending offices in existence, its Applicable Lending Office
(provided that for the purposes of this Section 2.13(f) only, the term
"Applicable Lending Office" shall not include the lending office of any
affiliate of such Lender) if the making of such change would avoid the need for,
or reduce the amount of, any additional amounts that may thereafter accrue and
would not, in the reasonable judgment of such Lender, be otherwise notably
disadvantageous to such Lender. The Borrower shall reimburse such Lender for
such Lender's reasonable expenses incurred in connection with such change or in
considering such a change in an amount not to exceed the Borrower's pro rata
share of such expenses based on such Lender's Commitment and Advances to the
Borrower and the total lending commitments and loans of such Lender to its
similarly situated customers.
2.07 Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Revolving Credit Advances owing to it
(other than pursuant to Section 2.10, 2.14, 9.01(b), 9.04(c) or 9.07) in excess
of its ratable share of payments on account of the Revolving Credit Advances
obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in the Revolving Credit Advances owing to them as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender by delivering payment pursuant to this Section 2.14 may, to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of set-off) with respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such participation.
2.08 Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for
working capital and general corporate purposes of the Borrower and its
Subsidiaries, including, without limitation, to pay a portion of the Special
Dividend, provided that such proceeds shall not be used for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the Board of Governors of the Federal Reserve System).
ARTICLE THREE
CONDITIONS TO EFFECTIVENESS AND LENDING
3.01 SECTION .0. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.03. Sections 2.01 and 2.03 of this Agreement shall become
effective on and as of the first date (the "Effective Date") on which the
following conditions precedent have been satisfied:
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(a) The Acquisition shall have been consummated in
accordance with the terms of the Purchase Documents, without any waiver or
amendment that, in the reasonable judgment of the Lenders, could reasonably be
expected to materially adversely affect the ability of the Borrower or either
Guarantor to perform their respective obligations hereunder, and in material
compliance with all applicable laws.
(b) There shall have occurred no Material Adverse Change
since December 31, 1997 other than as disclosed in Schedule 3.01(b) hereto.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Loan Parties or any of their respective
Subsidiaries pending or threatened before any court, governmental agency or
arbitrator that (i) could be reasonably likely to have a Material Adverse Effect
other than the matters described on Schedule 3.01(c) hereto (the "Disclosed
Litigation") or (ii) is initiated by any Person other than a Lender in its
capacity as a Lender that purports to affect the legality, validity or
enforceability of this Agreement or any Note or the consummation of the
transactions contemplated hereby, and there shall have been no Material Adverse
Change in the status, or financial effect on any Loan Party, of the Disclosed
Litigation from that described on Schedule 3.01(c) hereto.
(d) All governmental and third party consents and
approvals necessary to consummate the Acquisition (including, in the case of the
Federal Communications Commission approval, the grant of the Federal
Communications Commission Transfer Applications) and necessary in connection
with the execution, delivery and performance of this Agreement and the Notes
shall have been obtained (without the imposition of any conditions that could
reasonably be expected to materially adversely affect the ability of any Loan
Party to perform its obligations hereunder) and shall remain in effect, and no
law or regulation shall be applicable that restrains, prevents or imposes
adverse conditions upon the transactions contemplated hereby that could
reasonably be expected to materially adversely affect the ability of any Loan
Party to perform its obligations hereunder.
(e) The Borrower shall have notified each Lender and the
Administrative Agent in writing as to the proposed Effective Date.
(f) The Borrower shall have paid all invoiced fees and
expenses of the Administrative Agent and the Lenders (including the invoiced
fees and expenses of Xxxxxxxx Xxxxx & Calabria, counsel to the Administrative
Agent).
(g) On the Effective Date, the following statements shall
be true and the Administrative Agent shall have received for the account of each
Lender a certificate signed by a duly authorized officer of the Borrower, dated
the Effective Date, stating that:
(i) The representations and warranties contained in
Section 4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that
constitutes a Default.
(h) The Administrative Agent shall have received on or
before the Effective Date the following, each dated such day, in form and
substance satisfactory to the
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Administrative Agent and (except for the Revolving Credit Notes) in sufficient
copies for each Lender:
(i) The Revolving Credit Notes to the order of the
Lenders, respectively.
(ii) Certified copies of the resolutions of the Board of
Directors of each Loan Party approving the transactions
contemplated by this Agreement and the Notes and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement
and such Notes.
(iii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of each Loan Party authorized to
sign this Agreement and the Notes and the other documents to
be delivered hereunder.
(iv) Certified copies of the Purchase Documents, duly
executed by the parties thereto, together with all agreements,
instruments and other documents delivered in connection
therewith.
(v) A certificate, in substantially the form of Exhibit D
hereto, attesting to the Solvency of each Loan Party after
giving effect to the Acquisition, the Special Dividend and the
Borrowings contemplated hereunder, and the Citibank
Indebtedness from the chief financial officer of each such
Loan Party.
(vi) Certified copies of the resolutions of the Board of
Directors (or committee thereof) of the Borrower and each
other Loan Party approving the Special Dividend as
contemplated by the Purchase Documents.
(vii) Certified copies of (A) all amendments to the
Purchase Documents and (B) each other document delivered
pursuant thereto, duly executed by the parties thereto,
together with all agreements, instruments and other documents
delivered in connection therewith.
(viii) Opinions, each dated the Effective Date, (A) of
X'Xxxxx & Xxxxxx, special Puerto Rico counsel to the Loan
Parties, covering such matters as the Administrative Agent or
any Lender may reasonably request (and each Loan Party hereby
instructs such counsel to deliver such opinion to the Lenders
and the Administrative Agent); and (B) reliance opinions, each
dated the Effective Date, of Xxxxx & Wood, Fiddler Xxxxxxxx &
Xxxxxxxxx, Xxxx X. Xxxxxx, Esq., and Xxxxxxxxxxx, Xxxxxx &
Xxxxxxx.
(ix) A certificate of a responsible financial officer
confirming that the Citibank Indebtedness has been fully
funded on the Effective Date in accordance with the terms of
the 364-Day Credit Agreement and the Five-Year Credit
Agreement (as described in the definition of Citibank
Indebtedness.)
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3.02 SECTION .0. Conditions Precedent to Each Revolving Credit
Borrowing. The obligation of each Lender to make a Revolving Credit Advance on
the occasion of each Revolving Credit Borrowing shall be subject to the
conditions precedent that the Effective Date and the Acquisition shall have
occurred and on the date of such Revolving Credit Borrowing the following
statements shall be true (and each of the giving of the applicable Notice of
Revolving Credit Borrowing and the acceptance by the Borrower of the proceeds of
such Revolving Credit Borrowing shall constitute a representation and warranty
by the Borrower that on the date of such Borrowing such statements are true):
(a) the representations and warranties contained in
Section 4.01 are correct in all material respects on and as of the date of such
Revolving Credit Borrowing, before and after giving effect to such Revolving
Credit Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date, and
(b) no event has occurred and is continuing, or would
result from such Revolving Credit Borrowing or from the application of the
proceeds therefrom, that constitutes a Default.
3.03 SECTION .0. Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified in Section
3.01, each Lender shall be deemed to have consented to, approved or accepted or
to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Administrative Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender prior
to the date that the Borrower, by notice to the Lenders, designates as the
proposed Effective Date, specifying its objection thereto. The Administrative
Agent shall promptly notify the Lenders of the occurrence of the Effective Date.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES
4.01 SECTION .0. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) (i) Each Loan Party is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted; and (iii) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could (either
individually or in the aggregate) have a Material Adverse Effect.
(b) The execution, delivery and performance by each Loan
Party of this Agreement and the Notes executed by it and the consummation of the
transactions contemplated hereby, are within such Loan Party's corporate powers,
have been duly authorized
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by all necessary corporate action, and (i) do not contravene (A) such Loan
Party's charter or by-laws (or other equivalent organizational documents), or
(B) any law or any material contractual restriction binding on or affecting such
Loan Party or, to the knowledge of the chief financial officer of the Borrower,
any other contract the breach of which would limit the ability of any Loan Party
to perform its obligations under this Agreement or the Notes, and (ii) will not
result in the creation or imposition of any Lien upon any Property of the
Borrower or any of its Subsidiaries pursuant to the terms of any agreement or
instrument.
(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 any Loan Party of this Agreement or the Notes.
(d) This Agreement has been, and each of the Notes when
delivered hereunder will have been, duly executed and delivered by the Borrower.
This Agreement has been duly executed and delivered by each Guarantor. Assuming
that this Agreement has been duly executed by the Administrative Agent and each
of the Initial Lenders, this Agreement is, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with their respective terms.
Assuming that this Agreement has been duly executed by the Administrative Agent
and each of the Initial Lenders, this Agreement is the legal, valid and binding
obligation of each Guarantor enforceable against each Guarantor in accordance
with its terms.
