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EXHIBIT 10.17
FIVE-YEAR CREDIT AGREEMENT
Dated as of March 2, 1999
TELECOMUNICACIONES DE PUERTO RICO, INC., a Puerto Rico
corporation (the "Borrower"), PUERTO RICO TELEPHONE COMPANY, INC., a Puerto Rico
corporation ("Wireline"), and CELULARES TELEFONICA, INC., a Puerto Rico
corporation ("Wireless" and, collectively with Wireline, the "Guarantors"), the
banks, financial institutions and other institutional lenders (the "Initial
Lenders") listed on the signature pages hereof, Citibank, N.A. ("Citibank"), as
administrative agent (in such capacity, the "Agent") for the Lenders (as
hereinafter defined), 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, 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):
"Advance" means a Revolving Credit Advance or a Competitive
Bid 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.
"Agent's Account" means the account of the Agent maintained by
the Agent at Citibank with its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Account No. 00000000, Attention: Loan Investor Services.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance and, in the case of
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a Competitive Bid Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office with respect to
such Competitive Bid Advance.
"Applicable Margin" means, as of any date, a percentage per
annum determined by reference to the Performance Level in effect on
such date as set forth below:
Performance Level Applicable Margin Applicable Margin Applicable Margin for
for Base Rate for Eurodollar Rate Eurodollar Rate Advances
Advances Advances
Utilization of 50% Utilization of greater
or less than 50%
Xxxxx 0 0.000% 0.200% 0.350%
Xxxxx 0 0.000% 0.325% 0.475%
Xxxxx 0 0.000% 0.575% 0.725%
Xxxxx 0X 0.000% 0.900% 1.050%
Xxxxx 0X 0.000% 0.950% 1.150%
Xxxxx 0 0.000% 1.150% 1.400%
Xxxxx 0 0.000% 1.550% 1.800%
"Applicable Percentage" means, as of any date, a percentage
per annum determined by reference to the Performance Level in effect on
such date as set forth below:
Performance Xxxxx Xxxxxxxxxx Xxxxxxxxxx
Xxxxx 0 0.100%
Xxxxx 0 0.125%
Xxxxx 0 0.150%
Xxxxx 0X 0.200%
Level 4B 0.250%
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Level 5 0.350%
Xxxxx 0 0.450%
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate that is offered to its customers
generally (before giving effect to any applicable margin); and
(b) 1/2 of one percent per annum above the Federal
Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance that
bears interest as provided in Section 2.07(a)(i).
"Borrower" has the meaning specified in the recital of
parties.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower at Citibank with its office at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No. 4078-8269.
"Borrowing" means a Revolving Credit Borrowing or a
Competitive Bid Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City or San Xxxx,
Puerto Rico, provided that, if the applicable Business Day relates to
any Eurodollar Rate Advances or LIBO Rate Advances, "Business Day"
means a day of the year on which banks are not required or authorized
by law to close in New York City or San Xxxx, Puerto Rico and on which
dealings are carried on in the London interbank market.
"Commitment" has the meaning specified in Section 2.01.
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"Competitive Bid Advance" means an advance by a Lender to the
Borrower as part of a Competitive Bid Borrowing resulting from the
competitive bidding procedure described in Section 2.03 and refers to a
Fixed Rate Advance or a LIBO Rate Advance.
"Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose
offer to make one or more Competitive Bid Advances as part of such
borrowing has been accepted under the competitive bidding procedure
described in Section 2.03.
"Competitive Bid Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of
Exhibit A-2 hereto, evidencing the indebtedness of the Borrower to such
Lender resulting from a Competitive Bid Advance made by such Lender.
"Competitive Bid Reduction" has the meaning specified in
Section 2.01.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Controlling Interest" means (a) on and prior to the third
anniversary of the date of the initial Borrowing, ownership of at least
40.01% plus one share, and thereafter, 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 2.08 or 2.09.
"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
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under leases that have been, in accordance with GAAP, recorded as
capital leases, (f) all obligations of such Person in respect of
acceptances, letters of credit or similar extensions of credit, (g) all
net obligations of such Person in respect of Hedge Agreements, (h) all
Debt of others referred to in clauses (a) through (g) above or clause
(i) below guaranteed directly, or indirectly through a Subsidiary, by
such Person, or in effect guaranteed directly, or indirectly through a
Subsidiary, by such Person through a written agreement either (1) to
pay or purchase such Debt or to advance or supply funds for the payment
or purchase of such Debt or (2) to purchase, sell or lease (as lessee
or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss and (i) all Debt referred
to in clauses (a) through (h) above secured by (or for which the holder
of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation,
accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Debt.
"Debt to 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 or its predecessor entities 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(c).
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"EBITDA" means the sum, determined on a Consolidated basis, of
the Borrower's (i) net income (or net loss), (ii) interest expense,
(iii) income tax expense, (iv) depreciation expense, (v) amortization
expense and (vi) non-cash severance charges
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in an aggregate amount not to exceed $120,000,000 in calendar year
1999, $30,000,000 in calendar year 2001 and $40,000,000 in calendar
year 2002.
"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 or its predecessor entities 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 or its predecessor entities 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 (i) a Lender; (ii) an Affiliate of a
Lender that is a financial institution and is majority-owned by such
Lender; (iii) a commercial bank organized under the laws of the United
States, or any State thereof, or the Commonwealth of Puerto Rico, and
having total assets in excess of $5,000,000,000; (iv) a savings and
loan association or savings bank organized under the laws of the United
States, or any State thereof, or the Commonwealth of Puerto Rico, and
having total assets in excess of $5,000,000,000; (v) a commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development or has concluded
special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow or of the Cayman
Islands, or a political subdivision of any such country, and having
total assets in excess of $5,000,000,000 so long as such bank is acting
through a branch or agency located in the Commonwealth of Puerto Rico,
the United States or in the country in which it is organized or another
country that is described in this clause (v); (vi) the central bank of
any country that is a member of the Organization for Economic
Cooperation and Development; or (vii) any other Person approved by the
Agent and, so long as no Default has occurred and is continuing, 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
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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; 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.
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"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 Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Revolving Credit
Borrowing, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the average (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S. dollars are
offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such
Interest Period in an amount approximately equal to such Reference
Bank's pro rata share of the contemplated Eurodollar Rate Advance
comprising part of such Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period. The Eurodollar Rate for any Interest Period
for each Eurodollar Rate Advance comprising part of the same Borrowing
shall be determined by the Agent on the basis of applicable rates
furnished to and received by the Agent from the Reference Banks two
Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.08.
"Eurodollar Rate Advance" means a Revolving Credit Advance
that bears interest as provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for all Eurodollar Rate Advances or LIBO 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
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includes deposits by reference to which the interest rate on Eurodollar
Rate Advances or LIBO 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 Agent from three Federal funds brokers of
recognized standing selected by it.
"Fixed Rate Advances" has the meaning specified in Section
2.03(a)(i).
"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" means GTE Corporation, a New York corporation, or its
successor.
"Guaranteed Obligations" has the meaning specified in Section
7.01.
"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.
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"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.
"Information Memorandum" means the information memorandum
dated January 27, 1999 used by the Agent in connection with the
syndication of the Commitments.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing and each LIBO
Rate Advance comprising part of the same Competitive Bid Borrowing, the
period commencing on the date of such Eurodollar Rate Advance or LIBO
Rate Advance or the date of the Conversion of any Base Rate Advance
into such Eurodollar 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 Eurodollar Rate Advances, each subsequent
period commencing on the last day of the immediately preceding Interest
Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be one, two, three or six months, as the Borrower
may, upon notice received by the Agent not later than 11:00 A.M. (New
York City 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
Eurodollar Rate Advances comprising part of the same Revolving
Credit Borrowing or for LIBO Rate Advances comprising part of
the same Competitive Bid 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
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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.
"Lenders" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Section 9.07.
"LIBO Rate" means, for any Interest Period for all LIBO Rate
Advances comprising part of the same Competitive Bid Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the average (rounded upward to the nearest whole multiple
of 1/16 of 1% per annum, if such average is not such a multiple) of the
rate per annum at which deposits in U.S. dollars are offered to the
principal office of each of the Reference Banks in London, England by
prime banks in the London interbank market at 11:00 A.M. (London time)
two Business Days before the first day of such Interest Period in an
amount substantially equal to the amount that would be such Reference
Bank's ratable share of such Borrowing if such Borrowing were to be a
Revolving Credit Borrowing to be outstanding during such Interest
Period and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period. The LIBO Rate for any Interest Period for
each LIBO Rate Advance comprising part of the same Competitive Bid
Borrowing shall be determined by the Agent on the basis of applicable
rates furnished to and received by the Agent from the Reference Banks
two Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 2.08.
"LIBO Rate Advances" has the meaning specified in Section
2.03(a)(i).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind.
"Loan Party" means each of the Borrower and the Guarantors.
"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
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the Effective Date or (b) the ability of any Loan Party to service its
Debt obligations on a timely basis.
"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 or a Competitive Bid
Note.
"Notice of Competitive Bid Borrowing" has the meaning
specified in Section 2.03(a)(i).
"Notice of Revolving Credit Borrowing" has the meaning
specified in Section 2.02(a).
"Other Taxes" has the meaning specified in Section 2.14(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Performance Level" means, as of any date of determination,
the level set forth below as then in effect for the Borrower, as
determined in accordance with the following provisions of this
definition:
Level 1: Public Debt Rating of at least A- by S&P or A3 by
Xxxxx'x.
Level 2: Public Debt Rating of lower than Level 1 but at least
BBB+ by S&P or Baa1 by Xxxxx'x.
Level 3: Public Debt Rating of lower than Level 2 but at
least BBB by S&P or Baa2 by Xxxxx'x.
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Level 4A: Public Debt Rating of lower than Level 3 but at least
BBB- by S&P and Baa3 by Xxxxx'x; or, if no Public
Debt Rating is available, a Debt to EBITDA Ratio of
3.5:1.0 or less.
Level 4B: Public Debt Rating of lower than Level 3 but at least
BBB- by S&P or Baa3 by Xxxxx'x; or, if no Public Debt
Rating is available, a Debt to EBITDA Ratio of
greater than 3.5:1.0 but less than or equal to
3.7:1.0.
Level 5: Public Debt Rating of lower than Level 4B but at
least BB+ by S&P and Ba1 by Xxxxx'x; or, if a Public
Debt Rating is not available from both S&P and
Xxxxx'x, a Debt to EBITDA Ratio of greater than
3.7:1.00 but less than or equal to 3.9:1.0.
Level 6: Public Debt Rating of lower than Level 5; or, if a
Public Debt Rating is not available from both S&P and
Xxxxx'x, a Debt to EBITDA Ratio of greater than
3.9:1.0.
