Document:

exv10w16

 

Exhibit 10.16

AMENDMENT, FREEZE AND TERMINATION AGREEMENT TO THE

XANSER CORPORATION

NON-EMPLOYEE DIRECTORS’ DEFERRED STOCK UNIT PLAN

     THIS AMENDMENT, FREEZE AND TERMINATION AGREEMENT is made by Xanser Corporation (the
“Sponsor”),

W I T N E S S E T H:

     WHEREAS, the Sponsor previously entered into that Xanser Corporation Non-Employee Directors’
Deferred Stock Unit Plan (the “Plan”);

     WHEREAS, the Sponsor reserved the right to amend and/or terminate the Plan at any time;

     WHEREAS, on the date of this Agreement there are no participants in the Plan; and

     WHEREAS, the Sponsor has determined to amend the Plan, effective as of the earlier of (a) the
“KSL Effective Time” (as that term is defined in that certain Agreement and Plan of Merger dated
October 31, 2004, by and among Kaneb Services LLC and Valero L.P. (“Valero”) and certain of
Valero’s affiliates, as amended from time to time), (b) a date during 2005 designated in writing by
an executive officer of the Sponsor that precedes the KSL Effective Time and is not later than
December 15, 2005, and (c) December 15, 2005 (such effective date is referred to hereinafter as the
“Termination Date”) (1) to prohibit additional individuals from becoming participants under the
Plan, (2) to cease all benefit accruals under the Plan and (3) to terminate the Plan and distribute
all accrued and vested amounts payable under the Plan;

     NOW, THEREFORE, the Sponsor hereby agrees that notwithstanding any other provisions of the
Plan to the contrary, the Plan is amended, frozen and terminated as follows.

     1. Effective as of the Termination Date, the Plan is amended by adding thereto the following
new Section 29:

- 1 -

 

     29. Eligibility, Benefit Accruals, Vesting And Computation And Payment Of
Benefits Incident To Freezing And Termination Of The Plan.

A. Eligibility. Notwithstanding any other provision of the Plan to the
contrary, no individual who is not a Participant under the Plan on the Final
Valuation Date shall become a Participant under the Plan on or after the
Final Valuation Date. Notwithstanding any other provision of the Plan to
the contrary, the term “Final Valuation Date” means, with respect to a
Participant, the earlier of (a) the “KSL Effective Time” (as that term is
defined in that certain Agreement and Plan of Merger dated October 31, 2004,
by and among Kaneb Services LLC and Valero L.P. (“Valero”) and certain of
Valero’s affiliates, as amended from time to time (the “Merger Agreement”),
(b) a date during 2005 designated in writing by an executive officer of the
Sponsor that precedes the KSL Effective Time and is not later than December
15, 2005, and (c) December 15, 2005.

B. Benefit Accrual. Notwithstanding any other provision of the Plan to the
contrary, any individual who is a Participant under the Plan on the Final
Valuation Date and who has not already ceased accruing benefits under the
Plan shall cease accruing benefits under the Plan as of the Final Valuation
Date.

C. Vesting. Notwithstanding any other provision of the Plan to the
contrary, each Participant under the Plan who was not already fully vested
in his or her accrued benefit under the Plan as of the Final Valuation Date
shall become fully vested as of the Final Valuation Date in his or her
accrued benefit under the Plan.

D. Computation of Benefits Payable Under the Plan as of the Final Valuation
Date. Notwithstanding any other provision of the Plan to the contrary, as
of the Final Valuation Date each Participant (or his or her beneficiary)
shall be entitled to receive, in lieu of any other benefits under the Plan,
(a) that number of shares of the Company’s Common Stock equal to the number
of Deferred Stock Units credited to the Participant’s Deferred Stock Unit
Ledger account and (b) a single sum payment in cash in an amount equal to
the sum of (i) the KSL DSUs credited to the Participant’s KSL Deferred Stock
Unit Ledger account multiplied by an amount equal to the KSL Consideration
(as that term is defined in the Merger Agreement), with the aggregate amount
of such payment rounded to the nearest cent, and (ii) the Quarterly Cash
Distributions (and interest thereon) credited to the Participant’s KSL
Deferred Stock Unit Ledger account, provided, however, that if the Merger
Agreement is terminated before December 15, 2005, or if the transactions
contemplated in the Merger Agreement do not occur before December 15, 2005,
then each Participant (or his or her beneficiary) shall be entitled to
receive, in lieu of any other benefits under the Plan including, but not
limited to, the preceding provisions of this Section 29.D, (a) that number
of shares of the Company’s Common Stock equal to the number of Deferred
Stock Units credited to the Participant’s Deferred Stock Unit Ledger
account, (b) that number of KSL Common Shares equal to the number of KSL
DSUs

- 2 -

 

credited to the Participant’s KSL Deferred Stock Unit Ledger account, and
(c) a single sum payment in cash in an amount equal to the Quarterly Cash
Distributions (and interest thereon) credited to the Participant’s KSL
Deferred Stock Unit Ledger account.

E. Payment of Benefits Payable Under the Plan on the Final Valuation Date.
Notwithstanding any other provision of the Plan to the contrary or any
election previously made under the Plan by the Participant, a Participant’s
benefit payable to him pursuant to Section 29.D shall be distributed to the
Participant (or his or her beneficiary) as soon as administratively
practicable after the Final Valuation Date, but in no case later than
December 31, 2005.

  2.  The Plan, as amended by this Amendment, Freeze and Termination Agreement, is frozen and
terminated on the Termination Date.

- 3 -

 

     IN WITNESS WHEREOF, the Sponsor has caused this Agreement to be executed on the 29th day of April, 2005.

	 	 	 	 	 	 	 
	 	 	XANSER CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William H. Kettler	 	 
	 

	 	Title:
	 	Vice Presidentexv10w23

 

EXHIBIT 10.23

CREDIT AGREEMENT

Dated as of February 28, 2006

TELECOMUNICACIONES DE PUERTO RICO, INC., a Puerto Rico corporation (the “Borrower”), PUERTO
RICO TELEPHONE COMPANY, INC., a Puerto Rico corporation (“PRTC” and, collectively with each
Significant Subsidiary (as hereinafter defined) that shall become a guarantor hereunder in
accordance with Section 5.01(j), the “Guarantors”), the banks, financial institutions and
other institutional lenders (the “Initial Lenders”) and initial issuers of letters of
credit (the “Initial Issuing Banks”) listed on the signature pages hereof and Citibank,
N.A. (“Citibank”), as administrative agent (in such capacity, the “Agent”) for the
Lenders (as hereinafter defined), agree as follows:

ARTICLE IARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

     SECTION 1.01. Certain Defined Terms.

As used in this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the terms defined):

     “Advance” means a Revolving Credit Advance or a Term Advance.

     “Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such Person or is a
director or officer of such Person. For purposes of this definition, the term “control”
(including the terms “controlling”, “controlled by” and “under common control with”) of a
Person means the possession, direct or indirect, of the power to vote 10% or more of the
Voting Stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by contract or
otherwise.

     “Agent’s Account” means the account of the Agent maintained by the Agent at
Citibank with its office at 399 Park Avenue, New York, New York 10043, Account No. 36852248,
Attention: Loan Investor Services.

     “Applicable Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar
Lending Office in the case of a Eurodollar Rate Advance.

     “Applicable Margin” means, as of any date (a) for Base Rate Advances, 0.0% per
annum and (b) for Eurodollar Rate Advances, a percentage per annum determined by reference
to the Performance Level in effect on such date as set forth below:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Applicable Margin for Eurodollar	 	 	 	 
	Performance	 	 	 	Rate Advances under Revolving	 	 	 	Applicable Margin for Eurodollar
	Level	 	 	 	Credit Facility	 	 	 	Rate Advances under Term Facility
	Level 1

	 	 	 	0.390%
	 	 	 	0.450%
	Level 2

	 	 	 	0.425%
	 	 	 	0.500%
	Level 3

	 	 	 	0.450%
	 	 	 	0.550%
	Level 4

	 	 	 	0.525%
	 	 	 	0.650%
	Level 5

	 	 	 	0.625%
	 	 	 	0.800%
	Level 6

	 	 	 	0.750%
	 	 	 	1.000%

 

 

     “Applicable Percentage” means, as of any date, a percentage per annum
determined by reference to the Performance Level in effect on such date as set forth below:

	 	 	 	 	 
	Performance Level	 	Applicable Percentage
	Level 1
	 	 	0.060	%
	Level 2
	 	 	0.075	%
	Level 3
	 	 	0.100	%
	Level 4
	 	 	0.125	%
	Level 5
	 	 	0.175	%
	Level 6
	 	 	0.250	%

     “Appropriate Lender” means, at any time, with respect to either of the Term
Facility or Revolving Credit Facility, a Lender that has a Commitment with respect to such
Facility at such time.

     “Assignment and Acceptance” means an assignment and acceptance entered into by
a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of
Exhibit C hereto.

“Assuming Lender” has the meaning specified in Section 2.18.

“Assumption Agreement” has the meaning specified in Section 2.18.

     “Available Amount” of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming compliance
at such time with all conditions to drawing).

     “Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the higher of:

     (a) the rate of interest announced publicly by Citibank in New York, New York,
from time to time, as Citibank’s base rate that is offered to its customers
generally (before giving effect to any applicable margin); and

     (b) 1/2 of one percent per annum above the Federal Funds Rate.

     “Base Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(i).

     “Borrower” has the meaning specified in the recital of parties.

     “Borrower’s Account” means the account of the Borrower maintained by the
Borrower at Citibank with its office at 399 Park Avenue, New York, New York 10043, Account
No. 4078-8269.

     “Borrowing” means a Revolving Credit Borrowing or a Term Borrowing.

     “Business Day” means a day of the year on which banks are not required or
authorized by law to close in New York City or San Juan, Puerto Rico, provided that,
if the applicable Business Day relates to any Eurodollar Rate Advances, “Business Day” means
a day of the year on which banks are not required or authorized by law to close in New York
City or San Juan, Puerto Rico and on which dealings are carried on in the London interbank
market.

     “Commitment” means a Revolving Credit Commitment, a Letter of Credit Commitment
or a Term Commitment.

     “Commitment Increase” has the meaning specified in Section 2.18.

 

 

     “Consolidated” refers to the consolidation of accounts in accordance with GAAP.

     “Consolidated Assets” means, for any period, the total assets of the Borrower
and its Subsidiaries as shown on the audited Consolidated balance sheet or unaudited
Consolidated balance sheet, as the case may be, as of the end of the most recent fiscal
quarter preceding such period.

     “Controlling Interest” means (a) ownership of at least 35% plus one share, of
the Voting Stock of the Borrower and (b) the ability to appoint a majority of the Board of
Directors of the Borrower.

     “Convert”, “Conversion” and “Converted” each refers to a
conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.08
or 2.09.

     “Debt” of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all obligations of such Person for the deferred purchase
price of property or services (other than trade payables incurred in the ordinary course of
such Person’s business for which collection proceedings have not been commenced,
provided that trade payables for which collection proceedings have commenced shall
not be included in the term “Debt” so long as the payment of such trade payables is being
contested in good faith and by proper proceedings and for which appropriate reserves are
being maintained), (c) all obligations of such Person evidenced by notes, bonds, debentures
or other similar instruments, (d) all obligations of such Person created or arising under
any conditional sale or other similar title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person as lessee under leases that have been, in
accordance with GAAP, recorded as capital leases, (f) all obligations of such Person in
respect of acceptances, letters of credit or similar extensions of credit, (g) all net
obligations of such Person in respect of Hedge Agreements, (h) all Debt of others referred
to in clauses (a) through (g) above or clause (i) below guaranteed directly, or indirectly
through a Subsidiary, by such Person, or in effect guaranteed directly, or indirectly
through a Subsidiary, by such Person through a written agreement either (1) to pay or
purchase such Debt or to advance or supply funds for the payment or purchase of such Debt or
(2) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of such Debt or
to assure the holder of such Debt against loss and (i) all Debt referred to in clauses (a)
through (h) above secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Debt.

     “Debt to EBITDA Ratio” of any Person at any date means the ratio of (a) Debt of
the types that, in accordance with GAAP, would be classified as indebtedness on a
Consolidated balance sheet of such Person on such date to (b) EBITDA for the period of four
fiscal quarters of such Person ended on or immediately prior to such date, provided
that for purposes of clause (a) of this definition, Debt shall not include (1) the
obligations specified in clause (g) of the definition thereof set forth above or (2) with
respect to the Borrower, any obligations which may be assumed by the Borrower for guaranties
of any indebtedness of the Borrower’s employee stock ownership plan up to an aggregate
principal amount of $28,698,500.

     “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).

 

 

     “Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or
in the Assignment and Acceptance pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify to the Borrower and the Agent.

     “EBITDA” means the sum, determined on a Consolidated basis, of the Borrower’s
(i) net income (or net loss), (ii) interest expense, (iii) income tax expense, (iv)
depreciation expense, (v) amortization expense and (vi) non-cash severance charges in an
aggregate amount not to exceed $20,000,000 in any period of twelve consecutive calendar
months.

     “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) any commercial bank
organized under the laws of the Commonwealth of Puerto Rico having total assets in excess of
$1,000,000,000 or any other commercial bank having total assets in excess of $1,000,000,000
that has an Applicable Lending Office that is not subject to deduction or withholding of
Taxes; or (iv) any other Person approved by (x) the Agent, (y) with respect to an assignment
of Revolving Credit Commitments, each Issuing Bank and (y) so long as no Default has
occurred and is continuing, the Borrower, in each case, such approval not to be unreasonably
withheld or delayed; provided, however, that neither the Borrower nor any
Affiliate of the Borrower shall qualify as an Eligible Assignee.

     “Environmental Action” means any action, suit, demand, demand letter, claim,
notice of non-compliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement relating in any way to any
Environmental Law, Environmental Permit or Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment, including, without
limitation, (a) by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any governmental or
regulatory authority or any third party for damages, contribution, indemnification, cost
recovery, compensation or injunctive relief.

     “Environmental Law” means any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.

     “Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued thereunder.

     “ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a
member of the Loan Parties’ controlled group, or under common control with the Borrower,
within the meaning of Section 414 of the Internal Revenue Code.

 

 

     “ERISA Event” means (a) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the application for
a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of
any Plan of a notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of
ERISA (including any such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility of any of the Loan Parties
or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any of the Loan Parties or any ERISA Affiliate from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (f) the imposition of a lien under Section 302(f) of ERISA with respect to any
Plan; (g) the adoption of an amendment to a Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that is reasonably expected to result in the
termination of, or the appointment of a trustee to administer, a Plan.

     “Eurocurrency Liabilities” has the meaning assigned to that term in Regulation
D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

     “Eurodollar Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it became a Lender (or, if no
such office is specified, its Domestic Lending Office), or such other office of such Lender
as such Lender may from time to time specify to the Borrower and the Agent.

     “Eurodollar Rate” means, for any Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing, an interest rate per annum equal to the rate
per annum obtained by dividing (a) the rate per annum (rounded upward to the nearest whole
multiple of 1/100 of 1% per annum) appearing on Moneyline Telerate Markets Page 3750 (or any
successor page) (the “Telerate Page”) as the London interbank offered rate for
deposits in U.S. dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such Interest Period or,
if for any reason such rate is not available, the average (rounded upward to the nearest
whole multiple of 1/100 of 1% per annum, if such average is not such a multiple) of the rate
per annum at which deposits in U.S. dollars are offered by the principal office of each of
the Reference Banks in London, England to prime banks in the London interbank market at
11:00 A.M. (London time) two Business Days before the first day of such Interest Period in
an amount approximately equal to such Reference Bank’s pro rata share of the contemplated
Eurodollar Rate Advance comprising part of such Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest Period. The Eurodollar
Rate for any Interest Period for each Eurodollar Rate Advance comprising part of the same
Borrowing shall be determined by the Agent on the basis of applicable rates quoted on the
Telerate Page or furnished to and received by the Agent from the Reference Banks, as the
case may be, two Business Days before the first day of such Interest Period,
subject, however, to the provisions of Section 2.08.

     “Eurodollar Rate Advance” means an Advance that bears interest as provided in
Section 2.07(a)(ii).

     “Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing means the reserve percentage applicable
two Business Days before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets

 

 

consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period.

     “Events of Default” has the meaning specified in Section 6.01.

     “Facility” means the Revolving Credit Facility, the Letter of Credit Facility
or the Term Facility.

     “Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a Business Day, for
the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day that is a Business Day, the average of the quotations for
such day on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.

     “Fitch” means Fitch, Inc.

     “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.

     “Guaranteed Obligations” has the meaning specified in Section 7.01.

     “Guaranty” has the meaning specified in Section 7.01.

     “Hazardous Materials” means (a) petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials, polychlorinated
biphenyls and radon gas and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.

     “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.

     “Increase Date” has the meaning specified in Section 2.18.

     “Increasing Lender” has the meaning specified in Section 2.18.

     “Information Memorandum” means the information memorandum dated January 26,
2006 used by the Agent in connection with the syndication of the Commitments.

     “Interest Period” means, for each Eurodollar Rate Advance comprising part of
the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the
date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending
on the last day of the period selected by the Borrower pursuant to the provisions below and,
thereafter, with respect to Eurodollar Rate Advances, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be one, two, three or six months, and subject to clause (iii)

 

 

of this
definition, any other period, as the Borrower may, upon notice received by the Agent not
later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day
of such Interest Period, select; provided, however, that:

     (i) the Borrower may not select any Interest Period that ends (x) after the
Termination Date, in the case of any Revolving Credit Borrowing or (y) after the
Maturity Date, in the case of any Term Borrowing;

     (ii) Interest Periods commencing on the same date for Eurodollar Rate Advances
comprising part of the same Borrowing shall be of the same duration;

     (iii) the Borrower shall not be entitled to select an Interest Period having
duration of any period other than one, two, three or six months unless, by 2:00 P.M.
(New York City time) on the third Business Day prior to the first day of such
Interest Period, each Appropriate Lender notifies the Agent that such Lender will be
providing funding for such Borrowing with such Interest Period (the failure of any
Appropriate Lender to so respond by such time being deemed for all purposes of this
Agreement as an objection by such Lender to the requested duration of such Interest
Period, provided that each Lender shall use commercially reasonable good faith
efforts to so respond); provided further that, if any or all of the Appropriate
Lenders object to the requested duration of such Interest Period, the duration of
the Interest Period for such Borrowing shall be one, two, three or six months, as
specified by the Borrower in the applicable Notice of Borrowing, notice of
Conversion or other notice of Interest Period selected by the Borrower as the
desired alternative to the selected Interest Period;

     (iv) 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

     (v) 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.

     “Issuance” with respect to any Letter of Credit means the issuance, amendment,
renewal or extension of such Letter of Credit.

     “Issuing Bank” means an Initial Issuing Bank or any Eligible Assignee to which
a portion of an Issuing Bank’s Letter of Credit Commitment hereunder has been assigned
pursuant to Section 9.07 or any other Revolving Credit Lender so long as such Eligible
Assignee or other Revolving Credit Lender expressly agrees to perform in accordance with
their terms all of the obligations that by the terms of this Agreement are required to be
performed by it as an Issuing Bank and notifies the Agent of its Applicable Lending Office
(which information shall be recorded by the Agent in the Register), for so long as such
Initial Issuing Bank, Eligible Assignee or other Revolving Credit Lender, as the case may
be, shall have a Letter of Credit Commitment.

 

 

     “L/C Cash Deposit Account” means an interest bearing cash deposit account to be
established and maintained by the Agent, over which the Agent shall have sole dominion and
control, upon terms as may be satisfactory to the Agent and the Borrower.

     “L/C Related Documents” has the meaning specified in Section 2.06(c)(i).

     “Lenders” means the Initial Lenders, the Issuing Banks, each Assuming Lender
that shall become a party hereto pursuant to Section 2.18 and each Person that shall become
a party hereto pursuant to Section 9.07.

     “Letter of Credit” has the meaning specified in Section 2.01(c).

     “Letter of Credit Agreement” has the meaning specified in Section 2.03(a).

     “Letter of Credit Commitment” means, with respect to each Issuing Bank, the
obligation of such Issuing Bank to issue Letters of Credit for the account of the Borrower
and its specified Subsidiaries in (a) the amount set forth opposite the Issuing Bank’s name
on Schedule I hereto under the caption “Letter of Credit Commitment” or (b) if such Issuing
Bank has entered into one or more Assignment and
Acceptances, the amount set forth for such Issuing Bank in the Register maintained by
the Agent pursuant to Section 9.07(d) as such Issuing Bank’s “Letter of Credit Commitment”,
in each case as such amount may be reduced prior to such time pursuant to Section 2.05.

     “Letter of Credit Facility” means, at any time, an amount equal to the least of
(a) the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time,
(b) $50,000,000 and (c) the aggregate amount of the Revolving Credit Commitments, as such
amount may be reduced at or prior to such time pursuant to Section 2.05.

     “Lien” means any lien, security interest or other charge or encumbrance of any
kind.

     “Loan Party” means each of the Borrower and the Guarantors.

     “Majority Shareholder” means the Person owning, directly or indirectly, over
50% of the Voting Stock of the Borrower as of the Effective Date.

     “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 or (b) the ability of any Loan Party to service its Debt obligations on a
timely basis.

     “Maturity Date” means the earlier of (a) February 28, 2011 and (b) the date of
acceleration of the Advances pursuant to Section 6.01.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Multiemployer Plan” means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an
obligation to make contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.

 

 

     “Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA
Affiliate and at least one Person other than such Loan Party and the ERISA Affiliates or (b)
was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.

     “Note” means a Revolving Credit Note or a Term Note.

     “Notice of Borrowing” has the meaning specified in Section 2.02(a).

     “Notice of Issuance” has the meaning specified in Section 2.03(a).

     “Other Taxes” has the meaning specified in Section 2.14(b).

     “Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56,
signed into law October 26, 2001.

     “PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

     “Performance Level” means, as of any date of determination, the level set forth
below as then in effect for the Borrower, as determined in accordance with the following
provisions of this definition:

	 	 	 
	Level 1:

	 	Public Debt Rating of at least A by S&P, A2 by Moody’s or A
by Fitch.
	 
	 	 
	Level 2:

	 	Public Debt Rating of lower than Level 1 but at least A- by
S&P, A3 by Moody’s or A- by Fitch.
	 
	 	 
	Level 3:

	 	Public Debt Rating of lower than Level 2 but at least BBB+
by S&P, Baa1 by Moody’s or BBB+ by Fitch.
	 
	 	 
	Level 4:

	 	Public Debt Rating of lower than Level 3 but at least BBB
by S&P, Baa2 by Moody’s of BBB by Fitch.
	 
	 	 
	Level 5:

	 	Public Debt Rating of lower than Level 4 but at least BBB-
by S&P, Baa3 by Moody’s or BBB- by Fitch.
	 
	 	 
	Level 6:

	 	Public Debt Rating of lower than Level 5.

     For purposes of the foregoing, (a) if only one of S&P, Moody’s and Fitch shall have in
effect a Public Debt Rating, the Performance Level shall be determined by reference to the
available rating and (b) if the Public Debt Ratings established by S&P, Moody’s and Fitch
shall fall within different Performance Levels and (i) two of the ratings are at the same
level and the other rating is at a different level, the Performance Level shall be based on
the two ratings at the same level and (ii) each of the three ratings fall within different
levels, then the Performance Level shall be determined based on the rating that is in
between the highest and the lowest 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 made, or
existing on property acquired, in the ordinary course of business; (j) landlord’s Liens
under leases to which such Person is a party; (k) zoning restrictions, easements, licenses,
and restrictions on the use of real property or minor irregularities in title thereto, which
do not materially impair the use of such property in the operation of the business of such
Person or the value of such property for the purpose of such business; and (l) bankers’
liens, rights of set-off or analogous rights granted or arising by operation of law to any
deposits held by or other indebtedness owing by any lender or any affiliate thereof to or
for the credit or account of such Person.

     “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.

     “Public Debt Rating” means, as of any date, the rating that has been most
recently announced by any of S&P, Moody’s or Fitch, as the case may be, for any class of
non-credit enhanced long-term senior unsecured debt issued by the Borrower. For purposes of
the foregoing, (a) if any rating established by S&P, Moody’s or Fitch shall be changed, such
change shall be effective as of the date on which such change is first announced publicly by
the rating agency making such change; and (b) if S&P, Moody’s or Fitch shall change the
basis on which ratings are established, each reference to the Public Debt Rating announced
by S&P, Moody’s or Fitch, as the case may be, shall refer to the then equivalent rating by
S&P, Moody’s or Fitch, as the case may be.

     “Ratable Share” of any amount means, with respect to any Revolving Credit
Lender at any time, the product of such amount multiplied by a fraction the
numerator of which is the amount of such Lender’s Revolving Credit Commitment at such time
(or, if the Revolving Credit Commitments shall have been terminated pursuant to Section 2.05
or 6.01, such Lender’s Revolving Credit Commitment as in effect immediately prior to such
termination) and the denominator of which is the aggregate amount of all Revolving Credit
Commitments at such time (or, if the Revolving Credit Commitments shall have been terminated
pursuant to Section 2.05 or 6.01, the aggregate amount of all Revolving Credit Commitments
as in effect immediately prior to such termination).

     “Receivables Subsidiary” means a bankruptcy-remote, special-purpose wholly
owned Subsidiary formed in connection with a Permitted Receivables Financing.

     “Reference Banks” means initially, Citibank, Banco Bilbao Vizcaya Argentaria
Puerto Rico and Scotiabank de Puerto Rico or, if less than three of such banks are able to
furnish timely information in

 

 

accordance with Section 2.08, any other commercial bank
designated by the Borrower and approved by the Required Lenders as constituting a “Reference
Bank” hereunder.

     “Register” has the meaning specified in Section 9.07(d).

     “Required Lenders” means at any time Lenders owed or holding at least a
majority of the sum of (a) the aggregate principal amount of the Advances outstanding at
such time, (b) the aggregate unused Commitments under the Term Facility at such time and (c)
the aggregate unused Revolving Credit Commitments at such time.

     “Required Revolving Credit Lenders” means at any time Revolving Credit Lenders
owed or holding at least a majority of the aggregate principal amount of the Revolving
Credit Advances outstanding at such time or, if no Revolving Credit Advances are then
outstanding, Revolving Credit Lenders holding at least a majority of the Revolving Credit
Commitments at such time.

     “Revolving Credit Advance” means an advance by a Revolving Credit Lender to the
Borrower as part of a Borrowing under Section 2.01(a).

     “Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.

     “Revolving Credit Commitment” means as to any Lender (a) the amount set forth
opposite such Lender’s name on Schedule I hereto as such Lender’s “Revolving Credit
Commitment” or (b) if such Lender has entered into any Assignment and Acceptance, the amount
set forth for such Lender in the Register maintained by the Agent pursuant to Section
9.07(d) as such Lender’s “Revolving Credit Commitment”, as such amount may be reduced
pursuant to Section 2.05.

     “Revolving Credit Facility” means, at any time, the aggregate amount of the
Revolving Credit Lenders’ Revolving Credit Commitments at such time.

     “Revolving Credit Lender” means any Lender that has a Revolving Credit
Commitment.

     “Revolving Credit Note” means a promissory note of the Borrower payable to the
order of any Revolving Credit Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the
Revolving Credit Advances made by such Lender, delivered pursuant to a request made under
Section 2.17.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

     “Services Agreement” means the Services Agreement, dated as of March 2, 2004,
by and among the Borrower, PRTC and Verizon Corporate Services Group Incorporated, as
amended, modified, renewed or replaced from time to time.

     “Significant Subsidiary” means at any time, with respect to the Borrower, any
Subsidiary, other than a Receivables Subsidiary, the assets of which, in the aggregate,
exceed 5% of the Consolidated Assets, determined in accordance with GAAP.

     “Single Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA
Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so
maintained and in respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been or were to be
terminated.

 

 

     “Solvent” and “Solvency” mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such Person’s ability
to pay such debts and liabilities as they mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in the light of all
the facts and circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability after taking into account any
indemnification pursuant to the terms of any agreements entered into in connection
therewith.

     “Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50% of (a) the
issued and outstanding capital stock having ordinary voting power to elect a majority of the
Board of Directors of such corporation (irrespective of whether at the time capital stock of
any other class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial interest in such trust
or estate, is at the time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.

     “Taxes” has the meaning specified in Section 2.14(a).

     “Term Advance” has the meaning specified in Section 2.01(b).

     “Term Borrowing” means a borrowing consisting of simultaneous Term Advances of
the same Type made by the Term Lenders.

     “Term Commitment” means as to any Lender (a) the amount set forth opposite such
Lender’s name on Schedule I hereto as such Lender’s “Term Commitment” or (b) if such Lender
has entered into any Assignment and Acceptance, the amount set forth for such Lender in the
Register maintained by the Agent pursuant to Section 9.07(d) as such Lender’s “Term
Commitment”, as such amount may be reduced pursuant to Section 2.05.

     “Term Facility” means, at any time, the aggregate amount of the Term Lenders’
Term Commitments at such time.

     “Term Lender” means any Lender that has a Term Commitment.

     “Term Note” means a promissory note of the Borrower payable to the order of any
Term Lender, in substantially the form of Exhibit A-2 hereto, evidencing the indebtedness of
the Borrower to such Lender
resulting from the Term Advances made by such Lender, delivered pursuant to a request
made under Section 2.17.

     “Termination Date” means the earlier of February 28, 2009 and the date of
termination in whole of the Commitments pursuant to Section 2.05 or 6.01.

     “Type” refers to the distinction between a Base Rate Advance and a Eurodollar
Rate Advance.

     “Unissued Letter of Credit Commitment” means, with respect to any Issuing Bank,
the obligation of such Issuing Bank to issue Letters of Credit for the account of the
Borrower or its specified Subsidiaries

 

 

in an amount equal to the excess of (a) the amount of
its Letter of Credit Commitment over (b) the aggregate Available Amount of all Letters of
Credit issued by such Issuing Bank.

     “Unused Revolving Credit Commitment” means, with respect to each Revolving
Credit Lender at any time, (a) such Lender’s Revolving Credit Commitment at such time
minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit
Advances made by such Lender (in its capacity as a Lender) and outstanding at such time,
plus (ii) such Lender’s Ratable Share of (A) the aggregate Available Amount of all
the Letters of Credit outstanding at such time and (B) the aggregate principal amount of all
Advances made by the Issuing Banks pursuant to Section 2.03(c) that have not been ratably
funded by such Lender and outstanding at such time.

     “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.

     “Withholding Tax Change” means the approval by either the Chamber of
Representatives or the Senate of the Commonwealth of Puerto Rico of any proposal to change
any applicable law, treaty or government rule, regulation or order which would require the
Borrower to deduct or withhold any Taxes from or in respect of any sum payable hereunder or
under any Note to any Lender or the Agent.

SECTION 1.02. Computation of Time
Periods. In this Agreement in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and the words “to” and “until”
each mean “to but excluding”.

SECTION 1.03. Accounting Terms. All terms of an
accounting or financial nature not specifically defined herein shall be construed in accordance
with GAAP.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT

SECTION 2.01. The Advances and
Letters of Credit. (a) Revolving Credit Advances. Each Revolving Credit Lender
severally (but not jointly) agrees, on the terms and conditions hereinafter set forth, to make
Revolving Credit Advances to the Borrower from time to time on any Business Day during the period
from the Effective Date until the Termination Date in an amount not to exceed such Lender’s Unused
Revolving Credit Commitment. Each Revolving Credit Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Revolving
Credit Advances of the same Type made on the same day by the Revolving Credit Lenders ratably
according to their respective Revolving Credit Commitments. Within the limits of this Section
2.01(a), the Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.10 and
reborrow under this Section 2.01(a).