(e) The Consolidated balance sheet of the Borrower (or
its predecessor entities) and its Subsidiaries as at December 31, 1997, and the
related Consolidated statements of income and cash flows of the Borrower (or its
predecessor entities) and its Subsidiaries for the fiscal year then ended,
accompanied by an opinion of Deloitte & Touche LLP, independent public
accountants, copies of which have been furnished to each Lender, fairly present
the Consolidated financial condition of the Borrower (or its predecessor
entities) and its Subsidiaries as at such date and the Consolidated results of
the operations of the Borrower (or its predecessor entities) and its
Subsidiaries for the period ended on such date, all in accordance with generally
accepted accounting principles consistently applied. Except (i) as referred to
or reflected or provided for in the respective balance sheets referred to above;
(ii) for their respective obligations hereunder and under the Citibank
Indebtedness; (iii) as otherwise notified to the Administrative Agent in
writing; or (iv) as otherwise set forth in the Amended and Restated Stock
Purchase Agreement or the Disclosure Schedule delivered thereunder; none of such
respective entities has on the date hereof any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments.
(f) There is no pending or (to the knowledge of any Loan
Party) threatened action or proceeding, including, without limitation, any
Environmental Action, affecting any Loan Party or any of its Subsidiaries before
any court, governmental agency or arbitrator that is initiated by any Person
other than a Lender in its capacity as a Lender that purports to affect the
legality, validity or enforceability of this Agreement or any Note, or that, if
adversely determined could (either individually or in the aggregate) taking into
account rights of reimbursement and indemnification, have a Material Adverse
Effect.
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(g) No Loan Party is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
(h) None of the Loan Parties is an "investment company",
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(i) Each of the Loan Parties has obtained all
environmental, health and safety permits, licenses and other authorizations
required under all Environmental Laws to carry on its business as now being or
as proposed to be conducted, except to the extent failure to have any such
permit, license or authorization would not (either individually or in the
aggregate) have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of the Borrower and its
Subsidiaries is in compliance with the terms and conditions thereof, and is also
in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply
therewith would not (either individually or in the aggregate) have a Material
Adverse Effect.
(j) The Borrower has provided to the Administrative Agent
for distribution to the Lenders copies of the Information Memorandum, dated
January 27, 1999, prepared by the Borrower for use in connection with the
syndication of the Citibank Indebtedness and the Borrower acknowledges that the
Lenders are relying on the information contained therein in connection with the
extension of credit contemplated by this Agreement. The information, including
without limitation all financial information of the Loan Parties and the
predecessor entities thereof (but not including the projected financial
information thereof), contained in such Information Memorandum (the
"Information") was, as of its date, complete and correct in all material
respects and did not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements were made, and, in the case of the projected financial information of
the Loan Parties or any of them contained in such Information Memorandum, such
information was prepared by the Borrower in good faith based upon assumptions
believed by it to be reasonable. Nothing has come to the attention of the
Borrower that would lead it to believe that as of the date hereof, the
Information contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein not
materially misleading in light of the circumstances under which such statements
were made, except as otherwise disclosed in this Agreement, including the
Schedules hereto or in the case of the projected financial information that the
assumptions on which such information was based were not reasonable.
(k) (i) The Special Dividend has been approved, declared
and, on the Effective Date, shall be paid, by and in accordance with all
necessary corporate action required by
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the General Corporations Law of Puerto Rico of 1995, as amended (the "GCL"), the
charter, by-laws and the resolutions of the Board of Directors of the Borrower
and of each of its Subsidiaries.
(ii) On the Effective Date, the Acquisition shall have
been consummated in all material respects in accordance with
the terms of the Purchase Documents.
(iii) On the Effective Date, (A) GTE Holdings (Puerto
Rico) shall have acquired valid title to shares of capital
stock of the Borrower comprising the Controlling Interest of
the Borrower, and (B) the Puerto Rico Telephone Authority
shall own shares of capital stock of the Borrower representing
not less than shares representing 43% minus one share of all
of the issued and outstanding capital stock of the Borrower.
(l) The Loan Parties have exercised all commercially
reasonable efforts to ensure Year 2000 compliance of its computer systems and
equipment so that the so called Year 2000 problem will not result in a Default
or a Material Adverse Effect.
(m) (i) The obligations of the Loan Parties hereunder and
under the Notes, and the obligations of the Loan Parties under the Citibank
Indebtedness are of equal priority (pari passu), and (ii) except for any rights
to set-off in favor of the agent(s) or the lenders under Section 9.05 of the
346-Day Credit Agreement and the Five-Year Credit Agreement (as described in the
definition of Citibank Indebtedness), no Lien over any Property of the Loan
Parties has been granted in favor of the lenders party to such agreements, as
security for the obligations of the Borrower and its Subsidiaries under the
Citibank Indebtedness.
(n) No Agency Relationship. The Borrower understands and
agrees that neither the Administrative Agent nor any Lender is the agent or
representative of the Borrower, and this Agreement shall not be construed to
make the Administrative Agent or any such Lender liable to any third parties for
any obligations of the Borrower or any of its Subsidiaries in connection with
the operation and administration of their respective businesses.
ARTICLE FIVE
COVENANTS OF THE LOAN PARTIES
5.01 SECTION .0. Affirmative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, each Loan
Party will:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA and Environmental Laws, except where the failure to so
comply would not have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all
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lawful claims that, if unpaid, might by law become a Lien upon its Property;
provided, however, that neither any Loan Party nor any of its Subsidiaries shall
be required to pay or discharge any such tax, assessment, charge or claim that
is being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien resulting
therefrom attaches to its Property and becomes enforceable against its other
creditors and the aggregate of such Liens would have a Material Adverse Effect.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which such Loan Party or such Subsidiary operates;
provided, however, that such Loan Party and its Subsidiaries may self-insure to
the extent consistent with prudent business practice.
(d) Preservation of Corporate Existence, Etc. Preserve
and maintain, and cause each of their respective Subsidiaries to preserve and
maintain, its corporate existence, rights (charter and statutory), licenses and
franchises; provided, however, that each Loan Party and its Subsidiaries may
consummate any transaction permitted under Section 5.02(b) and provided further
that neither any Loan Party nor any of its Subsidiaries shall be required to
preserve any license, right or franchise, if the senior management of such Loan
Party or of such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of such Loan Party or the
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to such Loan Party or such Subsidiary.
(e) Visitation Rights. During normal business hours and
upon reasonable notice from time to time, permit the Administrative Agent or any
of the Lenders or any agents or representatives thereof, to examine and make
copies of and abstracts from the records and books of account of (excluding any
confidential information), and visit the properties of, such Loan Party and any
of its Subsidiaries, and to discuss the affairs, finances and accounts of such
Loan Party and any of its Subsidiaries with the appropriate representatives of
such Loan Party and together with the appropriate representatives of such Loan
Party's independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets and
business of such Loan Party and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, its
material Properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise permitted under this
Agreement with any of their Affiliates, other than another Loan Party, (i) on
terms that are fair and reasonable and no less favorable to such Loan Party or
such Subsidiary than it would obtain in a comparable arm's-
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length transaction with a Person not an Affiliate, except where the failure to
do so, in the aggregate, would not have a Material Adverse Effect, (ii) as
required by the Federal Communications Commission's rules and regulations for
transactions among affiliates, or (iii) as contemplated by the Management
Agreement and the Technology Transfer Agreement.
(i) Reporting Requirements. Furnish to each of the
Lenders:
(i) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each
fiscal year of the Borrower, the Consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such
quarter and the Consolidated statements of income and cash
flows of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending
with the end of such quarter, in each case together with
consolidating schedules pertaining thereto for the Borrower
and each of its Subsidiaries, duly certified (subject to
year-end audit adjustments) by the chief financial officer,
treasurer or controller of the Borrower as having been
prepared in accordance with generally accepted accounting
principles and certificates of the chief financial officer,
treasurer or controller of the Borrower as to compliance with
the terms of this Agreement and setting forth in reasonable
detail the calculations necessary to demonstrate compliance
with Section 5.03, provided that in the event of any change in
GAAP used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the
determination of compliance with Section 5.03, a statement of
reconciliation showing the calculations used for purposes of
Section 5.03;
(ii) as soon as available and in any event within 120
days after the end of each fiscal year of the Borrower, a copy
of the annual audited report for such year for the Borrower
and its Subsidiaries, containing the Consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of
such fiscal year and the Consolidated statements of income and
cash flows of the Borrower and its Subsidiaries for such
fiscal year, in each case together with consolidating
schedules pertaining thereto for the Borrower and each of its
Subsidiaries, in each case accompanied by an opinion
acceptable to the Required Lenders by Deloitte & Touche LLP or
other independent public accountants of nationally recognized
standing, provided that in the event of any change in GAAP
used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the
determination of compliance with Section 5.03, a statement of
reconciliation showing the calculations used for purposes of
Section 5.03;
(iii) promptly upon receipt thereof, copies of all
management letters and other material reports which are
submitted to the Board of Directors of the Borrower or any of
its Subsidiaries by their independent certified public
accountants in connection with any annual audit of the
Borrower and/or any such Subsidiary by such accountants;
(iv) as soon as possible and in any event within five
Business Days after the occurrence of each Default continuing
on the date of such statement, a
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statement of the chief financial officer, treasurer or
controller of the Borrower setting forth details of such
Default and the action that the Borrower has taken and
proposes to take with respect thereto;
(v) promptly after the sending or filing thereof, copies
of any quarterly and annual reports and proxy solicitations
that any Loan Party sends to any of its securityholders, and
copies of any reports, including any reports on Form 8-K that
such Loan Party files with the Commission (other than reports
on Form 8-K filed solely for the purpose of incorporating
exhibits into a registration statement previously filed with
the Securities and Exchange Commission);
(vi) prompt notice of all actions and proceedings before
any court, governmental agency or arbitrator affecting any
Loan Party or any of its Subsidiaries of the type described in
Section 3.01(c); and
(vii) such other information respecting any Loan Party or
any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request.
