EXHIBIT 10.26
U.S. $90,000,000
REVOLVING CREDIT AGREEMENT
Dated as of May 16, 2002
Among
TELECOMUNICACIONES DE PUERTO RICO, INC.
as Borrower,
PUERTO RICO TELEPHONE COMPANY, INC.
As the Guarantor,
BANCO POPULAR DE PUERTO RICO
as Lender,
and
BANCO POPULAR DE PUERTO RICO
as Administrative Agent
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TABLE OF CONTENTS PAGE #
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.................................. 12
SECTION 1.01 CERTAIN DEFINED TERMS....................................... 12
SECTION 1.02 COMPUTATION OF TIME PERIODS................................. 23
SECTION 1.03 ACCOUNTING TERMS............................................ 23
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES................................ 23
SECTION 2.01 THE REVOLVING CREDIT ADVANCES............................... 23
SECTION 2.02 MAKING THE REVOLVING CREDIT ADVANCES........................ 24
SECTION 2.03 FACILITY FEE................................................ 25
SECTION 2.04 TERMINATION OR REDUCTION OF THE COMMITMENTS................. 25
SECTION 2.05 REPAYMENT OF REVOLVING CREDIT ADVANCES...................... 25
SECTION 2.06 INTEREST.................................................... 25
SECTION 2.07 INTEREST RATE DETERMINATION................................. 26
SECTION 2.08 OPTIONAL CONVERSION OF REVOLVING CREDIT ADVANCES............ 27
SECTION 2.09 PREPAYMENTS OF ADVANCES..................................... 27
SECTION 2.10 INCREASED COSTS............................................. 28
SECTION 2.11 ILLEGALITY.................................................. 29
SECTION 2.12 PAYMENTS AND COMPUTATIONS................................... 29
SECTION 2.13 TAXES....................................................... 30
SECTION 2.14 SHARING OF PAYMENTS, ETC.................................... 32
SECTION 2.15 USE OF PROCEEDS............................................. 32
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING......................... 33
SECTION 3.01 CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01....... 33
SECTION 3.02 CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT BORROWING..... 34
SECTION 3.03 DETERMINATIONS UNDER SECTION 3.01........................... 34
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................... 35
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE BORROWER.............. 35
ARTICLE V COVENANTS OF THE LOAN PARTIES..................................... 37
SECTION 5.01 AFFIRMATIVE COVENANTS....................................... 37
SECTION 5.02 NEGATIVE COVENANTS.......................................... 41
SECTION 5.03 FINANCIAL COVENANTS......................................... 43
ARTICLE VI EVENTS OF DEFAULT................................................ 44
SECTION 6.01 EVENTS OF DEFAULT........................................... 44
ARTICLE VII GUARANTY........................................................ 46
SECTION 7.01 GUARANTY; LIMITATION OF LIABILITY........................... 46
SECTION 7.02 GUARANTY ABSOLUTE........................................... 47
SECTION 7.03 WAIVER...................................................... 48
SECTION 7.04 CONTINUING GUARANTY; ASSIGNMENTS............................ 49
SECTION 7.05 SUBROGATION................................................. 50
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ARTICLE VIII THE ADMINISTRATIVE AGENT....................................... 50
SECTION 8.01 APPOINTMENT, POWERS AND IMMUNITIES.......................... 50
SECTION 8.02 RELIANCE BY ADMINISTRATIVE AGENT............................ 51
SECTION 8.03 DEFAULTS.................................................... 51
SECTION 8.04 RIGHTS AS A LENDER.......................................... 51
SECTION 8.05 INDEMNIFICATION............................................. 52
SECTION 8.06 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS...... 52
SECTION 8.07 FAILURE TO ACT.............................................. 52
SECTION 8.08 RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT.............. 53
ARTICLE IX MISCELLANEOUS.................................................... 53
SECTION 9.01 AMENDMENTS, ETC............................................. 53
SECTION 9.02 NOTICES, ETC................................................ 54
SECTION 9.03 NO WAIVER; REMEDIES......................................... 56
SECTION 9.04 COSTS AND EXPENSES.......................................... 56
SECTION 9.05 RIGHT OF SET-OFF............................................ 57
SECTION 9.06 BINDING EFFECT.............................................. 57
SECTION 9.07 ASSIGNMENTS AND PARTICIPATIONS.............................. 58
SECTION 9.08 NONDISCLOSURE............................................... 60
SECTION 9.09 GOVERNING LAW............................................... 61
SECTION 9.10 JURISDICTION, ETC........................................... 61
SECTION 9.11 WAIVER OF JURY TRIAL........................................ 62
SECTION 9.12 EXECUTION IN COUNTERPARTS................................... 62
SECTION 9.13 EXHIBITS AND SCHEDULES INCORPORATED......................... 62
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REVOLVING CREDIT AGREEMENT
Dated as of May 16, 2002
TELECOMUNICACIONES DE PUERTO RICO, INC., a Puerto Rico corporation (the
"Borrower"), and PUERTO RICO TELEPHONE COMPANY, INC., a Puerto Rico corporation
("PRTC" or the "Guarantor"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof (the "Lenders"), and
Banco Popular de Puerto Rico ("BPPR" or "Lender"), as administrative agent for
the Lenders (in such capacity, the "Administrative Agent"), agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 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):
"Additional Bank Indebtedness" means, collectively, the BBVA
Indebtedness, the Citibank Indebtedness, and additional unsecured loans or
other unsecured extensions of credit to the Borrower by banks and other
financial institutions.
"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, 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.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's LIBOR Lending Office.
"Applicable Margin" means 0.30% per annum, for any Interest Period.
"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.
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"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.
"Base Rate Advance" means a Revolving Credit Advance that bears
interest based upon the Base Rate as provided in Section 2.06(a)(i).
"Bonds" means the following series of senior notes issued by the
Borrower: (a) $300,000,000 of 6.15% Senior Notes due 2002; (b)
$400,000,000 of 6.65% Senior Notes due 2006; and (c) $300,000,000 of 6.80%
Senior Notes due 2009; provided, that after May 15, 2002, the term "Bonds"
shall mean only the $400,000,000 of 6.65% Senior Notes due 2006, and the
$300,000,000 of 6.80% Senior Notes due 2009.
"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 de Puerto Rico with its office at Popular
Center, 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.
"BBVA Indebtedness" means that certain two year term loan facility
in a principal amount of $50,000,000, extended to the Borrower pursuant to
that certain Term Credit Agreement dated as of May 16, 2002, among the
Borrower, the Guarantor, Banco Bilbao Vizcaya Argentaria Puerto Rico, as
administrative agent, and the Lenders party thereto, for working capital
and other general corporate purposes of the Borrower.
"Citibank Indebtedness" means 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, for working capital and other general corporate
purposes of the Borrower.
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"Commercial Paper Program" means the commercial paper program of the
Borrower established pursuant to the Issuing and Paying Agent Agreement
with the Chase Manhattan Bank (now known as XX Xxxxxx Xxxxx), whereby the
Borrower may issue at any one time up to $500,000,000 principal amount of
short term notes having maturities of up to one year.
"Commercial Paper Program Guaranty" means that certain Joint and
Several Guaranty by Puerto Rico Telephone Company, Inc., and Celulares
Telefonica, Inc. in favor of the Holders of Notes Issued by
Telecomunicaciones de Puerto Rico, Inc. Under a Certain Commercial Paper
Program dated November 9, 2000, whereby the Guarantor guarantees the
payment of principal and interest due by the Borrower under the notes
issued pursuant to the Commercial Paper Program.
"Commitment" has the meaning specified in Section 2.01.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Assets" means, for any period, the total assets of the
Borrower and its Subsidiaries as shown on the audited Consolidated balance
sheet or unaudited Consolidated balance sheet, as the case may be, as of
the end of the most recent fiscal quarter preceding such period.
"Controlling Interest" means: (a) ownership of at least 35% 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.
"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
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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 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) EBITDA for the period of four fiscal quarters of such Person
ended on or immediately prior to such date, provided that for purposes of
clause (a) of this definition, Debt shall not include: (1) the obligations
specified in clause (g) of the definition thereof set forth above; or (2)
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 an 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(b).