          (b) The Term Advances. Each Term Lender severally (but not jointly) agrees, on the
terms and conditions hereinafter set forth, to make an advance (a “Term Advance”) to the
Borrower on any Business Day during the period from the Effective Date to and including May 1, 2006
in an amount not to exceed such Lender’s Term Commitment at such time. The Term Borrowing shall
consist of Term Advances made on the same day by the
Term Lenders ratably according to their Term Commitments. Amounts borrowed under this Section
2.01(b) and repaid or prepaid may not be reborrowed.

          (c) Letters of Credit. Each Issuing Bank agrees, on the terms and conditions
hereinafter set forth, in reliance upon the agreements of the other Revolving Credit Lenders set
forth in this Agreement, to issue standby and trade letters of credit (each, a “Letter of
Credit”) denominated in U.S. dollars for the account of the Borrower and its specified
Subsidiaries from time to time on any Business Day during the period from the Effective Date until
30 days before the Termination Date in an aggregate Available Amount (i) for all Letters of Credit
issued by each Issuing Bank not to exceed at any time the lesser of (x) the Letter of Credit
Facility at such time and

 

 

(y) such Issuing Bank’s Letter of Credit Commitment at such time and (ii)
for each such Letter of Credit not to exceed an amount equal to the aggregate amount of the Unused
Revolving Credit Commitments of the Revolving Credit Lenders at such time. No Letter of Credit
shall have an expiration date (including all rights of the Borrower or the beneficiary to require
renewal) later than the earlier of (x) one year after the issuance thereof, provided that a
Letter of Credit may by its terms be renewable annually upon notice given to the applicable Issuing
Bank so long as such renewal is subject to the conditions set forth in Section 3.02 , and the terms
of such Letter of Credit do not permit the expiration date (after giving effect to any renewal) to
extend to a date later than five Business Days before the Termination Date and (y) five Business
Days before the Termination Date. Within the limits referred to above, the Borrower may from time
to time request the issuance of Letters of Credit under this Section 2.01(c).

SECTION 2.02. Making the Advances. (a) Except
as otherwise provided in Section 2.03(c), each Borrowing shall be made on notice, given not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed
Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or the Business Day of
the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower
to the Agent, which shall give to each Appropriate Lender prompt notice thereof by telecopier or
facsimile. Each such notice of a Borrowing (a “Notice of Borrowing”) shall be by
telephone, confirmed immediately in writing, or telecopier or facsimile in substantially the form
of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of
Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case
of a Borrowing consisting of Eurodollar Rate Advances, the initial Interest Period for each such
Advance. Each Appropriate Lender shall, before 12:00 noon (New York City time) on the date of such
Borrowing, make available for the account of its Applicable Lending Office to the Agent at the
Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing. After the
Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Agent will make such funds available to the Borrower at the Borrower’s Account.

(b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not
select Eurodollar Rate Advances under a Facility for any Borrowing under that Facility if the
aggregate obligation of the Appropriate Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.08 or 2.12, (ii) the Eurodollar Rate Advances under the Revolving
Credit Facility may not be outstanding as part of more than twelve separate Revolving Credit
Borrowings and (iii) the Eurodollar Rate Advances under the Term Facility may not be outstanding as
part of more than five separate Term Borrowings.

(c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of any
Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date specified in such Notice of
Borrowing for such 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
Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.

(d) Unless the Agent shall have received notice from an Appropriate Lender prior to the time of any
Borrowing that such Lender will not make available to the Agent such Lender’s ratable portion of
such Borrowing, the Agent may assume that such Lender has made such portion available to the Agent
on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such ratable portion
available to the Agent, such Lender and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Advances
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute
such Lender’s Advance as part of such Borrowing for purposes of this Agreement and the Borrower
shall be relieved of its obligations to repay such amount under this Section 2.02(d).

(e) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall
not relieve any other Lender of its obligation hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing.

SECTION
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit. (a)
Request for Issuance. (i) Each Letter of Credit shall be issued upon notice, given not
later than 11:00 A.M. (New York City time) on the fifth Business Day prior to the date of the
proposed Issuance of such Letter of Credit (or on such shorter notice as

 

 

 the applicable Issuing
Bank may agree), by the Borrower to any Issuing Bank, and such Issuing Bank shall give the Agent
prompt notice thereof. Each such notice by the Borrower of Issuance of a Letter of Credit (a
“Notice of Issuance”) shall be by telecopier, confirmed immediately in writing, specifying
therein the requested (A) date of such Issuance (which shall be a Business Day), (B) Available
Amount of such Letter of Credit, (C) expiration date of such Letter of Credit (which shall be in
accordance with Section 2.01(c)), (D) name and address of the beneficiary of such Letter of Credit
and (E) form of such Letter of Credit. Such Letter of Credit shall be issued pursuant to such
application and agreement for letter of credit as such Issuing Bank and the Borrower shall agree
for use in connection with such requested Letter of Credit (a “Letter of Credit
Agreement”). If the requested form of such Letter of Credit is acceptable to such Issuing Bank
in its reasonable discretion (it being understood that any such form shall have only explicit
documentary conditions to draw and shall not include discretionary conditions), such Issuing Bank
will, upon fulfillment of the applicable conditions set forth in Section 3.02, make such Letter of
Credit available to the Borrower at its office referred to in Section 9.02 or as otherwise agreed
with the Borrower in connection with such Issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of
this Agreement shall govern.

(b) Participations. By the Issuance of a Letter of Credit (or an amendment to a Letter of
Credit increasing or decreasing the amount thereof) and without any further action on the part of
the applicable Issuing Bank or the Revolving Credit Lenders, such Issuing Bank hereby grants to
each Revolving Credit Lender, and each Revolving Credit Lender hereby acquires from such Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Ratable Share of the
Available Amount of such Letter of Credit. The Borrower hereby agrees to each such participation.
In consideration and in furtherance of the foregoing, each Revolving Credit Lender hereby
absolutely and unconditionally agrees to pay to the Agent, for the account of such Issuing Bank in
accordance with Section 2.03(c), such Lender’s Ratable Share of each drawing made under a Letter of
Credit funded by such Issuing Bank and not reimbursed by the Borrower on the date made, or of any
reimbursement payment required to be refunded to the Borrower for any reason, which amount will be
advanced, and deemed to be a Revolving Credit Advance to the Borrower hereunder, regardless of the
satisfaction of the conditions set forth in Section 3.02. Each Revolving Credit Lender further
acknowledges and agrees that its participation in each Letter of Credit will be automatically
adjusted to reflect such Lender’s Ratable Share of the Available Amount of such Letter of Credit at
each time such Lender’s Revolving Credit Commitment is amended pursuant to a Commitment Increase in
accordance with Section 2.18, an assignment in accordance with Section 9.07 or otherwise pursuant
to this Agreement.

(c) Drawing and Reimbursement. The payment by an Issuing Bank of a draft drawn under any
Letter of Credit which is not reimbursed by the Borrower on the date made shall constitute for all
purposes of this Agreement the making by such Issuing Bank of a Revolving Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft, without regard to whether the making of
such Advance would exceed such Issuing Bank’s Unused Revolving Credit Commitment. Each Issuing
Bank shall give prompt notice of each drawing under any Letter of Credit issued by it to the
Borrower and the Agent. Upon written demand by such Issuing Bank, with a copy of such demand to
the Agent and the Borrower, each Revolving Credit Lender shall pay to the Agent such Lender’s
Ratable Share of such outstanding Advance pursuant to Section 2.03(b). Each Revolving Credit
Lender acknowledges and agrees that its obligation to make Revolving Credit Advances pursuant to
this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the
Revolving Credit Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Promptly after receipt thereof, the Agent shall
transfer such funds to such Issuing Bank. Each Revolving Credit Lender agrees to fund its Ratable
Share of an outstanding Revolving Credit Advance on (i) the Business Day on which demand therefor
is made by such Issuing Bank, provided that notice of such demand is given not later than
11:00 A.M. (New York City time) on such Business Day, or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. If and to the extent
that any Revolving Credit Lender shall not have so made the amount of such Advance available to the
Agent, such Lender agrees to pay to the Agent forthwith on demand such amount together with
interest thereon, for each day from the date of demand by any such Issuing Bank until the date such
amount is paid to the Agent, at the Federal Funds Rate for its account or the account of such
Issuing Bank, as applicable. If such Lender shall pay to the Agent such amount for the account of
any such Issuing Bank on any Business Day, such amount so paid in respect of principal shall
constitute a Revolving Credit Advance made by such Lender on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Revolving Credit Advance made by such
Issuing Bank shall be reduced by such amount on such Business Day.

(d) Letter of Credit Reports. Each Issuing Bank shall furnish (A) to the Agent and each
Revolving Credit Lender (with a copy to the Borrower) on the first Business Day of each month a
written report summarizing Issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the preceding month and drawings during such month under all Letters of Credit
issued by such Issuing Bank and (B) to the Agent and each Revolving Credit

 

 

Lender (with a copy to the Borrower) on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit issued by such Issuing Bank.

          (e) Failure to Make Advances. The failure of any Revolving Credit Lender to make the
Advance to be made by it on the date specified in Section 2.03(c) shall not relieve any other
Revolving Credit Lender of its obligation hereunder to make its Advance on such date, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to be made by such
other Lender on such date.

SECTION 2.04. Fees. (a) Facility Fee. The Borrower
agrees to pay to the Agent for the account of each Revolving Credit Lender a facility fee on the
aggregate amount of such Lender’s Revolving Credit Commitment from the Effective Date in the case
of each Initial Lender and from the later of the Effective Date and the effective date specified in
the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender
until the Termination Date at a rate per annum equal to the Applicable Percentage in effect from
time to time, payable in arrears quarterly on the last day of each March, June, September and
December, commencing March 31, 2006, and on the Termination Date.

(b) Commitment Fee. The Borrower agrees to pay to the Agent for the account of each Term
Lender a commitment fee on the aggregate amount of such Lender’s Term Commitment from the Effective
Date in the case of each Initial Lender and from the later of the Effective Date and the effective
date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the earlier of the date of the initial Borrowing under the Term Facility
and May 1, 2006 at a rate per annum equal to the Applicable Percentage in effect from time to time,
payable on the earlier of the date of such Borrowing and May 1, 2006.

          (c) Letter of Credit Fees. (i) The Borrower shall pay to the Agent for the account
of each Revolving Credit Lender a commission on such Lender’s Ratable Share of the average daily
aggregate Available Amount of all Letters of Credit issued and outstanding from time to time at a
rate per annum equal to the Applicable Margin for Eurodollar Rate Advances in effect from time to
time during such calendar quarter, payable in arrears quarterly on the last day of each March,
June, September and December, commencing with the quarter ended March 31, 2006, and on the
Termination Date; provided that the Applicable Margin shall be 2% above the Applicable
Margin in effect upon the occurrence and during the continuation of an Event of Default if the
Borrower is required to pay default interest pursuant to Section 2.07(b).

     (ii) The Borrower shall pay to each Issuing Bank, for its own account, a fronting fee
and such other commissions, issuance fees, transfer fees and other fees and charges in
connection with the Issuance or administration of each Letter of Credit as the Borrower and
such Issuing Bank shall agree, provided such amounts are agreed between the Borrower
and such Issuing Bank, in the relevant Letter of Credit Agreement or otherwise, to be
payable by the Borrower.

	 	(d)	 	Agent’s Fees. The Borrower shall pay to the Agent for its own account such
fees as may from time to time be agreed between the Borrower and the Agent.

SECTION 2.05.
Optional Termination or Reduction of the Commitments. The Borrower shall have the right,
upon at least three Business Days’ notice to the Agent, to terminate in whole or reduce ratably in
part the unused Term Commitments or the Unused Revolving Credit Commitments of the Lenders;
provided that each partial reduction of a Facility (i) shall be in the aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) shall be made ratably
among the Appropriate Lenders in accordance with their Commitments under such Facility.

SECTION 2.06.
Repayment of Advances and Letter of Credit Drawings. (a) Revolving Credit
Advances. The Borrower shall repay to the Agent for the ratable account of the Revolving
Credit Lenders on the Termination Date the aggregate principal amount of the Revolving Credit
Advances then outstanding.

(b) Term Advances. The Borrower shall repay to the Agent for the ratable account of the
Term Lenders on the Maturity Date the aggregate principal amount of the Term Advances then
outstanding.

(c) Letter of Credit Drawings. The obligations of the Borrower under any Letter of Credit
Agreement and any other agreement or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, such Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it being understood that
any such payment by the Borrower is without prejudice to, and does not constitute a waiver of, any
rights the Borrower might have or might acquire as a result of the payment by any Lender of any
draft or the

 

 

 reimbursement by the Borrower thereof):

     (i) any lack of validity or enforceability of this Agreement, any Note, any Letter of
Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto
(all of the foregoing being, collectively, the “L/C Related Documents”);

     (ii) any change in the time, manner or place of payment of, or in any other term of,
all or any of the obligations of the Borrower in respect of any L/C Related Document or any
other amendment or waiver of or any consent to departure from all or any of the L/C Related
Documents;

     (iii) the existence of any claim, set-off, defense or other right that the Borrower may
have at any time against any beneficiary or any transferee of a Letter of Credit (or any
Persons for which any such beneficiary or any such transferee may be acting), any Issuing
Bank, the Agent, any Lender or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;

     (iv) any statement or any other document presented under a Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;

     (v) payment by any Issuing Bank under a Letter of Credit against presentation of a
draft or certificate that does not strictly comply with the terms of such Letter of Credit;

     (vi) any exchange, release or non-perfection of any collateral, or any release or
amendment or waiver of or consent to departure from any guarantee, for all or any of the
obligations of the Borrower in respect of the L/C Related Documents; or

     (vii) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including, without limitation, any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or a guarantor.

SECTION 2.07. Interest. (a) Scheduled Interest.
The Borrower shall pay interest on the unpaid principal amount of each 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 Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from
time to time plus (y) the Applicable Margin in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be Converted or paid in full.

     (ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for
such Advance to the sum of (x) the Eurodollar Rate for such Interest Period for such
Advance, plus (y) the Applicable Margin in effect from time to time, payable in
arrears on the last day of such Interest Period and, if such Interest Period has a duration
of more than three months, on each day that occurs during such Interest Period every three
months from the first day of such Interest Period and on the date such Eurodollar Rate
Advance shall be Converted or paid in full.

	 	(b)	 	Default Interest. Upon the occurrence and during the continuance of an Event
of Default under Section 6.01(a), the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears on the dates
referred to in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2%
per annum above the rate per annum required to be paid on such Advance pursuant to clause
(a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from the date
such amount shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on Base Rate Advances
pursuant to clause (a)(i) above.

SECTION 2.08. Interest Rate
Determination. (a) Upon request of the Agent, each Reference Bank agrees to furnish to the
Agent timely information for the purpose of determining each Eurodollar Rate. If the Telerate Page
is unavailable and any one or more of the Reference Banks shall not furnish such timely information
to the Agent for the purpose of determining any such interest rate, the Agent shall determine such
interest rate on the basis of timely information furnished by the remaining Reference Banks. The
Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate
determined by the Agent for purposes of Section 2.07(a)(i) or (ii), and the

 

 

 rate, if any, furnished
by each Reference Bank for the purpose of determining the interest rate under Section 2.07(a)(ii).

(b) If, with respect to any Eurodollar Rate Advances under the Revolving Credit Facility or the
Term Facility, the Lenders owed at least a majority of the aggregate principal amount thereof
notify the Agent that the Eurodollar Rate for any Interest Period for such Advances will not
adequately reflect the cost to such Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances under such Facility for such Interest Period, the Agent shall forthwith so
notify the Borrower and the Appropriate Lenders, whereupon (i) each Eurodollar Rate Advance under
that Facility shall automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance, and (ii) the obligation of the Appropriate Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances under that Facility shall be suspended until the Agent shall notify the Borrower and
the Appropriate Lenders that the circumstances causing such suspension no longer exist.

(c) If the Borrower shall fail to select the duration of any Interest Period for any Eurodollar
Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in
Section 1.01, the Agent will forthwith so notify the Borrower and the Appropriate Lenders and such
Advances will automatically, on the last day of the then existing Interest Period therefor, Convert
into Base Rate Advances.

(d) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances
comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than
$10,000,000, such Advances shall automatically Convert into Base Rate Advances.

(e) Upon the occurrence and during the continuance of any Event of Default under Section 6.01(a),
(i) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

(f) If the Telerate Page is unavailable and fewer than two Reference Banks determine and furnish
timely information to the Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances,

     (i) the Agent shall forthwith notify the Borrower and the Lenders that the interest
rate cannot be determined for such Eurodollar Rate Advances,

     (ii) each such Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance (or if such Advance is then a
Base Rate Advance, will continue as a Base Rate Advance), and

     (iii) the obligation of the Lenders to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no longer exist.

SECTION 2.09. Optional Conversion of
Advances. The Borrower may on any Business Day, upon notice given to the Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.08 and 2.12, Convert all Advances of one
Type comprising the same Borrowing into Advances of the other Type; provided,
however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be
made only on the last day of an Interest Period for such Eurodollar Rate Advances and any
Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than
$10,000,000. Each such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for each
such Advance. Each notice of Conversion shall be irrevocable and binding on the Borrower.

SECTION 2.10. Optional Prepayments of
Advances. The Borrower may, upon notice not later than 11:00 A.M. (New York City time) for
Base Rate Advances and upon at least two Business Days’ notice to the Agent for Eurodollar Rate
Advances stating the proposed date and the aggregate principal amount of the prepayment, and if
such notice is given the Borrower shall, prepay the outstanding principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal amount prepaid; provided, however,
that (x) each partial prepayment shall be in an aggregate principal amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 9.04(c).

SECTION 2.11. Increased Costs. (a) If, due to
either (i) the introduction of or any change in or in the interpretation

 

 

 of any law or regulation
or (ii) the compliance with any written guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Advances
or of agreeing to issue or of issuing or maintaining or participating in Letters of Credit
(excluding for purposes of this Section 2.11 any such increased costs resulting from (i) Taxes or
Other Taxes (as to which Section 2.14 shall govern) and (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender is organized or has its Applicable Lending Office or any
political subdivision thereof), then the Borrower shall from time to time, upon demand by such
Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost (whether or not
such increased costs arise prior to the receipt of written notification from such central bank or
other governmental authority); provided that the Borrower shall not be required to pay any
such increased costs to the extent such increased costs accrued prior to the date that is six
months prior to such notice, provided
further that, if the change in law or circumstance giving rise to such increased costs or
reductions is retroactive, then the six-month period referred to above shall be extended to include
the period of retroactive effect thereof. A certificate as to the amount of such increased cost,
submitted to the Borrower and the Agent by such Lender, shall be conclusive and binding for all
purposes, absent error in the calculation of such amount.

(b) If any Lender determines that compliance with any law or regulation or any written guideline or
request from any central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender (excluding any reserves included in the
computation of the Eurodollar Rate) and that the amount of such capital is increased by or based
upon the existence of such Lender’s commitment to lend or to issue or participate in Letters of
Credit hereunder and other commitments of such type or the issuance or maintenance of or
participation in the Letters of Credit (or similar contingent obligations), then, upon demand by
such Lender (with a copy of such demand to the Agent), the Borrower shall pay to the Agent for the
account of such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender or such corporation (whether or not such amounts arise prior
to the receipt of written notification from such central bank or other governmental authority) in
the light of such circumstances, to the extent that such Lender reasonably determines such increase
in capital to be allocable (in the proportion that such Lender’s Commitment hereunder bears to all
of such Lender’s commitments of this type) to the existence of such Lender’s commitment to lend or
to issue or participate in Letters of Credit hereunder or to the issuance or maintenance of or
participation in any Letters of Credit; 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, provided further that, if the change in law or circumstance giving
rise to such increased costs or reductions is retroactive, then the six-month period referred to
above shall be extended to include the period of retroactive effect thereof. A certificate as to
such amounts submitted to the Borrower and the Agent by such Lender shall be conclusive and binding
for all purposes, absent error in the calculation of such amounts.

(c) Any Lender claiming any additional amounts payable pursuant to this Section 2.11 agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to
minimize such additional amounts and to change the jurisdiction of its Applicable Lending Office if
the making of such a change would avoid the need for, or reduce the amount of, any additional
amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be
otherwise notably disadvantageous to such Lender. The Borrower shall reimburse such Lender for
such Lender’s reasonable expenses incurred in connection with such change or in considering such a
change in an amount not to exceed the Borrower’s pro rata share of such expenses based on such
Lender’s Commitment and Advances and the total lending commitments and loans of such Lender to its
similarly situated customers.

SECTION 2.12. Illegality. Notwithstanding any other
provision of this Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful, or any central bank
or other governmental authority having relevant jurisdiction asserts that it is unlawful, for any
Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar
Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, (i) each Eurodollar Rate
Advance made by such Lender will automatically, upon such demand, Convert into a Base Rate Advance
and (ii) the obligation of such Lender to make Eurodollar Rate Advances or to Convert Advances into
Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.

SECTION 2.13. Payments and Computations.
(a) The Borrower shall make each payment hereunder and under the Notes without counterclaim or
set-off not later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars to the
Agent at the Agent’s Account in same day funds. The Agent will promptly thereafter cause to be

 

 

distributed like funds relating to the payment of principal or interest or fees ratably (other than
amounts payable pursuant to Section 2.04, 2.11, 2.14 or 9.04(c)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon any Assuming Lender
becoming a Lender hereunder as a result of a Commitment Increase pursuant to Section 2.18, and upon
the Agent’s receipt of such Lender’s Assumption Agreement and recording of the information
contained therein, from and after the applicable Increase Date the Agent shall make all payments
hereunder and under any Notes issued in connection therewith in respect of the interest assumed
thereby to the Assuming Lender. Upon its acceptance of an Assignment and Acceptance and recording
of the information contained therein in the Register pursuant to Section 9.07(c), from and after
the effective date specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly between themselves.

(b) All computations of interest based on the Base Rate shall be made by the Agent on the basis of
a year of 365 or 366 days, as the case may be, and all computations of interest based on the
Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit commissions shall be
made by the Agent on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for which such
interest, fees or commissions are payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent error in the calculation of such
interest rate.

(c) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of interest, fees or
commissions, as the case may be; provided, however, that, if such extension would
cause payment of interest on or principal of Eurodollar Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.

(d) Unless the Agent shall have received notice from the Borrower prior to the time on which any
payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the
Agent may assume that the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due
date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall
not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith
on demand such amount distributed to such Lender together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender repays such amount to
the Agent, at the Federal Funds Rate.

SECTION 2.14. Taxes. (a) Subject to subsections (e) and (f)
below, any and all payments by the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.13, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto imposed by Puerto Rico, the United States or any political subdivision of either
(or in the case of any payments by or on behalf of the Borrower through an account or branch
outside the United States or Puerto Rico or by or on behalf of the Borrower by a payor that is not
a United States person or not organized or resident in Puerto Rico such payments shall be made free
and clear of and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto imposed by a foreign
jurisdiction or any political subdivision thereof), excluding, in the case of each Lender
and the Agent, taxes imposed on its overall net income, and franchise taxes imposed on it in lieu
of net income taxes (x) in the case of a Lender pursuant to the laws of the jurisdiction (or any
political subdivision or taxing authority therein) in which it is organized or in which the
principal office of such Lender, or Applicable Lending Office of such Lender is located, or (y) in
the case of any payment to the Agent in its capacity as Agent, the jurisdiction (or any political
subdivision or taxing authority therein) in which it is organized or in which the principal office
of the Agent is located or in which the office designated by the Agent to act as Agent is located
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Notes being hereinafter referred to as “Taxes”).
Subject to subsections (e) and (f) below, if the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any Lender or the Agent,
(i) the sum payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under this Section 2.14)
such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. Within 30 days after the date of any payment of
Taxes, the Borrower shall furnish to the Agent, at its address referred to in Section 9.02, the
original or a certified copy of a receipt evidencing payment thereof. For purposes of this
subsection (a) and subsection (e), the

 

 

 terms “United States” and “United States
person” shall have the meanings specified in Section 7701 of the Internal Revenue Code.

(b) In addition, the Borrower agrees to pay any stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any payment made hereunder or under the
Notes or from the execution, delivery or registration of, performing under, or otherwise with
respect to, this Agreement or the Notes as a result of the introduction of or any change in or in
the interpretation of any law or regulation after the Effective Date (hereinafter referred to as
“Other Taxes”).

(c) Subject to subsections (d), (e) and (f) below, the Borrower shall indemnify each Lender and the
Agent for the full amount of Taxes or Other Taxes (to the extent not previously paid under
subsection (a) or (b) above) imposed on or paid by such Lender or the Agent (as the case may be)
and any liability (including penalties, interest and expenses but excluding any taxes imposed by
any jurisdiction on amounts payable under this Section 2.14) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such Lender or the Agent
(as the case may be) makes written demand therefor.

(d) Each Lender organized under the laws of a jurisdiction outside of Puerto Rico from time to
time, as requested in writing by the Borrower (but only so long as such Lender remains lawfully
able to do so), shall provide each of the Agent and the Borrower with two properly and accurately
completed and duly executed original copies of any form, document or other certificate that is
necessary for such Lender to be exempt from, or entitled to a reduced rate of Taxes or payments
hereunder or under the Notes or for the Borrower to determine the applicable rate of deduction or
withholding of any Taxes. If any Lender which is organized under the laws of a jurisdiction
outside of Puerto Rico is unable to provide the above-described forms, documents or other
certificates for a relevant interest period (or if the Lender’s appropriate personnel responsible
for providing the forms, documents or other certificates actually become aware that the forms,
documents or other certificates provided by it are inaccurate), such Lender shall notify the
Borrower in writing prior to or immediately upon the commencement of such relevant interest period.

(e) For any period with respect to which a Lender has failed to provide the Borrower with the
appropriate form, document or other certificate requested by the Borrower in accordance with
Section 2.14(d) (other than if such
failure is due to a change in any applicable law, treaty or government rule, regulation or order,
or any change in the interpretation, administration or application thereof occurring subsequent to
the date hereof such that such Lender is not lawfully able to provide the Borrower with the
appropriate form, document or other certificate, or if such form, document or other certificate is
no longer required to establish an exemption from the applicable tax), such Lender shall not be
entitled to indemnification under Section 2.14(a) or (c) with respect to Taxes by reason of such
failure and the Borrower shall be entitled to withhold Taxes from payments to such Lender;
provided, however, that should a Lender become subject to Taxes because of its
failure to deliver a form, document or other certificate required hereunder, the Borrower shall
take such steps at such Lender’s expense as such Lender shall reasonably request to assist such
Lender to recover such Taxes.

(f) Notwithstanding anything else contained in this Section 2.14, the Borrower shall only be
required to pay additional sums with respect to Taxes (subject to subsection (h) below) to a Lender
(or the Agent, as the case may be) pursuant to subsection (a) or (c) above if the obligation to pay
such Taxes results from such Lender’s inability to obtain a complete exemption from Taxes as a
result of (i) any amendment to the laws (or any regulations thereunder), or any amendment to, or
change in, an interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority adopted or enacted after the date hereof
(or in the case of an entity that becomes a Lender after the date hereof, the date such entity
becomes a Lender), (ii) an amendment, modification or revocation of any existing applicable tax
treaty ratified, enacted or amended after the date hereof (or in the case of an entity that becomes
a Lender after the date hereof, the date such entity becomes a Lender), or (iii) the ratification
of a new tax treaty ratified after the date hereof (or in the case of an entity that becomes a
Lender after the date hereof, the date such entity becomes a Lender).

(g) In the event that the Borrower makes an additional payment under Section 2.14(a) or 2.14(c)
for the account of any Lender and such Lender, in its sole opinion, determines that it has finally
and irrevocably received or been granted a credit against, or relief or remission from, or
repayment of, any tax paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to such additional payment, such Lender shall, to the extent
that it determines that it can do so without prejudice to the retention of the amount of such
credit, relief, remission or repayment, pay to the Borrower such amount as such Lender shall, in
its sole opinion, have determined is attributable to such deduction or withholding and will leave
such Lender (after such payment) in no worse position than it would have been had the Borrower not
been required to make such deduction or withholding. Nothing contained herein shall (i) interfere
with the right of a Lender to arrange its tax affairs in whatever manner it thinks fit or (ii)
oblige any Lender to claim any tax credit or to disclose any information relating to its tax
affairs or any computations in respect thereof or (iii) require any Lender to take or refrain from
taking any action that would prejudice its ability to benefit from any other credits, reliefs,
remissions or repayments to which it may be entitled. Each Lender and the Agent shall reasonably
cooperate with the Borrower at the Borrower’s written request and sole

 

 

expense, in contesting any Taxes or Other Taxes the Borrower would bear pursuant to this
Section 2.14, provided, however, that (i) no tax return of such Lender or the Agent
is or would be held open as a result of such contest, (ii) neither such Lender nor the Agent is
required to reopen a tax year that has already closed and (iii) such Lender and the Agent shall, in
the sole opinion of such Lender and the Agent, respectively, have determined that such contest will
leave such Lender and the Agent, respectively, in no worse position than it would have been in had
it not contested such Taxes or Other Taxes. Nothing contained herein shall interfere with the
right of a Lender or the Agent to arrange its tax affairs in whatever manner it thinks fit, if in
the sole judgment of such Lender or the Agent, such contest would be disadvantageous to such Lender
or the Agent. In pursuing a contest in the Lender’s or the Agent’s name, such Lender or the Agent
will be represented by counsel of such Lender’s or the Agent’s choice, and will defend against,
settle or otherwise control the contest and will not relinquish control or decision making over the
contest.

(h) (i) Any Lender claiming any additional amounts payable pursuant to this Section 2.14 or (ii)
upon a Withholding Tax Change, each Lender, agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to avoid or minimize such additional amounts
and to change the jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise notably
disadvantageous to such Lender. The Borrower shall reimburse such Lender for such Lender’s
reasonable expenses incurred in connection with such change or in considering such a change in an
amount not to exceed the Borrower’s pro rata share of such expenses based on such Lender’s
Commitment and Advances to the Borrower and the total lending commitments and loans of such Lender
to its similarly situated customers.

SECTION 2.15. Sharing of Payments, Etc. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of
the Advances owing to it (other than (x) as payment of a Revolving Credit Advance made by an
Issuing Bank pursuant to the first sentence of Section 2.03(c) or (y) pursuant to Section 2.11,
2.14, 9.01(b), 9.04(c) or 9.07) in excess of its ratable share of payments on account of the
Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in the Advances owing to them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together with an amount equal
to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s
required repayment to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of the total amount so
recovered; and provided further that, so long as the obligations under this
Agreement shall not have been accelerated, any excess payment received by any Appropriate Lender
shall be shared on a pro rata basis only with other Appropriate Lenders. The Borrower agrees that
any Lender so purchasing a participation from another Lender by delivering payment pursuant to this
Section 2.15 may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such participation.

SECTION 2.16. Use of Proceeds. The proceeds of the Advances shall be available (and the
Borrower agrees that it shall use such proceeds) solely for general corporate purposes of the
Borrower and its Subsidiaries, including, without limitation, to provide a backstop for commercial
paper, provided that such proceeds shall not be used for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System).

SECTION 2.17. Evidence of Debt. (a) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Advance owing to such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time hereunder in respect of
Advances. The Borrower agrees that upon notice by any Lender to the Borrower (with a copy of such
notice to the Agent) to the effect that a Note is required or appropriate in order for such Lender
to evidence (whether for purposes of pledge, enforcement or otherwise) the Advances owing to, or to
be made by, such Lender, the Borrower shall promptly execute and deliver to such Lender a Revolving
Credit Note or a Term Note payable to the order of such Lender in a principal amount up to the
Revolving Credit Commitment or Term Commitment, as the case may be, of such Lender.

 

 

          (b) The Register maintained by the Agent pursuant to Section 9.07(d) shall include a control
account, and a subsidiary account for each Lender, in which accounts (taken together) shall be
recorded (i) the date
and amount of each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each Assignment and
Acceptance delivered to and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder and (iv) the amount
of any sum received by the Agent from the Borrower hereunder and each Lender’s share thereof.

          (c) Entries made in good faith by the Agent in the Register pursuant to subsection (b) above,
and by each Lender in its account or accounts pursuant to subsection (a) above, shall be
prima facie evidence of the amount of principal and interest due and payable or to
become due and payable from the Borrower to, in the case of the Register, each Lender and, in the
case of such account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an entry,
or any finding that an entry is incorrect, in the Register or such account or accounts shall not
limit or otherwise affect the obligations of the Borrower under this Agreement.

SECTION 2.18. Commitment Increase. At any time (x) prior to the Termination Date (but not
more than once in any calendar year) in the case of the Revolving Credit Commitments or (y) on or
prior to May 1, 2006 in the case of the Term Commitments, in each case, if no Default shall have
occurred and be continuing at such time, the Borrower may, if it so elects, increase the aggregate
amount of the Revolving Credit Commitments or Term Commitments (each, a “Commitment
Increase”), either by designating a Person not theretofore a Lender and acceptable to the Agent
and, in the case of a Commitment Increase of the Revolving Credit Facility, each Issuing Bank (such
acceptance not to be unreasonably withheld), (each such Person, an “Assuming Lender”) to
become a Lender or by agreeing with an existing Lender that such Lender’s Revolving Credit
Commitment or Term Commitment, as the case may be, shall be increased (each such Lender, an
“Increasing Lender”). Upon execution and delivery by the Borrower and each Increasing
Lender or Assuming Lender (the “Increase Date”) of an instrument of assumption in form and
amount reasonably satisfactory to the Agent and each Issuing Bank (each an “Assumption
Agreement”), such Increasing Lender shall have a Revolving Credit Commitment or Term Commitment
as therein set forth or such Assuming Lender shall become a Lender with a Revolving Credit
Commitment or Term Commitment as therein set forth and all the rights and obligations of a Lender
with a Commitment hereunder; provided that (i) the Borrower shall provide prompt notice of
such increase to the Agent, which shall promptly notify the other Lenders, (ii) the aggregate
amount of each such increase which is effective on any day shall be at least $10,000,000 or an
integral multiple thereof, (iii) the aggregate amount of the Revolving Credit Commitments shall at
no time exceed $300,000,000, (iv) the aggregate amount of the Term Commitments shall at no time
exceed $300,000,000 and (v) the Agent shall have received on or before such date (A) either (1)
certified copies of resolutions of the Board of Directors of the Borrower evidencing the ability of
the Borrower to effect the Commitment Increase or (2) a certificate from secretary of the Borrower
stating that the resolutions of the Board of Directors of the Borrower that were delivered to the
Agent pursuant to Section 3.01(g)(ii), which resolutions authorize the Borrower to effect the
Commitment Increase, have not been amended, modified, rescinded or revoked since the date they were
adopted and continue to be in full force and effect and (B) an opinion of counsel for the Borrower
(which may be in-house counsel), in substantially the form of Exhibit F hereto with such
modifications as are reasonably acceptable to the Required Lenders.

     Upon any increase in the aggregate amount of the Revolving Credit Commitments or Term
Commitments pursuant to this Section 2.18, within five Business Days in the case of the Base Rate
Advances outstanding, and at the end of the then current Interest Period with respect thereto in
the case of the Advances comprising each Eurodollar Rate Borrowing then outstanding (but in any
event within 45 days), the respective Advances under the applicable Facility shall be reallocated
among the Appropriate Lenders so that, after giving effect to such reallocation, the Advances
comprising each Borrowing under such Facility and continuing into the subsequent Interest Period
are funded by the Appropriate Lenders ratably according to their respective Commitments under such
Facility on such day. Each Lender agrees that the conditions precedent set forth in Section 3.02
shall not apply to any additional amounts required to be funded by such Lender pursuant to this
Section 2.18.

 

 

ARTICLE III

CONDITIONS TO EFFECTIVENESS AND LENDING

SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01. Section 2.01 of this
Agreement shall become effective on and as of the first date (the “Effective Date”) on
which the following conditions precedent have been satisfied:

     (a) There shall have occurred no Material Adverse Change since December 31, 2004 other
than as disclosed in Schedule 3.01(a) hereto.

     (b) There shall exist no action, suit, investigation, litigation or proceeding
affecting any of the Loan Parties or any of their respective Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect other than the matters described on Schedule
3.01(b) hereto (the “Disclosed Litigation”) or (ii) is initiated by any Person other
than a Lender in its capacity as a Lender that purports to affect the legality, validity or
enforceability of this Agreement or any Note or the consummation of the transactions
contemplated hereby, and there shall have been no material adverse change in the status, or
financial effect on any Loan Party, of the Disclosed Litigation from that described on
Schedule 3.01(b) hereto.

     (c) All governmental and third party consents and approvals necessary in connection
with the execution, delivery and performance of this Agreement and the Notes shall have been
obtained (without the imposition of any conditions that could reasonably be expected to
materially adversely affect the ability of any Loan Party to perform its obligations
hereunder) and shall remain in effect, and no law or regulation shall be applicable that
restrains, prevents or imposes adverse conditions upon the transactions contemplated hereby
that could reasonably be expected to materially adversely affect the ability of any Loan
Party to perform its obligations hereunder.

     (d) The Borrower shall have notified each Lender and the Agent in writing as to the
proposed Effective Date.

     (e) The Borrower shall have paid all invoiced fees and expenses of the Agent and the
Lenders (including the invoiced fees and expenses of counsel to the Agent).

     (f) On the Effective Date, the following statements shall be true and the Agent shall
have received for the account of each Lender a certificate signed by a duly authorized
officer of the Borrower, dated the Effective Date, stating that:

     (i) The representations and warranties contained in Section 4.01 are correct on
and as of the Effective Date, and

     (ii) No event has occurred and is continuing that constitutes a Default.

     (g) The Agent shall have received on or before the Effective Date the following, each
dated such day, in form and substance satisfactory to the Agent and (except for the Notes)
in sufficient copies for each Lender:

     (i) Notes to the order of Lenders, to the extent requested pursuant to Section
2.17.

     (ii) Certified copies of the resolutions of the Board of Directors of each Loan
Party approving the transactions contemplated by this Agreement and the Notes and of
all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and such Notes.

 

 

     (iii) A certificate of the Secretary or an Assistant Secretary of each Loan
Party certifying the names and true signatures of the officers of each Loan Party
authorized to sign this Agreement and the Notes and the other documents to be
delivered hereunder.

     (iv) A certificate, in substantially the form of Exhibit D 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 Curtis, Mallet-Prevost, Colt & Mosle LLP, New York
counsel for the Loan Parties, substantially in the form of Exhibit E hereto.

     (vi) A favorable opinion of Roberto Garcia, Esq., Vice President of Legal and
Regulatory Affairs of the Borrower, substantially in the form of Exhibit F hereto.

     (vii) A favorable opinion of Shearman & Sterling LLP, counsel for the Agent, in
form and substance satisfactory to the Agent.

     (h) The termination in whole of the commitments of the lenders party to the 364-Day
Credit Agreement dated as of March 1, 2005 (the “Existing Credit Agreement”) among
the Borrower, PRTC, as guarantor, Citibank, as administrative agent, Banco Bilbao Vizcaya
Argentaria Puerto Rico and Bank of Nova Scotia, Hato Rey, Puerto Rico, as co-syndication
agents, and Banco Popular de Puerto Rico and FirstBank Puerto Rico, as co-documentation
agents, and the payment in full of all obligations outstanding under the Existing Credit
Agreement. Each of the Initial Lenders that is a party to the Existing Credit Agreement
hereby waives the requirement of three Business Days notice to terminate the commitments
under the Existing Credit Agreement.

SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. The obligation of each
Lender to make an Advance (other than a Revolving Credit Advance made by any Issuing Bank or any
Revolving Credit Lender pursuant to Section 2.03(c)) on the occasion of each Borrowing, and the
obligation of each Issuing Bank to issue a Letter of Credit shall be subject to the conditions
precedent that the Effective Date shall have occurred and on the date of such Borrowing or Issuance
the following statements shall be true (and each of the giving of the applicable Notice of
Borrowing or Notice of Issuance and the acceptance by the Borrower of the proceeds of such
Borrowing shall constitute a representation and warranty by the Borrower that on the date of such
Borrowing or such Issuance such statements are true):

     (a) the representations and warranties contained in Section 4.01 are correct in all
material respects on and as of the date of such Borrowing or Issuance, before and after
giving effect to such Borrowing or Issuance and to the application of the proceeds
therefrom, as though made on and as of such date, and

     (b) no event has occurred and is continuing, or would result from such Borrowing or
Issuance or from the application of the proceeds therefrom, that constitutes a Default.

SECTION 3.03. Determinations Under Section 3.01. For purposes of determining compliance
with the conditions specified in Section 3.01, each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter required thereunder to
be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of
the Agent responsible for the transactions contemplated by this Agreement shall have received
notice from such Lender prior to the date that the Borrower, by notice to the Lenders, designates
as the proposed Effective Date, specifying its objection thereto. The Agent shall promptly notify
the Lenders of the occurrence of the Effective Date.

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Borrower. The Borrower represents and
warrants as follows:

(a) Each Loan Party is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation.

(b) The execution, delivery and performance by each Loan Party of this Agreement and
the Notes executed by it and the consummation of the transactions contemplated hereby, are
within such Loan Party’s corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) such Loan Party’s charter or by-laws (or other
equivalent organizational documents) or (ii) any law or any material contractual restriction
binding on or affecting such Loan Party or, to the knowledge of the chief financial officer
of the Borrower, any other contract the breach of which would limit the ability of any Loan
Party to perform its obligations under this Agreement or the Notes.

(c) No authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is required for the
due execution, delivery and performance by any Loan Party of this Agreement or the Notes.

(d) This Agreement has been, and each of the Notes when delivered hereunder will have
been, duly executed and delivered by the Borrower. This Agreement has been duly executed
and delivered by each Guarantor. Assuming that this Agreement has been duly executed by the
Agent and each of the Initial Lenders, this Agreement is, and each of the Notes when
delivered hereunder will be, the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with their respective terms. Assuming that
this Agreement has been duly executed by the Agent and each of the Initial Lenders, this
Agreement is the legal, valid and binding obligation of each Guarantor enforceable against
each Guarantor in accordance with its terms.

(e) The Consolidated balance sheet of the Borrower and its Subsidiaries as at December
31, 2004, and the related Consolidated statements of income and cash flows of the Borrower
and its Subsidiaries for the fiscal year then ended, accompanied by an opinion of Ernst &
Young LLP, independent public accountants, and the Consolidated balance sheet of the
Borrower and its Subsidiaries as at September 30, 2005, and the related Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries for the nine months
then ended, duly certified by the chief financial officer of the Borrower, copies of which
have been furnished to each Lender, fairly present, subject, in the case of said balance
sheet as at September 30, 2005, and said statements of income and cash flows for the nine
months then ended, to year-end audit adjustments, the Consolidated financial condition of
the Borrower and its Subsidiaries as at such dates and the Consolidated results of the
operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in
accordance with generally accepted accounting principles consistently applied.

(f) There is no pending or (to the knowledge of any Loan Party) threatened action or
proceeding, including, without limitation, any Environmental Action, affecting any Loan
Party or any of its Subsidiaries before any court, governmental agency or arbitrator that is
initiated by any Person other than a Lender in its capacity as a Lender that purports to
affect the legality, validity or enforceability of this Agreement or any Note.

(g) Neither the Borrower nor any of its Subsidiaries is an Investment Company, as such
term is defined in the Investment Company Act of 1940, as amended.

 

 

(h) No Loan Party is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board
of Governors of the Federal Reserve System), and no proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.

(i) The obligations of the Borrower under this Agreement, and the obligations of each
Guarantor under the Subsidiary Guaranty rank pari passu in right of payment with all other
senior unsecured Debt of such Person.

ARTICLE V

COVENANTS OF THE LOAN PARTIES

SECTION 5.01. Affirmative Covenants. So long as any Advance shall remain unpaid, any
Letter of Credit is outstanding or any Lender shall have any Commitment hereunder, each Loan Party
will:

     (a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects, with all applicable laws, rules, regulations and orders,
such compliance to include, without limitation, compliance with ERISA, Environmental Laws
and the Patriot Act, except where the failure to so comply would not have a Material Adverse
Effect.

     (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its property and (ii)
all lawful claims that, if unpaid, might by law become a Lien upon its property;
provided, however, that neither any Loan Party nor any of its Subsidiaries
shall be required to pay or discharge any such tax, assessment, charge or claim that is
being contested in good faith and by proper proceedings and as to which appropriate reserves
are being maintained, unless and until any Lien resulting therefrom attaches to its property
and becomes enforceable against its other creditors and the aggregate of such Liens would
have a Material Adverse Effect.

     (c) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which such Loan Party
or such Subsidiary operates; provided, however, that such Loan Party and its
Subsidiaries may self-insure to the extent consistent with prudent business practice.

     (d) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence, rights (charter
and statutory) and franchises; provided, however, that each Loan Party and
its Subsidiaries may consummate any transaction permitted under Section 5.02(b) and
provided further that neither any Loan Party nor any of its Subsidiaries
shall be required to preserve any right or franchise if the senior management of such Loan
Party or of such Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of such Loan Party or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any material respect to such
Loan Party or such Subsidiary.

     (e) Visitation Rights. During normal business hours and upon reasonable notice
from time to time, permit the Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books of account
of (excluding any confidential information), and visit the properties of, such Loan Party
and any of its Subsidiaries, and to discuss the affairs, finances and accounts of such Loan
Party and any of its Subsidiaries with the appropriate representatives of such
Loan Party and together with the appropriate representatives of such Loan Party’s
independent certified public accountants.

 

 

     (f) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of such Loan Party and each such
Subsidiary in accordance with generally accepted accounting principles in effect from time
to time.

     (g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of
its Subsidiaries to maintain and preserve, its material properties that are used or useful
in the conduct of its business in good working order and condition, ordinary wear and tear
excepted.

     (h) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries
to conduct, all transactions otherwise permitted under this Agreement with any of their
Affiliates, other than another Loan Party, (i) on terms that are fair and reasonable and no
less favorable to such Loan Party or such Subsidiary than it would obtain in a comparable
arm’s-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 Services Agreement.

     (i) Reporting Requirements. Furnish to the Lenders:

     (i) as soon as available and in any event within 60 days after the end of each
of the first three quarters of each fiscal year of the Borrower, the Consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such quarter and
the Consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, duly certified (subject to year-end audit
adjustments) by the chief financial officer, treasurer or controller of the Borrower
as having been prepared in accordance with generally accepted accounting principles
and certificates of the chief financial officer, treasurer or controller of the
Borrower as to compliance with the terms of this Agreement and setting forth in
reasonable detail the calculations necessary to demonstrate compliance with Section
5.03, provided that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Section 5.03, a statement of
reconciliation showing the calculations used for purposes of Section 5.03;

     (ii) as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, a copy of the annual audited report for such year
for the Borrower and its Subsidiaries, containing the Consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such fiscal year and the
Consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal year, in each case accompanied by an opinion acceptable
to the Required Lenders by Ernst & Young LLP or other independent public accountants
of nationally recognized standing 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;

     (iii) as soon as possible and in any event within five Business Days after the
occurrence of each Default continuing on the date of such statement, a statement of
the chief
financial officer, treasurer or controller of the Borrower setting forth
details of such Default and the action that the Borrower has taken and proposes to
take with respect thereto;

 

 

     (iv) promptly after the sending or filing thereof, copies of any quarterly and
annual reports and proxy solicitations that any Loan Party sends to any of its
securityholders, and copies of any reports on Form 8-K that such Loan Party files
with the Securities and Exchange Commission (other than reports on Form 8-K filed
solely for the purpose of incorporating exhibits into a registration statement
previously filed with the Securities and Exchange Commission);

     (v) prompt notice of all actions and proceedings before any court, governmental
agency or arbitrator affecting any Loan Party or any of its Subsidiaries of the type
described in Section 3.01(b); and

     (vi) such other information respecting any Loan Party or any of its
Subsidiaries as any Lender through the Agent may from time to time reasonably
request.

     (j) Certain Obligations Respecting Subsidiaries. The Borrower will take such
action, and will cause each of its Significant Subsidiaries and any Significant Subsidiary
formed with the intent of merging with or into a Person that will be a Significant
Subsidiary subject to this provision to take such action, from time to time as shall be
necessary to ensure that all Significant Subsidiaries of the Borrower are party to, as Loan
Parties, the Guaranty provided in Article VII hereof. Without limiting the generality of
the foregoing, in the event that the Borrower or any of its Significant Subsidiaries shall
form or acquire any new Significant Subsidiary, the Borrower or the respective Significant
Subsidiary will cause such new Significant Subsidiary to (i) become a party hereto and to
the Guaranty pursuant to a written instrument in form and substance satisfactory to the
Agent, and (ii) deliver such proof of corporate action, incumbency of officers, opinions of
counsel and other documents relating to the foregoing as is consistent with those delivered
by each Loan Party pursuant to Section 3.01 hereof, or as any Lender or the Agent shall have
reasonably requested.

     SECTION 5.02. Negative Covenants. So long as any Advance shall remain unpaid,
any Letter of Credit is outstanding or any Lender shall have any Commitment hereunder, the
Borrower will not:

     (a) Liens, Etc. Create or suffer to exist, or permit any of its Subsidiaries
to create or suffer to exist, any Lien on or with respect to any of its properties, whether
now owned or hereafter acquired, or assign for security purposes (but not in connection with
a bona fide sale thereof), or permit any of its Subsidiaries to assign for security purposes
(but not in connection with a bona fide sale thereof), any right to receive income;
provided that nothing in this Section 5.02 shall be construed to prevent or restrict
the following:

     (i) Permitted Liens,

     (ii) purchase money Liens upon or in any real property or equipment acquired or
held by the Borrower or any of its Subsidiaries in the ordinary course of business
to secure the purchase price of such property or equipment or to secure Debt
incurred solely for the purpose of financing the acquisition of such property or
equipment, or Liens existing on such property or equipment at the time of its
acquisition or conditional sales or other similar title retention agreements with
respect to property hereafter acquired or extensions, renewals or replacements of
any of the foregoing for the same or a lesser amount, provided,
however, that no such Lien shall extend to or cover any properties of any
character other than the real property or equipment being acquired, and no such
extension, renewal or replacement shall extend to or cover any properties not
theretofore subject to the Lien being extended, renewed or replaced,

     (iii) the Liens existing on the Effective Date and described on Schedule
5.02(a) hereto and other undisclosed Liens existing on the Effective Date securing
obligations in aggregate amount not to exceed $10,000,000,

 

 

     (iv) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Borrower or any of its Subsidiaries; provided
that any such Liens that were created during the period immediately prior to such
merger, consolidation or acquisition were created in the ordinary course of business
of such Person and the Debt secured by such Liens does not exceed the fair market
value of the assets (including intangible assets) of such Person so merged into or
consolidated with the Borrower or any of its Subsidiaries,

     (v) the replacement, extension or renewal of any Lien permitted by clauses
(iii) and (iv) above upon or in the same property theretofore subject 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 the Majority
Shareholder so long as the surviving corporation assumes all obligations of the Borrower
hereunder and under the Notes and each Guarantor confirms in writing its guarantee
obligations hereunder upon the occurrence of and following such merger, and
provided, in each case, that no Default shall have occurred and be continuing at the
time of such proposed transaction or would result therefrom.

     (c) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any change in accounting policies or reporting practices, except (i) as
required or permitted by generally accepted accounting principles or (ii) where the effect
of such change, together with all other changes in accounting policies or reporting
practices made pursuant to this clause (ii) since the Effective Date, is immaterial to the
Borrower and its Subsidiaries taken as a whole.

     (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,

     (ii) Debt which may be borrowed and outstanding from time to time under the
credit agreements existing on and as of the Effective Date and described on Schedule
5.02(d) hereto (the “Existing Debt”), and any Debt extending the maturity
of, or refunding or refinancing, in whole or in part, the Existing Debt,
provided that the principal amount of such Existing Debt shall not be
increased above the principal amount thereof outstanding immediately prior to such
extension, refunding or refinancing, and the direct and contingent obligors therefor
shall not be changed, as a result of or in connection with such extension, refunding
or refinancing,

     (iii) unsecured Debt incurred in the ordinary course of business aggregating
not more than $150,000,000 for PRTC and for all of the other Guarantors not more
than $75,000,000 in the aggregate at any one time outstanding,

 

 

     (iv) Debt in respect of operating leases,

     (v) indorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, and

     (vi) Debt incurred by a Receivables Subsidiary created in connection with a
Permitted Receivables Financing.

SECTION 5.03. Financial Covenants. So long as any Advance shall remain unpaid, any Letter
of Credit is outstanding 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 3.0:1.0.

     (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 3.5:1.0.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. Events of Default. If any of the following events (“Events of
Default”) shall occur and be continuing:

     (a) The Borrower shall fail to pay any principal of any Advance when the same becomes
due and payable; or the Borrower shall fail to pay any interest on any Advance within five
Business Days after the same becomes due and payable; or any fees or other amounts payable
under this Agreement or any Note are not paid within five Business Days after the same
becomes due and payable; or

     (b) Any representation or warranty made or deemed made by the Borrower herein or by the
Borrower (or any of its officers) in connection with this Agreement shall prove to have been
incorrect in any material respect when made or deemed made; or

     (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), (i)(v) or (j), 5.02 or 5.03, (ii) any Loan
Party shall fail to perform or observe any term, covenant or agreement contained in Section
5.01(i) (other than clauses (iii) and (v) thereof) if such failure shall remain unremedied
for five Business Days after written notice thereof shall have been given to such Loan Party
by the Agent or any Lender or (iii) any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement on its part to be performed or
observed if such failure shall remain unremedied for 30 days after written notice thereof
shall have been given to such Loan Party by the Agent or any Lender; or

     (d) Article VII is breached by any Guarantor or shall cease to be in full force and
effect or any Guarantor shall so state in writing; or

     (e) The Borrower or any of its Subsidiaries shall fail to pay any principal of or
premium or interest on any Debt that is outstanding in a principal, or in the case of Hedge
Agreements net, amount of at least $20,000,000 in the aggregate (but excluding Debt
outstanding hereunder) of the Borrower or such Subsidiary (as the case may be) (the
“Requisite Amount”), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the later of five Business Days and the
applicable grace period, if any, specified in the agreement or instrument relating to such
Debt; or any such Debt aggregating the Requisite Amount shall be declared due and payable in
accordance with its terms or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt aggregating the Requisite Amount and shall

 

 

continue after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate the maturity of such
Debt; or any such Debt aggregating the Requisite Amount shall be required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or redemption), purchased
or defeased in accordance with its terms, or any offer to prepay, redeem, purchase or
defease such Debt shall be required to be made in accordance with its terms, in each case
prior to the stated maturity thereof where the cause of such prepayment, redemption,
purchase or defeasance or offer therefor is the occurrence of an event or condition that is
premised on a material adverse deterioration of the financial condition, results of
operation or properties of the Borrower or any of its Subsidiaries, provided that
with respect to Debt aggregating the Requisite Amount of the types described in clauses (h)
or (i) of the definition of “Debt” and to the extent such Debt relates to the obligations of
any Person other than the Borrower or any of its Subsidiaries, no Event of Default shall
occur so long as the payment of such Debt is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained; or any event shall
occur or condition shall exist under any agreement or instrument relating to any Debt that
is outstanding in a principal, or in the case of Hedge Agreements net, amount of at least
$40,000,000 and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to accelerate, or
permit the acceleration of, the maturity of such Debt; or

     (f) The Borrower or any of its Subsidiaries shall generally not pay their respective
debts as such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower or its Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought
in such proceeding (including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar official for, it or
for any substantial part of its property) shall occur; or the Borrower or its Subsidiaries
shall take any corporate action to authorize any of the actions set forth in this subsection
(f) under any law relating to bankruptcy, insolvency or reorganization or relief of debtors;
or

     (g) Judgments or orders for the payment of money in excess of $30,000,000 in the
aggregate shall be rendered against the Borrower or its Subsidiaries and enforcement
proceedings shall have been commenced by any creditor upon such judgment or order for which
a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; provided, however, that any such judgment or order
shall not be an Event of Default under this Section 6.01(g) if and for so long as (i) (A)
the amount of such judgment or order is covered by a valid and binding policy of insurance
between the defendant and the insurer or insurers covering payment thereof, (B) such insurer
shall be rated, or, if more than one insurer, at least 90% of such insurers as measured by
the amount of risk insured, shall be rated, at least “A-” by A.M. Best Company or its
successor or its successors and (C) such insurer(s) has been notified of, and has not
disputed the claim made for payment of, the amount of such judgment or order or (ii) (A) the
amount of such judgment or order is covered by a valid and binding indemnification agreement
between the defendant and an indemnitor, (B) such indemnitor shall have a rating for any
class of its non-credit enhanced long-term senior unsecured debt of not lower than BBB+ by
S&P, Baa3 by
Moody’s or BBB+ by Fitch 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) The Majority Shareholder shall cease for any reason to maintain, directly or
indirectly, the Controlling Interest; or (ii) the Borrower shall for any reason cease to own
100% of the Voting Stock of any Guarantor; or

 

 

     (i) Any Loan Party or its ERISA Affiliates shall incur, or shall be reasonably likely
to incur, liability that would have a Material Adverse Effect as a result of one or more of
the following: (i) the occurrence of any ERISA Event; (ii) the partial or complete
withdrawal of such Loan Party or its ERISA Affiliates from a Multiemployer Plan; or (iii)
the reorganization or termination of a Multiemployer Plan;

then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make Advances
(other than Advances to be made by an Issuing Bank or a Revolving Credit Lender pursuant to Section
2.03(c)) and of the Issuing Banks to issue Letters of Credit to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required
Lenders, by notice to the Borrower, declare the Advances, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon the Advances, all
such interest and all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (A)
the obligation of each Lender to make Advances (other than Advances to be made by an Issuing Bank
or a Revolving Credit Lender pursuant to Section 2.03(c)) and of the Issuing Banks to issue Letters
of Credit 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.

          SECTION 6.02. Actions in Respect of the Letters of Credit upon Default. If any Event
of Default shall have occurred and be continuing, the Agent may with the consent, or shall at the
request, of the Required Revolving Credit Lenders, irrespective of whether it is taking any of the
actions described in Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith
upon such demand the Borrower will, (a) pay to the Agent on behalf of the Revolving Credit Lenders
in same day funds at the Agent’s office designated in such demand, for deposit in the L/C Cash
Deposit Account, an amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding or (b) make such other arrangements in respect of the outstanding Letters of Credit as
shall be acceptable to the Required Revolving Credit Lenders and not more disadvantageous to the
Borrower than clause (a); provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code,
an amount equal to the aggregate Available Amount of all outstanding Letters of Credit shall be
immediately due and payable to the Agent for the account of the Revolving Credit Lenders without
notice to or demand upon the Borrower, which are expressly waived by the Borrower, to be held in
the L/C Cash Deposit Account. If at any time an Event of Default is continuing the Agent
determines that any funds held in the L/C Cash Deposit Account are subject to any right or claim of
any Person other than the Agent and the Revolving Credit Lenders or that the total amount of such
funds is less than the aggregate Available Amount of all Letters of Credit, the Borrower will,
forthwith upon demand by the Agent, pay to the Agent, as additional funds to be deposited and held
in the L/C Cash Deposit Account, an amount equal to the excess of (a) such aggregate Available
Amount over (b) the total amount of funds, if any, then held in the L/C Cash Deposit Account that
the Agent determines to be free and clear of any such right and claim. Upon the drawing of any
Letter of Credit, to the extent funds are on deposit in the L/C Cash Deposit Account, such funds
shall be applied to reimburse the Issuing Banks to the extent permitted by applicable law. After
all Letters of Credit shall have expired or been fully drawn upon and all other obligations of the
Borrower hereunder shall have been paid in full, the balance, if any, in such L/C Cash Deposit
Account shall be returned to the Borrower.

ARTICLE VII

GUARANTY

SECTION 7.01. Guaranty; Limitation of Liability. (a) Each Guarantor hereby jointly and
severally unconditionally and irrevocably guarantees the punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all obligations of each other Loan Party now or
hereafter existing under this Agreement or any Note, whether for principal, interest, fees,
expenses or otherwise (such obligations, to the extent not paid by such Loan Party or specifically
waived in accordance with Section 9.01, being the “Guaranteed Obligations”), and agrees to
pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Agent or
the Lenders in enforcing any rights under this Article VII (this “Guaranty”). Without
limiting the generality of the foregoing, each

 

 

Guarantor’s liability shall extend to all amounts
that constitute part of the Guaranteed Obligations and would be owed by any Loan Party to the Agent
or any Lender under this Agreement or any Note but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such
Loan Party.

(b) (i) Each Guarantor and, by its acceptance of this Guaranty, the Agent and each other Lender,
hereby confirms that it is the intention of all such parties that this Guaranty not constitute a
fraudulent transfer or fraudulent conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal, state or Commonwealth
of Puerto Rico law to the extent applicable to this Guaranty. To effectuate the foregoing
intention, the Agent, each other Lender and each Guarantor hereby irrevocably agrees that the
obligations of each Guarantor under this Guaranty shall not exceed the greater of (A) the benefit
realized by such Guarantor from the proceeds of the Advances made from time to time by the Borrower
to such Guarantor and (B) the maximum amount that will, after giving effect to such maximum amount
and all other probable contingent and fixed liabilities of such Guarantor that are relevant under
applicable law, and after giving effect to any collections from, rights to receive contribution
from, or payments made by or on behalf of each other Guarantor in respect of the obligations of
such other Guarantor under this Guaranty, result in the obligations of such Guarantor under this
Guaranty not constituting a fraudulent transfer or fraudulent conveyance. For purposes hereof,
“Bankruptcy Law” means Title 11, United States Code, or any similar Federal, state or
Commonwealth of Puerto Rico law for the relief of debtors.

     (ii) Each Guarantor agrees that in the event any payment shall be required to be made
to the Lenders under this Guaranty, such Guarantor will contribute, to the maximum extent
such that the contribution will not result in a fraudulent transfer or fraudulent
conveyance, such amounts to each other Guarantor so as to maximize the aggregate amount paid
to the Lenders under this Agreement and the Notes.

SECTION 7.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of this Agreement and the Notes,
regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Agent or the Lenders with respect thereto. The obligations
of each Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate
action or actions may be brought and prosecuted against such Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrower or any other Guarantor or
whether the Borrower or any other Guarantor is joined in any such action or actions. The liability
of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective
of, and, to the maximum extent permitted by law, each Guarantor hereby irrevocably waives, any
defenses it may now or hereafter have in any way relating to, any or all of the following:

     (a) any lack of validity or enforceability of this Agreement or any agreement or
instrument relating hereto;

     (b) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from this Agreement or any Note, including, without limitation, any increase in
the Guaranteed Obligations resulting from the extension of additional credit to the Borrower
or otherwise;

     (c) any taking, exchange, release or non-perfection of any collateral, or any taking,
release or amendment or waiver of or consent to departure from any other guaranty, for all
or any of the Guaranteed Obligations;

     (d) any change, restructuring or termination of the corporate structure or existence of
the Borrower; or

     (e) any other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by the Agent or any Lender that might
otherwise constitute a defense available to, or a discharge of, any Guarantor, the Borrower
or any other guarantor or surety other than payment when due.

 

 

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the
Agent or any Lender upon the insolvency, bankruptcy or reorganization of the Borrower or any
Guarantor or otherwise, all as though such payment had not been made.

SECTION 7.03. Waiver. Each Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty, the right to require application against the property of the Borrower or any other
Guarantor, and any requirement that the Agent or any Lender exhaust any right or take any action
against the Borrower or any other Person or any collateral. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements contemplated herein and
that the waiver set forth in this Section 7.03 is knowingly made in contemplation of such benefits.
Each Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or
in the future.

SECTION 7.04. Continuing Guaranty; Assignments. This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until the latest of (i) the payment in full of the
Guaranteed Obligations and all other amounts payable under this Guaranty, (ii) the Termination Date
and (iii) the latest date of expiration or termination of all Letters of Credit, (b) be binding
upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable
by the Lenders, the Agent and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations hereunder (including, without limitation, all or any portion
of its Commitment, the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in respect thereof
granted to such Lender herein or otherwise, in each case as provided in Section 9.07.

SECTION 7.05. Subrogation. No Guarantor will exercise any rights that it may now or
hereafter acquire against the Borrower or any other insider guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor’s obligations under this Guaranty,
including, without limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of the Agent or any Lender
against the Borrower, any other Guarantor or any other insider guarantor or any collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from the Borrower, any other Guarantor
or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security solely on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash, all Letters of Credit shall have expired or been terminated and the
Termination Date shall have occurred. If any amount shall be paid to any Guarantor in violation of
the immediately preceding sentence at any time prior to the latest of (a) the payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, (b) the
Termination Date and (c) the latest date of expiration or termination of all Letters of Credit,
such amount shall be held in trust for the benefit of the Agent and the Lenders and shall forthwith
be paid to the Agent to be credited and applied to the Guaranteed Obligations and all other amounts
payable under this Guaranty, whether matured or unmatured, in accordance with the terms of this
Guaranty, or to be held as collateral for any Guaranteed Obligations or other amounts payable under
this Guaranty thereafter arising. If (i) any Guarantor shall make payment to the Agent or any
Lender of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and
all other amounts payable under this Guaranty shall be paid in full in cash, (iii) the Termination
Date shall have occurred and (iv) all Letters of Credit shall have expired or been terminated, the
Agent and the Lenders will, at such Guarantor’s request and expense, execute and deliver to such
Guarantor appropriate documents, without recourse and without representation or warranty, necessary
to evidence the transfer by
subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.

ARTICLE VIII

THE AGENT

SECTION 8.01. Authorization and Action. Each Lender (in its capacities as a Lender and
Issuing Bank, as applicable) hereby appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such
powers and discretion under this Agreement as are delegated to
the Agent by the terms hereof, together with such

 

 

powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon the instructions of the
Required Lenders and such instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to this Agreement or applicable law.
The Agent agrees to give to each Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.

SECTION 8.02. Agent’s Reliance, Etc. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the Agent: (i) may
treat the Lender that made any Advance as the holder of the Debt resulting therefrom
until the Agent receives and accepts an Assignment and Acceptance entered into by such Lender, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 9.07; (ii) may consult with
legal counsel (including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no
warranty or representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or in connection with
this Agreement; (iv) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement on the part of any Loan
Party or to inspect the property (including the books and records) of any Loan Party except as
specifically set forth in this Agreement; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to be created under or
in connection with, this Agreement or any other instrument or document furnished pursuant hereto;
and (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier or facsimile)
believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 8.03. Citibank and Affiliates. With respect to its Commitments, the Advances made
by it and any Note or Notes issued to it, Citibank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not the Agent; and the
term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and generally engage in any
kind of business with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any of its Subsidiaries, all as if Citibank were not
the Agent and without any duty to account therefor to the Lenders.

SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that it has, independently
and without reliance upon the Agent or any other Lender and based on the financial statements
referred to in Section 4.01 and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this Agreement.

SECTION 8.05. Indemnification. (a) The Lenders agree to indemnify
the Agent (to the extent not reimbursed by the Borrower), ratably according to the respective
principal amounts of the Advances owed each of them (or if no Advances are at the time outstanding,
ratably according to their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever that may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by the Agent under this
Agreement, in each case whether or not such investigation, litigation or proceeding is brought by
any Lender, its directors, shareholders or creditors or the Agent is otherwise a party thereto,
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 Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including reasonable counsel fees) incurred by the Agent in connection with
the preparation, execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the

 

 

Agent is not reimbursed
for such expenses by the Borrower.

(b) Each Revolving Credit Lender severally (but not jointly) agrees to indemnify each Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such Lender’s Ratable
Share of 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 any such Issuing Bank in any way relating to or arising out of
this Agreement or any action taken or omitted by such Issuing Bank in its capacity as such
hereunder or in connection herewith, in each case whether or not such investigation, litigation or
proceeding is brought by any Lender, its directors, shareholders or creditors or the Agent is
otherwise a party thereto, 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 such Issuing Bank’s gross negligence or willful misconduct.

(c) The failure of any Lender to reimburse the Agent or any Issuing Bank promptly upon demand for
its share of any amount required to be paid by the Lenders to the Agent or an Issuing Bank as
provided herein shall not relieve any other Lender of its obligation hereunder to reimburse the
Agent or such Issuing Bank for its pro rata share of such amount, but no Lender shall be
responsible for the failure of any other Lender to reimburse the Agent or any Issuing Bank for such
other Lender’s share of such amount. Without prejudice to the survival of any other agreement of
any Lender hereunder, the agreement and obligations of each Lender contained in this Section 7.05
shall survive the payment in full of principal, interest and all other amounts payable hereunder
and under the Notes. Each of the Agent and each Issuing Bank agrees to return to the Lenders their
respective shares of any amounts paid under this Section 8.05 that are subsequently reimbursed by
the Borrower.

SECTION 8.06. Successor Agent. The Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Agent which, so long as no Default shall have occurred and be continuing,
shall be subject to the Borrower’s approval, which approval shall not be unreasonably withheld. If
no successor Agent shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Agent’s giving of notice of resignation or the
Required Lenders’ removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State thereof or the Commonwealth of Puerto Rico
and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights, powers, discretion, privileges and duties of the retiring
Agent, and the retiring Agent, upon appointment of such successor Agent, shall be discharged from
its duties and obligations under this Agreement. After any retiring Agent’s resignation or removal
hereunder as Agent, the provisions of this Article VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this Agreement.

SECTION 8.07. Other Agents. Banco Bilbao Vizcaya Argentaria Puerto Rico and Scotiabank de
Puerto Rico have been designated as co-syndication agents, Banco Popular de Puerto Rico and The
Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, have been designated as co-documentation
agents, and certain other Lenders have been designated as managing agents or co-agents and the use
of such titles does not impose on Banco Bilbao Vizcaya Argentaria Puerto Rico, Banco Popular de
Puerto Rico, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, Scotiabank de Puerto Rico or
such other Lender any rights, duties or obligations greater than those of any other Lender.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Amendments, Etc. (a) No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by any Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (i) no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders, do any of the following: (A) waive
any of the conditions specified in Section 3.01, (B) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Advances, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder, (C) release any Guarantor
from any of the obligations imposed upon it by this Agreement or (D) amend this Section 9.01; and
(ii) no amendment, waiver or consent shall, unless in writing and signed by the

 

 

Required Lenders
and each Lender that has or is owed obligations under this Agreement or the Notes that are modified
by such amendment, waiver or consent, (A) increase the Commitment of such Lender or subject such
Lender to any additional obligations, (B) reduce the principal of, or interest on, the Note held by
such Lender or any fees or other amounts payable hereunder to such Lender, (C) postpone any date
fixed for any payment of principal of, or interest on, the Advances made by such Lender or any fees
or other amounts payable hereunder to such Lender or (D) waive the application of Section 2.15; and
provided further that (x) no amendment, waiver or consent shall, unless in writing
and signed by the Agent in addition to the Lenders required above to take such action, affect the
rights or duties of the Agent under this Agreement or any Note and (y) no amendment, waiver or
consent shall, unless in writing and signed by the Issuing Banks in addition to the Lenders
required above to take such action, adversely affect the rights or obligations of the Issuing Banks
in their capacities as such under this Agreement.

(b) Each Lender grants (x) to the Agent the right to purchase all (but not less than all) of such
Lender’s Commitments and Advances owing to it and any Notes held by it and all of its rights and
obligations hereunder and under the Notes at a price equal to the aggregate amount of outstanding
Advances owed to such Lender (together with all accrued and unpaid interest, fees and other amounts
owed to such Lender), and (y) to the Borrower the right to cause an assignment of all (but not less
than all) of such Lender’s Commitments and Advances owing to it and any Notes held by it and all of
its rights and obligations hereunder and under such Notes to Eligible Assignees at a price equal to
the aggregate amount of outstanding Advances (together with all accrued and unpaid interest, fees
and other amounts owed to such Lender) owed to such Lender, which right may be exercised by the
Agent or the Borrower, as the case may be, if such Lender refuses to execute any amendment, waiver
or consent which requires the written consent of all the Lenders and to which Lenders owed at least
90% of the aggregate unpaid principal amount of Advances or, if no such principal amount is then
outstanding, Lenders having at least 90% of the Commitments, the Agent and the Borrower have
agreed. Each Lender agrees that if the Agent or the Borrower, as the case may be, exercises its
option hereunder, it shall promptly execute and deliver all agreements and documentation necessary
to effectuate such assignment as set forth in Section 9.07.

SECTION 9.02. Notices, Etc. (a) All notices and other communications provided for
hereunder shall be in writing (including telecopier or electronic mail communication) and either
(x) mailed, telecopied or delivered by hand or by courier, or (y) as and to the extent set forth in
the proviso to this first sentence of Section 9.02(a)and in Section 9.02(b), by e-mail and
electronic posting: if to the Borrower or PRTC, at 1513 Roosevelt Avenue, 10th Floor,
Guaynabo, Puerto Rico 00968 or P.O. Box 360998 San Juan, Puerto Rico 00936-0998, Attention: Adail
Ortiz (fax no.(787) 749-9024), with a copy to Maria Elena de la Cruz (fax no. (787) 783-2919); if
to any Initial Lender, at its Domestic Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its address at Two Penns
Way, New Castle, Delaware 19720, Attention: Loan Investor Services; or, as to any Loan Party or the
Agent, at such other address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent, provided that materials required to be
delivered pursuant to Section 5.01(i)(i), (ii) or (iv) shall be delivered to the Agent as specified
in Section 9.02(b) and by the Agent to the Lenders as specified in Sections 9.02(b) and (c). All
such notices and communications shall, when mailed, telecopied, faxed or e-mailed, 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, faxed or confirmed by
e-mail, provided that notices and communications to the Agent pursuant to Article II, III
or VIII shall not be effective until received by the Agent, and provided, further,
that notices and communications to any Person required to be provided hereunder within five
Business Days shall only be made by hand or via telecopy,
facsimile or courier. Delivery by telecopier or facsimile 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.

(b) So long as Citibank or any of its Affiliates is the Agent, materials required to be delivered
pursuant to Section 5.01(i)(i), (ii) and (iv) shall be delivered to the Agent in an electronic
medium in a format acceptable to the Agent and the Lenders by e-mail at
oploanswebadmin@citigroup.com or such other e-mail address as the Agent shall notify to the
Borrower, and such delivery to the Agent shall constitute delivery by the Borrower to the Agent and
the Lenders for purposes of Section 5.01(i)(i), (ii) or (iv), as the case may be. The Borrower
agrees that the Agent may make such materials, as well as any other written information, documents,
instruments and other material relating to the Borrower, any of its Subsidiaries or any other
materials or matters relating to this Agreement, the Notes or any of the transactions contemplated
hereby delivered to the Agent by the Borrower hereunder (collectively, the
“Communications”) available to the Lenders by posting such Communications on Intralinks or
a substantially similar electronic system which is in general use for such purposes (the
“Platform”). The Borrower acknowledges that (i) the distribution of material through an
electronic medium is not necessarily secure and that there are

 

 

confidentiality and other risks
associated with such distribution, (ii) the Platform is provided “as is” and “as available” and
(iii) neither the Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness
of the Communications or the Platform and each expressly disclaims liability for errors or
omissions in the Communications or the Platform; provided that (x) the Agent shall use
reasonable commercial efforts to ensure that all Communications delivered by the Borrower to the
Agent for posting on the Platform are posted thereon in their entirety and as delivered by the
Borrower, and (y) in the event that the Agent shall become aware that the Platform has been subject
to unauthorized access or otherwise is experiencing problems that may lead to breaches of
confidentiality or failures of appropriate posting or access, then the Agent shall promptly notify
the Borrower and shall cease to utilize the Platform for the purposes specified herein until such
problems shall have been resolved. No warranty of any kind, express, implied or statutory,
including, without limitation, any warranty of merchantability, fitness for a particular purpose,
non-infringement of third party rights or freedom from viruses or other code defects, is made by
the Agent or any of its Affiliates in connection with the Platform.
(c) Each Lender agrees that notice from the Agent to it (as provided in the next sentence) (a
“Notice”) specifying that any Communications have been posted to the Platform shall
constitute effective delivery of such information, documents or other materials by the Borrower and
the Agent to such Lender for purposes of this Agreement; provided that if requested by any
Lender the Agent shall deliver a copy of the Communications to such Lender by e-mail or telecopier.
Each Lender agrees (i) to notify the Agent in writing of such Lender’s e-mail address to which a
Notice may be sent by electronic transmission (including by electronic communication) on or before
the date such Lender becomes a party to this Agreement (and from time to time thereafter to ensure
that the Agent has on record an effective e-mail address for such Lender) and (ii) that any Notice
may be sent to such e-mail address.

SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender or the Agent to
exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent and the Arranger in connection with the
preparation, execution, delivery, administration, modification and amendment of this Agreement, the
Notes and the other documents to be delivered hereunder, including, without limitation, (A) all due
diligence, syndication (including printing and distribution), transportation, computer,
duplication, appraisal, audit and insurance expenses and (B) the reasonable fees and expenses of
counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights
and responsibilities under this Agreement. Such expenses shall be paid by the Borrower upon
presentation of an itemized invoice (after reasonable time for the Borrower to review such
invoice), regardless of whether the transactions contemplated by this Agreement are consummated.
The Borrower further agrees to pay on demand all costs and expenses of the Agent and the Lenders,
if any (including, without limitation, reasonable counsel fees and expenses), in connection with
the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement,
the Notes and the other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in connection with the
enforcement of rights under this Section 9.04(a).