(viii) Further Assurances. The Borrower will execute,
acknowledge where appropriate, and deliver, and cause to be
executed, acknowledged where appropriate, and delivered, from
time to time, promptly at the request of the Administrative
Agent or any of the Lenders, all such instruments and
documents as in the reasonable opinion of the Administrative
Agent or such Lender are necessary or advisable to carry out
the intent and purpose of this Agreement and the Notes.
(ix) Performance of Agreements. The Borrower will take
all action and do all things which it is authorized by law or
contract to take and to do in order to perform and observe and
to cause the Loan Parties to perform and observe, all
covenants and agreements on its or their part to be performed
and observed under this Agreement, the Notes, and the
Contribution Agreement (which Contribution Agreement shall not
be amended without the consent of the Required Lenders).
(x) So long as any Commitments are available, or any
amounts under the Notes are outstanding hereunder, the
obligations of the Loan Parties hereunder and under the Notes
shall remain of equal priority (pari passu) with the
obligations of the Loan Parties under the Citibank
Indebtedness.
5.02 SECTION .0. Negative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will not:
(a) Liens, Etc. Create or suffer to exist, or permit any
of its Subsidiaries to create or suffer to exist, any Lien on or with respect to
any of its Properties, whether now owned or hereafter acquired, or assign for
security purposes (but not in connection with a bona fide sale thereof), or
permit any of its Subsidiaries to assign for security purposes (but not in
connection with a bona fide sale thereof), any right to receive income for any
purpose,
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including for the purpose of securing the Citibank Indebtedness; provided that
nothing in this Section 5.02 shall be construed to prevent or restrict the
following:
(i) Permitted Liens,
(ii) purchase money Liens upon or in any real property or
equipment acquired or held by the Borrower or any of its
Subsidiaries in the ordinary course of business to secure the
purchase price of such property or equipment or to secure Debt
incurred solely for the purpose of financing the acquisition
of such property or equipment, or Liens existing on such
property or equipment at the time of its acquisition or
conditional sales or other similar title retention agreements
with respect to property hereafter acquired or extensions,
renewals or replacements of any of the foregoing for the same
or a lesser amount, provided, however, that no such Lien shall
extend to or cover any properties of any character other than
the real property or equipment being acquired, and no such
extension, renewal or replacement shall extend to or cover any
properties not theretofore subject to the Lien being extended,
renewed or replaced,
(iii) the Liens existing on the Effective Date and
described on Schedule 5.02(a) hereto and other undisclosed
Liens existing on the Effective Date securing obligations in
aggregate amount not to exceed $10,000,000,
(iv) Liens on property of a Person existing at the time
such Person is merged into or consolidated with the Borrower
or any of its Subsidiaries; provided that any such Liens that
were created during the period immediately prior to such
merger, consolidation or acquisition were created in the
ordinary course of business of such Person and the Debt
secured by such Liens does not exceed the fair market value of
the assets (including intangible assets) of such Person so
merged into or consolidated with the Borrower or any of its
Subsidiaries,
(v) the replacement, extension or renewal of any Lien
permitted by clauses (iii) and (iv) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or
extension of the final maturity date) of the Debt secured
thereby; and
(vi) Liens not otherwise permitted pursuant to clause (i)
through (v) above securing obligations not to exceed at any
time outstanding the amount of $10,000,000.
(b) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its Property or assets
(whether now owned or hereafter acquired) to, any Person, or permit any of its
Subsidiaries to do so, except that (i) any Subsidiary of the Borrower may merge
or consolidate with or into, or dispose of its Property or assets to, any other
Subsidiary of the Borrower, (ii) any Subsidiary of the Borrower may merge into
or dispose of its Property or assets to the Borrower, and (iii) the Borrower may
merge with any Subsidiary of
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GTE so long as the surviving corporation assumes to the reasonable satisfaction
of the Administrative Agent all obligations of the Borrower hereunder and under
the Notes and the Guarantors confirm in writing their guarantee obligations
hereunder upon the occurrence of and following such merger, and provided, in
each case, that no Default shall have occurred and be continuing at the time of
such proposed transaction or would result therefrom.
(c) Accounting Changes. Make or permit, or permit any of
its Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except (i) as required or permitted by generally accepted
accounting principles or (ii) where the effect of such change, together with all
other changes in accounting policies or reporting practices made pursuant to
this clause (ii) since the Effective Date, is immaterial to the Borrower and its
Subsidiaries taken as a whole.
(d) Subsidiary Debt. Permit any of its Subsidiaries to
create or suffer to exist, any Debt other than:
(i) Debt owed to the Borrower or to a wholly owned
Subsidiary of the Borrower (it being understood that such Debt
includes any Debt incurred (A) in connection with the
Acquisition and (B) under the Contribution Agreement,
(ii) Debt existing on the Effective Date and described on
Schedule 5.02(d) hereto (the "Existing Debt"), and any Debt
extending the maturity of, or refunding or refinancing, in
whole or in part, the Existing Debt, provided that the
principal amount of such Existing Debt shall not be increased
above the principal amount thereof outstanding immediately
prior to such extension, refunding or refinancing, and the
direct and contingent obligors therefor shall not be changed,
as a result of or in connection with such extension, refunding
or refinancing,
(iii) unsecured Debt incurred in the ordinary course of
business aggregating for each of the Guarantors not more than
$75,000,000 at any one time outstanding,
(iv) Debt in respect of operating leases, and
(v) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business.
(e) Certain Obligations Respecting Subsidiaries.
(i) The Borrower will, and will cause each of its
Subsidiaries to, take such action from time to time as shall
be necessary to ensure that each of its Subsidiaries is a
Wholly Owned Subsidiary.
(ii) 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
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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 (A)
become a party hereto and to the Guaranty pursuant to a
written instrument in form and substance satisfactory to the
Administrative Agent, and (B) 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 6
hereof, or as any Lender or the Administrative Agent shall
have reasonably requested.
(f) Modifications of Certain Documents. The Borrower will
not, and shall cause its Subsidiaries not to, without the prior written consent
of the Administrative Agent and the Required Lenders, modify, amend or
supplement, or give any consent to any modification, amendment or supplement to
any of the Purchase Documents, the effect of which would be to waive, settle, or
compromise any material right of indemnification, guaranty of payment or
performance, or any material right to receive payment thereunder from any Person
granted to the Borrower.
5.03 SECTION .0. Financial Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
(a) Debt to Annualized EBITDA Ratio. Maintain a Debt to
Annualized EBITDA Ratio, computed at the end of each fiscal quarter of the
Borrower commencing with the fiscal quarter ending September 30, 1999, of not
more than 4.0:1.0.
(b) Annualized EBITDA to Interest Ratio. Maintain an
Annualized EBITDA to Interest Ratio, computed at the end of each fiscal quarter
of the Borrower commencing with the fiscal quarter ending September 30, 1999, of
not less than 3.25:1.0.
ARTICLE SIX
EVENTS OF DEFAULT
6.01 SECTION .0. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable; or the Borrower shall fail to pay
any interest on any Advance within five Business Days after the same becomes due
and payable; or any fees or other amounts payable under this Agreement or any
Note are not paid within five (5) Business Days after the same becomes due and
payable; or
(b) Any representation or warranty made or deemed made by
the Borrower herein or by the Borrower (or any of its officers) in connection
with this Agreement shall prove to have been incorrect in any material respect
when made or deemed made; or
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(c) Any Loan Party shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(d), (e), (h), (i)(iv) or
(i)(vi), 5.02 or 5.03; or
(d) (i) any Loan Party shall fail to perform or observe
any term, covenant or agreement contained in Section 5.01(i) (other than clauses
(iv) and (vi) thereof) if such failure shall remain unremedied for five Business
Days after written notice thereof shall have been given to such Loan Party by
the Administrative Agent or any Lender or (ii) any Loan Party shall fail to
perform or observe any other term, covenant or agreement contained in this
Agreement on its part to be performed or observed if such failure shall remain
unremedied for thirty (30) days after written notice thereof shall have been
given to such Loan Party by the Administrative Agent or any Lender; or
(e) Article VII is breached by any Guarantor or shall
cease to be in full force and effect or any Guarantor shall so state in writing;
or
(f) The Borrower or any of its Subsidiaries shall fail to
pay any principal of or premium or interest on any Debt that is outstanding in a
principal or, in the case of Hedge Agreements, net amount of at least
$20,000,000 in the aggregate (but excluding Debt outstanding hereunder) of the
Borrower or such Subsidiary (as the case may be) (the "Requisite Amount"), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the later of five Business Days and the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any such Debt
aggregating the Requisite Amount shall be declared due and payable in accordance
with its terms or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt aggregating the Requisite
Amount and shall continue after the applicable grace period, if any, specified
in such agreement or instrument, if the effect of such event or condition is to
accelerate the maturity of such Debt; or any such Debt aggregating the Requisite
Amount shall be required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased in
accordance with its terms, or any offer to prepay, redeem, purchase or defease
such Debt shall be required to be made in accordance with its terms, in each
case prior to the stated maturity thereof where the cause of such prepayment,
redemption, purchase or defeasance or offer therefor is the occurrence of an
event or condition that is premised on a material adverse deterioration of the
financial condition, results of operation or properties of the Borrower or any
of its Subsidiaries, provided that with respect to Debt aggregating the
Requisite Amount of the types described in clauses (h) or (i) of the definition
of "Debt" and to the extent such Debt relates to the obligations of any Person
other than the Borrower or any of its Subsidiaries, no Event of Default shall
occur so long as the payment of such Debt is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being maintained;
or any event shall occur or condition shall exist under any agreement or
instrument relating to any Debt that is outstanding in a principal or, in the
case of Hedge Agreements, net amount, of at least $40,000,000 and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or permit
the acceleration of, the maturity of such Debt; or
(g) The Borrower or any of its Subsidiaries shall
generally not pay their respective debts as such debts become due, or shall
admit in writing its inability to pay its
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debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth in this subsection (f) under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors; or
(h) Any judgment or order for the payment of money in
excess of $30,000,000 shall be rendered against the Borrower or its Subsidiaries
and enforcement proceedings shall have been commenced by any creditor upon such
judgment or order for which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; provided,
however, that any such judgment or order shall not be an Event of Default under
this Section 6.01(g) if and for so long as (i) (A) the amount of such judgment
or order is covered by a valid and binding policy of insurance between the
defendant and the insurer or insurers covering payment thereof, (B) such insurer
shall be rated, or, if more than one insurer, at least 90% of such insurers as
measured by the amount of risk insured, shall be rated, at least "A" by A.M.
Best Borrower or its successor or its successors and (C) such insurer(s) has
been notified of, and has not disputed the claim made for payment of, the amount
of such judgment or order or (ii) (A) the amount of such judgment or order is
covered by a valid and binding indemnification agreement between the defendant
and an indemnitor, (B) such indemnitor shall have a rating for any class of its
non-credit enhanced long-term senior unsecured debt of not lower than BBB+ by
S&P or Baa3 by Xxxxx'x and (C) such indemnitor has been notified of, and has not
disputed the claim made for payment of, the amount of such judgment or order; or
(i) (i) After the Effective Date, GITI or any entity
controlling GITI shall cease for any reason to maintain, directly or indirectly,
the Controlling Interest; or (ii) any Person or two or more Persons (other than
GTE or its Subsidiaries or Xxxx Atlantic Corporation as successor to or parent
of GTE after the merger of GTE with Xxxx Atlantic Corporation or any of its
Subsidiaries) acting in concert shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of
GITI (or other securities convertible into such Voting Stock) representing more
than 50% of the combined voting power of all Voting Stock of GITI; or (iii) the
Borrower shall for any reason cease to own 100% of the Voting Stock of either
Guarantor; or
(j) Any Loan Party or its ERISA Affiliates shall incur,
or shall be reasonably likely to incur, liability that would have a Material
Adverse Effect as a result of one or more of the following: (i) the occurrence
of any ERISA Event; (ii) the partial or complete
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withdrawal of such Loan Party or its ERISA Affiliates from a Multiemployer Plan;
or (iii) the reorganization or termination of a Multiemployer Plan;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Notes, all interest thereon and all other amounts payable
under this Agreement to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that in
the event of an actual or deemed entry of an order for relief with respect to
the Borrower under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (B) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE SEVEN
GUARANTY
(a) SECTION .0. Guaranty; Limitation of Liability. ()
Each Guarantor hereby unconditionally and irrevocably, jointly and severally
("in solidum") guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of each other Loan
Party now or hereafter existing under this Agreement or any Note, whether for
principal, interest, fees, expenses or otherwise (such obligations, to the
extent not paid by such Loan Party or specifically waived in accordance with
Section 9.01, being the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including reasonable counsel fees and expenses) incurred by the
Administrative Agent or the Lenders in enforcing any rights under this Article
VII ("this Guaranty"). Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any Loan Party to the Administrative
Agent or any Lender under this Agreement or any Note but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Loan Party.
(b) (i)Each Guarantor and, by its acceptance of this
Guaranty, the Administrative Agent and each other Lender, hereby confirms that
it is the intention of all such parties that this Guaranty not constitute a
fraudulent transfer or fraudulent conveyance for purposes of the Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar Federal, state or Commonwealth of Puerto Rico law to the extent
applicable to this Guaranty. To effectuate the foregoing intention, the
Administrative Agent, each other Lender and each Guarantor hereby irrevocably
agrees that, notwithstanding the fact that this is a joint and several Guaranty,
the obligations of each Guarantor under this Guaranty shall not exceed the
greater of (A) the benefit realized by such Guarantor from the proceeds of the
Advances made from time to time by the Borrower to such Guarantor and (B) the
maximum amount that will, after giving effect to such maximum amount and all
other probable
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contingent and fixed liabilities of such Guarantor that are relevant under
applicable law, and after giving effect to any collections from, rights to
receive contribution from, or payments made by or on behalf of the other
Guarantor in respect of the obligations of such other Guarantor under this
Guaranty, result in the obligations of such Guarantor under this Guaranty not
constituting a fraudulent transfer or fraudulent conveyance. For purposes
hereof, "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar
Federal, state or Commonwealth of Puerto Rico law for the relief of debtors.
(ii) Each Guarantor agrees that in the event any payment
shall be required to be made to the Lenders under this
Guaranty, such Guarantor will contribute, to the maximum
extent permitted by law, such that the contribution will not
result in a fraudulent transfer or fraudulent conveyance, such
amounts to the other Guarantor so as to maximize the aggregate
amount paid to the Lenders under this Agreement and the Notes.
(iii) This is a guaranty of payment and not of
collection, and is the primary obligation of each of the
Guarantors; and the Administrative Agent or any Lender may,
subject to the terms and conditions hereof, enforce this
Guaranty against either Guarantor without any prior
enforcement of the Guaranteed Obligations against the Borrower
or the other Guarantor, and/or without any prior enforcement
of any other collateral security held by the Administrative
Agent or the Lenders as security for the payment and
performance of the Borrower's obligations to the
Administrative Agent and/or the Lenders.
7.02 SECTION .0. Guaranty Absolute. Each Guarantor guarantees
that the Guaranteed Obligations will be paid strictly in accordance with the
terms of this Agreement and the Notes, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Administrative Agent or the Lenders with respect thereto.
The obligations of each Guarantor under this Guaranty are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted directly against such Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrower or the other
Guarantor or whether the Borrower or the other Guarantor is joined in any such
action or actions. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and, to the maximum
extent permitted by law, each Guarantor hereby irrevocably waives, any defenses
it may now or hereafter have in any way relating to, any or all of the
following:
(a) any lack of validity or enforceability of this
Agreement, the Notes or any agreement or instrument relating hereto;
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to departure from this Agreement or
any Note, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to the Borrower or
otherwise;
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(c) any taking, exchange, release or non-perfection of
any collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any change, restructuring or termination of the
corporate structure or existence of the Borrower; or
(e) any other circumstance (including, without
limitation, any statute of limitations) or any existence of or reliance on any
representation by the Administrative Agent or any Lender that might otherwise
constitute a defense available to, or a discharge of, any Guarantor, the
Borrower or any other guarantor or surety other than payment when due.
This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Administrative Agent or any
Lender upon the insolvency, bankruptcy or reorganization of the Borrower or
either Guarantor or otherwise, all as though such payment had not been made.
(f) SECTION .0. Waiver. () Each Guarantor hereby waives
the right to require application (excusion de bienes) in respect of the Property
of the Borrower or the other Guarantor, promptness, diligence, notice of
acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Administrative Agent
or any Lender exhaust any right or take any action against the Borrower or any
other Person or any collateral. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated herein
and that the waiver set forth in this Section 7.03 is knowingly made in
contemplation of such benefits. Each Guarantor hereby waives any right to revoke
this Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
(g) So far as each of the Guarantors is concerned, the
Lenders or the Administrative Agent for the benefit of the Lenders, may, at any
time and from time to time, without the consent of or notice to the Guarantors,
and without impairing or releasing any of the obligations of the Guarantors
hereunder, upon or without any terms or conditions and in whole or in part:
(i) exercise or refrain from exercising any rights
against the Borrower or others (including, without limitation,
any other guarantor of payment of the Guaranteed Obligations)
or otherwise act or refrain from acting, whether under the
Credit Agreement or under rights and remedies that the Lenders
may now or hereafter have under any collateral given
thereunder or henceforth; and when making any demand hereunder
against either or both the Guarantors, the Lenders or the
Administrative Agent for the benefit of the Lenders, may, but
shall be under no obligation to, make a similar demand on any
other guarantor of payment of the Guaranteed Obligations, and
any failure by the Lenders or the Administrative Agent to make
any such demand or to collect any payments from any other
guarantor or any release of another guarantor of payment of
the Guaranteed Obligations shall not relieve the Guarantors of
their obligations and liabilities hereunder, and shall not
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release, impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Lenders against the
Guarantors (for the purposes hereof, "demand" shall include
the commencement and continuation of any legal proceedings);
(ii) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including
any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and subordinate the payment of all
or any part thereof to the payment of any liability (whether
due or not) of the Borrower to creditors of the Borrower other
than the Lenders;
(iii) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of the Borrower
hereunder to the Administrative Agent and/or the Lenders,
regardless of what liability or liabilities of the Borrower
remain unpaid; and
(iv) amend or otherwise modify, consent to or waive any
breach of, or any act, omission or Default under, this
Agreement and the Notes or any other agreements, instruments
or documents referred to therein or executed and delivered
pursuant thereto or in connection therewith, and this Guaranty
shall apply to the Guaranteed Obligations as set forth in each
of such documents as so amended and modified. Any such action
taken by the Administrative Agent or the Lenders shall not
impair or release any of the obligations of the Guarantor
hereunder.
7.03 SECTION .0. Continuing Guaranty; Assignments. This
Guaranty is a continuing guaranty and shall (a) remain in full force and effect
until the later of the cash payment in full of the Guaranteed Obligations and
all other amounts payable under this Guaranty and the Termination Date, (b) be
binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Lenders, the Administrative Agent and their
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations hereunder (including, without limitation,
all or any portion of its Commitment, the Advances owing to it and the Note or
Notes held by it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise, in each case as provided in Section 9.07.
7.04 SECTION .0. Subrogation. Neither Guarantor will exercise
any rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under this Guaranty, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Administrative Agent or any Lender against the Borrower, the other
Guarantor or any other insider guarantor or any collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower, the other Guarantor or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and
until all of the Guaranteed
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Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and the Termination Date shall have occurred. If any amount
shall be paid to either Guarantor in violation of the preceding sentence at any
time prior to the later of the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty and the
Termination Date, such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Guaranteed Obligations
and all other amounts payable under this Guaranty, whether matured or unmatured,
in accordance with the terms of this Guaranty, or to be held as collateral for
any Guaranteed Obligations or other amounts payable under this Guaranty
thereafter arising. If (i) either Guarantor shall make payment to the
Administrative Agent or any Lender of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall be paid in full in cash and (iii) the
Termination Date shall have occurred, the Administrative Agent and the Lenders
will, at such Guarantor's request and expense, execute and deliver to such
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to such Guarantor of
an interest in the Guaranteed Obligations resulting from such payment by such
Guarantor.
ARTICLE EIGHT
THE ADMINISTRATIVE AGENT
8.01 SECTION .0. Appointment, Powers and Immunities. Each
Lender hereby irrevocably appoints and authorizes the Administrative Agent to
act as its agent hereunder with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Administrative Agent (which
term as used in this sentence and in Section 8.05 and the first sentence of
Section 8.06 hereof shall include reference to its affiliates and its own and
its affiliates' officers, directors, employees and agents): (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement ,
and shall not by reason of this Agreement be a trustee for any Lender; (b) shall
not be responsible to the Lenders for any recitals, statements, representations
or warranties contained in this Agreement, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other document executed hereunder, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
Note or any other document referred to or provided for herein or therein or for
any failure by the Borrower or any other Person to perform any of its
obligations hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or under any other
document executed hereunder; and (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful
misconduct. The Administrative Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Administrative Agent may
deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a notice of the assignment or transfer thereof shall
have been filed with the Administrative Agent.
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8.02 SECTION .0. Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon any certification, notice or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants and other
experts selected by the Administrative Agent. As to any matters not expressly
provided for by this Agreement or any other documents, the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Required
Lenders or, if provided herein, in accordance with the instructions given by all
of the Lenders as is required in such circumstance, and such instructions of
such Lenders and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders.
8.03 SECTION .0. Defaults. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received notice from a Lender or any Loan Party
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall (subject to Section 8.07
hereof) take such action with respect to such Default as shall be directed by
the Required Lenders, provided that, unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interest of the
Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders, or all of the Lenders.
8.04 SECTION .0. Rights as a Lender. With respect to its
Commitments and the Advances made by it, the Administrative Agent (and any
successor acting as Administrative Agent) in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Administrative Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. Banco Popular (and
any successor acting as Administrative Agent) and its affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in and generally engage in any kind of banking, trust or other
business with the Loan Parties (and any of their Subsidiaries or Affiliates) as
if it were not acting as the Administrative Agent, and Banco Popular and its
affiliates may accept fees and other consideration from the Loan Parties for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
8.05 SECTION .0. Indemnification. The Lenders agree to
indemnify the Administrative Agent (to the extent not reimbursed under Section
9.04 hereof, but without limiting the obligations of the Borrower under said
Section 9.04, ratably in accordance with the aggregate principal amount of the
Advances held by the Lenders (or, if no Loans are at the time outstanding,
ratably in accordance with their respective Commitments), for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Administrative Agent (including
by any Lender) arising out of or by reason
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of any investigation in or in any way relating to or arising out of this
Agreement or any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses that the Borrower is obligated to pay under
Section 9.04 hereof, but excluding, unless a Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
8.06 SECTION .0. Non-Reliance on Administrative Agent and
Other Lenders. Each Lender agrees that it has, independently and without
reliance on the Administrative Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and its Subsidiaries and decision to enter into this
Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
under any other documents. The Administrative Agent shall not be required to
keep itself informed as to the performance or observance by any Loan Party of
this Agreement or any of the other documents or any other document referred to
or provided for herein or therein or to inspect the Properties or books of the
Borrower or any of its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or under the documents, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or any of its Subsidiaries (or any of their affiliates)
that may come into the possession of the Administrative Agent or any of its
Affiliates.
8.07 SECTION .0. Failure to Act. Except for action expressly
required of the Administrative Agent hereunder and under the other documents,
the Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 8.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
8.08 SECTION .0. Resignation or Removal of Administrative
Agent. Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower, and the Administrative
Agent may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent with the prior consent of the
Borrower (which consent shall not be unreasonably withheld); provided that no
such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and the Commitments have been terminated and/or the
Loans and other amounts payable by the Loan Parties hereunder have been declared
forthwith due and payable. If no successor Administrative Agent shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Administrative
Agent, then the
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retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, that shall be a bank with a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 8
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent
hereunder.
8.09 SECTION .0. Agency Fee. The Borrower will pay to the
Administrative Agent an agency fee in the amount of $50,000, payable in full on
the Effective Date.
ARTICLE NINE
MISCELLANEOUS
(a) SECTION .0. Amendments, Etc. () Except as otherwise
expressly provided in this Agreement, any provision of this Agreement may be
amended, modified or supplemented only by an instrument in writing signed by the
Borrower, the Administrative Agent and the Required Lenders, or by the Borrower
and the Administrative Agent acting with the consent of the Required Lenders,
and any provision of this Agreement may be waived by the Required Lenders or by
the Administrative Agent acting with the consent of the Required Lenders;
provided that: (x) no modification, supplement or waiver shall, unless by an
instrument signed by all of the Lenders or by the Administrative Agent acting
with the consent of all of the Lenders: (i) increase, or extend the term of any
of the Commitments, or extend the time or waive any requirement for the
reduction or termination of any of the Commitments, (ii) reduce or terminate,
other than reductions or termination of Commitments made by the Borrower as
permitted in Section 2.02 hereof, the Commitment(s) of any Lender, (iii) extend
the date fixed for the payment of principal of or interest on any Revolving
Credit Advance, or any fee hereunder, (iv) reduce the amount of any such payment
of principal, (v) reduce the rate at which interest is payable thereon or any
fee is payable hereunder, (vi) alter the rights or obligations of the Borrower
to prepay Loans, (vii) alter the terms of this Section 9.01, (viii) modify the
definition of the term "Required Lenders", or modify in any other manner the
number or percentage of the Lenders required to make any determinations or waive
any rights hereunder or to modify any provision hereof, (ix) release any
Guarantor from any of its guarantee obligations under Article VII hereof or (x)
waive any of the conditions precedent set forth in Article III hereof; and (y)
any modification of any of the rights or obligations of the Administrative Agent
shall require the consent of the Administrative Agent.
(b) Each Lender grants (x) to the Administrative Agent
the right to purchase all (but not less than all) of such Lender's Commitments
and Advances owing to it and the Notes held by it and all of its rights and
obligations hereunder and under the other documents at a price equal to the
aggregate amount of outstanding Advances owed to such Lender (together with all
accrued and unpaid interest and fees owed to such Lender), and (y) to the
Borrower the right to cause an assignment of all (but not less than all) of such
Lender's Commitments and
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Advances owing to it and the Notes held by it and all of its rights and
obligations hereunder and under the other documents to Eligible Assignees, which
right may be exercised by the Administrative Agent or the Borrower, as the case
may be, if such Lender refuses to execute any amendment, waiver or consent which
requires the written consent of all the Lenders and to which Lenders owed at
least 90% of the aggregate unpaid principal amount of Revolving Credit Advances
or, if no such principal amount is then outstanding, Lenders having at least 90%
of the Commitments, the Administrative Agent and the Borrower have agreed. Each
Lender agrees that if the Administrative Agent or the Borrower, as the case may
be, exercises its option hereunder, it shall promptly execute and deliver all
agreements and documentation necessary to effectuate such assignment as set
forth in Section 9.07.
9.02 SECTION .0. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier
communication) and mailed, telecopied or delivered by hand or by courier, if to
the Borrower, at 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxx Xxxx or XX
Xxx 000000, Xxx Xxxx, Xxxxxx Xxxx 00000-0000, Attention: Xxxx X. Xxxxxxx (fax
no. (000)000-0000); if to PRTC, at 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx,
Xxxxxx Xxxx or XX Xxx 000000, Xxx Xxxx, Xxxxxx Xxxx 00000-0000, Attention:
Xxxxxxx Xxxxxxxx (fax no. (000)000-0000); if to CTI, at 1515 Roosevelt Avenue,
12th Floor, Guaynabo, Puerto Rico or XX Xxx 000000, Xxx Xxxx, Xxxxxx Xxxx
00000-0000, Attention: Xxxxx X. Xxxxxxxx- Xxxxxxx (fax no. 787(000-0000); if to
any Initial Lender, at its applicable Lending Office specified opposite its name
on Schedule I hereto; if to any other Lender, at its applicable Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender;
and if to the Administrative Agent, at its address at 000 Xxxxx Xxxxxx Xxxxxx,
Xxxx Xxx, Xxxxxx Xxxx, Xxxxxxxxx: Manager, Structured Finance Division; or, as
to any Loan Party or the Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Administrative Agent. All such notices
and communications shall, when mailed or telecopied, be effective when deposited
in the first class mails or, in the case of international delivery, mails or
couriers that deliver within two Business Days, or telecopied, provided that
notices and communications to the Administrative Agent pursuant to Article II,
III or VIII shall not be effective until received by the Administrative Agent,
and provided, further, that notices and communications to any Person required to
be provided hereunder within five Business Days shall only be made by hand or
via telecopy or courier. Delivery by telecopier of an executed counterpart of
any amendment or waiver of any provision of this Agreement or the Notes or of
any Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
9.03 SECTION .0. No Waiver; Remedies. No failure on the part
of any Lender or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
(a) SECTION .0. Costs and Expenses. () The Borrower
agrees to pay on demand all reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification and
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amendment of this Agreement, the Notes and the other documents to be delivered
hereunder, including, without limitation, (A) all due diligence, syndication
(including printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, audit and insurance expenses and (B) the reasonable fees
and expenses of Xxxxxxxx Xxxxx & Calabria, counsel for the Administrative Agent
with respect thereto and with respect to advising the Administrative Agent as to
its rights and responsibilities under this Agreement. Such expenses shall be
paid by the Borrower, regardless of whether the transactions contemplated by
this Agreement are consummated. The Borrower further agrees to pay on demand all
costs and expenses of the Administrative Agent and the Lenders, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the Notes and the other documents to be
delivered hereunder, including, without limitation, reasonable fees and expenses
of counsel for the Administrative Agent and each Lender in connection with the
enforcement of rights under this Section 9.04(a).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with (i) the Notes,
this Agreement, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Advances or (ii) the actual or alleged
presence of Hazardous Materials on any property of the Borrower or any of their
respective Subsidiaries or any Environmental Action relating in any way to the
Borrower or any of their respective Subsidiaries, in each case whether or not
such investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense (A) is found by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct, (B) arises from disputes among two or more Lenders (but not
including any such dispute that involves a Lender to the extent such Lender is
acting in any different capacity (i.e., Administrative Agent) under the Credit
Agreement or the Notes or to the extent that it involves the Administrative
Agent's syndication activities) or (C) arises from or relates to a breach by
such Indemnified Party of its obligations under this Agreement. The Borrower
also agrees not to assert any claim against the Administrative Agent, any
Lender, any of their Affiliates, or any of their respective directors, officers,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to the Notes, this Agreement, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any
LIBOR Rate Advance is made by the Borrower (or pursuant to Section 9.01(b)) to
or for the account of a Lender other than on the last day of the Interest Period
for such Advance, as a result of a payment, prepayment or Conversion pursuant to
this Agreement or acceleration of the maturity
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of the Notes pursuant to Section 6.01, the Borrower shall, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion, including, without
limitation, any loss (excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in Sections 2.11, 2.14 and 9.04 shall survive the payment in
full of principal, interest and all other amounts payable hereunder and under
the Notes.
9.04 SECTION .0. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 by the Required
Lenders to authorize the Administrative Agent to declare the Notes due and
payable pursuant to the provisions of Section 6.01 and notice to the Borrower as
required under Section 6.01, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender or such Affiliate to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement and the Note held by such Lender,
whether or not such Lender shall have made any demand under this Agreement or
such Note and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender and its Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender and its Affiliates may
have.
9.05 SECTION .0. Binding Effect. This Agreement shall become
effective (other than Sections 2.01 and 2.03, which shall only become effective
upon satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower and the Administrative Agent and when
the Administrative Agent shall have been notified by each Initial Lender that
such Initial Lender has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Guarantors, the Administrative Agent
and each Lender and their respective successors and assigns, except that neither
the Borrower nor the Guarantors shall have the right to assign their rights
hereunder or any interest herein without the prior written consent of all of the
Lenders.
(a) SECTION .0. Assignments and Participations. () Each
Lender may, with the consent of the Administrative Agent (except as provided in
clause (g) below) and the Borrower (such consent not to be unreasonably
withheld) and, if demanded by the Borrower pursuant to Section 9.01(b) or
following a request for a payment to or on behalf of such Lender under Section
2.10 or Section 2.13 or following a notice given by such Lender pursuant to
Section 2.11, upon at least ten Business Days' notice to such Lender and the
Administrative Agent, will, assign to one or more Persons all or a portion of
its rights and obligations under this
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Agreement (including, without limitation, all or a portion of its Commitment,
the Revolving Credit Advances owing to it and the Revolving Credit Note or Notes
held by it); provided, that the Borrower may make demand with respect to a
Lender that has given notice pursuant to Section 2.11 only if the Borrower makes
such demand of all Lenders similarly situated that have given such notice;
provided, further, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement and the
Revolving Credit Notes, (ii) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender, or an assignment of
all of a Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) each such assignment
shall be to an Eligible Assignee, (iv) each such assignment made as a result of
a demand by the Borrower shall be arranged by the Borrower after consultation
with the Administrative Agent and shall be either an assignment of all of the
rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together cover all of the
rights and obligations of the assigning Lender under this Agreement, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower unless and until such Lender shall have received one or more
payments from either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal and all other amounts payable to such Lender
under this Agreement, (vi) in the case of Banco Popular only, Banco Popular
shall retain at least forty percent (40%) of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Revolving Credit Advances owing to it and the Revolving Credit
Note or Notes held by it at the time of such assignment, (vii) no Lender shall
at any time have more than two (2) assignees that were not Initial Lenders, and
(viii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Revolving Credit Notes subject to
such assignment and a processing and recordation fee of $2,500 (which shall be
paid by Persons other than the Borrower unless such assignment is made as a
result of a demand by the Borrower). Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights other than rights of
indemnification under Section 9.04 or otherwise relating to a time prior to the
effective date of such Assignment and Acceptance and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and
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Acceptance, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; (ii)
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with such
powers and discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender, an assignee representing that it is an Eligible Assignee
and the Borrower, together with the Revolving Credit Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Revolving Credit Note a new Note to the
order of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder a new Revolving Credit Note to the order of the
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Revolving Credit Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Revolving
Credit Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A-1
hereto.
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The
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51
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Each Lender may sell participations to one or more
banks or other entities (other than the Borrower or any of its Affiliates) in or
to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the Advances
owing to it and the Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(v) no participant under any such participation shall have any right to approve
any amendment or waiver of any provision of this Agreement or any Note, or any
consent to any departure by the Borrower therefrom, except that a Lender may
agree with a participant as to the manner in which the Lender shall exercise the
Lender's rights to approve any amendment, waiver or consent to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation.
(f) Any Lender may at any time, without the consent of
the Administrative Agent or the Borrower, create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System, provided, however, that no such assignment shall
have the effect of increasing the costs payable by the Borrower.
(g) Any Lender may at any time, without the consent of,
but with notice to the Administrative Agent, assign all or part of its rights or
obligations under this Agreement to any Affiliate of such Lender, provided,
however, that no such assignment shall have the effect of increasing the costs
payable by the Borrower.
9.06 SECTION .0. Nondisclosure. None of the Administrative
Agent or any Lender shall disclose without the prior consent of the Borrower
(other than to the Administrative Agent or another Lender, their respective
directors, employees, auditors, affiliates or counsel who shall agree to be
bound by the terms of this provision) any information with respect to the Loan
Parties or any Subsidiary thereof contained in financial statements, projections
or reports provided to the Administrative Agent or any Lender by, or on behalf
of, the Loan Parties or any Subsidiary, provided that the Administrative Agent
or any Lender may disclose any such information (a) as has become generally
available to the public in a manner, or through actions, which do not violate
the terms of this Section 9.08, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state, Commonwealth
of Puerto Rico or federal regulatory body having or claiming to have
jurisdiction over any Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations
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52
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to the Administrative Agent or any Lender and (e) to a
prospective co-lender or participant in the amounts outstanding hereunder or
under the Advances, provided, however, that such prospective co-lender or
participant executes an agreement containing provisions substantially identical
to those contained in this Section 9.08 and which shall by its terms inure to
the benefit of the Borrower and provided, further, that to the extent
practicable, the Administrative Agent and each Lender shall use reasonable best
efforts to provide prior written notice of such disclosure to the Borrower.
9.07 SECTION .0. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the
Commonwealth of Puerto Rico.
9.08 Execution in Counterparts. This Agreement 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 Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
9.09 Submission to Jurisdiction; Service of Process and Venue.
(a) Each of the Loan Parties hereby agrees that any suit,
action or proceeding with respect to this Agreement or the Notes or any other
document executed hereunder to which it is a party or any judgment entered by
any court in respect thereof may be brought in the United States District Court
for the District of Puerto Rico, in the Court of First Instance of Puerto Rico
sitting in San Xxxx, as the party commencing such suit, action or proceeding may
elect in its sole discretion; and each party hereto hereby irrevocably submits
to the non-exclusive jurisdiction of such court for the purpose of any such
suit, action, proceeding or judgment. Each party hereto further submits, for the
purpose of any such suit, action, proceeding or judgment brought or rendered
against it, to the appropriate courts of the jurisdiction of its domicile.
(b) Each of the Loan Parties hereby irrevocably consents to
the service of process in any suit, action or proceeding in such courts by the
mailing thereof by the Administrative Agent or any Lender by registered or
certified mail, postage prepaid, at its address set forth beneath its signature
hereto. Nothing herein shall in any way be deemed to limit the ability of the
Administrative Agent or any Lender to serve any such writs, process or summonses
in any other manner permitted by applicable law or to obtain jurisdiction over
the Loan Parties in such other jurisdictions, and in such manner, as may be
permitted by applicable law.
(c) Each of the Loan Parties hereby irrevocably waives any
objection that it may now or hereafter have to the laying of the venue of any
suit, action or proceeding arising out of or relating to this Agreement, the
Notes or any document executed hereunder brought in any such court and hereby
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
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53
9.10 Waiver of Jury Trial. Each of the Loan Parties, the
Administrative Agent and the Lenders hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
9.11 Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Advance,
together with all fees, charges and other amount which are treated as interest
on such Advance under applicable law (collectively the "Charges"), shall exceed
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Advance in
accordance with applicable law, the rate of interest payable in respect of such
Advance hereunder, together with all charges payable in respect thereof, shall
be limited to the Maximum Rate and, to the extent lawful, the interest and
charges that would have been payable in respect of such Advance but were not
payable as a result of the operation of this Section shall be accumulated and
the interest and charges payable to such Lender in respect of other Advances or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Rate to
the date of repayment, shall have been received by such Lender.
9.12 Exhibits and Schedules Incorporated. The Exhibits and
Schedules annexed hereto are hereby incorporated by reference herein as part of
this Agreement with the same effect as if set forth in the body hereof.
9.13 Construction of Documents. The parties hereto acknowledge
that they were represented by counsel in connection with the negotiation and
drafting of this Agreement and the Notes and that this Agreement and such Notes
shall not be subject to the principle of construing their meaning against the
party which drafted the same.
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54
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
TELECOMUNICACIONES DE PUERTO RICO, INC.
as Borrower
By:
Name:
Title:
PUERTO RICO TELEPHONE COMPANY, INC.
as Guarantor
By:
Name:
Title:
CELULARES TELEFONICA, INC.
as Guarantor
By:
Name:
Title:
BANCO POPULAR DE PUERTO RICO,
as Managing Agent and Administrative Agent
By:
Name:
Title:
SCOTIABANK DE PUERTO RICO
as Co-Agent
By:
Name:
Title:
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The Lenders
COMMITMENT: $80,000,000 BANCO POPULAR DE PUERTO RICO
By:
Xxxx X. Xxxxx
Vice President
Applicable Lending Office(s): 000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx
Attention: Structured Finance Division
Telecopier: (000) 000-0000
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56
The Lenders
COMMITMENT: $20,000,000 BANCO POPULAR NORTH AMERICA
By:
Xxxxxx X. Xx Monaco
Vice President
Applicable Lending Office(s): 7th Xxxx
00xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
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The Lenders
COMMITMENT: $25,000,000 BANCO BILBAO VIZCAYA PUERTO RICO
By:_______________________________________
Xxxxxxx Xxxxxx
Executive Vice President
By: ______________________________________
Xxxxxx Xxxxxx
Executive Vice President
Applicable Lending Office(s): 000 Xxxxx Xxxxxx Xxx.
Torre BBV
Hato Rey, San Xxxx, P.R.
Attention: Xxxxxxxx Xxxxx
Telecopier: (000) 000-0000
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The Lenders
COMMITMENT: $75,000,000 SCOTIABANK DE PUERTO RICO
By:
Xxxx X. Xxxxx
Vice President
Applicable Lending Office(s): Scotiabank de Puerto Rico
000 Xxxxx xx Xxxx Xxx.
Mezzanine Floor
Hato Rey, San Xxxx, P.R. 00918
Attention: Xxxx X. Xxxxx
Telecopier: (000) 000-0000
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Co-Agent
COMMITMENT: $75,000,000 SCOTIABANK DE PUERTO RICO
By:
Xxxx X. Xxxxx
Vice President
Applicable Lending Office(s): Scotiabank de Puerto Rico
000 Xxxxx xx Xxxx Xxx.
Mezzanine Floor
Hato Rey, San Xxxx, P.R. 00918
Attention: Xxxx X. Xxxxx
Telecopier: (000) 000-0000
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Schedule 1 - List of
Applicable Lending Offices
1. BANCO POPULAR DE PUERTO RICO:
000 XXXXX XXXXXX XXXXXX
XXXX XXX, XXXXXX XXXX 00000
2. BANCO POPULAR NORTH AMERICA:
0xx XXXX
00xx XXXXXX - 0xx XXXXX
XXX XXXX, XX 00000
3. BANCO BILBAO VIZCAYA PUERTO RICO:
254 XXXXX XXXXXX AVENUE
TORRE BBV
HATO REY, SAN XXXX, P.R. 00000
4. SCOTIABANK DE PUERTO RICO:
000 XXXXX XX XXXX XXXXXX
MEZZANINE FLOOR
HATO REY, SAN XXXX, P.R. 00918
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Schedule 3.01(b) -
Material Adverse Changes
62
Schedule 3.01(c) -
Disclosed Litigation
63
Schedule 5.02(a) -
Existing Liens
64
Schedule 5.02(d) -
Existing Subsidiary Debt
65
EXHIBIT A-1 - FORM OF
REVOLVING CREDIT
PROMISSORY NOTE
$___________ Dated: _________, 199_
FOR VALUE RECEIVED, the undersigned, TELECOMUNICACIONES DE
PUERTO RICO, INC., a Puerto Rico corporation (the "Borrower"), HEREBY PROMISES
TO PAY to the order of _________________________ (the "Lender") for the account
of its Applicable Lending Office on the Termination Date (each as defined in the
Credit Agreement referred to below) the principal sum of U.S. $ amount of
Lender's Commitment in figures or, if less, the aggregate amount of the
Revolving Credit Advances made by the Lender to the Borrower pursuant to the
Credit Agreement dated as of March 2, 1999 among the Borrower, Puerto Rico
Telephone Company, Inc. and Celulares Telefonica, Inc., as Guarantors, the
Lender and certain other lenders parties thereto, Banco Popular de Puerto Rico
("Banco Popular"), as managing agent and administrative agent (the
"Administrative Agent") and Scotiabank de Puerto Rico, as co-agent (the
"Co-Agent") (as amended or modified from time to time, the "Credit Agreement";
the terms defined therein being used herein as therein defined), outstanding on
the Termination Date.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Credit Advance from the date of such Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Banco Popular, as Administrative Agent, at
___________________________, in same day funds. Each Revolving Credit Advance
owing to the Lender by the Borrower pursuant to the Credit Agreement, and all
payments made on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached hereto which is
part of this Promissory Note.
This Promissory Note is one of the Revolving Credit Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of Revolving Credit
Advances by the Lender to the Borrower from time to time in an aggregate amount
not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Revolving
Credit Advance being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.
TELECOMUNICACIONES DE PUERTO RICO, INC.
By:
Name:
Title:
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ADVANCES AND PAYMENTS OF PRINCIPAL
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DATE AMOUNT OF ADVANCE AMOUNT OF PRINCIPAL UNPAID PRINCIPAL NOTATION
PAID OR PREPAID BALANCE MADE BY
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EXHIBIT A-2 - OMITTED
68
EXHIBIT B-1 - FORM OF NOTICE OF
REVOLVING CREDIT BORROWING
Banco Popular de Puerto Rico, as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
Date
Attention: _______________
Ladies and Gentlemen:
The undersigned, Telecomunicaciones de Puerto Rico, Inc., refers to the
Credit Agreement, dated as of March 2, 1999 (as amended or modified from time to
time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, Puerto Rico Telephone Company, Inc. and
Celulares Telefonica, Inc., as Guarantors, certain Lenders parties thereto,
Banco Popular de Puerto Rico ("Banco Popular"), as managing agent and
administrative agent (the "Administrative Agent") for the Lenders, and
Scotiabank de Puerto Rico ("Scotiabank"), as Co-Agent for the Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests a Revolving Credit Borrowing
under the Credit Agreement, and in that connection sets forth below the
information relating to such Revolving Credit Borrowing (the "Proposed Revolving
Credit Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Credit
Borrowing is _______________, 199_.
(ii) The Type of Advances comprising the Proposed Revolving
Credit Borrowing is Base Rate Advances LIBOR Rate Advances.
(iii) The aggregate amount of the Proposed Revolving Credit
Borrowing is $_______________.
(iv) The initial Interest Period for each LIBOR Rate Advance
made as part of the Proposed Revolving Credit Borrowing is _____
months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Revolving
Credit Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Revolving Credit Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date; and
69
(B) no event has occurred and is continuing, or would result from such
Proposed Revolving Credit Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
Very truly yours,
TELECOMUNICACIONES DE PUERTO RICO, INC.
By:
Title:
70
EXHIBIT B-2 - OMITTED
71
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of March 2, 1999 (as
amended or modified from time to time, the "Credit Agreement") among
Telecomunicaciones de Puerto Rico, Inc., a Puerto Rico corporation, as Borrower,
Puerto Rico Telephone Company, Inc. and Celulares Telefonica, Inc., as
Guarantors, the Lenders (as defined in the Credit Agreement), Banco Popular de
Puerto Rico as managing agent and administrative agent for the Lenders (the
"Administrative Agent") and Scotiabank de Puerto Rico ("Scotiabank"), as
Co-Agent for the Lenders (the "Co-Agent"). Terms defined in the Credit Agreement
are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement. After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the Revolving Credit Advances owing to the Assignee will be as set forth on
Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Credit Notes held by the Assignor and requests
that the Administrative Agent exchange such Revolving Credit Note or Notes for
new Revolving Credit Note or Notes payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant hereto or new
Revolving Credit Notes payable to the order of the Assignee in an amount equal
to the Commitment assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitment retained by the Assignor under the Credit
Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignor or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such
72
action as agent on its behalf and to exercise such powers and discretion under
the Credit Agreement as are delegated to the Administrative Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; and (v) agrees that it will perform in accordance with their terms all
of the obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights, other
than rights of indemnification under Section 9.04 of the Credit Agreement or
otherwise relating to a time prior to the Effective Date hereof, and be released
from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement and the Revolving Credit Notes in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and facility fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Revolving Credit Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Puerto Rico.
8. This Assignment and Acceptance 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 Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2
73
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Commitment:
$_________
Aggregate outstanding principal amount of
Revolving Credit Advances assigned: $ __________
Principal amount of Revolving Credit Note payable to Assignee: $ __________
Principal amount of Revolving Credit Note payable to Assignor: $ __________
Effective Date: _______________, ____
NAME OF ASSIGNOR, as Assignor
By
Title:
Dated: _______________, ____
NAME OF ASSIGNEE, as Assignee
By
Title:
Dated: _______________, ____
Domestic Lending Office:
Address
Eurodollar Lending Office:
Address
Accepted this
____ day of __________, ____
_____________
(1) This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
74
BANCO POPULAR DE PUERTO RICO
as Administrative Agent
By:
Title: ________________________
Approved this ___ day
of __________, ____
TELECOMUNICACIONES DE PUERTO RICO, INC.
By:
Title: ________________________
ii
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EXHIBIT D - FORM OF
SOLVENCY CERTIFICATE
76
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
CELULARES TELEFONICA, INC.
as Guarantors,
BANCO POPULAR DE PUERTO RICO
as Managing Agent and Administrative Agent,
SCOTIABANK DE PUERTO RICO
As Co-Agent,
and
BANCO POPULAR DE PUERTO RICO
SCOTIABANK DE PUERTO RICO
BANCO BILBAO VIZCAYA PUERTO RICO
BANCO POPULAR NORTH AMERICA
as Initial Lenders
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TABLE OF CONTENTS
Page #
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Computation of Time Periods 13
SECTION 1.03. Accounting Terms; Interest 14
SECTION 1.04. Construction 14
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Revolving Credit Advances 15
SECTION 2.02. Making the Revolving Credit Advances 15
SECTION 2.03. Commitment Fee 17
SECTION 2.04. Termination or Reduction of the Commitments 17
SECTION 2.05. Repayment of Revolving Credit Advances 17
SECTION 2.06. Interest 17
SECTION 2.07. Interest Rate Determination 18
SECTION 2.08. Optional Conversion of Revolving Credit Advances 19
SECTION 2.09. Prepayments of Revolving Credit Advances 20
SECTION 2.10. Increased Costs 20
SECTION 2.11. Illegality 21
SECTION 2.12. Payments and Computations 21
SECTION 2.13. Taxes 22
SECTION 2.14. Sharing of Payments, Etc 25
SECTION 2.15. Use of Proceeds 25
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections
2.01 and 2.03 25
SECTION 3.02. Conditions Precedent to Each Revolving Credit
Borrowing 28
SECTION 3.03. Determinations Under Section 3.01 28
78
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower 28
ARTICLE V
COVENANTS OF THE LOAN PARTIES
SECTION 5.01. Affirmative Covenants 32
SECTION 5.02. Negative Covenants 35
SECTION 5.03. Financial Covenants 38
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default 38
ARTICLE VII
GUARANTY
SECTION 7.01. Guaranty; Limitation of Liability 41
SECTION 7.02. Guaranty Absolute 42
SECTION 7.03. Waiver 43
SECTION 7.04. Continuing Guaranty; Assignments 45
SECTION 7.05. Subrogation 45
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. Appointment, Powers and Immunities 46
SECTION 8.02. Reliance by Administrative Agent 46
SECTION 8.03. Defaults 46
SECTION 8.04. Rights as a Lender 47
SECTION 8.05. Indemnification 47
SECTION 8.06. Non-Reliance on Administrative Agent and Other Lenders 47
SECTION 8.07. Failure to Act 48
SECTION 8.08. Resignation or Removal of Administrative Agent 48
SECTION 8.09. Agency Fee 49
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc 49
SECTION 9.02. Notices, Etc 50
SECTION 9.03. No Waiver; Remedies 50
SECTION 9.04. Costs and Expenses 50
SECTION 9.05. Right of Set-off 52
SECTION 9.06. Binding Effect 52
SECTION 9.07. Assignments and Participations 52
SECTION 9.08. Nondisclosure 56
SECTION 9.09. Governing Law 56
SECTION 9.10. Execution in Counterparts 56
SECTION 9.11. Submission to Jurisdiction; Service of Process and Venue 56
SECTION 9.12. Waiver of Jury Trial 57
SECTION 9.13. Interest Rate Limitation 57
SECTION 9.14. Exhibits and Schedules Incorporated 58
SECTION 9.15 Construction of Documents 58
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Schedules
Schedule I - List of Applicable Lending Offices
Schedule 3.01(b) - Material Adverse Changes
Schedule 3.01(c) - Disclosed Litigation
Schedule 5.02(a) - Existing Liens
Schedule 5.02(d) - Existing Subsidiary Debt
Exhibits
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - OMITTED
Exhibit B-1 - Form of Notice of Revolving Credit Borrowing
Exhibit B-2 - OMITTED
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Solvency Certificate
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