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Exhibit 10.12
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STOCK PURCHASE AGREEMENT
Dated as of
March 1, 1999
between
PUERTO RICO TELEPHONE AUTHORITY
and
TELECOMUNICACIONES DE PUERTO RICO, INC.
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement") dated as of March 1, 1999, by
and between Puerto Rico Telephone Authority (the "Authority" or "Seller"), a
public corporation and government instrumentality of the Commonwealth of Puerto
Rico ("Puerto Rico"), and Telecomunicaciones de Puerto Rico, Inc., a Puerto Rico
corporation ("TELPRI" or "Buyer").
WHEREAS, the Authority, Puerto Rico Telephone Company (the "Company"), GTE
Holdings (Puerto Rico) LLC and GTE International Telecommunications Incorporated
entered into an Amended and Restated Stock Purchase Agreement dated as of July
21, 1998 (as amended from time to time, the "Stock Purchase Agreement"),
pursuant to which the Authority agreed to sell a majority interest in the
Company;
WHEREAS, in order to comply with requirements imposed by the Federal
Communications Commission, and pursuant to authority granted under Act No. 54 of
August 4, 1997 and Joint Resolution No. 209 of June 24, 1998 (collectively, the
"Authorizing Legislation"), the Authority organized two Puerto Rico
corporations, Puerto Rico Telephone Company, Inc. ("PRTC") and Celulares
Telefonica, Inc. ("CTI"), and transferred all assets and liabilities of the
Company relating to its wireless business to CTI and then merged the Company
into PRTC;
WHEREAS, pursuant to authority granted under the Authorizing Legislation,
the Authority organized TELPRI for the purpose of transferring to TELPRI all of
the shares of common stock, $0.01 par value per share, of PRTC (the "PRTC
Shares") and all of the shares of common stock, $0.01 par value per share, of
CTI (the
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"CTI Shares") in exchange for shares of common stock of TELPRI and a cash
payment of $100,000; and
WHEREAS, the Authority is the owner of 589,000 PRTC Shares, representing
100% of the issued and outstanding capital stock of PRTC, and 411,000 CTI
Shares, representing 100% of the issued and outstanding capital stock of CTI
(collectively, the "Shares").
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 Purchase of Shares. The Authority hereby agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase, from the
Authority, the Shares. In full consideration therefor, Buyer agrees to (i) issue
1,000,000 shares of its common stock (the "TELPRI Shares"), representing all of
its issued and outstanding capital stock, and (ii) deliver such TELPRI shares to
the Authority and pay the Authority $100,000 in cash or in immediately available
funds by wire transfer to an account designated in writing by the Authority
(together with the TELPRI Shares, the "Purchase Price").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY
The Authority hereby represents and warrants to Buyer that:
2.01 Existence and Power. The Authority is validly existing as a public
corporation under the laws of Puerto Rico and has all requisite power, authority
and legal right to conduct its affairs as currently conducted.
2.02 Corporate Authorization.
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(a) The execution, delivery and performance by the Authority of this
Agreement and the documents to be delivered in connection herewith are within
the Authority's powers and have been duly authorized by the Governing Board of
the Authority and, upon execution thereof, will be duly executed and delivered
by the Authority.
(b) This Agreement constitutes the valid and binding agreement of
the Authority, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally, by
general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
2.03 Capitalization. The Authority is currently the record and beneficial
owner of all the issued and outstanding PRTC Shares and CTI Shares.
2.04 No Broker. The Authority has not authorized any broker, dealer, agent
or finder to act on its behalf nor does Seller have any knowledge of any broker,
dealer, agent or finder purporting to act on its behalf with respect to this
transaction.
2.05 Title to Shares. Upon delivery of the Purchase Price to the
Authority, in accordance with the terms of this Agreement, the Shares will be
validly issued, fully paid, and non-assessable and free of preemptive rights,
and upon delivery of the Shares to Buyer, Buyer will acquire good and
indefeasible title to the Shares, free and clear of any and all liens, claims or
encumbrances of any kind, other than liens, claims or encumbrances created by or
through the Authority.
ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Authority that:
3.01 Existence and Power; Capitalization. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of Puerto
Rico and has all requisite power, authority and legal right to conduct its
affairs as currently conducted. Buyer's authorized capitalization consists of
10,000,000 shares of common stock, none of which are issued and outstanding.
3.02 Corporate Authorization.
(a) The execution, delivery and performance by Buyer of this
Agreement and the documents to be delivered in connection herewith are within
Buyer's powers and have been duly authorized by the Board of Directors of Buyer
and, upon execution thereof, will be duly executed and delivered by Buyer.