(b) The Borrower agrees to indemnify and hold harmless the Agent and each Lender and each of their
Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified
Party”) from and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the preparation for a
defense of, any investigation, litigation or proceeding arising out of, related to or in connection
with (i) the Notes, this Agreement, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Advances or Letters of Credit or (ii) the actual or alleged
presence of Hazardous Materials on any property of the Borrower or any of its Subsidiaries or any
Environmental Action relating in any way to the Borrower or any of its Subsidiaries, in each case
whether or not such investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions contemplated hereby are
consummated, except to the extent such claim, damage, loss, liability or expense (A) is found by a
court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or
willful misconduct, (B) arises from disputes among two or more Lenders (but not including any such
dispute that involves a Lender to the extent such Lender is acting in any different capacity
(i.e., Agent or Arranger) under the Credit Agreement or the Notes or to the extent that it
involves the Agent’s syndication activities) or (C) arises from or relates to a breach by such
Indemnified Party of its obligations under this Agreement. The Borrower also agrees not to assert
any claim against the Agent, any Lender, any of their

 

 

Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating to the Notes, this
Agreement, any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances.

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the
Borrower (or pursuant to Section 9.01(b)) to or for the account of a Lender other than on the last
day of the Interest Period for such Advance, as a result of a payment, prepayment or Conversion
pursuant to this Agreement or acceleration of the maturity of the Notes pursuant to Section 6.01,
the Borrower shall, upon demand by such Lender (with a copy of such demand to the Agent), pay to
the Agent for the account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of such payment or
Conversion, including, without limitation, any loss (excluding loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.

(d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in Sections 2.11, 2.14 and 9.04 shall survive
the payment in full of principal, interest and all other amounts payable hereunder and under the
Notes.

SECTION 9.05. Right of Set-off. Upon (i) the occurrence and during the continuance of any
Event of Default and (ii) the making of the request or the granting of the consent specified by
Section 6.01 by the Required Lenders to authorize the Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01 and notice to the Borrower as required under Section
6.01, each Lender and each of its Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other indebtedness at any time
owing by such Lender or such Affiliate to or for the credit or the account of any Loan Party
against any and all of the obligations of such Loan Party now or hereafter existing under this
Agreement and the Note held by such Lender, whether or not such Lender shall have made any demand
under this Agreement or such Note and although such obligations may be unmatured. Each Lender
agrees promptly to notify the applicable Loan Party after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Lender and its Affiliates under this Section are in addition
to other rights and remedies (including, without limitation, other rights of set-off) that such
Lender and its Affiliates may have.

SECTION 9.06. Binding Effect. This Agreement shall become effective (other than Section
2.01, which shall only become effective upon satisfaction of the conditions precedent set forth in
Section 3.01) when it shall have been executed by the Borrower and the Agent and when the Agent
shall have been notified by each Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each
Lender and their respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior written consent of
all of the Lenders.

SECTION 9.07. Assignments and Participations. (a) Each Lender may, with the consent of
the Agent (except as provided in clause (g) below) and, so long as no Default has occurred and is
continuing, the Borrower (such consent, in the case of the Agent or the Borrower, not to be
unreasonably withheld) and, so long as no Default has occurred and is continuing, if demanded by
the Borrower (1) pursuant to Section 9.01(b), (2) following a request for a payment to or on behalf
of such Lender under Section 2.11 or Section 2.14, (3) following a Withholding Tax Change affecting
payments to such Lender or (4) following a notice given by such Lender pursuant to Section 2.12,
upon at least ten Business Days’ notice to such Lender and the Agent, will, assign to one or more
Persons all or a portion of its rights and obligations under any Facility under this Agreement
(including, without limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes held by it); provided, that the Borrower may make demand with respect to
a Lender that has given notice pursuant to Section 2.12 only if the Borrower makes such demand of
all Lenders similarly situated that have given such notice; provided, further, that
(i) each such assignment shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement with respect to such Facility, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender or an assignment of
all of a Lender’s rights and obligations under this Agreement, the amount of the Commitment under
such Facility of the assigning Lender being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event
be less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, (iii) each such
assignment shall be to an Eligible Assignee, (iv) each such assignment made as a result of a demand
by the Borrower shall be arranged by the Borrower after consultation with the Agent and shall be
either an assignment of all of the rights and obligations of the assigning Lender under this
Agreement or an assignment of a portion of such rights and

 

 

obligations made concurrently with
another such assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower unless and until such Lender shall have
received one or more payments from either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing
to such Lender, together with accrued interest thereon to the date of payment of such principal and
all other amounts payable to such Lender under this Agreement and (vi) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Notes subject to such assignment and a
processing and recordation fee of $3,500 (which shall be paid by Persons other than the Borrower
unless such assignment is made as a result of a demand by the Borrower). Upon such execution,
delivery, acceptance and recording, from and after the effective date specified in each Assignment
and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights other than rights of indemnification under Section
9.04 or otherwise relating to a time prior to the effective date of such Assignment and Acceptance
and be released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto).

(b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and
the assignee thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created under or in connection
with, this Agreement or any other instrument or document furnished pursuant hereto; (ii) such
assigning Lender makes no representation or warranty and assumes no responsibility with respect to
the financial condition of any Loan Party or the performance or observance by any Loan Party of any
of its obligations under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon
the Agent, such assigning Lender or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers and discretion as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by it as a Lender.

(c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender, an assignee
representing that it is an Eligible Assignee and the Borrower, together with the Note or Notes
subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in substantially the form of
Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.

(d) The Agent shall maintain at its address referred to in Section 9.02 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of the Advances owing to,
each Lender from time to time (the “Register”). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior notice.

(e) Each Lender may sell participations to one or more banks or other entities (other than the
Borrower or any of its Affiliates) in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Commitment, the Advances
owing to it and the Notes held by it); provided, however, that (i) such Lender’s
obligations under this Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder
of any such Note for all purposes of this Agreement, (iv) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with

 

 

such Lender in connection with such
Lender’s rights and obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any provision of this
Agreement or any Note, or any consent to any departure by the Borrower therefrom, except that a
Lender may agree with a participant as to the manner in which the Lender shall exercise the
Lender’s rights to approve any amendment, waiver or consent to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such participation, or postpone
any date fixed for any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such participation.

(f) Any Lender may at any time, without the consent of the Agent or the Borrower, create a security
interest in all or any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve System,
provided, however, that no such assignment shall have the effect of increasing the
costs payable by the Borrower.

(g) Any Lender may at any time, without the consent of, but with notice to the Agent, assign all or
part of its rights or obligations under this Agreement to any Affiliate of such Lender,
provided, however, that no such assignment shall have the effect of increasing the
costs payable by the Borrower.

SECTION 9.08. Nondisclosure. None of the Agent, any Lender or any Affiliate thereof shall
disclose without the prior consent of the Borrower (other than to the Agent, another Lender or any
such Affiliate, their respective directors, employees, auditors, affiliates or counsel who shall
agree to be bound by the terms of this provision) any information with respect to the Loan Parties
or any Subsidiary thereof contained in financial statements, projections or reports provided to the
Agent, any Lender or any Affiliate thereof by, or on behalf of, the Loan Parties or any Subsidiary,
provided that the Agent, any Lender or any Affiliate thereof may disclose any such
information (a) as has become generally available to the public in a manner, or through actions,
which do not violate the terms of this Section 9.08, (b) to, or as may be required or appropriate
in any report, statement or testimony submitted to, any municipal, state or federal regulatory body
having or claiming to have jurisdiction over the Agent, any Lender or any Affiliate thereof or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be required or
appropriate in response to any summons or subpoena or in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to the Agent, any Lender or
any Affiliate thereof and (e) to a prospective co-lender or participant in the amounts outstanding
hereunder or under the Advances, provided, however, that such prospective co-lender
or participant executes an agreement containing provisions substantially identical to those
contained in this Section 9.08 and which shall by its terms inure to the benefit of the Borrower
and provided, further, that to the extent practicable, the Agent, each Lender and
their respective Affiliates shall use reasonable best efforts to provide prior written notice of
such disclosure to the Borrower.

SECTION 9.09. Governing Law. This Agreement and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.

SECTION 9.10. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an executed counterpart of
a signature page to this Agreement by telecopier or facsimile shall be effective as delivery of a
manually executed counterpart of this Agreement.

SECTION 9.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New
York State court or federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action
or proceeding may be heard and determined in any such New York State court or, to the extent
permitted by law, in such federal court. Each of the Loan Parties hereby agrees that service of
process in any such action or proceeding brought in any such New York State court or in such
federal court may be made upon CT Corporation System at its offices at 111 Eighth Avenue, 13th
Floor, New York, N.Y. 10011 (the “Process Agent”) and each Loan Party hereby irrevocably
appoints the Process Agent its authorized agent to accept such service of process, and agrees that
the failure of the Process Agent to give any notice of any such service shall not impair or affect
the validity of such service or of any judgment rendered in any action or proceeding based thereon.
Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions

 

 

 by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or the Notes in the
courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

          SECTION 9.12. No Liability of Issuing Banks. The Borrower assumes all risks of the
parties to this Agreement related to the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither an Issuing Bank nor any
of its officers or directors shall be liable or responsible for: (a) the use that may be made of
any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuing Bank against presentation of documents that do
not comply with the terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever
in making or failing to make payment under any Letter of Credit, except that the Borrower shall
have a claim against such Issuing Bank, and such Issuing Bank shall be liable to the Borrower, to
the extent of any direct, but not consequential, damages suffered by the Borrower to the extent
that the Borrower proves such damages were caused by such Issuing Bank’s willful misconduct or
gross negligence when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. In furtherance and not in limitation of the foregoing, such
Issuing Bank may accept documents that appear on their face to be in order, without responsibility
for further investigation, regardless of any notice or information to the contrary;
provided that nothing herein shall be deemed to excuse such Issuing Bank if it acts with
gross negligence or willful misconduct in accepting such documents.

          SECTION 9.13. Patriot Act Notice. Each Lender and the Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the Patriot
Act, it is required to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information that will allow
such Lender or the Agent, as applicable, to identify the Borrower in accordance with the Patriot
Act. The Borrower shall provide, to the extent commercially reasonable, such information and take
such actions as are reasonably requested by the Agent or any Lenders in order to assist the Agent
and the Lenders in maintaining compliance with the Patriot Act.

 

 

          SECTION 9.14. Waiver of Jury Trial. Each of the Borrower, the Guarantors, the Agent
and the Lenders hereby irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this
Agreement or the Notes or the actions of the Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 	 	 
	 	 	TELECOMUNICACIONES DE PUERTO RICO, INC.,
as Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Title: President and Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	 	 	PUERTO RICO TELEPHONE COMPANY, INC.,

as Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Title: President and Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	 	 	CITIBANK, N.A.

as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Title:
	 	 

 

 

U.S. $600,000,000

CREDIT AGREEMENT

Dated as of February 28, 2006

Among

TELECOMUNICACIONES DE PUERTO RICO, INC.

as Borrower,

PUERTO RICO TELEPHONE COMPANY, INC.

as Guarantor,

THE INITIAL LENDERS NAMED HEREIN

as Initial Lenders,

CITIBANK, N.A.

as Administrative Agent,

[BANCO BILBAO VIZCAYA ARGENTARIA PUERTO RICO

and

SCOTIABANK DE PUERTO RICO]

as Co-Syndication Agents,

[BANCO POPULAR DE PUERTO RICO

and

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH]

as Co-Documentation Agents

and

CITIGROUP GLOBAL MARKETS INC.

as Lead Arranger and Book Manager

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 1.02.  Computation of Time Periods	 	 	13	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 1.03.  Accounting Terms	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE II	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.01.  The Advances and Letters of Credit	 	 	13	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.02.  Making the Advances	 	 	14	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.03.  Issuance of and Drawings and Reimbursement Under Letters of Credit	 	 	14	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.04.  Fees	 	 	16	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.05.  Optional Termination or Reduction of the Commitments	 	 	16	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.06.  Repayment of Advances and Letter of Credit Drawings	 	 	16	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.07.  Interest	 	 	17	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.08.  Interest Rate Determination	 	 	17	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.09.  Optional Conversion of Advances	 	 	18	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.10.  Optional Prepayments of Advances	 	 	18	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.11.  Increased Costs	 	 	18	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.12.  Illegality	 	 	19	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.13.  Payments and Computations	 	 	19	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.14.  Taxes	 	 	20	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.15.  Sharing of Payments, Etc.	 	 	22	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.16.  Use of Proceeds	 	 	22	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 2.17.  Evidence of Debt	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE III	 	 	 	 
	 
	 
	 	SECTION 3.01.  Conditions Precedent to Effectiveness of Section 2.01	 	 	24	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 3.02.  Conditions Precedent to Each Borrowing and Issuance	 	 	25	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 3.03.  Determinations Under Section 3.01	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 4.01.  Representations and Warranties of the Borrower	 	 	26	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE V	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 5.01.  Affirmative Covenants	 	 	27	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 5.02.  Negative Covenants	 	 	29	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 5.03.  Financial Covenants	 	 	31	 
	 
	 	 	 	 	 	 
	ARTICLE VI	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 6.01.  Events of Default	 	 	31	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 6.02.  Actions in Respect of the Letters of Credit upon Default	 	 	33	 
	 
	 	 	 	 	 	 
	ARTICLE VII	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 7.01.  Guaranty; Limitation of Liability	 	 	33	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 7.02.  Guaranty Absolute	 	 	34	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 7.03.  Waiver	 	 	35	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 7.04.  Continuing Guaranty; Assignments	 	 	35	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 7.05.  Subrogation	 	 	35	 
	 
	 	 	 	 	 	 
	ARTICLE VIII	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 8.01.  Authorization and Action	 	 	35	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 8.02.  Agent’s Reliance, Etc.	 	 	36	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 8.03.  Citibank and Affiliates	 	 	36	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 8.04.  Lender Credit Decision	 	 	36	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 8.05.  Indemnification	 	 	36	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 8.06.  Successor Agent	 	 	37	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 8.07.  Other Agents	 	 	37	 
	 
	 	 	 	 	 	 
	ARTICLE IX	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.01.  Amendments, Etc.	 	 	37	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.02.  Notices, Etc.	 	 	38	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.03.  No Waiver; Remedies	 	 	39	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.04.  Costs and Expenses	 	 	39	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.05.  Right of Set-off	 	 	40	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.06.  Binding Effect	 	 	40	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.07.  Assignments and Participations	 	 	40	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	SECTION 9.08.  Nondisclosure	 	 	42	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.09.  Governing Law	 	 	42	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.10.  Execution in Counterparts	 	 	42	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.11.  Jurisdiction, Etc.	 	 	42	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.12.  No Liability of Issuing Banks	 	 	43	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.13.  Patriot Act Notice	 	 	43	 
	 
	 	 	 	 	 	 
	 
	 	SECTION 9.14.  Waiver of Jury Trial	 	 	44	 

 

 

Schedules

Schedule I
— Commitments and Applicable Lending Offices

Schedule II
— Existing Letters of Credit

Schedule 3.01(a) — Material Adverse Changes

Schedule 3.01(b) — Disclosed Litigation

Schedule 5.02(a) — Existing Liens

Schedule 5.02(d) — Existing Subsidiary Debt

	 	 	 	 	 
	Exhibits	 	 	 	 
	 
	Exhibit A-1

	 	—
	 	Form of Revolving Credit Note
	 
	 	 	 	 
	Exhibit A-2

	 	—
	 	Form of Term Note
	 
	 	 	 	 
	Exhibit B

	 	—
	 	Form of Notice of Borrowing
	 
	 	 	 	 
	Exhibit C

	 	—
	 	Form of Assignment and Acceptance
	 
	 	 	 	 
	Exhibit D

	 	—
	 	Form of Solvency Certificate
	 
	 	 	 	 
	Exhibit E

	 	—
	 	Form of Opinion of New York Counsel for the Loan Parties
	 
	 	 	 	 
	Exhibit F

	 	—
	 	Form of Opinion of Puerto Rico Counsel for the Loan Parties

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