For purposes of the foregoing, (a) if only one of S&P and
Xxxxx'x shall have in effect a Public Debt Rating, the Performance
Level for Xxxxxx 0, 0, 0 xxx 0X xxxxx xx determined by reference to the
available rating, (b) if only one of S&P and Xxxxx'x shall have in
effect a Public Debt Rating, the Performance Level for Levels 5 and 6
shall be determined by reference to the Debt to EBITDA Ratio and (c) if
the Public Debt Ratings established by S&P and Xxxxx'x shall fall
within different Performance Levels for Levels 1, 2, 3 and 4B, the
Performance Level shall be based upon the higher rating unless such
Public Debt Ratings differ by two or more levels, in which case the
rating one level higher than the lower rating level will apply.
"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
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faith by appropriate proceedings; (i) leases made, or existing on
property acquired, in the ordinary course of business; (j) landlord's
Liens under leases to which such Person is a party; (k) zoning
restrictions, easements, licenses, and restrictions on the use of real
property or minor irregularities in title thereto, which do not
materially impair the use of such property in the operation of the
business of such Person or the value of such property for the purpose
of such business; and (l) 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.
"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.
"Public Debt Rating" means, as of any date, the rating that
has been most recently announced by any of S&P or Xxxxx'x, as the case
may be, for any class of non-credit enhanced long-term senior unsecured
debt issued by the Borrower. For purposes of the foregoing, (a) if any
rating established by S&P or Xxxxx'x shall be changed, such change
shall be effective as of the date on which such change is first
announced publicly by the rating agency making such change; and (b) if
S&P or Xxxxx'x shall change the basis on which ratings are established,
each reference to the Public Debt Rating announced by S&P or Xxxxx'x,
as the case may be, shall refer to the then equivalent rating by S&P or
Xxxxx'x, as the case may be.
"Purchase" means the acquisition by GITI, directly or
indirectly, of the Controlling Interest.
"Reference Banks" means initially, Citibank, Bank of America
National Trust and Savings Association, The Chase Manhattan Bank and
Xxxxxx Guaranty Trust Company of New York or, if less than three of
such banks are able to furnish timely information in accordance with
Section 2.08, any other commercial bank designated by the Borrower and
approved by the Required Lenders as constituting a "Reference Bank"
hereunder.
"Register" has the meaning specified in Section 9.07(d).
"Required Lenders" means at any time Lenders owed at least a
majority in interest of the then aggregate unpaid principal amount of
the Revolving Credit
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Advances owing to Lenders, or, if no such principal amount is then
outstanding, Lenders having at least a majority in interest of the
Commitments.
"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 Eurodollar Rate Advance (each of which shall be a
"Type" of Revolving Credit Advance).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of
the Lenders pursuant to Section 2.01.
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Lender, in substantially the form
of Exhibit A-1 hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Revolving Credit Advances
made by such Lender.
"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.
"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
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the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability after taking into account any indemnification pursuant to the
terms of the Stock Purchase Agreement and any other agreements entered
into in connection therewith.
"Special Dividend" has the meaning specified in Section 2.16.
"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, Inc., GTE Holdings (Puerto Rico) LLC 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 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 2.14(a).
"Termination Date" means the earlier of the date that is five
years after the date of this Agreement (but in no event later than
March 30, 2004) and the date of termination in whole of the Commitments
pursuant to Section 2.05 or 6.01.
"Utilization" refers to the aggregate principal amount of
Advances outstanding as a percentage of the aggregate Commitments.
"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.
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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 Agent pursuant to Section 9.07(d), as such amount may be
reduced pursuant to Section 2.05 (such Lender's "Commitment"), provided that the
aggregate amount of the Commitments of the Lenders shall be deemed used from
time to time to the extent of the aggregate amount of the Competitive Bid
Advances then outstanding and such deemed use of the aggregate amount of the
Commitments shall be allocated among the Lenders ratably according to their
respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "Competitive Bid Reduction"), and provided further that any
Competitive Bid Advance made by a Lender shall not reduce such Lender's
obligation to lend its pro rata share of the remaining undrawn Commitments. Each
Revolving Credit Borrowing shall be in an aggregate amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and shall consist of Revolving
Credit Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitments. Within the limits of this Section
2.01, the Borrower may borrow under this Section 2.01, prepay pursuant to
Section 2.10 and reborrow under this Section 2.01.
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. (New York City time) on the third Business Day prior to the date of the
proposed Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurodollar Rate Advances, or the Business Day of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Base Rate Advances, by the Borrower to the 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,
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confirmed immediately in writing, or telecopier or telex in substantially the
form of Exhibit B-1 hereto, specifying therein the requested (i) date of such
Revolving Credit Borrowing, (ii) Type of Advances comprising such Revolving
Credit Borrowing, (iii) aggregate amount of such Revolving Credit Borrowing, and
(iv) in the case of a Revolving Credit Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Revolving Credit Advance. Each
Lender shall, before 12:00 noon (New York City time) on the date of such
Revolving Credit Borrowing, make available for the account of its Applicable
Lending Office to the Agent at the Agent's Account, in same day funds, such
Lender's ratable portion of such Revolving Credit Borrowing. After the Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Agent will make such funds available to the Borrower
at the Borrower's Account.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Revolving Credit Borrowing if the aggregate obligation of the Lenders to
make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.08
or 2.12 and (ii) the Eurodollar Rate Advances may not be outstanding as part of
more than twelve separate Revolving Credit Borrowings.
(c) Each Notice of Revolving Credit Borrowing shall be irrevocable
and binding on the Borrower. In the case of any Revolving Credit Borrowing that
the related Notice of Revolving Credit Borrowing specifies is to be comprised of
Eurodollar 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 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 Agent such Lender's ratable portion of such Revolving Credit
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such ratable
portion available to the Agent, such Lender and the Borrower severally agree to
repay to the 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 Agent, at (i) in the
case of the Borrower, the interest rate applicable at the time to
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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 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. The Competitive Bid Advances. (a) Each Lender
severally agrees that the Borrower may make Competitive Bid Borrowings under
this Section 2.03 from time to time on any Business Day during the period from
the Effective Date until the date occurring 30 days prior to the Termination
Date in the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount of the Advances then outstanding
shall not exceed the aggregate amount of the Commitments of the Lenders
(computed without regard to any Competitive Bid Reduction).
(i) The Borrower may request a Competitive Bid Borrowing under this Section
2.03 by delivering to the Agent, by telecopier or telex, a notice of a
Competitive Bid Borrowing (a "Notice of Competitive Bid Borrowing"), in
substantially the form of Exhibit B-2 hereto, specifying therein the
requested (v) date of such proposed Competitive Bid Borrowing, (w)
aggregate amount of such proposed Competitive Bid Borrowing, (x) (i) in the
case of a Competitive Bid Borrowing consisting of LIBO Rate Advances,
Interest Period and maturity date for repayment of each LIBO Rate Advance
to be made as part of such Competitive Bid Borrowing or (ii) in the case of
a Competitive Bid Borrowing consisting of Fixed Rate Advances, maturity
date for repayment of each Fixed Rate Advance to be made as part of such
Competitive Bid Borrowing (which maturity date may not be earlier than the
date occurring 7 days after the date of such Competitive Bid Borrowing or
later than the Termination Date), (y) interest payment date or dates
relating thereto, and (z) other terms, including the terms applicable to
prepayment thereof, if any, to be applicable to such Competitive Bid
Borrowing, not later than 10:00 A.M. (New York City time) (A) at least one
Business Day prior to the date of the proposed Competitive Bid Borrowing,
if the Borrower shall specify in the Notice of Competitive Bid Borrowing
that the rates of interest to be offered by the Lenders shall be fixed
rates per annum (the Advances comprising any such Competitive Bid Borrowing
being referred to herein as "Fixed Rate Advances") and (B) at least four
Business Days prior to the date of the
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proposed Competitive Bid Borrowing, if the Borrower shall instead specify
in the Notice of Competitive Bid Borrowing that the rates of interest to be
offered by the Lenders are to be based on the LIBO Rate (the Advances
comprising such Competitive Bid Borrowing being referred to herein as "LIBO
Rate Advances"). Each Notice of Competitive Bid Borrowing shall be
irrevocable and binding on the Borrower. The Agent shall in turn promptly
notify each Lender of each request for a Competitive Bid Borrowing received
by it from the Borrower by sending such Lender a copy of the related Notice
of Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more Competitive Bid Advances to the
Borrower as part of such proposed Competitive Bid Borrowing at a rate or
rates of interest specified by such Lender in its sole discretion, by
notifying the Agent (which shall give prompt notice thereof to the
Borrower), before 9:30 A.M. (New York City time) on the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances and before 10:00 A.M. (New York
City time) two Business Days before the date of such proposed Competitive
Bid Borrowing, in the case of a Competitive Bid Borrowing consisting of
LIBO Rate Advances, of the minimum amount and maximum amount of each
Competitive Bid Advance which such Lender would be willing to make as part
of such proposed Competitive Bid Borrowing (which amounts may, subject to
the proviso to the first sentence of this Section 2.03(a), exceed such
Lender's Commitment), the rate or rates of interest therefor and such
Lender's Applicable Lending Office with respect to such Competitive Bid
Advance; provided that if the Agent in its capacity as a Lender shall, in
its sole discretion, elect to make any such offer, it shall notify the
Borrower of such offer at least 30 minutes before the time and on the date
on which notice of such election is to be given to the Agent by the other
Lenders. If any Lender shall elect not to make such an offer, such Lender
shall so notify the Agent, before 10:00 A.M. (New York City time) on the
date on which notice of such election is to be given to the Agent by the
other Lenders, and such Lender shall not be obligated to, and shall not,
make any Competitive Bid Advance as part of such Competitive Bid Borrowing;
provided that the failure by any Lender to give such notice shall
not cause such Lender to be obligated to make any Competitive Bid Advance
as part of such proposed Competitive Bid Borrowing.
(iii) The Borrower shall, in turn, before 10:30 A.M. (New York City
time) on the date of such proposed Competitive Bid Borrowing, in the case
of a Competitive Bid Borrowing consisting of Fixed Rate Advances, and
before 11:00 A.M. (New York City time) two Business Days before the date of
such proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of LIBO Rate Advances, either:
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(x) cancel such Competitive Bid Borrowing by giving the Agent
notice to that effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above (provided that the Borrower
may not accept bids in excess of the aggregate amount of such
Competitive Bid Borrowing), in its sole discretion, by giving notice to
the Agent of the amount of each Competitive Bid Advance (which amount
shall be equal to or greater than the minimum amount, and equal to or
less than the maximum amount, notified to the Borrower by the Agent on
behalf of such Lender for such Competitive Bid Advance pursuant to
paragraph (ii) above) to be made by each Lender as part of such
Competitive Bid Borrowing, and reject any remaining offers made by
Lenders pursuant to paragraph (ii) above by giving the Agent notice to
that effect. The Borrower shall accept the offers made by any Lender or
Lenders to make Competitive Bid Advances in order of the lowest to the
highest rates of interest offered by such Lenders. If two or more
Lenders have offered the same interest rate, the amount to be borrowed
at such interest rate will be allocated among such Lenders in
proportion to the amount that each such Lender offered at such interest
rate.
(iv) If the Borrower notifies the Agent that such Competitive Bid
Borrowing is canceled pursuant to paragraph (iii)(x) above, the Agent shall
give prompt notice thereof to the Lenders and such Competitive Bid
Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent shall in
turn promptly notify (A) each Lender that has made an offer as described in
paragraph (ii) above, of the date and aggregate amount of such Competitive
Bid Borrowing and whether or not any offer or offers made by such Lender
pursuant to paragraph (ii) above have been accepted by the Borrower, (B)
each Lender that is to make a Competitive Bid Advance as part of such
Competitive Bid Borrowing, of the amount of each Competitive Bid Advance to
be made by such Lender as part of such Competitive Bid Borrowing, and (C)
each Lender that is to make a Competitive Bid Advance as part of such
Competitive Bid Borrowing, upon receipt, that the Agent has received forms
of documents appearing to fulfill the applicable conditions set forth in
Article III. Each Lender that is to make a Competitive Bid Advance as part
of such Competitive Bid Borrowing shall, before 12:00 noon (New York City
time) on the date of such Competitive Bid Borrowing specified in the notice
received from the Agent pursuant to clause (A) of the preceding sentence or
any later time when such Lender shall have received notice from the Agent
pursuant to clause (C) of the preceding sentence, make available for the
account of its Applicable Lending Office to the Agent at the Agent's
Account, in same day funds, such Lender's
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portion of such Competitive Bid Borrowing. Upon fulfillment of the
applicable conditions set forth in Article III and after receipt by the
Agent of such funds, the Agent will make such funds available to the
Borrower at the Borrower's Account. Promptly after each Competitive Bid
Borrowing the Agent will notify each Lender of the amount of the
Competitive Bid Borrowing, the consequent Competitive Bid Reduction and
the dates upon which such Competitive Bid Reduction commenced and will
terminate.
(vi) If the Borrower notifies the Agent that it accepts one or
more of the offers made by any Lender or Lenders pursuant to paragraph
(iii)(y) above, such notice of acceptance shall be irrevocable and
binding on the Borrower. 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 the
related Notice of Competitive Bid Borrowing for such Competitive Bid
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 Competitive Bid Advance to be made by such Lender as part of such
Competitive Bid Borrowing when such Competitive Bid Advance, as a
result of such failure, is not made on such date.
(b) Each Competitive Bid Borrowing shall be in an aggregate
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof
and, following the making of each Competitive Bid Borrowing, the Borrower shall
be in compliance with the limitation set forth in the proviso to the first
sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this Section 2.03,
repay or prepay pursuant to subsection (d) below, and reborrow under this
Section 2.03, provided that a Competitive Bid Borrowing shall not be made within
three Business Days of the date of any other Competitive Bid Borrowing.
(d) The Borrower shall repay to the Agent for the account of
each Lender that has made a Competitive Bid Advance, on the maturity date of
each Competitive Bid Advance (such maturity date being that specified by the
Borrower for repayment of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and
provided in the Competitive Bid Note evidencing such Competitive Bid Advance),
the then unpaid principal amount of such Competitive Bid Advance. The Borrower
shall have no right to prepay any principal amount of any Competitive Bid
Advance (i) unless, and then only on the terms, specified by the Borrower for
such Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered
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pursuant to subsection (a)(i) above and set forth in the Competitive Bid Note
evidencing such Competitive Bid Advance or (ii) as required pursuant to Section
2.10(b).
(e) The Borrower shall pay interest on the unpaid principal amount of
each Competitive Bid Advance from the date of such Competitive Bid Advance to
the date the principal amount of such Competitive Bid Advance is repaid in full,
at the rate of interest for such Competitive Bid Advance specified by the Lender
making such Competitive Bid Advance in its notice with respect thereto delivered
pursuant to subsection (a)(ii) above, payable on the interest payment date or
dates specified by the Borrower for such Competitive Bid Advance in the related
Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i)
above, as provided in the Competitive Bid Note evidencing such Competitive Bid
Advance. Upon the occurrence and during the continuance of an Event of Default
under Section 6.01(a), the Borrower shall pay interest on the amount of unpaid
principal of and interest on each Competitive Bid Advance owing to a Lender,
payable in arrears on the date or dates interest is payable thereon, at a rate
per annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Competitive Bid Advance under the terms of the Competitive
Bid Note evidencing such Competitive Bid Advance unless otherwise agreed in such
Competitive Bid Note.
(f) The indebtedness of the Borrower resulting from each
Competitive Bid Advance made to the Borrower as part of a Competitive Bid
Borrowing shall be evidenced by a separate Competitive Bid Note of the Borrower
payable to the order of the Lender making such Competitive Bid Advance.
SECTION 2.04. Fees. (a) Facility Fee. The Borrower agrees to
pay to the Agent for the account of each Lender a facility fee on the aggregate
amount of such Lender's Commitment from the Effective Date in the case of each
Initial Lender and from the later of the Effective Date and the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date at a rate per annum
equal to the Applicable Percentage in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing June 30, 1999, and on the Termination Date.
(b) Agent's Fees. The Borrower shall pay to the Agent for its
own account such fees as may from time to time be agreed between the Borrower
and the Agent.
SECTION 2.05. Optional Termination or Reduction of the
Commitments. The Borrower shall have the right, upon at least three Business
Days' notice to the 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 and provided further that
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the aggregate amount of the Commitments of the Lenders shall not be reduced to
an amount that is less than the aggregate principal amount of the Competitive
Bid Advances then outstanding.
SECTION 2.06. Repayment of Revolving Credit Advances. The
Borrower shall repay to the Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Revolving Credit Advances
then outstanding.
SECTION 2.07. 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 sum of (x) the Base Rate in effect from time to time plus
(y) the Applicable Margin in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September and
December during such periods and on the date such Base Rate Advance
shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Revolving Credit Advance is a Eurodollar 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 Eurodollar Rate for such Interest
Period for such Revolving Credit Advance, plus (y) the Applicable
Margin in effect from time to time, 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 Eurodollar 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 Base Rate
Advances pursuant to clause (a)(i) above.
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SECTION 2.08. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each Eurodollar Rate and each LIBO Rate. If any one or more of the Reference
Banks shall not furnish such timely information to the Agent for the purpose of
determining any such interest rate, the Agent shall determine such interest rate
on the basis of timely information furnished by the remaining Reference Banks.
The Agent shall give prompt notice to the Borrower and the Lenders of the
applicable interest rate determined by the Agent for purposes of Section
2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for
the purpose of determining the interest rate under Section 2.07(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Agent that the Eurodollar 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 Eurodollar Rate Advances for
such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each Eurodollar 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, Eurodollar Rate Advances shall be suspended until the
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 Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the 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.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $10,000,000, 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(a), (i) each Eurodollar 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 Advances into, Eurodollar Rate Advances shall be suspended.
(f) If fewer than two Reference Banks determine and furnish timely
information to the Agent for determining the Eurodollar Rate or LIBO Rate for
any Eurodollar Rate Advances or LIBO Rate Advances, as the case may be,
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(i) the Agent shall forthwith notify the Borrower and the
Lenders that the interest rate cannot be determined for such Eurodollar
Rate Advances or LIBO Rate Advances, as the case may be,
(ii) with respect to Eurodollar 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 Eurodollar Rate
Advances or LIBO Rate Advances or to Convert Revolving Credit Advances
into Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 2.09. Optional Conversion of Revolving Credit
Advances. The Borrower may on any Business Day, upon notice given to the Agent
not later than 11:00 A.M. (New York City 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 Eurodollar Rate Advances into Base Rate Advances
shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances and any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than $10,000,000. Each such notice of a
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Revolving Credit Advances to be Converted and (iii)
if such Conversion is into Eurodollar 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 2.10. Optional Prepayments of Revolving Credit
Advances. The Borrower may, upon notice not later than 11:00 A.M. (New York City
time) for Base Rate Advances and upon at least two Business Days' notice to the
Agent for Eurodollar Rate Advances stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amount of the Revolving Credit Advances
comprising part of the same Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid;
provided, however, that (x) each partial prepayment shall be in an aggregate
principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof and (y) in the event of any such prepayment of a Eurodollar Rate
Advance, the Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 9.04(c).
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SECTION 2.11. 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 Eurodollar Rate Advances or LIBO Rate Advances
(excluding for purposes of this Section 2.11 any such increased costs resulting
from (i) Taxes or Other Taxes (as to which Section 2.14 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 Agent), pay to the
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 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 Eurodollar Rate or the LIBO 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 Agent), the
Borrower shall pay to the 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 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 2.11 agrees to use reasonable efforts (consistent with its internal
policy and legal and
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regulatory restrictions) to minimize such additional amounts and to change 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 2.12. Illegality. Notwithstanding any other provision
of this Agreement, if any Lender shall notify the 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 Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or LIBO Rate Advances or to fund or maintain Eurodollar Rate Advances
or LIBO Rate Advances hereunder, (i) each Eurodollar Rate Advance and each LIBO
Rate Advance made by such Lender will automatically, upon such demand, Convert
into an Advance that bears interest at the rate set forth in Section 2.07(a)(i)
or a Base Rate Advance, as the case may be, and (ii) the obligation of such
Lender to make Eurodollar Rate Advances and LIBO Rate Advances or to Convert
Revolving Credit Advances into Eurodollar Rate Advances shall be suspended until
the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
SECTION 2.13. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 11:00 A.M.
(New York City time) on the day when due in U.S. dollars to the Agent at the
Agent's Account in same day funds. The 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 2.03,
2.11, 2.14 or 9.04(c)) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender 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. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.07(c),
from and after the effective date specified in such Assignment and Acceptance,
the Agent shall make all payments hereunder and under the Notes in respect of
the interest assigned thereby to the Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
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(b) All computations of interest based on the Base Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case may be, and
all computations of interest based on the Eurodollar Rate, LIBO Rate or the
Federal Funds Rate and of facility fees shall be made by the 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 Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
error in the calculation of such interest rate.
(c) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances or LIBO 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 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 Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the 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 Agent,
each Lender shall repay to the 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 Agent, at the Federal Funds Rate.
SECTION 2.14. 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 2.13, 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 imposed by Puerto Rico,
the United States or any political subdivision of either (or in the case of any
payments by or on behalf of the Borrower through an account or branch outside
the United States or Puerto Rico or by or on behalf of the Borrower by a payor
that is not a United States person or not organized or resident in Puerto Rico
such payments shall be made 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 imposed by a foreign
jurisdiction or any political subdivision thereof), excluding, in the case of
each Lender and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes (x) in the case of a
Lender pursuant to the laws of the jurisdiction (or
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any political subdivision or taxing authority therein) in which it is organized
or in which the principal office of such Lender, or Applicable Lending Office of
such Lender is located, or (y) in the case of any payment to the Agent in its
capacity as Agent, the jurisdiction (or any political subdivision or taxing
authority therein) in which it is organized or in which the principal office of
the Agent is located or in which the office designated by the Agent to act as
Agent is located (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 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 2.14) such Lender or the 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 Agent,
at its address referred to in Section 9.02, the original or a certified copy of
a receipt evidencing payment thereof. For purposes of this subsection (a) and
subsection (e), the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
(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 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 Agent (as the case may be) and any liability
(including penalties, interest and expenses but excluding any taxes imposed by
any jurisdiction on amounts payable under this Section 2.14) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender or the Agent (as the case may be) makes written demand
therefor.
(d) Each Lender organized under the laws of a jurisdiction outside of
Puerto Rico from time to time, as requested in writing by the Borrower (but only
so long as such Lender remains lawfully able to do so), shall provide each of
the Agent and the Borrower with two properly and accurately completed and duly
executed original copies of any form,
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document or other certificate that is necessary for such Lender to be exempt
from, or entitled to a reduced rate of Taxes or payments hereunder or under the
Notes or for the Borrower to determine the applicable rate of deduction or
withholding of any Taxes. If any Lender which is organized under the laws of a
jurisdiction outside of Puerto Rico is unable to provide the above-described
forms, documents or other certificates for a relevant interest period (or if the
Lender's appropriate personnel responsible for providing the forms, documents or
other certificates actually become aware that the forms, documents or other
certificates provided by it are inaccurate), such Lender shall notify the
Borrower in writing prior to or immediately upon the commencement of such
relevant interest period.
(e) For any period with respect to which a Lender has failed to provide
the Borrower with the appropriate form, document or other certificate requested
by the Borrower in accordance with Section 2.14(d) (other than if such failure
is due to a change in law occurring subsequent to the date on which a form,
document or other certificate originally was required to be provided, or if such
form, document or other certificate is no longer required to establish an
exemption from the applicable tax), such Lender shall not be entitled to
indemnification under Section 2.14(a) or (c) with respect to Taxes by reason of
such failure and the Borrower shall be entitled to withhold Taxes from payments
to such Lender; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form, document or other certificate required
hereunder, the Borrower shall take such steps at such Lender's expense as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(f) Notwithstanding anything else contained in this Section 2.14, the
Borrower shall only be required to pay additional sums with respect to Taxes
(subject to subsection (h) below) to a Lender (or the Agent, as the case may be)
pursuant to subsection (a) or (c) above if the obligation to pay such Taxes
results from such Lender's inability to obtain a complete exemption from 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).
(g) In the event that the Borrower makes an additional payment under
Section 2.14(a) or 2.14(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
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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 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 2.14, provided, however, that (i) no tax return of such
Lender or the Agent is or would be held open as a result of such contest, (ii)
neither such Lender nor the Agent is required to reopen a tax year that has
already closed and (iii) such Lender and the Agent shall, in the sole opinion of
such Lender and the Agent, respectively, have determined that such contest will
leave such Lender and the 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 Agent to
arrange its tax affairs in whatever manner it thinks fit, if in the sole
judgment of such Lender or the Agent, such contest would be disadvantageous to
such Lender or the Agent. In pursuing a contest in the Lender's or the Agent's
name, such Lender or the Agent will be represented by counsel of such Lender's
or the Agent's choice, and will defend against, settle or otherwise control the
contest and will not relinquish control or decision making over the contest.
(h) Any Lender claiming any additional amounts payable pursuant to this
Section 2.14 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to minimize such additional
amounts and to change the jurisdiction of its Eurodollar 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 2.15 Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or
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otherwise) on account of the Revolving Credit Advances owing to it (other than
pursuant to Section 2.11, 2.14, 9.01(b), 9.04(c) or 9.07) in excess of its
ratable share of payments on account of the Revolving Credit Advances obtained
by all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in the Revolving Credit Advances owing to them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (i) the
amount of such Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender by
delivering payment pursuant to this Section 2.15 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 2.16 Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely for general corporate purposes of the Borrower and its Subsidiaries,
including, without limitation, to pay a one-time dividend to the Puerto Rico
Telephone Authority (the "Special Dividend"), to pay related fees and expenses
and to provide a backstop for commercial paper, provided that such proceeds
shall not be used for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System).
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01 Conditions Precedent to Effectiveness of Sections
2.01 and 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective
on and as of the first date (the "Effective Date") on which the following
conditions precedent have been satisfied:
(a) The Purchase shall have been consummated in accordance
with the terms of the Stock Purchase Agreement, without any waiver or
amendment from the date of the Information Memorandum that, in the
reasonable judgment of the Lenders, could reasonably be expected to
materially adversely affect the ability of the Borrower or either
Guarantor to perform their respective obligations hereunder, and in
material compliance with all applicable laws.
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(b) There shall have occurred no Material Adverse Change since
December 31, 1997 other than as disclosed in Schedule 3.01(b) hereto.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting 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(c) hereto (the "Disclosed Litigation") or (ii) is
initiated by any Person other than a Lender in its capacity as a Lender
that purports to affect the legality, validity or enforceability of
this Agreement or any Note or the consummation of the transactions
contemplated hereby, and there shall have been no material adverse
change in the status, or financial effect on any Loan Party, of the
Disclosed Litigation from that described on Schedule 3.01(c) hereto.
(d) All governmental and third party consents and approvals
necessary to consummate the Purchase (including, in the case of the
Federal Communications Commission approval, the grant of the Federal
Communications Commission Transfer Applications) and necessary in
connection with the execution, delivery and performance of this
Agreement and the Notes shall have been obtained (without the
imposition of any conditions that could reasonably be expected to
materially adversely affect the ability of any Loan Party to perform
its obligations hereunder) and shall remain in effect, and no law or
regulation shall be applicable that restrains, prevents or imposes
adverse conditions upon the transactions contemplated hereby that could
reasonably be expected to materially adversely affect the ability of
any Loan Party to perform its obligations hereunder.
(e) The Borrower shall have notified each Lender and the Agent
in writing as to the proposed Effective Date.
(f) The Borrower shall have paid all invoiced fees and
expenses of the Agent and the Lenders (including the invoiced fees and
expenses of counsel to the Agent).
(g) On the Effective Date, the following statements shall be
true and the 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
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(ii) No event has occurred and is continuing that constitutes
a Default.
(h) The Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance satisfactory to the Agent
and (except for the Revolving Credit Notes) in sufficient copies for each
Lender:
(i) The Revolving Credit Notes to the order of the Lenders,
respectively.
(ii) Certified copies of the resolutions of the Board of
Directors of each Loan Party approving the transactions contemplated by
this Agreement and the Notes and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to this Agreement and such Notes.
(iii) A certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying the names and true signatures of the
officers of each Loan Party authorized to sign this Agreement and the
Notes and the other documents to be delivered hereunder.
(iv) Certified copies of the Stock Purchase Agreement, duly
executed by the parties thereto, together with all agreements,
instruments and other documents delivered in connection therewith.
(v) A certificate, in substantially the form of Exhibit D
hereto, attesting to the Solvency of each Loan Party after giving
effect to the Purchase, the Special Dividend and the Borrowings
contemplated hereunder, from the chief financial officer of each such
Loan Party.
(vi) Certified copies of the resolutions of the Board of
Directors (or committee thereof) of the Borrower and each other Loan
Party approving the Special Dividend as contemplated by the Stock
Purchase Agreement.
(vii) Certified copies of (A) all amendments to the Stock
Purchase Agreement and (B) each other document delivered pursuant
thereto, duly executed by the parties thereto, together with all
agreements, instruments and other documents delivered in connection
therewith.
(viii) A favorable opinion of Xxxxxx, Xxxxxx-Xxxxxxx, Colt &
Mosle, New York counsel for the Loan Parties, substantially in the form
of Exhibit E hereto.
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(ix) A favorable opinion of X'Xxxxx & Xxxxxx, Puerto Rico
counsel for the Loan Parties, substantially in the form of Exhibit F
hereto.
(x) A favorable opinion of Shearman & Sterling, counsel for
the Agent, in form and substance satisfactory to the Agent.
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 Conditions Precedent to Each Competitive Bid
Borrowing. The obligation of each Lender that is to make a Competitive Bid
Advance on the occasion of a Competitive Bid Borrowing to make such Competitive
Bid Advance as part of such Competitive Bid Borrowing is subject to the
conditions precedent that (i) the Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto, (ii)
prior to such Competitive Bid Borrowing, the Agent shall have received a
Competitive Bid Note payable to the order of such Lender for each of the one or
more Competitive Bid Advances to be made by such Lender as part of such
Competitive Bid Borrowing, in a principal amount equal to the principal amount
of the Competitive Bid Advance to be evidenced thereby and otherwise on such
terms as were agreed to for such Competitive Bid Advance in accordance with
Section 2.03, and (iii) on the date of such Competitive Bid Borrowing the
following statements shall be true (and each of the giving of the applicable
Notice of Competitive Bid Borrowing and the acceptance by the Borrower of the
proceeds of such Competitive Bid Borrowing shall constitute a representation and
warranty by the Borrower that on the date of such Competitive Bid Borrowing such
statements are true):
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(a) the representations and warranties contained in Section
4.01 are correct in all material respects on and as of the date of such
Competitive Bid Borrowing before and after giving effect to such
Competitive Bid Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date,
(b) no event has occurred and is continuing, or would result
from such Competitive Bid Borrowing or from the application of the
proceeds therefrom, that constitutes a Default, and
(c) no event has occurred and no circumstance exists as a
result of which the information concerning the Loan Parties that has
been provided to the Agent and each Lender by any Loan Party in writing
in connection herewith, taken as a whole, would include an untrue
statement of a material fact or omit to state any material fact or any
fact necessary to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
SECTION 3.04 Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the 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 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.
(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
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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.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery
and performance by any Loan Party of this Agreement or the Notes.