(b) This Agreement constitutes the valid and binding agreement of
Buyer, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally, by
general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
3.03 Investment Intent. Buyer understands that the Shares have not been
registered under the Securities Act of 1933, as amended, or any other applicable
state or federal securities law. Buyer is purchasing the Shares for investment,
for its own account, and with no present intention of reselling, directly or
indirectly participating in any distribution of or otherwise
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disposing of the Shares, except in compliance with applicable securities laws.
3.04 No General Solicitation. The Shares were not offered to Buyer by
means of general solicitations, publicly disseminated advertisements or sales
literature.
3.05 No Brokers. Buyer has not authorized any broker, dealer, agent or
finder to act on its behalf nor does Buyer have any knowledge of any broker,
dealer, agent or finder purporting to act on its behalf with respect to this
transaction.
3.06 Issuance of and Title to TELPRI Shares. Upon delivery of the Shares
to Buyer, in accordance with the terms of this Agreement, Buyer shall issue and
register in the name of the Authority one or more certificates evidencing the
TELPRI Shares being issued in connection herewith. Upon issuance, the TELPRI
Shares will be validly issued, fully paid, and non-assessable and free of
preemptive rights, and upon delivery of the TELPRI Shares to the Authority, the
Authority will acquire good and indefeasible title to the TELPRI Shares, free
and clear of any and all liens, claims or encumbrances of any kind, other than
liens, claims or encumbrances created by or through the Authority.
ARTICLE IV
CROSS-RECEIPT
4.1 Receipt of Shares. By execution and delivery of this Agreement, Buyer
hereby acknowledges the receipt of the Shares.
4.2 Receipt of Purchase Price. By execution and delivery of this
Agreement, the Authority hereby acknowledges receipt of the Purchase Price
(including the TELPRI Shares).
ARTICLE V
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
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5.1 Survival. The representations and warranties of the parties contained
in this Agreement shall survive the execution and delivery of this Agreement.
5.2 Indemnification by Buyer. Buyer shall indemnify and hold harmless the
Authority from and against any and all claims, losses, liabilities and damages,
including, without limitation, amounts paid in settlement, reasonable costs of
investigation and reasonable fees and disbursements of counsel, arising out of
or resulting from the inaccuracy of any Buyer representation or warranty, or the
breach by Buyer of any covenant or agreement, contained herein or in any
instrument or certificate delivered pursuant hereto.
5.3 Indemnification by the Authority. The Authority shall indemnify and
hold harmless Buyer from and against any and all claims, losses, liabilities and
damages, including, without limitation, amounts paid in settlement, reasonable
costs of investigation and reasonable fees and disbursements of counsel, arising
out of or resulting from the inaccuracy of any representation or warranty by the
Authority, or the breach by the Authority of any covenant or agreement,
contained herein or in any instrument or certificate delivered pursuant hereto.
ARTICLE VI
MISCELLANEOUS
6.1 Notices. All notices, requests and other communications to each party
hereunder shall be in writing (including telecopy or similar writing, with
confirmation of receipt) and shall be given:
If to the Authority, to:
Puerto Rico Telephone Authority
c/o Government Development Bank
for Puerto Rico
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Minillas Xxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: President
With a copy to
Xxxxxxxxxxx, Xxxxxx & Xxxxxxx
Banco Popular Center
Xxxxx 0000
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx
Akin, Gump, Strauss, Xxxxx & Xxxx L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xx.
If to Buyer, to:
Xxxxxxxxxxxxxxxxxx xx Xxxxxx Xxxx, Xxx.
0000 Xxxxxxxx X. Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: President
With a copy to:
GTE International Telecommunications Incorporated
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx
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6.2 Amendment and Modification. This Agreement may be amended, modified,
or supplemented only by written agreement of both of the parties hereto.
6.3 Waiver of Compliance; Consents. Any failure of a party to comply with
any obligation, covenant, agreement, or condition herein may be waived by the
other party; provided, however, that any such waiver may be made only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 6.3, with appropriate notice in
accordance with Section 6.1 of this Agreement.
6.4 Expenses. All fees and expenses (including all fees of counsel and
accountants) incurred by any party in connection with the negotiation, execution
and consummation of this Agreement shall be borne by the party who incurred
them.
6.5 Governing Law. This Agreement shall be construed in accordance with
and governed by the law of Puerto Rico without giving effect to principles of
conflicts of laws.
6.6 Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.
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6.7 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, understandings and negotiations, both written and oral,
between the parties with respect to the subject matter of this Agreement. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by either party hereto.
6.8 Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
6.9 Severability. If any one or more provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or, unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
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IN WITNESS WHEREOF, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PUERTO RICO TELEPHONE AUTHORITY
By:
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Name:
Title:
TELECOMUNICACIONES DE PUERTO
RICO, INC.
By:
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Name:
Title:
