EXHIBIT 10.29
U.S. $50,000,000
TERM CREDIT AGREEMENT
Dated as of June 24, 2002
Among
TELECOMUNICACIONES DE PUERTO RICO, INC.
as Borrower,
PUERTO RICO TELEPHONE COMPANY, INC.
as Guarantor,
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
as Lender,
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
as Administrative Agent,
and
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
as Arranger
163
TABLE OF CONTENTS
PAGE #
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS............................. 166
SECTION 1.01 CERTAIN DEFINED TERMS................................... 166
SECTION 1.02 COMPUTATION OF TIME PERIODS............................. 178
SECTION 1.03 ACCOUNTING TERMS........................................ 178
ARTICLE II. AMOUNTS AND TERMS OF THE ADVANCES........................... 179
SECTION 2.01 THE TERM CREDIT ADVANCES................................ 179
SECTION 2.02 MAKING THE TERM CREDIT ADVANCES......................... 179
SECTION 2.03 ARRANGEMENT FEE........................................ 180
SECTION 2.04 REDUCTION OF THE COMMITMENTS............................ 180
SECTION 2.05 REPAYMENT OF TERM CREDIT ADVANCES....................... 180
SECTION 2.06 INTEREST................................................ 180
SECTION 2.07 INTEREST RATE DETERMINATION............................. 181
SECTION 2.08 OPTIONAL CONVERSION OF TERM CREDIT ADVANCES............. 182
SECTION 2.09 PREPAYMENTS OF ADVANCES................................. 182
SECTION 2.10 INCREASED COSTS......................................... 182
SECTION 2.11 ILLEGALITY.............................................. 184
SECTION 2.12 PAYMENTS AND COMPUTATIONS............................... 184
SECTION 2.13 TAXES................................................... 185
SECTION 2.14 USE OF PROCEEDS......................................... 187
SECTION 2.15 SHARING OF PAYMENTS, ETC................................ 187
ARTICLE III. CONDITIONS TO EFFECTIVENESS AND LENDING.................... 187
SECTION 3.01 CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01... 187
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.............................. 189
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE BORROWER.......... 189
ARTICLE V. COVENANTS OF THE LOAN PARTIES................................ 191
SECTION 5.01 AFFIRMATIVE COVENANTS................................... 191
SECTION 5.02 NEGATIVE COVENANTS...................................... 195
164
SECTION 5.03 FINANCIAL COVENANTS..................................... 198
ARTICLE VI. EVENTS OF DEFAULT........................................... 198
SECTION 6.01 EVENTS OF DEFAULT....................................... 198
ARTICLE VII. GUARANTY................................................... 201
SECTION 7.01 GUARANTY; LIMITATION OF LIABILITY....................... 201
SECTION 7.02 GUARANTY ABSOLUTE....................................... 202
SECTION 7.03 WAIVER.................................................. 203
SECTION 7.04 CONTINUING GUARANTY; ASSIGNMENTS........................ 204
SECTION 7.05 SUBROGATION............................................. 204
ARTICLE VIII. THE ADMINISTRATIVE AGENT.................................. 205
SECTION 8.01 AUTHORIZATION AND ACTION................................ 205
SECTION 8.02 ADMINISTRATIVE AGENT'S RELIANCE, ETC.................... 205
SECTION 8.03 ANZ AND AFFILIATES...................................... 205
SECTION 8.04 LENDER CREDIT DECISION.................................. 206
SECTION 8.05 INDEMNIFICATION......................................... 206
SECTION 8.06 SUCCESSOR ADMINISTRATIVE AGENT.......................... 206
ARTICLE IX. MISCELLANEOUS............................................... 207
SECTION 9.01 AMENDMENTS, ETC......................................... 207
SECTION 9.02 NOTICES, ETC............................................ 207
SECTION 9.03 NO WAIVER; REMEDIES..................................... 209
SECTION 9.04 COSTS AND EXPENSES...................................... 209
SECTION 9.05 RIGHT OF SET-OFF........................................ 210
SECTION 9.06 BINDING EFFECT.......................................... 210
SECTION 9.07 ASSIGNMENTS AND PARTICIPATIONS.......................... 211
SECTION 9.08 NON-DISCLOSURE.......................................... 213
SECTION 9.09 GOVERNING LAW........................................... 213
SECTION 9.10 JURISDICTION, ETC....................................... 213
SECTION 9.11 WAIVER OF JURY TRIAL.................................... 214
SECTION 9.12 EXECUTION IN COUNTERPARTS............................... 214
165
TERM CREDIT AGREEMENT
DATED AS OF JUNE 24, 2002
TELECOMUNICACIONES DE PUERTO RICO, INC., a Puerto Rico corporation
(the "Borrower"), PUERTO RICO TELEPHONE COMPANY, INC., a Puerto Rico corporation
("PRTC" or the "Guarantor"), AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
("ANZ", and together with its affiliates, the "Lender"), ANZ, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent"), and ANZ as
sole arranger (in such capacity, the "Arranger") agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms. As used in this Agreement (as defined
below), 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):
"Administrative Agent's Account" means the account of the Administrative
Agent maintained by the Administrative Agent at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, New York,
ABA No. ▇▇▇-▇▇▇-▇▇▇, Account No. 400-928884.
"Advance" means the Term Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Agreement" means this Term Credit Agreement dated as of June [ ], 2002 by
and among the Borrower, the Guarantor, the Lenders, ANZ, as administrative agent
for the Lenders and ANZ as sole arranger, as may be amended from time to time.
"ANZ Prime Lending Rate" means the rate established by ANZ from time to
time as its prime lending rate for unsecured commercial loans within the United
States (but is not intended to be the lowest rate of interest charged by ANZ in
connection with extensions of credit to debtors).
"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:
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-------------------------
PERFORMANCE APPLICABLE
LEVEL MARGIN
-------------------------
Level I 0.85%
-------------------------
Level II 1.00%
-------------------------
Level III 1.20%
-------------------------
Level IV 1.40%
-------------------------
Level V 2.00%
-------------------------
"Assignment and Acceptance" has the meaning assigned to that term in
Section 9.07.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall be, for any day, the higher of: (i) the
sum of (x) the Federal Funds Rate and (y) 0.50% and (ii) the ANZ Prime Lending
Rate.
"Base Rate Advance" means a Term Credit Advance that bears interest based
upon the Base Rate as provided in Section 2.06(a)(i).
"BBVA Credit Agreement" means that certain Term Credit Agreement dated as
of May 16, 2002, among the Borrower, the Guarantor, Banco Bilbao Vizcaya
Argentaria Puerto Rico, as administrative agent, and the lenders party thereto.
"BBVA Indebtedness" means those certain revolving credit facilities in a
maximum aggregate principal amount of up to $50,000,000 extended to the Borrower
pursuant to the BBVA Credit Agreement for working capital and other general
corporate purposes of the Borrower.
"Bonds" means the following series of senior notes issued by the Borrower:
(i) $400,000,000 of 6.65% Senior Notes due 2006 and (ii) $300,000,000 of 6.80%
Senior Notes due 2009.
"Borrower" has the meaning specified in the recital of parties.
"Borrower's Account" means the account of the Borrower maintained by the
Borrower at Banco Popular de Puerto Rico with its office at Popular Center, Hato
Rey, Puerto Rico, ABA No. ▇▇▇-▇▇▇-▇▇▇, Account No. ▇▇▇-▇▇▇▇▇-▇.
"Borrowing" means the Term Credit Borrowing.
167
"BPOP Credit Agreement" means that certain Revolving Credit Agreement
dated as of May 16, 2002, among the Borrower, the Guarantor, Banco Popular de
Puerto Rico, as administrative agent, and the lenders party thereto.
"BPOP Indebtedness" means those certain revolving credit facilities in a
maximum aggregate principal amount of up to $90,000,000 extended to the Borrower
pursuant to the BPOP Credit Agreement for working capital and other general
corporate purposes of the Borrower.
"Business Day" means a day of the year on which banks are not required or
authorized by law or executive order to close in New York City or San ▇▇▇▇,
Puerto Rico, provided that, if the applicable Business Day relates to any LIBOR
Rate Advances, "Business Day" means a day of the year on which banks are not
required or authorized by law or executive order to close in New York City or
San ▇▇▇▇, Puerto Rico and on which dealings are carried on in the London
interbank market.
"Citibank Credit Agreement" means that certain Five-Year Credit Agreement
dated as of March 2, 1999 among the Borrower, Citibank, N.A., as administrative
agent, the lenders party thereto, Bank of America National Trust and Savings
Association, as syndication agent, and The Chase Manhattan Bank and ▇▇▇▇▇▇
Guaranty Trust Company of New York, as documentation agents.
"Citibank Indebtedness" means those certain revolving credit facilities in
a maximum aggregate principal amount of up to $500,000,000 extended to the
Borrower pursuant to the Citibank Revolving Credit Agreement.
"Commercial Paper Program" means the commercial paper program of the
Borrower established pursuant to the Issuing and Paying Agent Agreement with the
Chase Manhattan Bank, whereby the Borrower may issue at any one time up to
$500,000,000 principal amount of short term notes having maturities of up to one
year
"Commercial Paper Program Guaranty" means that certain Joint and Several
Guaranty by Puerto Rico Telephone Company, Inc. and Celulares Telefonica, Inc.
in favor of the Holders of Notes Issued by Telecomunicaciones de Puerto Rico,
Inc. Under a Certain Commercial Paper Program dated November 9, 2000, whereby
the Guarantor guarantees the payment of principal and interest due by the
Borrower under the notes issued pursuant to the Commercial Paper Program.
"Commitment" has the meaning specified in Section 2.01.
"Consolidated" refers to the consolidation of accounts in accordance with
GAAP.
"Consolidated Assets" means the total assets of the Borrower and its
Subsidiaries as shown on the audited Consolidated balance sheet or unaudited
Consolidated balance sheet, as the case may be, as of the end of the most recent
fiscal quarter.