(d) This Agreement has been, and each of the Notes when
delivered hereunder will have been, duly executed and delivered by the
Borrower. This Agreement has been duly executed and delivered by each
Guarantor. Assuming that this Agreement has been duly executed by the
Agent and each of the Initial Lenders, this Agreement is, and each of
the Notes when delivered hereunder will be, the legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with their respective terms. Assuming that this Agreement
has been duly executed by the Agent and each of the Initial Lenders,
this Agreement is the legal, valid and binding obligation of each
Guarantor enforceable against each Guarantor in accordance with its
terms.
(e) The Consolidated balance sheet of the Borrower (or its
predecessor entities) and its Subsidiaries as at December 31, 1997, and
the related Consolidated statements of income and cash flows of the
Borrower (or its predecessor entities) and its Subsidiaries for the
fiscal year then ended, accompanied by an opinion of Deloitte & Touche
LLP, independent public accountants, and the Consolidated balance sheet
of the Borrower (or its predecessor entities) and its Subsidiaries as
at September 30, 1998, and the related Consolidated statements of
income and cash flows of the Borrower (or its predecessor entities) and
its Subsidiaries for the nine months then ended, duly certified by the
chief financial officer of the Borrower (or its predecessor entities),
copies of which have been furnished to each Lender, fairly present,
subject, in the case of said balance sheet as at September 30, 1998,
and said statements of income and cash flows for the nine months then
ended, to year-end audit adjustments, the Consolidated financial
condition of the Borrower (or its predecessor entities) and its
Subsidiaries as at such dates and the Consolidated results of the
operations of the Borrower (or its predecessor entities) and its
Subsidiaries for the periods ended on such dates, 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,
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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) The Borrower (i) has initiated a review and assessment of
all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers, vendors and
customers) that could be materially adversely affected by the risk that
computer applications used by the Borrower or any of its Subsidiaries
(or suppliers, vendors and customers) may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior
to and any date on or after December 31, 1999 ("Year 2000 Problem"),
(ii) has developed a plan and timetable for addressing the Year 2000
Problem on a timely basis (which may include the procurement of new
systems) and (iii) reasonably believes that such plan is being
implemented on a timely basis. Based on the foregoing, the Borrower
believes that all computer applications that are material to its or any
of its Subsidiaries' business and operations are reasonably expected on
a timely basis to be able to perform properly date-sensitive functions
for all dates on and after January 1, 2000 except to the extent that a
failure to do so could not reasonably be expected to have a Material
Adverse Effect.
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:
(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
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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) 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 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 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
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representatives of such Loan Party's independent certified public accountants,
provided, however, that examination of the records of any Loan Party or any of
its Subsidiaries and the making of copies or abstracts shall occur only at times
when an Advance is outstanding.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of such Loan
Party and each such Subsidiary in accordance with generally accepted accounting
principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, its material properties that
are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under this
Agreement with any of their Affiliates, other than another Loan Party, (i) on
terms that are fair and reasonable and no less favorable to such Loan Party or
such Subsidiary than it would obtain in a comparable arm's-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
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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 Required Lenders by Deloitte & Touche LLP or other
independent public accountants of nationally recognized
standing, provided that in the event of any change in GAAP
used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the
determination of compliance with Section 5.03, a statement of
reconciliation showing the calculations used for purposes of
Section 5.03;
(iii) 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(c); and
(vi) such other information respecting any Loan Party
or any of its Subsidiaries as any Lender through the Agent may
from time to time reasonably request.
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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,
(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
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thereto or the replacement, extension or renewal (without
increase in the amount or extension of the final maturity
date) of the Debt secured thereby, and
(vi) Liens not otherwise permitted pursuant to
clauses (i) through (v) above securing obligations not to
exceed at any one time the amount of $10,000,000.
(b) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its 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 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
GTE so long as the surviving corporation assumes all obligations of the Borrower
hereunder and under the Notes, and provided, in each case, that no Default shall
have occurred and be continuing at the time of such proposed transaction or
would result therefrom.
(c) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or reporting
practices, except (i) as required or permitted by generally accepted accounting
principles or (ii) where the effect of such change, together with all other
changes in accounting policies or reporting practices made pursuant to this
clause (ii) since the Effective Date, is immaterial to the Borrower and its
Subsidiaries taken as a whole.
(d) Subsidiary Debt. Permit any of its Subsidiaries to create
or suffer to exist, any Debt other than:
(i) Debt owed to the Borrower or to a wholly owned
Subsidiary of the Borrower (it being understood that
such Debt includes any Debt incurred (A) in connection
with the Purchase and (B) under the contribution
agreement being entered into by and between the
Guarantors as of the closing date of the Purchase),
(ii) Debt existing on the Effective Date and described
on Schedule 5.02(d) hereto (the "Existing Debt"), and
any Debt extending the maturity of, or refunding or
refinancing, in whole or in part, the Existing Debt,
provided that the principal amount of such Existing
Debt shall not be increased above the principal amount
thereof outstanding immediately prior to such
extension, refunding or refinancing, and the direct and
contingent obligors
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therefor shall not be changed, as a result of or in connection with
such extension, refunding or refinancing,
(iii) unsecured Debt incurred in the ordinary course of
business aggregating for each of the Guarantors not more than
$75,000,000 at any one time outstanding,
(iv) Debt in respect of operating leases, and
(v) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business.
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 4.0:1.0.
(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
3.25:1.0.
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
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(c) (i) 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 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 Agent or any Lender; or
(d) Article VII is breached by any Guarantor or shall cease to
be in full force and effect or any Guarantor shall so state in writing;
or
(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,
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
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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) Judgments or orders for the payment of money in excess of
$30,000,000 in the aggregate 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 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
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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) (i) After the Effective Date, GITI or any entity
controlling GITI shall cease for any reason to maintain, directly or
indirectly, the Controlling Interest; or (ii) any Person or two or more
Persons 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 GTE or its
Subsidiaries or Xxxx Atlantic Corporation as successor to or parent of
GTE after the merger of GTE with Xxxx Atlantic Corporation or any of
its Subsidiaries; or (iii) GTE or its Subsidiaries or Xxxx Atlantic
Corporation as successor to or parent of GTE after the merger of GTE
with Xxxx Atlantic Corporation or any of its Subsidiaries 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 either
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 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.
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Article VII
GUARANTY
SECTION 7.01. Guaranty; Limitation of Liability. (a) Each Guarantor
hereby unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all obligations of
each other Loan Party now or hereafter existing under this Agreement or any
Note, whether for principal, interest, fees, expenses or otherwise (such
obligations, to the extent not paid by such Loan Party or specifically waived in
accordance with Section 9.01, being the "Guaranteed Obligations"), and agrees to
pay any and all expenses (including reasonable counsel fees and expenses)
incurred by the Agent or the Lenders in enforcing any rights under this Article
VII ("this Guaranty"). Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any Loan Party to the Agent or any
Lender under this Agreement or any Note but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Loan Party.
(b) (i) Each Guarantor and, by its acceptance of this Guaranty, the
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 Agent, each other Lender
and each Guarantor hereby irrevocably agrees that the obligations of each
Guarantor under this Guaranty shall not exceed the greater of (A) the benefit
realized by such Guarantor from the proceeds of the Advances made from time to
time by the Borrower to such Guarantor and (B) the maximum amount that will,
after giving effect to such maximum amount and all other probable contingent and
fixed liabilities of such Guarantor that are relevant under applicable law, and
after giving effect to any collections from, rights to receive contribution
from, or payments made by or on behalf of the other Guarantor in respect of the
obligations of such other Guarantor under this Guaranty, result in the
obligations of such Guarantor under this Guaranty not constituting a fraudulent
transfer or fraudulent conveyance. For purposes hereof, "Bankruptcy Law" means
Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar Federal, state or Commonwealth of
Puerto Rico law for the relief of debtors.
(ii) Each Guarantor agrees that in the event any payment shall
be required to be made to the Lenders under this Guaranty, such
Guarantor will contribute, to the maximum extent such that the
contribution will not result in a fraudulent transfer or fraudulent
conveyance, such amounts to the other Guarantor so as to maximize the
aggregate amount paid to the Lenders under this Agreement and the
Notes.
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SECTION 7.02. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement and the Notes, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or the Lenders with respect thereto. The obligations of each
Guarantor under this Guaranty are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against such
Guarantor to enforce this Guaranty, irrespective of whether any action is
brought against the Borrower or the other Guarantor or whether the Borrower or
the other Guarantor is joined in any such action or actions. The liability of
each Guarantor under this Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and, to the maximum extent permitted by law, each
Guarantor hereby irrevocably waives, any defenses it may now or hereafter have
in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of this Agreement
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 Agent or any Lender that might otherwise
constitute a defense available to, or a discharge of, any Guarantor,
the Borrower or any other guarantor or surety other than payment when
due.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or either Guarantor or otherwise,
all as though such payment had not been made.
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SECTION 7.03. Waiver. Each Guarantor hereby waives 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 Agent or
any Lender exhaust any right or take any action against the Borrower or any
other Person or any collateral. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated herein
and that the waiver set forth in this Section 7.03 is knowingly made in
contemplation of such benefits. Each Guarantor hereby waives any right to revoke
this Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
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 each Guarantor, its successors and assigns and (c) inure to the benefit of
and be enforceable by the Lenders, the Agent and their successors, transferees
and assigns. Without limiting the generality of the foregoing clause (c), any
Lender may assign or otherwise transfer all or any portion of its rights and
obligations hereunder (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided in Section 9.07.
SECTION 7.05. Subrogation. Neither Guarantor will exercise any rights
that it may now or hereafter acquire against the Borrower or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's obligations under this Guaranty, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the Agent
or any Lender against the Borrower, the other Guarantor or any other insider
guarantor or any collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrower, the other Guarantor
or any other insider guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security solely on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and the Termination Date shall have occurred. If any amount
shall be paid to either Guarantor in violation of the preceding sentence at any
time prior to the later of the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty and the
Termination Date, such amount shall be held in trust for the benefit of the
Agent and the Lenders and shall forthwith be paid to the 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
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Guaranteed Obligations or other amounts payable under this Guaranty thereafter
arising. If (i) either Guarantor shall make payment to the 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 Agent and
the Lenders will, at such Guarantor's request and expense, execute and deliver
to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.
Article VIII
THE AGENT
SECTION 8.01. Authorization and Action . Each Lender hereby appoints
and authorizes the 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
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders and such instructions shall be binding upon all Lenders and
all holders of Notes; provided, however, that the Agent shall not be required to
take any action that exposes the Agent to personal liability or that is contrary
to this Agreement or applicable law. The Agent agrees to give to each Lender
prompt notice of each notice given to it by the Borrower pursuant to the terms
of this Agreement.