"EBITDA" means the sum, determined on a Consolidated basis, of the
Borrower's: (a) net income (or net loss); (b) interest expense; (c) income
tax expense; (d) depreciation expense; (e) amortization expense; and (f)
non-cash severance charges in an aggregate amount not to exceed
$40,000,000 in calendar year 2002.
"EBITDA to Interest Ratio" of any Person on any date means the ratio
of: (a) EBITDA for the period of four fiscal quarters of such Person ended
on or immediately prior to such date to (b) interest payable on, and
amortization of debt discount in respect of, all Debt of such Person for
the period of four fiscal quarters of such Person ended on or immediately
prior to such date, 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 above.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means: (a) a Lender; (b) an Affiliate of a
Lender that is a financial institution and is majority-owned by such
Lender or such Lender's holding company; (c) 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;
(d) a savings and loan association or savings bank organized under the
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laws of the United States, or any State thereof, and having total assets
in excess of $3,000,000,000; or (e) 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.
"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;
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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 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 Holdings (Puerto Rico)" shall mean GTE Holdings (Puerto Rico)
LLC, a limited liability company organized under the laws of the State of
Delaware.
"Guaranteed Obligations" has the meaning specified in Section 7.01.
"Guarantor" has the meaning specified in the recital of parties to
this Agreement.
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"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.
"Interest Period" means, for each LIBOR Rate Advance comprising part
of the same Revolving Credit 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 such 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 week or one, two, three or six 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;
(ii) Interest Periods commencing on the same date for LIBOR
Rate Advances comprising part of the same Revolving Credit 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 Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
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"LIBOR Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "LIBOR Lending Office" opposite its name
on Schedule I hereto or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Administrative
Agent.
"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, on
the Business Day that such Interest Period commences, 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, on the Business Day that such Interest Period commences.
"LIBOR Rate Advance" means a Revolving Credit Advance that bears
interest based upon the LIBOR Rate as provided in Section 2.06(a)(ii).
"Lenders" means BPPR and each Person that shall become a party
hereto pursuant to Section 9.07.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind.
"Loan Party" means each of the Borrower and the Guarantor.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties 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 ability of any Loan Party to conduct its business on substantially the
same basis as conducted on the Effective Date; (b) the rights and remedies
of the Administrative Agent or any Lender under any Loan Document; or (c)
the ability of any Loan Party to service its Debt obligations on a timely
basis.
"Merger Agreement" means the Plan of Reorganization and Agreement of
Merger dated May 1, 2002, between PRTC and Verizon Wireless Puerto Rico,
Inc. (formerly
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Celulares Telefonica, Inc.) ("VW"), pursuant to which VW was merged with
and into PRTC, with PRTC as the surviving corporation.
"Merger Documents" means, collectively, the Merger Agreement and all
other agreements, instruments and documents relating to the Merger, all of
which are listed in Schedule 1.01(a) hereto.
"Moody's" means Xxxxx'x Investors Service, Inc.
"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 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
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business; and (l) bankers' liens, rights 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.
"Permitted Receivables Financing" means any financing pursuant to
which the Borrower or any Subsidiary of the Borrower may sell, convey, or
otherwise transfer to a Receivables Subsidiary or any other Person (in the
case of transfer by a Receivables Subsidiary), or grant a security
interest in, any accounts receivable (and related assets) of the Borrower
or such Subsidiary, provided that such financing shall be on customary
market terms and shall non-recourse to the Borrower and its Subsidiaries
(other than the Receivables Subsidiary) except to a limited extent
customary for such transactions. The grant of a security interest in any
accounts receivable of the Borrower or any Subsidiary of the Borrower
(other than a Receivables Subsidiary) to secure Debt under any credit
facility shall not be deemed a Permitted Receivables Financing.
"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.
"PR-GCL" means the Puerto Rico General Corporations Law of 1995, as
amended.
"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.
"Purchase" means the acquisition by GITI, directly or indirectly, of
the Controlling Interest.
"Quarterly Date" means the last Business Day of March, June,
September and December of each year.
"Receivables Subsidiary" means a bankruptcy-remote, special-purpose
wholly owned Subsidiary formed in connection with a Permitted Receivables
Financing.
"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.
"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.
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances made by each of the Lenders
pursuant to Section 2.01.
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"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit A
hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Revolving Credit Advances made by such Lender.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"Shareholders Agreement" means the Shareholders Agreement as defined
in the Stock Purchase Agreement, as amended from time to time.
"Significant Subsidiary" means, at any time, with respect to the
Borrower, any Subsidiary, other than a Receivables Subsidiary, the assets
of which, in the aggregate, exceed 5% of the Consolidated Assets,
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 assets 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 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 Stock
Purchase Agreement and any other agreements entered into in connection
therewith.
"Stock Purchase Agreement" means the Amended and Restated Stock
Purchase Agreement dated as of May 27, 1998, as amended and restated as of
July 21, 1998 and as further amended from time to time on or before the
Effective Date, among Puerto Rico Telephone Authority, Puerto Rico
Telephone Company, GTE Holdings (Puerto Rico) and GITI.
"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
22
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).
"Termination Date" means the earlier of June 30, 2003, and the date
of termination in whole of the Commitments pursuant to Section 2.04 or
6.01.
"Type" means, as to any Revolving Credit Advance, whether such
Advance is a Base Rate Advance or a LIBOR Rate Advance, each of which
shall constitute a Type of Advance under this Agreement.
"Verizon" means Verizon Communications Inc., a Delaware corporation,
or its successor.
"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.
SECTION 1.02 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".
SECTION 1.03 Accounting Terms. All terms of an accounting or financial
nature not specifically defined herein shall be construed in accordance with
GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 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 SECTION
2.01 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
23
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 for in
Section 2.08.
SECTION 2.02 Making the Revolving Credit Advances. (a) Each Revolving
Credit Borrowing shall be made on notice, given not later than 11:00 A.M.
(Atlantic Standard Time) on the Business Day of the proposed Revolving Credit
Borrowing 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 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 consisting of
LIBOR Rate Advances, initial Interest Period for each such Revolving Credit
Advance. Each Lender shall, before 2:00 PM (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 2.11.
(c) Each Notice of Revolving Credit Borrowing shall be irrevocable
and binding on the Borrower. In the case of any Revolving Credit Borrowing
consisting 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
24
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 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.
SECTION 2.03 Facility Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee on the
aggregate amount of such Lender's Commitment from the Effective Date until the
Termination Date at a rate per annum equal to 0.125%, payable quarterly in
arrears on the last day of each March, June, September and December during the
term hereof, commencing on the June 30, 2002, and on the Termination Date.
SECTION 2.04 Termination or Reduction of the Commitments. (a) 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 $10,000,000 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.
SECTION 2.05 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.
SECTION 2.06 Interest. (a) 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
25
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 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 Advance, plus (y) the Applicable
Margin, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the
date such LIBOR Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default under Section 6.01(a), 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 2% per annum 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 2% per annum above the
rate per annum required to be paid on Revolving Credit Advances pursuant
to clause (a)(i) above.
SECTION 2.07 Interest Rate Determination. (a) 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).
(b) 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.
(c) 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.
26
(d) 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.
(e) 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.
(f) 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.
SECTION 2.08 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 SECTION 2.08 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.
SECTION 2.09 Prepayments of Advances. The Borrower may, upon at least two
Business Days' notice to the Administrative Agent 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
27
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 the Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to Section
9.04(c).
SECTION 2.10 Increased Costs. (a) 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 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 (consistent with its
internal policy and legal
28
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, the jurisdiction of its Applicable Lending Office 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 expenses based on such Lender's
Commitment and Advances and the total lending commitments and loans of
such Lender to its similarly situated customers.
SECTION 2.11 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.
SECTION 2.12 Payments and Computations. (a) 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 Section 2.11 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 to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.
(b) All computations of interest based on the Base Rate, LIBOR Rate
and of 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
29
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.
(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.
SECTION 2.13 Taxes. (a) Subject to subsections (e) and (f) below, 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 Administrative 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.
(b) 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").
(c) Subject to subsections (d), (e) and (f) 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
30
(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.
(d) 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 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).
(e) 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
31
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.
(f) Any Lender claiming any additional amounts payable pursuant to
this Section 2.13 agrees to use reasonable efforts (consistent with its
internal policy 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, 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 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.
SECTION 2.14 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, 2.13, 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.
SECTION 2.15 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 the payment of the principal of and interest on the
Borrower's $300,000,000 of 6.15% Senior Notes due 2002 on May 15, 2002; 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).
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ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01 Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 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:
(a) There shall have occurred no Material Adverse Change since
December 31, 2001.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting any of 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(b) 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(b) hereto.
(c) All governmental and third party consents and approvals
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.
(d) The Borrower shall have notified each Lender and the
Administrative Agent in writing of the proposed Effective Date.
(e) 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).
(f) 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.
33
(g) 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 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) A certificate, in substantially the form of Exhibit C
hereto, attesting to the Solvency of each Loan Party after giving
effect to the Borrowings contemplated hereunder, from the chief
financial officer of each such Loan Party.
(v) A favorable opinion of Xxxx X. Xxxxxx, Esq., Vice
President and General Counsel for the Loan Parties, substantially in
the form of Exhibit D hereto.
SECTION 3.02 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 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.
SECTION 3.03 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
34
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 IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) 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 by all necessary corporate action, and
do not contravene: (i) such Loan Party's charter or by-laws (or other
equivalent organizational documents); or (ii) 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 the Guarantor.
Assuming that this Agreement has been duly executed by the Administrative
Agent and each of the 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 Lenders, this Agreement is the
legal, valid and
35
binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms.
(e) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2001, and the related Consolidated
statements of income and cash flows of the Borrower 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 and its Subsidiaries as at such date and the
Consolidated results of the operations of the Borrower and its
Subsidiaries for the periods ended on such date, all in accordance with
generally accepted accounting principles consistently applied.
(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.
(g) Neither the Borrower nor any of its Subsidiaries is an
Investment Company, as such term is defined in the Investment Company Act
of 1940, as amended.
(h) 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.
(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) With respect to the Merger:
(i) The Merger Documents, including all transactions
contemplated thereby, have been duly approved by all necessary
corporate action of PRTC and VW in accordance with applicable law
and the charter or by-laws (or other
36
equivalent organizational documents) of PRTC and VW. No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body
(including the Federal Communications Commission) or any other third
party (other than the filing of the certificate of merger with the
Department of State of the Commonwealth of Puerto Rico) was required
for the due execution, delivery and performance by PRTC and VW, or
for the validity, of any Merger Document. Each of the Merger
Documents constitutes a legal, valid and binding obligation of PRTC
and VW, enforceable against PRTC and VW in accordance with their
respective terms. The Merger Documents listed in Schedule 1.01(a)
hereto constitute all of the agreements entered into among the
parties thereto in connection with the Merger and constitute and
contain all of the documents executed to effectuate the Merger and
all of the agreements among the parties thereto in connection with
the Merger, and there shall be no other document or agreement of any
kind related to the Merger other than the Merger Documents; and
(ii) The certificate of merger executed and delivered under
the Merger Agreement was filed with the Department of State of the
Commonwealth of Puerto Rico in accordance with the GCL, and the
Merger became effective, on May 2, 2002. As a result of the Merger,
the separate corporate existence of VW ceased, and VW merged with
and into PRTC and the Merger shall have with respect to PRTC and VW,
all of the effects set forth in Section 10.01 of the GCL, including,
without limitation, the assumption by PRTC of all of the liabilities
and obligations of VW.
(k) Pari Passu Status. (i) The obligations of the Loan Parties
hereunder and under the Notes, and the obligations of the Loan Parties
under the Additional Bank Indebtedness and the notes issued under the
Commercial Paper Program 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 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
agreement, as security for the obligations of the Borrower and its
Subsidiaries under the Additional Bank Indebtedness and the notes issued
under the Commercial Paper Program.
(l) 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 V
COVENANTS OF THE LOAN PARTIES
SECTION 5.01 Affirmative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party will:
37
(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 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 its 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 such 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
38
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-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 (each such
agreement as defined in the Stock Purchase Agreement).
(i) Reporting Requirements. Furnish to 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, 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 accompanied
by an opinion acceptable to the Administrative Agent by Ernst &
Young 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
39
compliance with Section 5.03, a statement of reconciliation showing
the calculations used for purposes of Section 5.03;
(iii) 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 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;
(iv) 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 on Form 8-K that such Loan Party files with the Securities
and Exchange 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);
(v) 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(b);
(vi) promptly after the closing thereof, copies of the closing
documents for each credit facility or financing constituting
Additional Bank Indebtedness under this Agreement; 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.
(j) 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 to carry out the intent and purpose of this Agreement
and the Notes.
(k) 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 and the Notes.
(l) Pari Passu Status. 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
Additional Bank Indebtedness and the notes issued under the Commercial
Paper Program. Should the Borrower grant to any creditor under Additional
Bank Indebtedness, financial debt covenants different to those included in
Section 5.03 hereof that would result in such creditor obtaining the
benefit of
40
substantially stricter terms against the Borrower over those set forth in
this Agreement, the Borrower agrees to amend this Agreement as necessary
to grant the Administrative Agent and the Lenders the same terms granted
to such other creditors.
(m) Certain Obligations Respecting Subsidiaries. The Borrower will
take such action, and will cause each of its Significant Subsidiaries and
any Significant Subsidiary formed with the intent of merging with or into
a Person that will be a Significant Subsidiary subject to this provision
to take such action, from time to time as shall be necessary to ensure
that all Significant Subsidiaries of the Borrower are party to, as Loan
Parties, the Guaranty provided in Article VII hereof. Without limiting the
generality of the foregoing, in the event that the Borrower or any of its
Significant Subsidiaries shall form or acquire any new Significant
Subsidiary, the Borrower or the respective Significant Subsidiary will
cause such new Significant Subsidiary to: (i) become a party hereto and to
the Guaranty pursuant to a written instrument in form and substance
satisfactory to the Agent; and (ii) deliver such proof of corporate
action, incumbency of officers, opinions of counsel and other documents
relating to the foregoing as is consistent with those delivered by each
Loan Party pursuant to Section 3.01 hereof, or as any Lender or the
Administrative Agent shall have reasonably requested.
SECTION 5.02 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; 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,
41
(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,
18 12 (vi) Liens not otherwise permitted pursuant to clauses
(i) through (v) above securing obligations not to exceed at any one
time the amount of $10,000,000; and
(vii) Liens on Property of a Receivables Subsidiary created in
connection with a Permitted Receivables Financing.
(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 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 assets to the Borrower; and (iii)
the Borrower may merge with any Subsidiary of Verizon 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 Guarantor confirms in writing its 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.
42
(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 Purchase; and (B) under
any contribution agreement entered into by and between the Guarantor
in connection with the Purchase, the Bonds and any of the Subsidiary
Existing Debt),
(ii) Debt which may be incurred in connection with the
Subsidiaries' guarantee of the Bonds or any refunding or
refinancing, in whole or in part, of the Bonds;
(iii) Debt which may be borrowed and outstanding from time to
time under the credit agreements existing on and as of the Effective
Date and described on Schedule 5.02(d) hereto (the "Subsidiary
Existing Debt"), and any Debt extending the maturity of, or
refunding or refinancing, in whole or in part, the Subsidiary
Existing Debt, provided that the principal amount of such Subsidiary
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,
(iv) unsecured Debt incurred in the ordinary course of
business aggregating for the Guarantor not more than $150,000,000 at
any one time outstanding,
(v) Debt in respect of operating leases,
(vi) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business, and
(vii) Debt incurred by a Receivables Subsidiary created in
connection with a Permitted Receivables Financing.
(viii) Debt which may be incurred in connection with the
Guarantor's guarantee of the notes issued under the Commercial Paper
Program pursuant to the Commercial Paper Program Guaranty.
SECTION 5.03 Financial Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
(a) Debt to EBITDA Ratio. Maintain a Debt to EBITDA Ratio, as at the
end of each fiscal quarter of the Borrower, of not more than 4.00:1.00.
(b) EBITDA to Interest Ratio. Maintain an EBITDA to Interest Ratio,
as at the end of each fiscal quarter of the Borrower, of not less than
3.25:1.00.
43
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 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 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
(c) Any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(d), (e), (h), (i)(iii) or
(i)(v), 5.02 or 5.03; (ii) any Loan Party shall fail to perform or observe
any term, covenant or agreement contained in Section 5.01(i) (other than
clauses (iii); and (v) 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 (iii) 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 30 days after written
notice thereof shall have been given to such Loan Party by the
Administrative Agent or any Lender; or
(d) Article VII is breached by the Guarantor or shall cease to be in
full force and effect or the Guarantor shall so state in writing; or
(e) 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,
44
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
(f) 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 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
(g) 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 Company 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
45
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
(h) 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 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 Person holding the Controlling Interest (or other securities
convertible into such Voting Stock) representing more of the combined
voting power of all Voting Stock of GITI or such other Person than that
owned by Verizon or its Subsidiaries; or (iii) Verizon or its Subsidiaries
shall fail to have the ability to appoint a majority of the Board of
Directors of GITI or other Person holding the Controlling Interest or the
business and affairs of GITI or such other Person shall not be managed by
or under the direction of such Board of Directors; or (iv) the Borrower
shall for any reason cease to own 100% of the Voting Stock of the
Guarantor; or
(i) 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 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 VII
GUARANTY
SECTION 7.01 Guaranty; Limitation of Liability. (a) The Guarantor hereby
unconditionally and irrevocably, jointly and severally ("in solidum") with the
Borrower, 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
46
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, the 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) The 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 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 the Guarantor hereby irrevocably agrees
that, notwithstanding the fact that this is a joint and several
Guaranty, the obligations of the Guarantor under this Guaranty shall
not exceed the greater of: (A) the benefit realized by the Guarantor
from the proceeds of the Advances made from time to time by the
Borrower to the Guarantor; and (B) the maximum amount that will,
after giving effect to such maximum amount and all other probable
contingent and fixed liabilities of the Guarantor that are relevant
under applicable law, and result in the obligations of the 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) This is a guaranty of payment and not of collection, and
is the primary obligation of the Guarantor; and the Administrative
Agent or any Lender may, subject to the terms and conditions hereof,
enforce this Guaranty against the Guarantor without any prior
enforcement of the Guaranteed Obligations against the Borrower,
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.
SECTION 7.02 Guaranty Absolute. The 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 the Guarantor under this Guaranty are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of the
47
Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and, to the maximum extent permitted by law, the 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;
(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, the
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 the
Guarantor or otherwise, all as though such payment had not been made.
SECTION 7.03 Waiver. (a) The Guarantor hereby waives the right to require
application (excusion de bienes) in respect of the Property of the Borrower,
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. The 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. The 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.
(b) So far as the Guarantor 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 Guarantor, and
without impairing or releasing any of the obligations of the Guarantor
hereunder, upon or without any terms or conditions and in whole or in
part:
48
(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 the Guarantor, 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 Guarantor of their obligations and liabilities
hereunder, and shall not release, impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Lenders
against the Guarantor (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.
SECTION 7.04 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 the 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
49
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.
SECTION 7.05 Subrogation. The Guarantor will not 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
the 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 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 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 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 the
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) the 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 the Guarantor's request and expense, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to the Guarantor of
an interest in the Guaranteed Obligations resulting from such payment by the
Guarantor.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01 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,
50
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.
SECTION 8.02 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.
SECTION 8.03 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.
SECTION 8.04 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
51
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.
SECTION 8.05 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 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.
SECTION 8.06 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.
SECTION 8.07 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.
52
SECTION 8.08 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
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.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc. (a) 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 the
Guarantor from any of its guarantee obligations under Article VII hereof; or (x)
waive any of the conditions precedent set forth in Article III
53
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 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.
SECTION 9.02 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
Telecomunicaciones de Puerto Rico, Inc.
0000 Xxxxxxxxx Xxxxxx
00xx Xxxxx,
Xxxxxxxx, Xxxxxx Xxxx 00000
or
X.X. Xxx 000000
Xxx Xxxx, Xxxxxx Xxxx 00000-0000,
Attention: W. Xxxx Xxxxxx, Vice President
Chief Financial Officer
Facsimile No: (000) 000-0000
54
with a copy to
Xxxx Xxxxxx
Vice President and General Counsel
Telecomunicaciones de Puerto Rico, Inc.
0000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Facsimile No: (000) 000-0000
if to PRTC, at
Puerto Rico Telephone Company, Inc.
0000 Xxxxxxxxx Xxxxxx
00xx Xxxxx,
Xxxxxxxx, Xxxxxx Xxxx 00000
or
X.X. Xxx 000000
Xxx Xxxx, Xxxxxx Xxxx 00000-0000,
Attention: W. Xxxx Xxxxxx, Vice President
Chief Financial Officer
Facsimile No: (000) 000-0000
with a copy to
Xxxx Xxxxxx
Vice President and General Counsel
Telecomunicaciones de Puerto Rico, Inc.
0000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Facsimile No: (000) 000-0000
if to any Lender, at its Applicable Lending Office specified opposite its name
on Schedule I hereto; and if to the Administrative Agent, at its address at 209
Xxxxx Xxxxxx Avenue, Hato Rey, Puerto Rico, Attention: 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, when deposited with 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
55
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.
SECTION 9.03 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.
SECTION 9.04 Costs and Expenses. (a) 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 amendment of this Agreement, the Notes and the other documents
to be delivered hereunder, including, without limitation, the reasonable fees
and expenses of Xxxxxxxx Xxxxx & Calabria, counsel for the Administrative Agent.
Such expenses shall be paid by the Borrower upon presentation of an itemized
statement of account (after the Borrower has had reasonable time to review such
statement of account) following consummation of the transactions contemplated by
this Agreement. 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 or Arranger) under the
Credit Agreement or the
56
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 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 2.12 and 9.04 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the
Notes.
SECTION 9.05 Right of Set-off. Upon: (a) the occurrence and during the
continuance of any Event of Default; and (b) 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 any Loan Party
against any and all of the obligations of such Loan Party 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 applicable Loan Party 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.
SECTION 9.06 Binding Effect. This Agreement shall become effective (other
than Section 2.01, 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
57
Agent and when the Administrative Agent shall have been notified by each Lender
that such Lender has executed it and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Guarantor, the Administrative Agent and each
Lender and their respective successors and assigns, except that neither the
Borrower nor the Guarantor shall have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.
SECTION 9.07 Assignments and Participations. (a) 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 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) no Lender shall at any time have more than two (2)
assignees that were not Initial Lenders; and (vii) 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
58
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 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
59
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 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.
SECTION 9.08 Nondisclosure. None of the Administrative Agent, any Lender
or any Affiliate thereof shall disclose without the prior consent of the
Borrower (other than to the Administrative Agent, or another Lender or any such
Affiliate, 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
60
in financial statements, projections or reports provided to the Administrative
Agent, any Lender or any Affiliate thereof by, or on behalf of, the Loan Parties
or any Subsidiary, provided that the Administrative Agent, any Lender or any
Affiliate thereof 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) to, or 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 the Administrative Agent, any Lender or any Affiliate
thereof or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (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, any Lender or any Affiliate thereof; 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, each Lender and their respective Affiliates shall use
reasonable best efforts to provide prior written notice of such disclosure to
the Borrower.
SECTION 9.09 Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the Commonwealth of Puerto
Rico.
SECTION 9.10 Jurisdiction, Etc. (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 or 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
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any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
SECTION 9.11 Waiver of Jury Trial. Each of the Borrower, the Guarantor,
the Administrative Agent and the Lenders hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or the
Notes or the actions of the Administrative Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
SECTION 9.12 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.
SECTION 9.13 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.
SECTION 9.14 2001 Revolving Credit Agreement. This Agreement replaces and
supersedes the Revolving Credit Agreement dated as of June 28, 2001 (the "2001
Revolving Credit Agreement"), among the parties hereto. The 2001 Revolving
Credit Agreement and the note issued thereunder are hereby terminated for all
purposes.
[Signatures Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Revolving Credit
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:
----------------------------------
W. Xxxx Xxxxxx
Vice President
Chief Financial Officer
PUERTO RICO TELEPHONE COMPANY, INC., as
Guarantor
By:
----------------------------------
W. Xxxx Xxxxxx
Vice President
Chief Financial Officer
BANCO POPULAR DE PUERTO RICO,
as Lender
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
BANCO POPULAR DE PUERTO RICO, as
Administrative Agent
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
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The Lenders
Commitment: $90,000,000 BANCO POPULAR DE PUERTO RICO
By:
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
Applicable Lending Office(s): 000 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx
Attention: Manager - Corporate Banking Division
Telecopier: (000) 000-0000
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