168
"Controlling Interest" means (a) ownership of at least 35% plus one share
of the Voting Stock of the Borrower and (b) the ability to appoint a majority of
the Board of Directors of the Borrower.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Term Credit Advances of one Type into Term Credit Advances of the other Type
pursuant to Section 2.07 or 2.08.
"Debt" of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person for the
deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of such Person's business for which collection
proceedings have not been commenced, provided that trade payables for which
collection proceedings have commenced shall not be included in the term "Debt"
so long as the payment of such trade payables is being contested in good faith
and by proper proceedings and for which appropriate reserves are being
maintained), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all obligations of such Person
created or arising under any conditional sale or other similar title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
obligations of such Person as lessee under leases that have been, in accordance
with GAAP, recorded as capital leases, (f) all obligations, contingent or
otherwise, 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) or (j) 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, (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 and (j) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any capital stock of or other ownership or profit
interest in such Person or any other Person or any warrants, rights or options
to acquire such capital stock, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends and
interest.
"Debt to EBITDA Ratio" of any Person at any date means the ratio of (a)
Debt of the types that, in accordance with GAAP, would be classified as
indebtedness on a Consolidated balance sheet of such Person on such date to (b)
EBITDA for the period of four fiscal quarters of such Person ended on or
immediately prior to such date, provided that for purposes of clause (a) of this
definition, Debt shall not include (1) the obligations specified in clause (g)
of the definition thereof set forth above or (2) with respect to the Borrower,
any obligations which may
169
be assumed by the Borrower for guaranties of any indebtedness of the Borrower's
employee stock ownership plan up to an aggregate principal amount of
$26,100,000.
"Default" means any Event of Default or any event that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"Disclosed Litigation" has the meaning specified in Section 3.01(b).
"EBITDA" of the Borrower and for the relevant period, 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 in an
aggregate amount not to exceed $40,000,000 in calendar year 2002.
"EBITDA to Interest Ratio" of any Person on any date means the ratio of
(a) EBITDA for the period of four fiscal quarters of such Person ended on or
immediately prior to such date to (b) interest payable on, and amortization of
debt discount in respect of, all Debt of such Person for the period of four
fiscal quarters of such Person ended on or immediately prior to such date,
provided that for purposes of clause (b) of this definition, Debt shall not
include the obligations specified in clause (g) of the definition thereof set
forth above.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (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
170
damages and (b) by any governmental or regulatory authority or any third party
for damages, contribution, indemnification, cost recovery, compensation or
injunctive relief.
"Environmental Law" means any federal, state, local (including the
Commonwealth of Puerto Rico) 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 and including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Hazardous Materials Transportation
Act, the Clean Water Act, the Toxic Substances Control Act, the Clean Air Act,
the Safe Drinking Water Act, the Atomic Energy Act, the Federal Insecticide,
Fungicide and Rodenticide Act and the Occupational Safety and Health Act, each
as amended from time to time..
"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; (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; or engagement in a non-exempt prohibited transaction within
the meaning of Section 4975 of the Internal Revenue Code or Section 406 of
ERISA.
"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.
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"Eurodollar Rate Reserve Percentage" of any Lender for any Advance means
the reserve percentage applicable during the relevant 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 such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"GAAP" means (a) in the case of the preparation of all financial reporting
requirements, generally accepted accounting principles in the United States, as
in effect from time to time, and (b) in the case of the calculation,
certification and compliance with all financial tests and covenants, generally
accepted accounting principles in the United States, as in effect on the date of
the financial statements delivered to each Lender in accordance with Section
4.01(e), in each case applied on a consistent basis both as to classification of
items and amounts.
"GITI" means GTE International Telecommunications Incorporated, a Delaware
corporation.
"Guaranteed Obligations" has the meaning specified in Section 7.01.
"Guarantor" has the meaning specified in the recital of parties to this
Agreement.
"Guaranty" has the meaning specified in Section 7.01.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
▇▇▇
"▇▇▇▇ ▇▇▇▇ Credit Agreement" means that certain Term Credit Agreement
dated as of May 31, 2002, among the Borrower, the Guarantor, and the lenders
party thereto.
"HSBC Indebtedness" means that certain term credit facility in a maximum
aggregate principal amount of up to $50,000,000 extended to the Borrower
pursuant to the HSBC Term Credit Agreement for working capital and other general
corporate purposes of the Borrower.
"Interest Period" means, for each LIBOR Rate Advance comprising part of
the same Term Credit Borrowing, the period commencing on the date of such LIBOR
Rate Advance or the date of the Conversion of any Base Rate Advance into such
LIBOR Rate Advance and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and, thereafter, with respect to such
LIBOR Rate Advances, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be for monthly periods of one, two, three or six
months (or any other period agreed by the Borrower, the Administrative Agent and
the Lenders), as the Borrower may, upon notice received by the Administrative
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:
(a) the Borrower may not select any Interest Period that ends after
the Termination Date;
(b) Interest Periods commencing on the same date for LIBOR Rate
Advances comprising part of the same Term Credit Borrowing shall be of the same
duration;
(c) 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
(d) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding day in
the calendar month that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest Period, such Interest
Period shall end on the last Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Lenders" means the Lender and each Person that shall become a party
hereto pursuant to Section 9.07.
"Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on Schedule I hereto
or opposite its name in the Assignment and Acceptance pursuant to which it
became a Lender or such other office of such
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Lender as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"LIBOR Rate" means, for any Interest Period for each Advance comprising
part of the same Term Credit Borrowing, (i) the rate per annum equal to the
average (rounded upwards, in necessary to the nearest 1/100 of 1%) of the
offered rates which appear on Moneyline Telerate Page 3750, British Bankers
Association Interest Settlement Rates (or such other system for the purpose of
displaying rates of leading reference banks in the London interbank market, as
designated by the Administrative Agent) as of 11:00 a.m. (London time) for
deposits in U.S. Dollars on the day two (2) Business Days prior to the first day
of such Interest Period in an amount approximately equal to the principal amount
of the Advance to which such Interest Period is to apply and for a period of
time comparable to such Interest Period, or, (ii) if such mechanism for
determining the applicable LIBOR Rate is not available, a rate of interest equal
to the average )rounded as mentioned above) of the respective rates per annum
(as quoted to the Administrative Agent (or its Affiliate) request) at which each
Reference Bank is offering U.S. Dollar deposits to prime banks in the London
interbank market at approximately 11:00 a.m. (London time) two (2) Business Days
before the first day of such Interest Period in an amount equal to the principal
amount of the Advance to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.
"LIBOR Rate Advance" means a Term Credit Advance that bears interest as
provided in Section 2.06(a)(ii).
"Lien" means any lien, security interest or other charge or encumbrance of
any kind.
"Loan Documents" means this Agreement, the Term Credit Notes, and, on and
after the date of delivery thereof, each guarantee, mortgage, pledge, assignment
or other security instrument required to be delivered under the terms of this
Agreement or any other Loan Document, in each case as amended or otherwise
modified from time to time.
"Loan Party" means each of the Borrower, the Guarantor and each other
Person (other than the Administrative Agent or any Lender) which is or becomes
or, under the terms of any Loan Document, is required to become a party to a
Loan Document.
"Majority Lenders" means at any time Lenders holding at least 51% of the
then aggregate unpaid principal amount of the Notes held by Lenders, or, if no
such principal amount is then outstanding, Lenders having at least 51% of the
Commitments.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any Loan Party and its Subsidiaries
taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
ability of any Loan Party to conduct its business on substantially the same
basis as conducted on the Effective Date, (b) the rights and remedies of the
Administrative Agent or any Lender under any Loan Document or (c) the ability of
any Loan Party to service its Debt obligations on a timely basis.
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"Moody's" means ▇▇▇▇▇'▇ 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 Term Credit Note.
"Notice of Term Credit Borrowing" has the meaning specified in Section
2.02(a).
"Other Taxes" has the meaning specified in Section 2.13(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor).
"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:
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PUBLIC
DEBT
RATING
-----------------------------------------------------------------------
PERFORMANCE S&P MOODY'S
LEVEL
-----------------------------------------------------------------------
Level I A- or higher and Baa1 or higher
BBB+ or higher and A3 or higher
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Level II BBB+ or higher and Baa2 or higher
BBB or higher and Baa1 or higher
-----------------------------------------------------------------------
Level III BBB or higher and Baa3 or higher
BBB- or higher and Baa2 or higher
-----------------------------------------------------------------------
Level IV BBB- or higher and Baa3 or higher
-----------------------------------------------------------------------
Level V lower than BBB- or lower than Baa3
-----------------------------------------------------------------------
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provided, however, that in the event of split ratings in which the rating from
one of the agencies is more than one level higher than the rating from the other
rating agency, the Performance Level will be the level which is immediately
above the Performance Level corresponding to the lower of the two ratings.
"Permitted Liens" means, with respect to any Person, (a) Liens for taxes,
assessments and governmental charges and levies to the extent not required to be
paid under Section 5.01(b) hereof; (b) pledges or deposits to secure obligations
under workers' compensation laws or similar legislation; (c) pledges or deposits
to secure performance in connection with bids, tenders, contracts (other than
contracts for the payment of money) or leases to which such Person is a party;
(d) deposits to secure public or statutory obligations of such Person; (e)
materialmen's, mechanics', carriers', workers', repairmen's or other like Liens
in the ordinary course of business, or deposits to obtain the release of such
Liens to the extent such Liens, in the aggregate, would not have a Material
Adverse Effect; (f) deposits to secure surety and appeal bonds to which such
Person is a party; (g) other pledges or deposits for similar purposes in the
ordinary course of business; (h) Liens created by or resulting from any
litigation or legal proceeding which at the time is currently being contested in
good faith by appropriate proceedings; (i) leases 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.
"Permitted Receivables Financing" means any financing pursuant to which
the Borrower or any Subsidiary of the Borrower may sell, convey, or otherwise
transfer to a Receivables Subsidiary or any other Person (in the case of
transfer by a Receivables Subsidiary), or grant a security interest in, any
accounts receivable (and related assets) of the Borrower or such Subsidiary,
provided that such financing shall be on customary market terms and shall be
non-recourse to the Borrower and its Subsidiaries (other than the Receivables
Subsidiary) except to a limited extent customary for such transactions. The
grant of a security interest in any accounts receivable of the Borrower or any
Subsidiary of the Borrower (other than a Receivables Subsidiary) to secure Debt
under any credit facility shall not be deemed a Permitted Receivables Financing.
"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.
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"Property" means with respect to any Person any right or interest in or to
property of any kind whatsoever, whether real, personal (including, without
limitation, cash) or mixed or whether tangible or intangible of such Person.
"Purchase" means the acquisition by GITI, directly or indirectly, of the
Controlling Interest.
"Receivables Subsidiary" means a bankruptcy-remote, special-purpose wholly
owned Subsidiary formed in connection with a Permitted Receivables Financing.
"Reference Banks" means each of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, Royal Bank of Canada
and ANZ.
"S&P" means Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"Significant Subsidiary" means at any time any Subsidiary, other than a
Receivables Subsidiary, the assets of which, in the aggregate, exceed five
percent (5%) of the Consolidated Assets, determined in accordance with GAAP.
"Single Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or
any ERISA Affiliate and no Person other than the Loan Parties and the ERISA
Affiliates or (b) was so maintained and in respect of which any Loan Party or
any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability after taking into account any indemnification pursuant to the
terms of the Stock Purchase Agreement and any other agreements entered into in
connection therewith.
"Stock Purchase Agreement" means the Amended and Restated Stock Purchase
Agreement dated as of May 27, 1998, as amended and restated as of July 21, 1998
and as further amended from time to time on or before the Effective Date, among
Puerto Rico Telephone Authority, Puerto Rico Telephone Company, GTE Holdings
(Puerto Rico) LLC and GITI.
177
"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.
"Subsidiary Existing Debt" has the meaning specified in Section 5.02(d).
"Taxes" has the meaning specified in Section 2.13(a).
"Term Credit Advance" means an advance by a Lender to the Borrower as part
of a Term Credit Borrowing and refers to a Base Rate Advance or a LIBOR Rate
Advance.
"Term Credit Borrowing" means the borrowing consisting of simultaneous
Term Credit Advances made by each of the Lenders pursuant to Section 2.01.
"Term Credit Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A hereto, evidencing
the aggregate indebtedness of the Borrower to such Lender resulting from the
Term Credit Advance made by such Lender.
"Termination Date" means the earlier of (a) June __, 2005 and (b) the date
of termination in whole of the Commitments pursuant to Section 2.04 or 6.01.
"Type" means, as to any Term Credit Advance, whether such Advance is a
Base Rate Advance or a LIBOR Rate Advance, each of which shall constitute a type
of Advance under this Agreement.
"Verizon" means Verizon Communications, Inc., a Delaware corporation.
"Voting Stock" means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.
SECTION 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03 Accounting Terms. All terms of an accounting or financial
nature not specifically defined herein shall be construed in accordance with
GAAP.
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 The Term Credit Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make one Term Credit Advance
to the Borrower on the Effective Date in the aggregate amount set forth opposite
such Lender's name on the signature pages hereof, as such amount may be reduced
pursuant to Section 2.04 (such Lender's "Commitment"). Within the limits of this
Section 2.01, the Borrower may borrow under this Section 2.01, prepay pursuant
to Section 2.09 and may Convert Borrowings of one Type into Borrowings of
another Type as provided for in Section 2.08, provided, however, that any
amounts repaid or prepaid may not be reborrowed.
SECTION 2.02 Making the Term Credit Advances.
The Term 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 Effective Date
by the Borrower to the Administrative Agent, which shall give to each Lender
prompt notice thereof by telecopier. The notice of the Term Credit Borrowing
(the "Notice of Term Credit Borrowing") shall be by telephone, confirmed
immediately in writing or telecopier in substantially the form of Exhibit B
hereto, specifying therein the requested (i) date of the Term Credit Borrowing,
(ii) Type of Advances comprising the Term Credit Borrowing, (iii) aggregate
amount of the Term Credit Borrowing, and (iv) in the case the Term Credit
Borrowing consists of LIBOR Rate Advances, initial Interest Period for each Term
Credit Advance. Each Lender shall, before 12:00 noon (New York City Time) on the
Effective Date, make available for the account of its Lending Office to the
Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of the Term Credit Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Borrower's Account.
Anything in subsection (a) above to the contrary notwithstanding, the Borrower
may not select LIBOR Rate Advance for the Term Credit Borrowing if the aggregate
obligation of the Lenders to make LIBOR Rate Advances shall then be suspended
pursuant to Section 2.07 or 2.11.
The Notice of Term Credit Borrowing 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 such Notice of Term Credit Borrowing for the Term
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 Term Credit Advance to be made
by such Lender as part of the Term Credit Borrowing when such Term Credit
Advance, as a result of such failure, is not made on such date.
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Unless the Administrative Agent shall have received notice from a Lender prior
to the time of the Term Credit Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of the Term
Credit Borrowing, the Administrative Agent may assume that such Lender has made
such portion available to the Administrative Agent on the Effective Date in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to Term Credit
Advances comprising such Term Credit Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Term Credit Advance as part of such Term 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).
The failure of any Lender to make the Term Credit Advance to be made by it as
part of the Term Credit Borrowing shall not relieve the other Lender of its
obligation hereunder to make its Term Credit Advance on the Effective Date, but
no Lender shall be responsible for the failure of the other Lender to make the
Term Credit Advance to be made by such other Lender on the Effective Date.
SECTION 2.03 [Reserved]
SECTION 2.04 Reduction of the Commitments. On the date of the Borrowing,
after giving effect to the Borrowing on such date, the aggregate unused
Commitments of the Lenders shall be automatically and permanently reduced to
zero.
SECTION 2.05 Repayment of Term Credit Advances. The Borrower shall repay
to the Administrative Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Term Credit Advances then
outstanding.
SECTION 2.06 Interest.
(a) Scheduled Interest. The Borrower shall pay interest on the unpaid
principal amount of the Term 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 Term 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, 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.
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(ii) LIBOR Rate Advances. During such periods as such Term Credit
Advance is a LIBOR Rate Advance, a rate per annum equal at all times
during each Interest Period for such Term Credit Advance to the sum of (x)
the LIBOR Rate for such Interest Period for such Term Credit Advance, plus
(y) the Applicable Margin, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the date
such LIBOR Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of an
Event of Default under Section 6.01(a), the Borrower shall pay interest on (i)
the unpaid principal amount of the Term Credit Advance owing to each Lender,
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 such Term Credit Advance pursuant to clause (a)(i) 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 Term Credit Advances pursuant to clause (a)(i) above.
SECTION 2.07 Interest Rate Determination. (a) The Administrative Agent
shall give prompt notice to the Borrower and the Lenders of the applicable
interest rate determined by the Administrative Agent for purposes of Section
2.06(a)(i) or (ii). If, with respect to any LIBOR Rate Advances, any Lender
notifies the Administrative Agent that the LIBOR Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Lender of making,
funding or maintaining their respective LIBOR Rate Advances for such Interest
Period, the Administrative Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each LIBOR Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and (ii) the obligation of the Lenders to make, or to Convert Term
Credit Advances into, LIBOR Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
(b) If the Borrower shall fail to select the duration of any Interest
Period for any LIBOR Rate Advances in accordance with the provisions contained
in the definition of "Interest Period" in Section 1.01, the Administrative Agent
will forthwith so notify the Borrower and the Lenders and such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.
(c) On the date on which the aggregate unpaid principal amount of LIBOR
Rate Advances comprising any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than $1,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(d) Upon the occurrence and during the continuance of any Event of Default
under Section 6.01, (i) each LIBOR Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the
181
Lenders to make, continue or to Convert Advances into, LIBOR Rate Advances shall
be suspended.
(e) If on any date the Administrative Agent is unable to determine the
LIBOR Rate for any LIBOR Rate Advances to be made on such date,
(i) the Administrative Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for such LIBOR
Rate Advances,
(ii) with respect to LIBOR Rate Advances, each such Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance (or if such Advance is then a
Base Rate Advance, will Continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make LIBOR Rate Advances or
to Convert Term Credit Advances into LIBOR Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
SECTION 2.08 Optional Conversion of Term Credit Advances. The Borrower may
on any Business Day, upon notice given to the Administrative 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 Term Credit Advances of one Type comprising the same Borrowing
into Term Credit Advances of the other Type; provided, however, that any
Conversion of LIBOR Rate Advances into Base Rate Advances shall be made only on
the last day of an Interest Period for such LIBOR Rate Advances and any
Conversion of Base Rate Advances into LIBOR Rate Advances shall be in an amount
not less than $1,000,000. Each such notice of a Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
Term Credit Advances to be Converted and (iii) if such Conversion is into LIBOR
Rate Advances, the duration of the initial Interest Period for each such
Advance. Each notice of Conversion shall be irrevocable and binding on the
Borrower.
SECTION 2.09 Prepayments of Advances. The Borrower may, upon at least five
Business Days' notice to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amount of the Term 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 $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and (y) the Borrower shall be obligated to
reimburse the Lenders in respect thereof pursuant to Section 9.04(b).
SECTION 2.10 Increased Costs. (a) If, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation or (ii)
the compliance with any written guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to any Lender of agreeing to
182
make or making, funding or maintaining LIBOR Rate Advances (excluding for
purposes of this Section 2.10 any such increased costs resulting from (i) Taxes
or Other Taxes (as to which Section 2.13 shall govern) and (ii) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender is organized or has its Lending Office or any political subdivision
thereof, then the Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost (whether or not
such increased costs arise prior to the receipt of written notification from
such central bank or other governmental authority); provided that the Borrower
shall not be required to pay any such increased costs to the extent such
increased costs accrued prior to the date that is six months prior to the date
of such notice. A certificate as to the amount of such increased cost, submitted
to the Borrower and the Administrative Agent by such Lender, shall be conclusive
and binding for all purposes, absent manifest error in the calculation of such
amount.
(b) If any Lender determines that compliance with any law or regulation or
any written guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender (excluding any reserves included in the
computation of the LIBOR Rate) and that the amount of such capital is increased
by or based upon the existence of such Lender's commitment to lend hereunder and
other commitments of this type (taking into consideration such Lender's policies
and the policies of any corporation controlling such Lender with respect to
capital adequacy) then, upon demand by such Lender (with a copy of such demand
to the Administrative Agent), the Borrower shall pay to the Administrative Agent
for the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation
(whether or not such amounts arise prior to the receipt of written notification
from such central bank or other governmental authority) in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable (in the proportion that such Lender's
Commitment hereunder bears to all of such Lender's commitments of this type) to
the existence of such Lender's commitment to lend hereunder; provided that the
Borrower shall not be required to compensate such Lender to the extent such
amounts arose prior to the date that is six months prior to such notice. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes, absent
manifest error in the calculation of such amounts.
(c) Any Lender claiming any additional amounts payable pursuant to this
Section 2.10 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to minimize such additional
amounts and to change the jurisdiction of its 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
183
expenses based on such Lender's Commitment and Advances and the total lending
commitments and loans of such Lender to its similarly situated customers.
SECTION 2.11 Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority having relevant jurisdiction asserts that it is unlawful, for any
Lender or its Lending Office to perform its obligations hereunder to make LIBOR
Rate Advances or to fund or maintain LIBOR Rate Advances hereunder, (i) each
LIBOR Rate Advance made by such Lender will automatically, upon such demand,
Convert into a Base Rate Advance, as the case may be, and (ii) the obligation of
such Lender to make LIBOR Rate Advances or to Convert Term Credit Advances into
LIBOR Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 2.12 Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York City
Time) on the day when due in U.S. dollars to the Administrative Agent at the
Administrative Agent's Account in same day funds. The Administrative Agent will
promptly , upon receipt, cause to be distributed like funds relating to the
payment of principal or interest or facility fees ratably (other than amounts
payable pursuant to Sections 2.09, 2.10 or 9.04(c)) to the Lenders for the
account of their respective 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 Lending Office, in each case to be applied in accordance with the terms
of this Agreement.
(b) All computations of interest and of facility fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or facility fees are payable.
Each determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error in the
calculation of such interest rate.
(c) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, that, if such extension would cause payment of
interest on or principal of LIBOR Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the time on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the
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Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
SECTION 2.13 Taxes. (a) Subject to subsections (e) and (f) below, any and
all payments by the Loan Parties hereunder or under the Notes shall be made, in
accordance with Section 2.12, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto excluding, in the case of
each Lender and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it in lieu of net income taxes (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). Subject to subsections (e) and (f) below,
if the Loan Parties shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any Lender or the
Administrative Agent: (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.13) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made; (ii) the Loan Parties
shall make such deductions; and (iii) the Loan Parties 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
Loan Parties shall furnish to the Administrative Agent, at its address referred
to in Section 9.02, the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, the Borrower agrees to pay any stamp or documentary taxes
or any other excise or property taxes, charges or similar levies that arise from
any payment made hereunder or under the Notes or from the execution, delivery or
registration of, performing under, or otherwise with respect to, this Agreement
or the Notes as a result of the introduction of or any change in or in the
interpretation of any law or regulation after the date hereof (hereinafter
referred to as "Other Taxes").
(c) Subject to subsections (d), (e) and (f) below, the Borrower shall
indemnify each Lender and the Administrative Agent for the full amount of Taxes
or Other Taxes (to the extent not previously paid under subsection (a) or (b)
above) imposed on or paid by such Lender or the Administrative Agent (as the
case may be) and any liability (including penalties, interest and expenses but
excluding any taxes imposed by any jurisdiction on amounts payable under this
Section 2.13) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender or the Administrative
Agent (as the case may be) makes written demand therefor.
(d) Notwithstanding anything else contained in this Section 2.13, the
Borrower shall only be required to pay additional sums with respect to Taxes, to
a Lender (or the Administrative Agent, as the case may be) pursuant to
subsection (a), (b) or (c) above if the obligation to pay such Taxes results
from such Lender being subject to any Taxes as a result of: (i) any amendment to
the laws (or any regulations thereunder), or any amendment to, or change in, an
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interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority adopted or enacted
after the date hereof (or in the case of an entity that becomes a Lender after
the date hereof, the date such entity becomes a Lender); (ii) an amendment,
modification or revocation of any existing applicable tax treaty ratified,
enacted or amended after the date hereof (or in the case of an entity that
becomes a Lender after the date hereof, the date such entity becomes a Lender);
or (iii) the ratification of a new tax treaty ratified after the date hereof (or
in the case of an entity that becomes a Lender after the date hereof, the date
such entity becomes a Lender).
(e) In the event that the Borrower makes an additional payment under
Section 2.13(a) or 2.13(c) for the account of any Lender and such Lender, in its
sole opinion, determines that it has finally and irrevocably received or been
granted a credit against, or relief or remission from, or repayment of, any tax
paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to such additional payment, such Lender
shall, to the extent that it determines that it can do so without prejudice to
the retention of the amount of such credit, relief, remission or repayment, pay
to the Borrower such amount as such Lender shall, in its sole opinion, have
determined is attributable to such deduction or withholding and will leave such
Lender (after such payment) in no worse position than it would have been had the
Borrower not been required to make such deduction or withholding. Nothing
contained herein shall: (i) interfere with the right of a Lender to arrange its
tax affairs in whatever manner it thinks fit; or (ii) oblige any Lender to claim
any tax credit or to disclose any information relating to its tax affairs or any
computations in respect thereof; or (iii) require any Lender to take or refrain
from taking any action that would prejudice its ability to benefit from any
other credits, reliefs, remissions or repayments to which it may be entitled.
Each Lender and the Administrative Agent shall reasonably cooperate with the
Borrower at the Borrower's written request and sole expense, in contesting any
Taxes or Other Taxes the Borrower would bear pursuant to this Section 2.13,
provided, however, that: (i) no tax return of such Lender or the Administrative
Agent is or would be held open as a result of such contest; (ii) neither such
Lender nor the Administrative Agent is required to reopen a tax year that has
already closed; and (iii) such Lender and the Administrative Agent shall, in the
sole opinion of such Lender and the Administrative Agent, respectively, have
determined that such contest will leave such Lender and the Administrative
Agent, respectively, in no worse position than it would have been in had it not
contested such Taxes or Other Taxes. Nothing contained herein shall interfere
with the right of a Lender or the Administrative Agent to arrange its tax
affairs in whatever manner it thinks fit, if in the sole judgment of such Lender
or the Administrative Agent, such contest would be disadvantageous to such
Lender or the Administrative Agent. In pursuing a contest in the Lender's or the
Administrative Agent's name, such Lender or the Administrative Agent will be
represented by counsel of such Lender's or the Administrative Agent's choice,
and will defend against, settle or otherwise control the contest and will not
relinquish control or decision making over the contest.
(f) Any Lender claiming any additional amounts payable pursuant to this
Section 2.13 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to minimize such additional
amounts and to change, to the extent such Lender has at such time additional
lending offices in existence, its Lending Office, if the making of such a
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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
Term Credit Advance to the Borrower and the total lending commitments and loans
of such Lender to its similarly situated customers.
SECTION 2.14 Use of Proceeds. The proceeds of the Term Credit Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely for working capital and general corporate purposes of the Borrower and
its Subsidiaries, including the payment or refinancing of other Debt of the
Borrower; 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).
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 otherwise) on account of the Advances made by it (other than
pursuant to Section 2.10, 2.13, 9.04(c) or 9.07) in excess of its ratable share
of payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances made by 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 the amount of such Lender's required repayment
to 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 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.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01 Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied, provided that such date shall be no later than July 31, 2002:
(a) There shall have occurred no Material Adverse Change since December
31, 2001.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting any of the Loan Parties or any of their respective
Subsidiaries pending or threatened before any court,
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governmental agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect other than the matters described on Schedule 3.01(b)
hereto (the "Disclosed Litigation") or (ii) is initiated by any Person other
than a Lender in its capacity as a Lender that purports to affect the legality,
validity or enforceability of this Agreement, any Note, any other Loan Document
or the consummation of the transactions contemplated hereby, and there shall
have been no material adverse change in the status, or financial effect on any
Loan Party, of the Disclosed Litigation from that described on Schedule 3.01(b)
hereto.
(c) All governmental and third party consents and approvals necessary in
connection with the execution, delivery and performance of this Agreement, the
Notes and any other Loan Document shall have been obtained (without the
imposition of any conditions that could reasonably be expected to materially
adversely affect the ability of any Loan Party to perform its obligations
hereunder) and shall remain in effect, and no law or regulation shall be
applicable that restrains, prevents or imposes adverse conditions upon the
transactions contemplated hereby that could reasonably be expected to materially
adversely affect the ability of any Loan Party to perform its obligations
hereunder.
(d) The Borrower shall have paid all costs and expenses of the
Administrative Agent and the Lenders in connection with the preparation,
negotiation, execution and, if applicable, filing and recording of this
Agreement and the other Loan Documents (including the accrued fees and expenses
of counsel to the Administrative Agent and the Lenders) to the extent invoiced
and subject to the terms and conditions of Section 9.04(a) herein.
(e) The Borrower shall have notified each Lender and the Administrative
Agent in writing of the proposed Effective Date.
(f) On the Effective Date, the following statements shall be true and the
Administrative Agent shall have received for the account of each Lender a
certificate signed by a duly authorized officer of the Borrower, dated the
Effective Date, stating that:
(i) The representations and warranties contained in Section 4.01 are
correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that constitutes a
Default.
(g) The Administrative Agent shall have received on or before the
Effective Date the following, each dated such day, in form and substance
satisfactory to the Administrative Agent and (except for the Term Credit Notes)
in sufficient copies for each Lender:
(i) The Term 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.
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(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 Loan Documents to be delivered hereunder.
(iv) A certificate, in substantially the form of Exhibit C hereto,
attesting to the Solvency of each Loan Party after giving effect to the
Borrowings contemplated hereunder, from the chief financial officer of
each such Loan Party.
(v) A favorable opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Colt & Mosle LLP,
special New York counsel for the Loan Parties, substantially in the form
of Exhibit D hereto.
(vi) A favorable opinion of ▇▇▇▇ ▇▇▇▇▇▇, Esq., Vice-President and
General Counsel for the Loan Parties, substantially in the form of Exhibit
E hereto.
(vii) Evidence that the agent for service of process appointed by
the Loan Parties pursuant to Section 9.10(b) shall have accepted such
appointment.
(h) The Borrower shall have paid to ANZ the fees set out in a letter
agreement dated June 24, 2002 between the Borrower and ANZ.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrower. In order to
induce the Lenders to make the Term Credit Advances hereunder, the Borrower
makes the following representations and warranties to the Lenders:
(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 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 such Loan Party's chief
executive officer, chief financial officer, treasurer or controller or any vice
president, 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. No Loan
Party nor any Subsidiary of a Loan Party is in violation of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to it, or in breach of any indenture, agreement, lease or instrument,
the violation or breach of which is reasonably likely to have a Material Adverse
Effect.
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(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for the due execution, delivery and performance by any Loan
Party of this Agreement or the Notes.
(d) This Agreement has been, and each of the Notes when delivered
hereunder will have been, duly executed and delivered by the Borrower. This
Agreement has been duly executed and delivered by the Guarantor. Assuming that
this Agreement has been duly executed by the Administrative Agent and each of
the Lenders, this Agreement is, and each of the Notes when delivered hereunder
will be, the legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with their respective terms. Assuming that
this Agreement has been duly executed by the Administrative Agent and each of
the Lenders, this Agreement is the legal, valid and binding obligation of the
Guarantor enforceable against the 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, 2001, and the related
Consolidated statements of income and cash flows of the Borrower (or its
predecessor entities) and its Subsidiaries for the fiscal year then ended,
accompanied by an opinion of Deloitte & Touche LLP, independent public
accountants, copies of which have been furnished to each Lender, fairly and
accurately represent the Consolidated financial condition of the Borrower and
its Subsidiaries as at such date and the Consolidated results of the operations
of the Borrower and its Subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently applied.
(f) There is no pending or (to the knowledge of any Loan Party) threatened
action or proceeding, including, without limitation, any Environmental Action,
affecting any Loan Party or any of its Subsidiaries before any court,
governmental agency or arbitrator that is initiated by any Person other than a
Lender in its capacity as a Lender that purports to affect the legality,
validity or enforceability of this Agreement or any Note.
(g) Neither the Borrower nor any of its Subsidiaries is an Investment
Company, as such term is defined in the Investment Company Act of 1940, as
amended.
(h) No Loan Party is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
(i) As of the date hereof, the Borrower has no direct or indirect
Significant Subsidiaries, except as set forth in Schedule 4.01(i).
(j) The Borrower and the Guarantor are Solvent.
(k) Each Loan Party and each of its respective Subsidiaries have filed all
federal, state, commonwealth and local tax returns required to be filed and have
paid all taxes shown thereon to
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be due, including interest and penalties, or have provided adequate reserves
therefor; no unpaid or uncontested assessments have been made against any Loan
Party or any Subsidiary of any Loan Party by any taxing authority, nor has any
unpaid or uncontested penalty or deficiency been assessed by any such authority,
and all contested assessments have been disclosed to the Administrative Agent
and adequate reserves have been made therefor. Such tax returns properly reflect
the income and taxes of each respective Loan Party and its Subsidiaries for the
periods covered thereby, subject only to reasonable adjustments required by the
corresponding taxing authorities upon audit or other adjustments not reasonably
likely to have a Material Adverse Effect.
(l) No Loan Party is subject to any labor dispute with its employees which
is reasonably likely to have a Material Adverse Effect.
(m) No written information, exhibit or report furnished by any Loan Party
to the Administrative Agent or any Lender in connection with the negotiation of
this Agreement contained any material misstatement of fact or omitted to state a
material fact necessary to make the statements contained therein not misleading.
(n) The operations and properties of each Loan Party comply in all
material respects with all applicable Environmental Laws; all necessary
Environmental Permits have been obtained and are in effect for the operations
and properties of each Loan Party, and each Loan Party is in compliance in all
material respects with all such Environmental Permits; none of the operations or
properties of any Loan Party is subject to any Environmental Action alleging the
violation of any Environmental Law; none of the operations of any Loan Party are
the subject of a federal, state, commonwealth or local investigation evaluating
whether any remedial action is needed to respond to a release of any hazardous
or toxic waste, substance or constituent, or any other substance into the
environment, which Environmental Action or remedial action is reasonably likely
to have a Material Adverse Effect.
(o) (i) The obligations of the Loan Parties hereunder and under the Notes,
and the obligations of the Loan Parties under the Commercial Paper Program, the
HSBC Indebtedness, the Citibank Indebtedness, the BPOP Indebtedness and the BBVA
Indebtedness are of equal priority (pari passu); and (ii) except for any rights
to set-off in favor of the agent(s) or the lenders under Section 9.05 of the
Citibank Credit Agreement , Section 9.05 of the BPOP Credit Agreement, Section
9.05 of the BBVA Credit Agreement and Section 8.05 of the HSBC Credit Agreement,
no Lien over any Property of the Loan Parties has been granted in favor of the
lenders party to such agreement, as security for the obligations of the Borrower
and its Subsidiaries under the Commercial Paper Program, the HSBC Indebtedness,
the Citibank Indebtedness, the BPOP Indebtedness and the BBVA Indebtedness.
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:
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(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries
to comply, in all material respects, with all applicable laws, rules,
regulations and orders, such compliance to include, without limitation,
compliance with ERISA and Environmental Laws, except where the failure to so
comply would not have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; provided, however, that neither any Loan Party
nor any of its Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained, unless
and until any Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors and the aggregate of such Liens would
have a Material Adverse Effect.
(c) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries
to maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties as such
Loan Party and such Subsidiaries 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 or to the interests of the Lenders.
(e) Visitation Rights. During normal business hours and upon reasonable
notice from time to time, permit the Administrative Agent or any of the Lenders
or any agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of,
such Loan Party and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of such Loan Party and any of its Subsidiaries with the
appropriate representatives of such Loan Party and together with the appropriate
representatives of such Loan Party's independent certified public accountants;
provided that with respect to any confidential information of the Loan Party and
any of its Subsidiaries, the Administrative Agent or any of the Lenders or any
agents or representatives thereof, shall be entitled to examine such information
but shall not be entitled to make copies or abstracts from the records and books
of the of account containing such information and shall hold any such
information in strict confidentiality to the same extent as if such information
was confidential information to the Administrative Agent or any of the Lenders
or any agents or representatives thereof.
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(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 GAAP, consistently applied.
(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 and in material compliance with all
applicable standards and rules imposed by all governmental authorities with
jurisdiction.
(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 Administrative Agent with
sufficient copies for distribution to the Lenders:
(i) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the
Borrower, the Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and the Consolidated statements
of income and cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with
the end of such quarter, duly certified (subject to year-end audit
adjustments) by the chief financial officer, treasurer or controller of
the Borrower as having been prepared in accordance with generally accepted
accounting principles and certificates of the chief financial officer,
treasurer or controller of the Borrower as to compliance with the terms of
this Agreement and setting forth in reasonable detail the calculations
necessary to demonstrate compliance with Section 5.03, provided that in
the event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 5.03, a statement of
reconciliation showing the calculations used for purposes of Section 5.03;
(ii) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the annual audited
report for such year for the Borrower and its Subsidiaries, containing the
Consolidated balance sheet of the Borrower and its Subsidiaries as of the
end of such fiscal year and the Consolidated statements of income and cash
flows of the Borrower and its Subsidiaries for such fiscal year, in each
case accompanied by an opinion acceptable to the Majority Lenders by Ernst
& Young or other independent public accountants of nationally recognized
standing, provided that in
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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 security holders, and copies of any reports on Form
8-K that such Loan Party files with the Securities and Exchange Commission
(other than reports on Form 8-K filed solely for the purpose of
incorporating exhibits into a registration statement previously filed with
the Securities and Exchange Commission);
(v) prompt notice of all actions and proceedings before any court,
governmental agency or arbitrator affecting any Loan Party or any of its
Subsidiaries of the type described in Section 3.01(b); and
(vi) such other information respecting any Loan Party or any of its
Subsidiaries as any Lender through the Administrative Agent may from time
to time reasonably request.
(j) Payment of Taxes, Etc. File, and cause its Subsidiaries to file, all
federal, state, commonwealth and local tax returns and other reports required by
law to be filed; maintain, and cause its Subsidiaries to maintain, adequate
reserves for the payment of all taxes, assessments, governmental charges and
levies imposed upon such Loan Party and its Subsidiaries, their income or their
profits; pay and discharge, and cause its Subsidiaries to pay and discharge, all
such taxes, assessments, governmental charges and levies imposed upon such Loan
Party and any of its Subsidiaries or against their respective properties prior
to the date on which penalties accrue, except to the extent that the same may be
contested by such Loan Party or such Subsidiary, as the case may be, in good
faith by appropriate proceedings and adequate reserves have been made therefor,
unless and until a Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors.
(k) Solvency. Continue, and cause each of its Subsidiaries, to be Solvent.
(l) Environmental Matters. Conduct its business and that of its
Subsidiaries so as to comply in all material respects with all applicable
Environmental Laws and Environmental Permits; provided, however, that nothing
contained in this subsection shall prohibit such Loan Party from contesting, in
good faith by appropriate legal proceedings, any such Environmental Law or
Environmental Permit or the interpretation or application thereof.
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(m)Certain Obligations Respecting Subsidiaries. The Borrower will take
such action, and will cause each of its Significant Subsidiaries and any
Significant Subsidiary formed with the intent of merging with or into a Person
that will be a Significant Subsidiary subject to this provision to take such
action, from time to time as shall be necessary to ensure that all Significant
Subsidiaries of the Borrower are party to, as Loan Parties, the Guaranty
provided in Article VII hereof. Without limiting the generality of the
foregoing, in the event that the Borrower or any of its Significant Subsidiaries
shall form or acquire any new Significant Subsidiary, the Borrower or the
respective Significant Subsidiary will cause such new Significant Subsidiary to
(A) become a party hereto and to the Guaranty pursuant to a written instrument
in form and substance satisfactory to the Administrative Agent, and (B) deliver
such proof of corporate action, incumbency of officers, opinions of counsel and
other documents relating to the foregoing as is consistent with those delivered
by each Loan Party pursuant to Article III hereof, or as any Lender or the
Administrative Agent shall have reasonably requested.
(n) Pari Passu Status. So long as any Commitments are available, or any
amounts under the Notes are outstanding hereunder, (i) the obligations of the
Loan Parties hereunder and under the Notes shall remain of equal priority (pari
passu) with the obligations of the Loan Parties under the Citibank Indebtedness,
the BBVA Indebtedness, the BPOP Indebtedness, the HSBC Indebtedness and the
notes issued under the Commercial Paper Program and under any other senior
unsecured Debt of any such Loan Party and (ii) the Loan Parties will notify the
Administrative Agent of any material amendments or modifications to the
financial covenants set forth in the legal documentation evidencing each of the
HSBC Indebtedness, the Citibank Indebtedness, the BPOP Indebtedness or the BBVA
Indebtedness and will, upon the Administrative Agent's request, amend this
Agreement to include such amendments or modifications.
(o) Further Assurances. The Borrower will execute, acknowledge where
appropriate, and deliver, and cause to be executed, acknowledged where
appropriate, and delivered, from time to time, promptly at the request of the
Administrative Agent or any of the Lenders, all such instruments and documents
as in the reasonable opinion of the Administrative Agent or such Lender are
necessary to carry out the intent and purpose of this Agreement and the Notes.
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,
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(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,
(iv) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Borrower or any of its
Subsidiaries; provided that any such Liens that were created during the
period immediately prior to such merger, consolidation or acquisition were
created in the ordinary course of business of such Person and the Debt
secured by such Liens does not exceed the fair market value of the assets
(including intangible assets) of such Person so merged into or
consolidated with the Borrower or any of its Subsidiaries,
(v) the replacement, extension or renewal of any Lien permitted by
clauses (iii) and (iv) above upon or in the same property theretofore
subject thereto or the replacement, extension or renewal (without increase
in the amount or extension of the final maturity date) of the Debt secured
thereby,
(vi) Liens not otherwise permitted pursuant to clauses (i) through
(v) above securing obligations not to exceed at any one time the amount of
$10,000,000; and
(vii) Liens on property of a Receivables Subsidiary created in
connection with a Permitted Receivables Financing.
(b) Mergers, Etc. Merge or consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or permit any of its Subsidiaries to do so,
except that (i) any Subsidiary of the Borrower may merge or consolidate with or
into, or dispose of assets to, any other Subsidiary of the Borrower, (ii) any
Subsidiary of the Borrower may merge into or dispose of assets to the Borrower,
and (iii) the Borrower may merge with any Subsidiary of Verizon so long as the
surviving corporation assumes to the reasonable satisfaction of the
Administrative Agent all obligations of the Borrower hereunder and under the
Notes, and the Guarantor confirms in writing its guarantee obligations hereunder
upon the occurrence of and following such merger and provided, in each case,
that no Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom; provided, further that, in the
event of a transaction contemplated by clause (iii) above,
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(x) the surviving entity shall have debt with a long term senior unsecured
rating given by ▇▇▇▇▇'▇ and/or S&P at least equal to the rating of the debt of
the Borrower immediately prior to the announcement of such transaction or,
otherwise, a credit standing acceptable to the Administrative Agent and (y) the
Administrative Agent shall have the right to request a legal opinion stating
that such merger complies with the provisions of this Agreement and that the
obligations thereunder have been validly assumed by the surviving entity.
(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 any contribution
agreement entered into by and among the Borrower and the Guarantor in
connection with the Purchase, the Bonds and any of the Subsidiary Existing
Debt);
(ii) Debt which may be incurred in connection with the Subsidiaries'
guarantee of the Bonds or any refunding or refinancing, in whole or in
part, of the Bonds;
(iii) Debt which may be borrowed and outstanding from time to time
under the credit agreements existing or contemplated on and as of the
Effective Date and described on Schedule 5.02(d) hereto (the "Subsidiary
Existing Debt"), and any Debt extending the maturity of, or refunding or
refinancing, in whole or in part, the Subsidiary Existing Debt, provided
that the principal amount of such Subsidiary Existing Debt shall not be
increased above the principal amount thereof outstanding immediately prior
to such extension, refunding or refinancing, and the direct and contingent
obligors therefor shall not be changed, as a result of or in connection
with such extension, refunding or refinancing;
(iv) unsecured Debt incurred in the ordinary course of business
aggregating for the Guarantor not more than $75,000,000 at any one time
outstanding;
(v) Debt in respect of operating leases;
(vi) endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business;
(vii) Debt incurred by a Receivables Subsidiary created in
connection with a Permitted Receivables Financing; and
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(viii) Debt which may be incurred in connection with the Guarantor's
guarantee of the notes issued under the Commercial Paper Program pursuant
to the Commercial Paper Program Guaranty.
SECTION 5.03 Financial Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
(a) Debt to EBITDA Ratio. Maintain a Debt to EBITDA Ratio, as at the end
of each fiscal quarter of the Borrower, of not more than 4.0:1.0.
(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 any Loan Party
herein or by any Loan Party (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect when made
or deemed made; or
(c) (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), (k),
(l), 5.02 or 5.03; (ii) any Loan Party shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(i) (other than clauses
(iii) and (v) thereof) if such failure shall remain unremedied for five Business
Days after written notice thereof shall have been given to such Loan Party by
the Administrative Agent or any Lender; or (iii) any Loan Party shall fail to
perform or observe any other term, covenant or agreement contained in this
Agreement on its part to be performed or observed if such failure shall remain
unremedied for 30 days after written notice thereof shall have been given to
such Loan Party by the Administrative Agent or any Lender; or
(d) Article VII is breached by the Guarantor or shall cease to be in full
force and effect or the Guarantor shall so state in writing; or
(e) The Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in a
principal or, in the case of Hedge Agreements net amount of at least $20,000,000
in the aggregate (but excluding Debt outstanding hereunder) of
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the Borrower or such Subsidiary (as the case may be) (the "Requisite Amount"),
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the later of five Business Days and the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any such Debt
aggregating the Requisite Amount shall be declared due and payable in accordance
with its terms or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt aggregating the Requisite
Amount and shall continue after the applicable grace period, if any, specified
in such agreement or instrument, if the effect of such event or condition is to
accelerate the maturity of such Debt; or any such Debt aggregating the Requisite
Amount shall be required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased in
accordance with its terms, or any offer to prepay, redeem, purchase or defease
such Debt shall be required to be made in accordance with its terms, in each
case prior to the stated maturity thereof where the cause of such prepayment,
redemption, purchase or defeasance or offer therefor is the occurrence of an
event or condition that is premised on a material adverse deterioration of the
financial condition, results of operation or properties of the Borrower or any
of its Subsidiaries, provided that with respect to Debt aggregating the
Requisite Amount of the types described in clauses (h) or (i) of the definition
of "Debt" and to the extent such Debt relates to the obligations of any Person
other than the Borrower or any of its Subsidiaries, no Event of Default shall
occur so long as the payment of such Debt is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being maintained;
or any event shall occur or condition shall exist under any agreement or
instrument relating to any Debt that is outstanding in a principal or in the
case of Hedge Agreements net amount of at least $40,000,000 and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or permit
the acceleration of, the maturity of such Debt; or
(f) Any Loan Party 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 any
Loan Party 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 any Loan Party or
its Subsidiaries shall take any corporate action to authorize any of the actions
set forth in this subsection (f) under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors; or
(g) Any judgment or order for the payment of money in excess of
$30,000,000 shall be rendered against any Loan Party 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
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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 ▇▇▇▇▇'▇ 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 Verizon or its Subsidiaries or (iii)
Verizon or its Subsidiaries shall fail to have the ability to appoint a majority
of the Board of Directors of GITI or other Person holding the Controlling
Interest or the business and affairs of GITI or such other Person shall not be
managed by or under the direction of such Board of Directors; or (iv) the
Borrower shall for any reason cease to own 100% of the Voting Stock of the
Guarantor; or
(i) Any Loan Party or its ERISA Affiliates shall incur, or shall be
reasonably likely to incur, liability that would have a Material Adverse Effect
as a result of one or more of the following: (i) the occurrence of any ERISA
Event; (ii) the partial or complete withdrawal of such Loan Party or its ERISA
Affiliates from a Multiemployer Plan; or (iii) the reorganization or termination
of a Multiemployer Plan; or
(j) Any material provision of any Loan Document after delivery thereof
pursuant to this Agreement shall for any reason (other than pursuant to the
terms hereof or thereof) cease to be valid and binding on or enforceable against
any party to it (other than the Administrative Agent or any Lender), or any such
party shall so state in writing,
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Majority 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 Majority 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
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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 any Loan Party under the Federal Bankruptcy
Code, (A) the obligation of each Lender to make Advances shall automatically be
terminated and (B) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE VII
GUARANTY
SECTION 7.01 Guaranty; Limitation of Liability. (a) In order to induce the
Lenders to extend credit to the Borrower hereunder, the Guarantor hereby
unconditionally and irrevocably guarantees, as a primary obligor and not merely
as a surety, the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all obligations of each other Loan Party now or
hereafter existing under this Agreement or any Note, whether for principal,
interest, fees, expenses or otherwise (such obligations, to the extent not paid
by such Loan Party or specifically waived in accordance with Section 9.01, being
the "Guaranteed Obligations"), and agrees to pay any and all expenses (including
reasonable counsel fees and expenses) incurred by the Administrative Agent or
the Lenders in enforcing any rights under this Article VII ("this Guaranty").
Without limiting the generality of the foregoing, the Guarantor's liability
shall extend to all amounts that constitute part of the Guaranteed Obligations
and would be owed by any Loan Party to the Administrative Agent or any Lender
under this Agreement or any Note but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Loan Party. All payments by the Guarantor shall be
made to the Administrative Agent in accordance with Section 2.12.
(b) The Guarantor and, by its acceptance of this Guaranty, the
Administrative Agent and each other Lender, hereby confirms that it is the
intention of all such parties that this Guaranty not constitute a fraudulent
transfer or fraudulent conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal, state or Commonwealth of Puerto Rico law to the extent applicable to
this Guaranty. To effectuate the foregoing intention, the Administrative Agent,
each other Lender and the Guarantor hereby irrevocably agrees that the
obligations of the Guarantor under this Guaranty shall not exceed the greater of
(A) the benefit realized by the Guarantor from the proceeds of the Advances made
from time to time by the Borrower to the Guarantor and (B) the maximum amount
that will, after giving effect to such maximum amount and all other probable
contingent and fixed liabilities of the Guarantor that are relevant under
applicable law, and after giving effect to any collections from, rights to
receive contribution from, or payments made by or on behalf of the Guarantor in
respect of the obligations of the Guarantor under this Guaranty, result in the
obligations of the Guarantor under this Guaranty not constituting a fraudulent
transfer or fraudulent conveyance. For purposes hereof, "Bankruptcy Law" means
▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar Federal, state or Commonwealth of
Puerto Rico law for the relief of debtors.
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(c) This is a guaranty of payment and not of collection, and is the
primary obligation of the Guarantor; and any Lender may, subject to the terms
and conditions hereof, enforce this Guaranty against the Guarantor without any
prior enforcement of the Guaranteed Obligations against the Borrower and/or
without any prior enforcement of any other collateral security held by the
Lenders as security for the payment and performance of the Borrower's
obligations to the Lenders.
SECTION 7.02 Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement and the Notes, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent or the Lenders with respect thereto. The
obligations of the Guarantor under this Guaranty are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or the Guarantor or whether
the Borrower or the Guarantor is joined in any such action or actions. The
liability of the Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and, to the maximum extent permitted by law,
the Guarantor hereby irrevocably waives, any defenses it may now or hereafter
have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of this Agreement 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, any Note or any other
Loan Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to the Borrower or
otherwise;
(c) any taking, exchange, release or non-perfection of any collateral, or
any taking, release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;
(d) any change, restructuring or termination of the corporate structure or
existence of the Borrower; or
(e) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the
Administrative Agent or any Lender that might otherwise constitute a defense
available to, or a discharge of, the Guarantor, the Borrower or any other
guarantor or surety other than payment when due.
This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Administrative Agent or any
Lender upon the insolvency, bankruptcy or reorganization of the Borrower or the
Guarantor or otherwise, all as though such payment had not been made.
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SECTION 7.03 Waiver. (a) The Guarantor hereby waives the right to require
application (excusion de bienes) in respect of the Property of the Borrower,
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any Lender exhaust any right or take any action against
the Borrower or any other Person or any collateral. The Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated herein and that the waiver set forth in this Section
7.03 is knowingly made in contemplation of such benefits. The Guarantor hereby
waives any right to revoke this Guaranty, and acknowledges that this Guaranty is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
(b) So far as the Guarantor is concerned, the Lenders or the
Administrative Agent for the benefit of the Lenders, may, at any time and from
time to time, without the consent of or notice to the Guarantor, and without
impairing or releasing any of the obligations of the Guarantor hereunder, upon
or without any terms or conditions and in whole or in part:
(i) exercise or refrain from exercising any rights against the
Borrower or others (including, without limitation, any other guarantor of
payment of the Guaranteed Obligations) or otherwise act or refrain from
acting, whether under the Credit Agreement or under rights and remedies
that the Lenders may now or hereafter have under any collateral given
thereunder or henceforth; and when making any demand hereunder against the
Guarantor, the Lenders or the Administrative Agent for the benefit of the
Lenders, may, but shall be under no obligation to, make a similar demand
on any other guarantor of payment of the Guaranteed Obligations, and any
failure by the Lenders or the Administrative Agent to make any such demand
or to collect any payments from any other guarantor or any release of
another guarantor of payment of the Guaranteed Obligations shall not
relieve the Guarantor of their obligations and liabilities hereunder, and
shall not release, impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Lenders against the Guarantor (for
the purposes hereof, "demand" shall include the commencement and
continuation of any legal proceedings);
(ii) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower other than the Lenders;
(iii) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower hereunder to the Administrative
Agent and/or the Lenders, regardless of what liability or liabilities of
the Borrower remain unpaid; and
(iv) amend or otherwise modify, consent to or waive any breach of,
or any act, omission or Default under, this Agreement and the Notes or any
other agreements, instruments or documents referred to therein or executed
and delivered pursuant thereto or in connection therewith, and this
Guaranty shall apply to the Guaranteed Obligations as set forth in each of
such documents as so amended and modified. Any such action
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taken by the Administrative Agent or the Lenders shall not impair or
release any of the obligations of the Guarantor hereunder.
SECTION 7.04 Continuing Guaranty; Assignments. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
later of the cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Guaranty and the Termination Date, (b) be binding
upon the Guarantor, its successors and assigns and (c) inure to the benefit of
and be enforceable by the Lenders, the Administrative Agent and their
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations hereunder (including, without limitation,
all or any portion of its Commitment, the Advances owing to it and the Note or
Notes held by it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise, in each case as provided in Section 9.07.
SECTION 7.05 Subrogation. The Guarantor will not exercise any rights that
it may now or hereafter acquire against the Borrower or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
the Guarantor's obligations under this Guaranty, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Administrative Agent or any Lender against the Borrower, the 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
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 the Guarantor in violation of the preceding sentence
at any time prior to the later of the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty and the
Termination Date, such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Guaranteed Obligations
and all other amounts payable under this Guaranty, whether matured or unmatured,
in accordance with the terms of this Guaranty, or to be held as collateral for
any Guaranteed Obligations or other amounts payable under this Guaranty
thereafter arising. If (i) the Guarantor shall make payment to the
Administrative Agent or any Lender of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall be paid in full in cash and (iii) the
Termination Date shall have occurred, the Administrative Agent and the Lenders
will, at the Guarantor's request and expense, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to the Guarantor of
an interest in the Guaranteed Obligations resulting from such payment by the
Guarantor.
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ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01 Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as Administrative Agent
on its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Administrative Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Administrative 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 Majority Lenders
and such instructions shall be binding upon all Lenders and all holders of
Notes; provided, however, that the Administrative Agent shall not be required to
take any action that exposes the Administrative Agent to personal liability or
that is contrary to this Agreement or applicable law. The Administrative 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 Administrative Agent's Reliance, Etc. Neither the
Administrative 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 Administrative Agent: (i) 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; (ii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iii) 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; (iv) 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 (v)
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 ANZ and Affiliates. With respect to its Commitment, the
Advances made by it and the Note or Notes issued to it, ANZ 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 Administrative Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include ANZ in its
individual capacity. ANZ 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
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and any Person who may do business with or own securities of any Loan Party or
any of its Subsidiaries, all as if ANZ were not the Administrative 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 Administrative 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
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 8.05 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Term Credit Advances owed
each of them (or if no Term 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 Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Administrative 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 Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative 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 Administrative
Agent is not reimbursed for such expenses by the Borrower.
SECTION 8.06 Successor Administrative Agent. The Administrative 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 Majority
Lenders. Upon any such resignation or removal, the Majority Lenders shall have
the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative 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 $250,000,000. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring
206
Administrative Agent, and the retiring Administrative Agent, upon appointment of
such successor Administrative Agent, shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative 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 Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Amendments, Etc. No amendment or waiver of any provision of
this Agreement, the Notes or any other Loan Documents, 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 Majority 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 no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders, do any of the
following at any time: (i) waive any of the conditions specified in Article III,
(ii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes or the Advances or the number of Lenders that
shall be required for the Lenders or any of them to take any action hereunder,
(iii) amend this Section 9.01, (iv) increase the Commitments of the Lenders or
subject the Lenders to any additional obligations, (v) reduce the principal of,
or interest on, the Notes, or any fees or other amounts payable hereunder, (vi)
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, (vii) limit the liability
of any party under any Loan Document or (viii) modify the definition of the term
"Majority Lenders"; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Lenders required above to take such action, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document.
SECTION 9.02 Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telecopier communication) and
mailed, telecopied or delivered by hand or by courier,
if to the Borrower, at
Telecomunicaciones de Puerto Rico, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
207
Attention: W. ▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇ ▇▇▇▇▇▇
Vice President and General Counsel
Telecomunicaciones de Puerto Rico, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ , ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
if to PRTC, at
Puerto Rico Telephone Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: W. ▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇ ▇▇▇▇▇▇
Vice President and General Counsel
Telecomunicaciones de Puerto Rico, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
if to any Lender, at its Lending Office specified opposite its name on Schedule
I hereto; and if to the Administrative Agent, at its address at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (Fax No.
(▇▇▇) ▇▇▇-▇▇▇▇) or, as to any Loan Party or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed or
telecopied, be effective when deposited in the first class mails or, in the case
of international delivery, when deposited with mails or couriers that deliver
within two Business Days or telecopied, provided that notices and communications
to the Administrative Agent pursuant to Article II, III or VIII shall not be
effective until received by the Administrative Agent, and provided, further,
that notices and communications to any Person required to be provided hereunder
within five Business Days shall only be made by hand or via
208
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 Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04 Costs and Expenses. (a) The Borrower agrees to pay on demand
all reasonable out-of-pocket costs and expenses of the Administrative Agent and
the Lenders in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the Notes and the
other documents to be delivered hereunder, including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent; provided
that such costs and expenses shall not in the aggregate be in excess of $30,000.
The Borrower further agrees to pay on demand all costs and expenses of the
Administrative Agent and the Lenders, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, reasonable fees and expenses of counsel for the
Administrative Agent and each Lender in connection with the enforcement of
rights under this Section 9.04(a).
(b) The Borrower agrees to indemnify and hold harmless the Administrative
Agent and each Lender and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or in connection with
the preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of their respective
Subsidiaries or any Environmental Action relating in any way to any Loan Party
or any of their respective Subsidiaries, in each case whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense (A) is found by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct, (B) arises from disputes among two or more Lenders (but not
including any such dispute that involves a Lender to the extent such Lender is
acting in any different capacity (i.e., Administrative Agent or Arranger) under
the Credit Agreement or the Notes or to the extent that it involves the
Administrative Agent's syndication activities) or (C) arises from or relates to
a breach by such Indemnified Party of its obligations
209
under this Agreement. The Borrower also agrees not to assert any claim against
the Administrative Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the Notes, this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Advances.
(c) If any payment of principal of, or Conversion of, any LIBOR Rate
Advance is made by the Borrower (or pursuant to Section 9.01(b)) to or for the
account of a Lender other than on the last day of the Interest Period for such
Advance, as a result of a payment, prepayment or Conversion pursuant to this
Agreement or acceleration of the maturity of the Notes pursuant to Section 6.01,
the Borrower shall, upon demand by such Lender (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment or Conversion, including, without limitation, any loss (excluding loss
of anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 9.04, 2.10 (to the extent that Section 2.10 applies to the LIBOR Rate
Advances previously made hereunder and the payment of principal, interest and
other amounts in respect thereto) and 2.13 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 the occurrence and during the
continuance of any Event of Default, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or such Affiliate to or for the credit or the
account of any Loan Party against any and all of the obligations of such Loan
Party now or hereafter existing under this Agreement and the Note held by such
Lender, whether or not such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify the applicable Loan Party after any such
set-off and application, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
and its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender and its Affiliates may have.
SECTION 9.06 Binding Effect. This Agreement shall become effective (other
than Section 2.01, which shall only become effective upon satisfaction of the
conditions precedent set forth in Section 3.01) when it shall have been executed
by each Loan Party, the Administrative Agent and by each initial Lender and
thereafter shall be binding upon and inure to the benefit of each Loan Party,
the Administrative Agent and each Lender and their respective successors and
210
assigns, except that no Loan Party shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Majority Lenders.
SECTION 9.07 Assignments and Participations. (a) Each Lender may assign to
one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitments, the Advances, the Note or Notes held by it and the
remaining Loan Documents); provided, however, that (i) 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 (as
hereinafter defined) with respect to such assignment) shall in no event be less
than $1,000,000 (unless such lesser amount is the entire amount of such
assigning Lender's Commitment or outstanding Advances) and shall be an integral
multiple of $100,000, (ii) each such assignment shall be to an Eligible Assignee
or to an Affiliate of the assignor, and (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, an Assignment
and Acceptance, together with any Note or Notes subject to such assignment and a
processing fee of $2,500.00. Upon such execution, delivery and acceptance, from
and after the effective date specified in each Assignment and Acceptance, 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 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 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 their
respective 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(e) and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the
Administrative
211
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which 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 in substantially the
form of Exhibit F hereto (the "Assignment and Acceptance") executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been duly completed, (i)
accept such Assignment and Acceptance and (ii) give prompt notice thereof to the
Borrower. Within five (5) Business Days after its receipt of such notice, the
Borrower, at their own expense, shall execute and deliver to the Administrative
Agent, in exchange for the surrendered Note or Notes, a new Note or new Notes to
the order of such Eligible Assignee in an amount equal to the Commitments
assumed by it pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained a Commitment hereunder, a new Note or new Notes to the order
of the assigning Lender in an amount equal to the Commitment(s) retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and shall otherwise be in
substantially the form of Exhibit A.
(d) Each Lender may sell participations to one or more banks or other
entities (other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Notes held by it); provided, however, that (i) such Lender's obligations under
this Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
(v) no participant under any such participation shall have any right to approve
any amendment or waiver of any provision of this Agreement or any Note, or any
consent to any departure by the Borrower therefrom, except that a Lender may
agree with a participant as to the manner in which the Lender shall exercise the
Lender's rights to approve any amendment, waiver or consent to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation.
(e) Any Lender may at any time, without the consent of the Administrative
Agent or the Borrower, create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Advances owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System, provided, however, that no such assignment shall have the effect of
increasing the costs payable by the Borrower.
212
SECTION 9.08 Non-disclosure. None of the Administrative Agent, any Lender
or any Affiliate thereof shall disclose without the prior consent of the
Borrower (other than to the Administrative Agent, the other 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 Administrative
Agent, any Lender or any Affiliate thereof by, or on behalf of, the Loan Parties
or any Subsidiary, provided that the Administrative Agent, any Lender or any
Affiliate thereof may disclose any such information (a) as has become generally
available to the public in a manner, or through actions, which do not violate
the terms of this Section 9.08, (b) to, or as may be required or appropriate in
any report, statement or testimony submitted to, any municipal, state or federal
regulatory body having or claiming to have jurisdiction over the Administrative
Agent, any Lender or any Affiliate thereof or to the Federal Reserve Board or
the Federal Deposit Insurance Corporation or similar organizations (whether in
the United States or elsewhere) or their successors, (c) as may be required or
appropriate in response to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to the Administrative Agent, any Lender or any Affiliate thereof and
(e) to a prospective assignee and/or participant in the amounts outstanding
hereunder or under the Advances, provided, however, that such prospective
assignee and/or participant executes an agreement containing provisions
substantially identical to those contained in this Section 9.08 and which shall
by its terms inure to the benefit of the Borrower and provided, further, that to
the extent practicable, the Administrative Agent, each Lender and their
respective Affiliates shall use reasonable best efforts to provide prior written
notice of such disclosure to the Borrower.
SECTION 9.09 Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 9.10 Jurisdiction, Etc. (a) Each of the Loan Parties hereby agrees
that any suit, action or proceeding with respect to this Agreement or the Notes
or any other document executed hereunder to which it is a party or any judgment
entered by any court in respect thereof may be brought in the United States
District Court for the Southern District of New York or in the Supreme Court of
the State of New York sitting in Manhattan, as the party commencing such suit,
action or proceeding may elect in its sole discretion; and each party hereto
hereby irrevocably submits to the non-exclusive jurisdiction of such court for
the purpose of any such suit, action, proceeding or judgment. Each party hereto
further submits, for the purpose of any such suit, action, proceeding or
judgment brought or rendered against it, to the appropriate courts of the
jurisdiction of its domicile.
(b) Each of the Loan Parties hereby agrees to appoint CT Corporation
System as its agent upon which process may be served in any legal action or
proceeding which may be instituted in any federal or state court in the City of
New York, borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, but for that purpose only. Service of process upon such agent at the
office of such agent at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and written
notice of said service to the Company by the person servicing the same addressed
as provided by Section 9.02
213
shall be deemed in every respect effective service of process upon the Company
in any such legal action or proceeding. Such appointment shall be irrevocable
for the term of this Term Credit Agreement until the appointment of a successor
by each of the Loan Parties with the consent of the Administrative Agent and
such successor's acceptance of such appointment. The Company further agrees to
take any and all actions, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of such agent or successor. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
(c) Each of the Loan Parties hereby irrevocably waives any objection that it may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement, the Notes or any
document executed hereunder brought in any such court and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
SECTION 9.11 Waiver of Jury Trial. Each of the Borrower, the Guarantor,
the Administrative Agent and the Lenders hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement, the
Notes or the other Loan Documents or the actions of the Administrative Agent or
any Lender in the negotiation, administration, performance or enforcement
thereof.
SECTION 9.12 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Term Credit
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
PUERTO RICO TELEPHONE TELECOMUNICACIONES DE PUERTO RICO,
COMPANY, INC., as Guarantor INC., as Borrower
By: By:
--------------------------------- ---------------------------------
Name: W. ▇▇▇▇ ▇▇▇▇▇▇ Name: W. ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Chief Title: Vice President and Chief
Financial Officer Financial Officer
214
AUSTRALIA AND NEW ZEALAND BANKING GROUP AUSTRALIA AND NEW ZEALAND BANKING
LIMITED, as Administrative Agent GROUP LIMITED, as Lender
By: By:
--------------------------------- ---------------------------------
Name: Name:
Title: Title:
By: By:
--------------------------------- ---------------------------------
Name: Name:
Title: Title:
AUSTRALIA AND NEW ZEALAND BANKING GROUP
LIMITED, as Arranger
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Commitment Lender
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$50,000,000 AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
TOTAL: $50,000,000
215
SCHEDULE I
LIST OF LENDING OFFICES
Australia and New Zealand Banking Group Limited ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Lender's Account
Bank: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, New York
ABA No. ▇▇▇-▇▇▇-▇▇▇
Account No.: 400-928884
Attention: ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
216