SECTION 8.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat the
payee of any Note as the holder thereof until the Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
9.07; (ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written
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or oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of the Borrower
or to inspect the property (including the books and records) of the Borrower
except as specifically set forth in this Agreement; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; and (vi) shall incur no liability under or
in respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier, telegram or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. Citibank and Affiliates. With respect to its Commitment,
the Advances made by it and the Note or Notes issued to it, Citibank shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries and any Person who may do business with or own
securities of any Loan Party or any of its Subsidiaries, all as if Citibank were
not the Agent and without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the 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 credit decisions in taking or
not taking action under this Agreement.
SECTION 8.05. Indemnification. The Lenders agree to indemnify the Agent
(to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Revolving Credit Advances owed each of them
(or if no Revolving Credit Advances are at the time outstanding, ratably
according to their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Agent under this
Agreement, provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the
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Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including reasonable counsel
fees) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, to the extent that
the Agent is not reimbursed for such expenses by the Borrower.
SECTION 8.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and 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 Agent which, so long as no Default shall have occurred and be
continuing, shall be subject to the Borrower's approval, which approval shall
not be unreasonably withheld. If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of America or of any
State thereof or the Commonwealth of Puerto Rico and having a combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent, upon appointment of
such successor Agent, shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement
SECTION 8.07. Other Agents. Bank of America National Trust and Savings
Association has been designated as syndication agent, The Chase Manhattan Bank
and Xxxxxx Guaranty Trust Company of New York have been designated as
documentation agents, and certain other Lenders have been designated as managing
agents or co-agents and the use of such titles does not impose on Bank of
America National Trust and Savings Association, The Chase Manhattan Bank, Xxxxxx
Guaranty Trust Company of New York or such other Lender any rights, duties or
obligations greater than those of any other Lender.
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Article IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. (a) No amendment or waiver of any
provision of this Agreement or the Revolving Credit Notes, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (i) no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders, do any
of the following: (A) waive any of the conditions specified in Section 3.01, (B)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Revolving Credit Notes, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder, (C)
release either Guarantor from any of the obligations imposed upon it by this
Agreement or (D) amend this Section 9.01; and (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender that has or is owed obligations under this Agreement or the Notes that
are modified by such amendment, waiver or consent, (A) increase the Commitment
of such Lender or subject such Lender to any additional obligations, (B) reduce
the principal of, or interest on, the Revolving Credit Note held by such Lender
or any fees or other amounts payable hereunder to such Lender, (C) postpone any
date fixed for any payment of principal of, or interest on, the Revolving Credit
Note held by such Lender or any fees or other amounts payable hereunder to such
Lender or (D) waive the application of Section 2.15; and provided further that
no amendment, waiver or consent shall, unless in writing and signed by the Agent
in addition to the Lenders required above to take such action, affect the rights
or duties of the Agent under this Agreement or any Note.
(b) Each Lender grants (x) to the 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
Notes at a price equal to the aggregate amount of outstanding Advances owed to
such Lender (together with all accrued and unpaid interest, fees and other
amounts 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 Notes to Eligible Assignees, which right may
be exercised by the 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 Agent and the Borrower have agreed. Each Lender agrees that if
the Agent or the Borrower, as the case
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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 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxx Xxxx 00000 or X.X. Xxx
000000 Xxx Xxxx, Xxxxxx Xxxx 00000-0000, Attention: Xxxx X. Xxxxxxx (fax
no.(000) 000-0000), with a copy to __________ (fax no. __________); if to
Wireline, at 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxx Xxxx 00000 or
X.X. Xxx 000000 Xxx Xxxx, Xxxxxx Xxxx 00000-0000, Attention: Xxxxxxx Xxxxxxxx
(fax no. (000) 000-0000), with a copy to __________ (fax no. __________); if to
Wireless, at 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxx Xxxx 00000 or
X.X. Xxx 000000 Xxx Xxxx, Xxxxxx Xxxx 00000-0000, Attention: Xxxxx X.
Xxxxxxxx-Xxxxxxx (fax no. (000) 000-0000), with a copy to __________ (fax no.
__________); if to any Initial Lender, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address at Xxx Xxxxx Xxx, Xxx
Xxxxxx, Xxxxxxxx 00000, Attention: Loan Investor Services; or, as to any Loan
Party or the 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 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 Agent pursuant to Article II, III or VIII shall not be
effective until received by the Agent, and provided, further, that notices and
communications to any Person required to be provided hereunder within five
Business Days shall only be made by hand or via telecopy or courier. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender
or the 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 Agent and the
Arranger in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the Notes and the
other documents to be delivered hereunder,
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including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, audit and insurance expenses and (B) the reasonable fees
and expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under this Agreement.
Such expenses shall be paid by the Borrower upon presentation of an itemized
statement of account (after reasonable time for the Borrower to review such
statement of account), regardless of whether the transactions contemplated by
this Agreement are consummated. The Borrower further agrees to pay on demand all
costs and expenses of the 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
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 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., Agent or Arranger) under the Credit
Agreement or the Notes or to the extent that it involves the 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 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
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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 Eurodollar
Rate Advance or LIBO 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 Agent), pay to the Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment or Conversion, including, without limitation, any loss (excluding loss
of anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.11, 2.14 and 9.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 9.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 by the Required Lenders to
authorize the 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 Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the
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Borrower and the Agent and when the Agent shall have been notified by each
Initial Lender that such Initial Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Agent and each Lender
and their respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of all of the Lenders.
SECTION 9.07. Assignments and Participations. (a) Each Lender may, with
the consent of the Agent (except as provided in clause (g) below) and, so long
as no Default has occurred and is continuing, the Borrower (such consent, in the
case of the Agent or the Borrower, not to be unreasonably withheld) and, so long
as no Default has occurred and is continuing, 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 2.11 or Section 2.14 or following a notice given by
such Lender pursuant to Section 2.12 upon at least ten Business Days' notice to
such Lender and the 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 2.12 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
(other than any right to make Competitive Bid Advances, Competitive Bid Advances
owing to it and Competitive Bid 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 $10,000,000 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 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
and (vi) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any
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Revolving Credit Notes subject to such assignment and a processing and
recordation fee of $3,500 (which shall be paid by Persons other than the
Borrower unless such assignment is made as a result of a demand by the
Borrower). Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights other than rights of indemnification under Section 9.04 or
otherwise relating to a time prior to the effective date of such Assignment and
Acceptance and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and 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 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 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 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 Agent shall,
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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 Agent
in exchange for the surrendered Revolving Credit Note a new Note to the order of
such Eligible Assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder a new Revolving Credit Note to the order of the
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Revolving Credit Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Revolving
Credit Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A-1
hereto.
(d) The 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 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 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,
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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 Agent or the
Borrower, create a security interest in all or any portion of its rights under
this Agreement (including, without limitation, the Advances owing to it and the
Note or Notes held by it) in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board of Governors of the Federal Reserve System,
provided, however, that no such assignment shall have the effect of increasing
the costs payable by the Borrower.
(g) Any Lender may at any time, without the consent of, but with notice
to the Agent, assign all or part of its rights or obligations under this
Agreement to any Affiliate of such Lender, provided, however, that no such
assignment shall have the effect of increasing the costs payable by the
Borrower.
SECTION 9.08 Nondisclosure. None of the Agent, any Lender or any
Affiliate thereof shall disclose without the prior consent of the Borrower
(other than to the Agent, 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 in financial statements, projections
or reports provided to the Agent, any Lender or any Affiliate thereof by, or on
behalf of, the Loan Parties or any Subsidiary, provided that the 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 or federal regulatory body having or claiming to have jurisdiction over
the 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 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 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 State of New
York.
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SECTION 9.10 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 9.11 Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each of the Loan Parties hereby agrees that service of
process in any such action or proceeding brought in any such New York State
court or in such federal court may be made upon CT Corporation System at its
offices at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Process Agent") and
each Loan Party hereby irrevocably appoints the Process Agent its authorized
agent to accept such service of process, and agrees that the failure of the
Process Agent to give any notice of any such service shall not impair or affect
the validity of such service or of any judgment rendered in any action or
proceeding based thereon. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Agreement
or the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes in any New
York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
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SECTION 9.12 Waiver of Jury Trial. Each of the Borrower, the Guarantor,
the 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 Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
TELECOMUNICACIONES DE PUERTO RICO, INC., as Borrower
By ______________________________________________
Title:
PUERTO RICO TELEPHONE COMPANY, INC., as Guarantor
By ______________________________________________
Title:
CELULARES TELEFONICA, INC., as Guarantor
By ______________________________________________
Title:
CITIBANK, N.A.
as Administrative Agent
By ______________________________________________
Title:
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The Lenders
Commitment Arrangers
---------- ---------
$33,666,667 CITIBANK, N.A.
By ___________________________________________________
Title:
$33,666,667 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By ___________________________________________________
Title:
$33,666,667 THE CHASE MANHATTAN BANK
By___________________________________________________
Title:
$33,666,667 XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By___________________________________________________
Title:
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Managing Agents
$23,333,333 ABN AMRO BANK N.V.
By ___________________________________________________
Title:
By ___________________________________________________
Title:
$23,333,333 BANCO BILBAO VIZCAYA, S.A.
By___________________________________________________
Title:
By ___________________________________________________
Title:
$23,333,333 THE BANK OF NEW YORK
By ___________________________________________________
Title:
By ___________________________________________________
Title:
$23,333,333 BANQUE NATIONALE DE PARIS
By ___________________________________________________
Title:
By ___________________________________________________
Title:
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$23,333,333 DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES
By ___________________________________________________
Title:
By ___________________________________________________
Title:
$23,333,333 FLEET NATIONAL BANK
By ___________________________________________________
Title:
$23,333,333 THE INDUSTRIAL BANK OF JAPAN, LIMITED
By ___________________________________________________
Title:
$23,333,333 ROYAL BANK OF CANADA
By ___________________________________________________
Title:
$23,333,333 WACHOVIA BANK, N.A.
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$23,333,333 WESTDEUTSCHE LANDESBANK GIROZENTRALE
By ___________________________________________________
Title:
By ___________________________________________________
Title:
Co-Agents
$15,000,000 BANKBOSTON N.A.
By ___________________________________________________
Title:
$15,000,000 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS
BRANCH
By ___________________________________________________
Title:
By ___________________________________________________
Title:
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$15,000,000 DEUTSCHE BANK AG NEW YORK AND/OR CAYMAN ISLANDS BRANCHES
By ___________________________________________________
Title:
By ___________________________________________________
Title:
$15,000,000 KBC BANK N.V.
By____________________________________________________
Title:
By ___________________________________________________
Title:
Lenders
$9,000,000 ARGENTARIA, CAJA POSTAL Y BANCO HIPOTECARIO S.A., NEW
YORK BRANCH
By ___________________________________________________
Title:
By ___________________________________________________
Title:
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$9,000,000 BANCA POPOLARE DI MILANO-NEW YORK BRANCH
By ___________________________________________________
Title:
By ___________________________________________________
Title:
$9,000,000 BANCO CENTRAL HISPANOAMERICANO S.A.
By ___________________________________________________
Title:
By ___________________________________________________
Title:
$9,000,000 CITIBANK, N.A.
By ___________________________________________________
Title:
By ___________________________________________________
Title:
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$9,000,000 BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH
By ___________________________________________________
Title:
By ___________________________________________________
Title:
$9,000,000 BW CAPITAL MARKETS, INC.
By ___________________________________________________
Title:
By ___________________________________________________
Title:
$9,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By ___________________________________________________
Title:
$9,000,000 PNC BANK, NATIONAL ASSOCIATION
By ___________________________________________________
Title:
$500,000,000 Total of Commitments
72
EXHIBIT A-1 - FORM OF
REVOLVING CREDIT
PROMISSORY NOTE
$___________ Dated: _________, 199_
FOR VALUE RECEIVED, the undersigned, TELECOMUNICACIONES DE PUERTO RICO,
INC., a Puerto Rico corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of _________________________ (the "Lender") for the account of its
Applicable Lending Office on the Termination Date (each as defined in the Credit
Agreement referred to below) the principal sum of U.S. $ [amount of Lender's
Commitment in figures] or, if less, the aggregate amount of the Revolving Credit
Advances made by the Lender to the Borrower pursuant to the Five-Year Credit
Agreement dated as of March 2, 1999 among the Borrower, Puerto Rico Telephone
Company, Inc. and Celulares Telefonica, Inc., as Guarantors, the Lender and
certain other lenders parties thereto, Citibank, N.A. ("Citibank"), as
administrative agent (in such capacity, the "Agent") for the Lender and such
other lenders, 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 (as amended or modified from time
to time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined), outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Credit Advance from the date of such Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, as Agent, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, in same day funds. Each Revolving Credit Advance owing to the Lender by
the Borrower pursuant to the Credit Agreement, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Promissory
Note.
This Promissory Note is one of the Revolving Credit Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of Revolving Credit
Advances by the Lender to the Borrower from time to time in an aggregate amount
not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Revolving
Credit Advance being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events
73
2
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
TELECOMUNICACIONES DE
PUERTO RICO, INC.
By ____________________________________________
Title:
74
A-1-2
ADVANCES AND PAYMENTS OF PRINCIPAL
AMOUNT OF PRINCIPAL UNPAID
AMOUNT OF PAID PRINCIPAL NOTATION
DATE ADVANCE OR PREPAID BALANCE MADE BY
75
EXHIBIT A-2 - FORM OF
COMPETITIVE BID
PROMISSORY NOTE
U.S.$___________ Dated: _________, 199_
FOR VALUE RECEIVED, the undersigned, TELECOMUNICACIONES DE PUERTO RICO,
INC., a Puerto Rico corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of _________________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the Five-Year Credit Agreement dated as
of March 2, 1999 among the Borrower, Puerto Rico Telephone Company, Inc. and
Celulares Telefonica, Inc., as Guarantors, the Lender and certain other lenders
parties thereto, Citibank, N.A. ("Citibank"), as Agent for the Lender and such
other lenders, Bank of America National Trust and Savings Association, as
syndication agent, and The Chase Manhattan Bank and Xxxxxx Guaranty Trust
Company of New York, as documentation agents (as amended or modified from time
to time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined)), on _______________, ____, the principal amount of
U.S.$_______________.
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:
Interest Rate: _____% per annum (calculated on the basis of a year of
_____ days for the actual number of days elapsed).
Interest Payment Date(s):_____________________.
Both principal and interest are payable in lawful money of the United
States of America to Citibank for the account of the Lender at the office of
Citibank, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No.
________________ Attention: ________________________, in same day funds.
This Promissory Note is one of the Competitive Bid Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.
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A-2-2
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
TELECOMUNICACIONES DE PUERTO RICO, INC.
By ______________________________________________
Title:
77
EXHIBIT B-1 - FORM OF NOTICE OF
REVOLVING CREDIT BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
[Date]
Attention: _______________
Ladies and Gentlemen:
The undersigned, Telecomunicaciones de Puerto Rico, Inc.,
refers to the Five-Year Credit Agreement, dated as of March 2, 1999 (as amended
or modified from time to time, the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, Puerto Rico
Telephone Company, Inc. and Celulares Telefonica, Inc., as Guarantors, certain
Lenders parties thereto, Citibank, N.A. ("Citibank"), as Agent for the Lenders,
Bank of America National Trust and Savings Association, as syndication agent,
and The Chase Manhattan Bank and Xxxxxx Guaranty Trust Company of New York, as
documentation agents, and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement that the undersigned hereby requests a
Revolving Credit Borrowing under the Credit Agreement, and in that connection
sets forth below the information relating to such Revolving Credit Borrowing
(the "Proposed Revolving Credit Borrowing") as required by Section 2.02(a) of
the Credit Agreement:
(i) The Business Day of the Proposed Revolving Credit
Borrowing is _______________, 199_.
(ii) The Type of Advances comprising the Proposed Revolving
Credit Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Revolving Credit
Borrowing is $_______________.
[(iv) The initial Interest Period for each Eurodollar Rate
Advance made as part of the Proposed Revolving Credit Borrowing is
_____ month[s].]
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Revolving Credit Borrowing:
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B-1-2
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Revolving Credit Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date; and
(B) no event has occurred and is continuing, or would result
from such Proposed Revolving Credit Borrowing or from the application
of the proceeds therefrom, that constitutes a Default.
Very truly yours,
TELECOMUNICACIONES DE PUERTO RICO, INC.
By ______________________________________________
Title:
79
EXHIBIT B-2 - FORM OF NOTICE OF
COMPETITIVE BID BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
[Date]
Attention: _______________
Ladies and Gentlemen:
The undersigned, Telecomunicaciones de Puerto Rico, Inc.,
refers to the Five-Year Credit Agreement, dated as of March 2, 1999 (as amended
or modified from time to time, the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, Puerto Rico
Telephone Company, Inc. and Celulares Telefonica, Inc., as Guarantors, certain
Lenders parties thereto, Citibank, N.A. ("Citibank"), as Agent for the Lenders,
Bank of America National Trust and Savings Association, as syndication agent,
and The Chase Manhattan Bank and Xxxxxx Guaranty Trust Company of New York, as
documentation agents, and hereby gives you notice, irrevocably, pursuant to
Section 2.03 of the Credit Agreement that the undersigned hereby requests a
Competitive Bid Borrowing under the Credit Agreement, and in that connection
sets forth the terms on which such Competitive Bid Borrowing (the "Proposed
Competitive Bid Borrowing") is requested to be made:
(A) Date of Competitive Bid Borrowing ________________________
(B) Amount of Competitive Bid Borrowing ________________________
(C) [Maturity Date] [Interest Period] ________________________
(D) Interest Rate Basis ________________________
(E) Interest Payment Date(s) ________________________
(F) ___________________ ________________________
(G) ___________________ ________________________
(H) ___________________ ________________________
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Competitive Bid Borrowing:
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B-2-2
(a) the representations and warranties contained in Section 4.01 are
correct, before and after giving effect to the Proposed Competitive Bid
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date;
(b) no event has occurred and is continuing, or would result from the
Proposed Competitive Bid Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;
(c) no event has occurred and no circumstance exists as a result of
which the information concerning the undersigned that has been provided to the
Agent and each Lender by the undersigned in connection with the Credit Agreement
would include an untrue statement of a material fact or omit to state any
material fact or any fact necessary to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading; and
(d) the aggregate amount of the Proposed Competitive Bid Borrowing and
all other Borrowings to be made on the same day under the Credit Agreement is
within the aggregate amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed Competitive Bid
Borrowing is to be made available to it in accordance with Section 2.03(a)(v) of
the Credit Agreement.
Very truly yours,
TELECOMUNICACIONES DE PUERTO RICO, INC.
By ________________________________________
Title:
81
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Five-Year Credit Agreement dated as of March
2, 1999 (as amended or modified from time to time, the "Credit Agreement") among
Telecomunicaciones de Puerto Rico, Inc., a Puerto Rico corporation, as Borrower,
Puerto Rico Telephone Company, Inc. and Celulares Telefonica, Inc., as
Guarantors, the Lenders (as defined in the Credit Agreement), Citibank, N.A. as
agent for the Lenders (the "Agent"), 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. Terms defined in
the Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Competitive Bid Advances and Competitive Bid
Notes) equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement (other than in
respect of Competitive Bid Advances and Competitive Bid Notes). After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the Revolving Credit Advances owing to the Assignee will be as set forth on
Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Credit Notes held by the Assignor and requests
that the Agent exchange such Revolving Credit Note or Notes for new Revolving
Credit Note or Notes payable to the order of the Assignee in an amount equal to
the Commitment assumed by the Assignee pursuant hereto or new Revolving Credit
Notes payable to the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto and the Assignor in an amount equal to
the Commitment retained by the Assignor under the Credit Agreement,
respectively, as specified on Schedule 1 hereto.
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3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service forms required under Section 2.14 of the Credit
Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights, other than
rights of indemnification under Section 9.04 of the Credit Agreement or
otherwise relating to a time prior to the Effective Date hereof, and be released
from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Credit Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and facility
fees with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and the
Revolving Credit Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so
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C-3
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
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C-4
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Commitment: $__________
Aggregate outstanding principal amount of
Revolving Credit Advances assigned: $__________
Principal amount of Revolving Credit Note payable to Assignee: $__________
Principal amount of Revolving Credit Note payable to Assignor: $__________
Effective Date(1): _______________, ____
[NAME OF ASSIGNOR], as Assignor
By ________________________________
Title:
Dated: _______________, ____
[NAME OF ASSIGNEE], as Assignee
By ________________________________
Title:
Dated: _______________, ____
(1) This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Agent
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C-5
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted this
____ day of __________, ____
Citibank, N.A., as Agent
By ___________________________________
Title:
Approved this ___ day
of __________, ____
TELECOMUNICACIONES DE PUERTO RICO, INC.
By ___________________________________
Title:
86
EXHIBIT F - FORM OF
OPINION OF COUNSEL
FOR THE LOAN PARTIES
__________ __, 1999
To each of the Lenders parties to the
Five-Year Credit Agreement dated as
of March 2, 1999 among
Telecomunicaciones de Puerto Rico,
Inc., Puerto Rico Telephone
Company, Inc., Celulares
Telefonica, Inc., said Lenders and
Citibank, N.A., as Agent for said
Lenders, and to Citibank, N.A., as
Agent
Telecomunicaciones de Puerto Rico, Inc.,
Puerto Rico Telephone Company, Inc.
and Celulares Telefonica, Inc.
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(g)(iv) of the
Five-Year Credit Agreement, dated as of March 2, 1999 (the "Credit Agreement"),
among Telecomunicaciones de Puerto Rico, Inc. (the "Borrower"), Puerto Rico
Telephone Company, Inc. ("Wireless"), Celulares Telefonica, Inc. ("Wireline"),
the Lenders parties thereto, Citibank, N.A., as Agent for said Lenders, 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. Terms defined in the Credit Agreement are used herein as
therein defined.
I am Counsel for the Borrower and I have acted as counsel for the
Borrower, Wireline and Wireless in connection with the preparation, execution
and delivery of the Credit Agreement.
In that connection, I, or attorneys under my direction, have examined:
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F-2
(1) The Credit Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of the
Credit Agreement.
(3) The Articles of Incorporation or equivalent organizational document of
each of the Loan Parties and all amendments thereto (the "Charters").
(4) The by-laws of each of the Loan Parties and all amendments thereto (the
"By-laws").
(5) A certificate of the [Secretary of State] of Puerto Rico dated _______
__, 1999, attesting to the continued corporate existence and good
standing of the Borrower in that [State].
(6) A certificate of the [Secretary of State] of Puerto Rico, dated _______
__, 1999, attesting to the continued corporate existence and good
standing of Wireline in that [State].
(7) A certificate of the [Secretary of State] of Puerto Rico, dated
________, 1999, attesting to the continued corporate existence and good
standing of Wireless in that [State].
In addition, I, or attorneys under my direction, have examined the originals, or
copies certified to my satisfaction, of such other corporate records of each of
the Loan Parties, certificates of public officials and of officers of each of
the Loan Parties, and agreements, instruments and other documents, as I have
deemed necessary as a basis for the opinions expressed below. As to questions of
fact material to such opinions, I have, when relevant facts were not
independently established by me, relied upon certificates of the Loan Parties or
their respective officers or of public officials. I have assumed the due
execution and delivery, pursuant to due authorization, of the Credit Agreement
by the Initial Lenders and the Agent.
My opinions expressed below are limited to the law of the
State of New York, the law of the [state] of Puerto Rico and the Federal law of
the United States.
Based upon the foregoing and upon such investigation as I have
deemed necessary, I am of the following opinion:
1. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the [State] of Puerto
Rico.
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F-3
2. Wireline is a corporation duly organized, validly existing and in good
standing under the laws of the [State] of Puerto Rico.
3. Wireless is a corporation duly organized, validly existing and in good
standing under the laws of the [State] of Puerto Rico.
4. The execution, delivery and performance by the Loan Parties of the
Credit Agreement and the Notes, and the consummation of the
transactions contemplated thereby, are within the Loan Parties'
corporate powers, have been duly authorized by all necessary corporate
action, and do not contravene (i) the Charter or the By-laws of any of
the Loan Parties, (ii) any law, rule or regulation applicable to any of
the Loan Parties, or (iii) to the best of my knowledge, after due
inquiry, any material contractual or material legal restriction
contained in any document to which any of the Loan Parties is a party
or relating to or affecting any of their properties. The Credit
Agreement and the Notes have been duly executed and delivered on behalf
of each of the Loan Parties party thereto.
5. No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or, to the
best of my knowledge, after due inquiry, any other third party is
required for the due execution, delivery and performance by the Loan
Parties of the Credit Agreement and the Notes.
6. Assuming the due execution and delivery of the Credit Agreement by the
Agent and the Lenders, the Credit Agreement is, and after giving effect
to the initial Borrowing, the Notes will be, legal, valid and binding
obligations of each of the Loan Parties enforceable against each of the
Loan Parties in accordance with their respective terms.
7. To the best of my knowledge, there are no pending or overtly threatened
actions or proceedings against any of the Loan Parties or any of their
respective Subsidiaries before any court, governmental agency or
arbitrator that purport to affect the legality, validity, binding
effect or enforceability of the Credit Agreement or any of the Notes or
the consummation of the transactions contemplated thereby or that are
likely to have a Materially Adverse Effect.
The opinions set forth above are subject to the following
qualifications:
(a) My opinion in paragraph 6 above as to enforceability is
subject to the effect of any applicable bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar law affecting
creditors' rights generally.
89
(b) My opinion in paragraph 6 above as to enforceability is
subject to the effect of general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing (regardless of whether considered in a proceeding in
equity or at law).
(c) I express no opinion as to (i) Section 2.15 of the Credit
Agreement insofar as it provides that any Lender purchasing a
participation from another Lender pursuant thereto may exercise set-off
or similar rights with respect to such participation, (ii) the
enforceability of the indemnification provisions set forth in Section
9.04 of the Credit Agreement to the extent enforcement thereof is
contrary to public policy regarding the exculpation of criminal
violations, intentional harm and acts of gross negligence or
recklessness, and (iii) the effect of the law of any jurisdiction other
than the State of New York wherein any Lender may be located or wherein
enforcement of the Credit Agreement or the Notes may be sought that
limits the rates of interest legally chargeable or collectible.
A copy of this opinion letter may be delivered by any of you to any
Person that becomes a Lender in accordance with the provisions of the Credit
Agreement. Any such Lender may rely on the opinions expressed above as if this
opinion letter were addressed and delivered to such Lender on the date hereof.
This opinion letter speaks only as of the date hereof. I expressly
disclaim any responsibility to advise you or any other Lender who is permitted
to rely on the opinions expressed herein as specified in the next preceding
paragraph of any development or circumstance of any kind including any change of
law or fact that may occur after the date of this opinion letter even though
such development, circumstance or change may affect the legal analysis, a legal
conclusion or any other matter set forth in or relating to this opinion letter.
Accordingly, any Lender relying on this opinion letter at any time should seek
advice of its counsel as to the proper application of this opinion letter at
such time.
Very truly yours,
90
EXECUTION COPY
U.S. $500,000,000
FIVE-YEAR CREDIT AGREEMENT
Dated as of March 2, 1999
Among
TELECOMUNICACIONES DE PUERTO RICO, INC.
as Borrower,
PUERTO RICO TELEPHONE COMPANY, INC.
and
CELULARES TELEFONICA, INC.
as Guarantors,
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders,
CITIBANK, N.A.
as Administrative Agent,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Syndication Agent,
THE CHASE MANHATTAN BANK
and
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
as Documentation Agents
and
XXXXXXX XXXXX BARNEY INC.
as Lead Arranger and Book Manager
91
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Page
SECTION 1.01 Certain Defined Terms .................................... 1
SECTION 1.02 Computation of Time Periods............................... 17
SECTION 1.03 Accounting Terms.......................................... 17
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 The Revolving Credit Advances............................. 17
SECTION 2.02 Making the Revolving Credit Advances...................... 17
SECTION 2.03 The Competitive Bid Advances.............................. 19
SECTION 2.04 Fees...................................................... 23
SECTION 2.05 Optional Termination or Reduction of the Commitments...... 23
SECTION 2.06 Repayment of Revolving Credit Advances.................... 24
SECTION 2.07 Interest.................................................. 24
SECTION 2.08 Interest Rate Determination............................... 25
SECTION 2.09 Optional Conversion of Revolving Credit Advances.......... 26
SECTION 2.10 Optional Prepayments of Revolving Credit Advances......... 26
SECTION 2.11 Increased Costs........................................... 27
SECTION 2.12 Illegality................................................ 28
SECTION 2.13 Payments and Computations................................. 28
SECTION 2.14 Taxes..................................................... 29
SECTION 2.15 Sharing of Payments, Etc.................................. 32
SECTION 2.16 Use of Proceeds........................................... 33
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01 Conditions Precedent to Effectiveness of Sections
2.01 and 2.03......................................................... 33
SECTION 3.02 Conditions Precedent to Each Revolving Credit Borrowing... 36
SECTION 3.03 Conditions Precedent to Each Competitive Bid Borrowing.... 36
SECTION 3.04 Determinations Under Section 3.01......................... 37
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ii
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrower............ 37
ARTICLE V
COVENANTS OF THE LOAN PARTIES
SECTION 5.01 Affirmative Covenants..................................... 39
SECTION 5.02 Negative Covenants........................................ 42
SECTION 5.03 Financial Covenants....................................... 45
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default......................................... 45
ARTICLE VII
GUARANTY
SECTION 7.01 Guaranty; Limitation of Liability......................... 49
SECTION 7.02 Guaranty Absolute......................................... 50
SECTION 7.03 Waiver.................................................... 51
SECTION 7.04 Continuing Guaranty; Assignments.......................... 51
SECTION 7.05 Subrogation............................................... 51
ARTICLE VIII
THE AGENT
SECTION 8.01 Authorization and Action ................................. 52
SECTION 8.02 Agent's Reliance, Etc..................................... 52
SECTION 8.03 Citibank and Affiliates................................... 53
SECTION 8.04 Lender Credit Decision.................................... 53
SECTION 8.05 Indemnification........................................... 53
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iii
SECTION 8.06 Successor Agent........................................... 54
SECTION 8.07 Other Agents.............................................. 54
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc........................................... 55
SECTION 9.02 Notices, Etc.............................................. 56
SECTION 9.03 No Waiver; Remedies....................................... 56
SECTION 9.04 Costs and Expenses........................................ 56
SECTION 9.05 Right of Set-off.......................................... 58
SECTION 9.06 Binding Effect............................................ 58
SECTION 9.07 Assignments and Participations............................ 59
SECTION 9.08 Nondisclosure............................................. 62
SECTION 9.09 Governing Law............................................. 62
SECTION 9.10 Execution in Counterparts................................. 63
SECTION 9.11 Jurisdiction, Etc......................................... 63
SECTION 9.12 Waiver of Jury Trial...................................... 64
Schedules
Schedule I - List of Applicable Lending Offices
Schedule 3.01(b) - Material Adverse Changes
Schedule 3.01(c) - Disclosed Litigation
Schedule 5.02(a) - Existing Liens
Schedule 5.02(d) - Existing Subsidiary Debt
Exhibits
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Revolving Credit Borrowing
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Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Solvency Certificate
Exhibit E - Form of Opinion of New York Counsel for the Loan Parties
Exhibit F - Form of Opinion of Puerto Rico Counsel for the Loan
Parties
