EXHIBIT 10.6(B)
Puerto Rico Telephone Company
Distributor Contract
Guaynabo, Puerto Rico, December 19, 1995.
WITNESSETH
PUERTO RICO TELEPHONE COMPANY, a corporation organized under the laws of the
State of Delaware and authorized to operate in the Commonwealth of Puerto Rico,
represented in this case by Xx. Xxxxx Xxxxx Xxxxxxxx, Vice President of
Cellulars/Beepers Telefonica (from now on known as "PRTC") and Xxxxxxxx,
represented in this case by Xxxxx Xxxxxxx, VP and General Manager (from now on
known as Distributor)
Whereas, PRTC at the present time operates the Cellular Radio Service (CRS).
Whereas, the Distributor desires to obtain subscribers for the CRS the means of
this agreement.
Whereas, PRTC desires to authorize the Distributor to find in representation of
PRTC, subscribers for the CRS.
Therefore, it is mutually agreed as follows:
ARTICLE 1. DEFINITIONS
Cellular Radio Service (CRS) or Cellular Domestic Public Telephone Service.
A. Communication service with license from the Federal Commission
Confederation (FCC), which uses cellular radio technology in the provision
of cellular telecom service to mobile subscriber and to the public
telephone network. (Abbreviated as P.T.D.C.S and also known as "Cellular
Service").
Equipment: Mobile and portable station that is used by the subscriber in
conjunction with the Cellular Radio Service.
Brand: Brand name or commercial brand, ensigns, symbols or decorative
designs of PRTC under licenses or sublicense from PRTC to be used in
conjunction with the Cellular Radio Service.
Subscriber: Potential customer or actual customer who is the end user of
the CRS provided by PRTC.
Work Period: The established accounting cycle that consists of thirty (30)
calendar days after this contract is awarded and subsequently. The same
will serve to regulate the beginning of the subscriber registered
accounting period and it will be used for compensation purposes.
ARTICLE 2. APPOINTMENT
In the means of this Agreement PRTC will authorize the Distributor to offer
to the public the CRS as a distributor of PRTC. As such, the Distributor is
authorized to obtain subscribers
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for the CRS and refer those subscribers to the PRTC or to the authorized
resellers. The Distributor will not be considered as an employee or agent
of PRTC, or any of its company affiliates, however it will be considered as
an independent contractor.
The Distributor agrees to refer its customer to PRTC's CRS during the term
of this contract. PRTC will assign the number as soon as requested by
Distributor, subject to availability and/or legal restriction or
regulation. The assignment and/or activation will be taken by PRTC only
during regular working hours from Monday to Saturday, except Holidays.
ARTICLE 3. TERMS AND TERMINATION OF AGREEMENT
This Agreement will be effective initially for one year, beginning as
stipulated by both parties and will continue to be valid subsequently from
year to year, unless and until it is terminated by any of the parties at
any time by the means of a written notification to the other party with at
least 30 days notification.
PRTC can terminate this contract if the Distributor activates less than 96
subscribers to the CRS during the term of a year. PRTC reserves the right
to modify prior thirty days written notice, the quantity of minimum
activations required to contract renewals.
The termination will apply prospectively and will cancel any order, which
was submitted before the termination date or that was pending to be
completed before the termination.
ARTICLE 4. PROCEDURES RELATED TO THE SALE OF CRS
The Distributor agrees to obtain subscribers for the CRS at the rates under
the terms and conditions specified by PRTC. The Distributor will use the
service orders that use PRTC and any other document/form that is necessary
to provide the CRS to each subscriber. These service orders have to be
signed by each subscriber for it to be accepted by PRTC.
Subject to laws and regulations applicable, PRTC has the right to reject
any subscriber if he does not honor the rules that are applicable to the
credit norms. The Distributor agrees to comply with all the reasonable
procedures to verify the credit rules established by PRTC to accept such as
a subscriber.
When the Distributor obtains a subscription for CRS, the subscriber will
then be converted, as a client of PRTC for CRS and PRTC will invoice
directly to subscriber. PRTC is responsible to collect to the subscriber
all charges of the CRS.
Subject to the approval of regulation that is required, PRTC will determine
and periodically modify the rates for CRS and notify to the Distributor of
each modification as soon as it is possible. The rate modification will
apply to existing and future subscribers.
ARTICLE 5. COMPENSATION AND PAYMENT TERMS
A. For the Distributor to have the right to receive a commission, as per
specified in clause 5(C) of this contract, referred by the Distributor the
subscriber remain in service for at least one hundred and fifty (150)
calendar days since the activation date.
PRTC will notify the activation date to the Distributor 15 on/or before 15
days after receipt of service order. If the subscribe does not remain as a
client of PRTC during the minimum period of 150 days, the PRTC could make a
charge back in the next invoice to the Distributor to discount the payment
from the commission such quantity equal to the payment in the case that
the subscriber does not remain as a customer during the minimum period.
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PRTC will pay to the Distributor a commission for each subscriber referral
as specified in Exhibit A, which will be paid only once for each referral.
B. During the first five (5) days of the current working period the
Distributor should send to PRTC or invoice with the commission earned
during the immediate past working period. The invoice should include the
subscriber name, Service Order Number, the assigned telephone number, and
the activation date. Each invoice shall be accomplished by the original
contract of cellular service for each new subscriber that the Distributor
is claiming for the commission including that contract that a deposit was
required.
C. PRTC will pay to the Distributor the commission in the following 30 days
after receipt of the invoice.
ARTICLE 6. DEPOSITS AND ADVANCED PAYMENTS
To safeguard PRTC interest, PRTC could request the petitioner or Distributor to
make an adequate deposit to keep it as a guaranteed payment and/or request an
advanced payment and/or a Financial Guarantee Bond "For the sum of $5,000".
The deposits will be subject to the tariff regulation of Puerto Rico Telephone
Company including the prevailing type percent (%) of interest payment.
In the case of the guarantor cancelling the bid or bids mentioned in a written
notification, PRTC should receive such notifications under the same terms as the
Distributor.
The deposits made by the subscriber and requested by PRTC and received by the
Distributor will be delivered to PRTC with the Order Service. PRTC will only
receive individual deposits by each subscriber, payable to the order of PRTC by
cash, check and/or money order.
ARTICLE 7. BRAND UTILIZATION
Distributor will not appear as if directly or indirectly, without the
authorization of PRTC, that is sponsored, authorized, endorsed, affiliated or
agent of PRTC or any affiliation or successor, including but not limited to the
use of the name "Puerto Rico Telephone Company" or any of its affiliates, or any
imitation of colors used on or part of any name of Company or brand or in any
other form deception or confusion without the written consent of PRTC. However,
the Distributor expressly is obliged to identify all units of terminal equipment
that it distributes with PRTC's logo that will be provided by PRTC at no charge.
ARTICLE 8. PROVISION OF THE RADIO MOBILE UNIT
A. PRTC will not be responsible for the installation, the transmission
nor maintenance of the radio mobile unit of any Distributor.
B. The operative characteristic of the mentioned equipment will be such
that it will not interfere with the services provided by PRTC.
ARTICLE 9. RULES AND PROCEDURES
Distributor is obliged to comply as it may apply, with all the rules and
regulations pertaining to FCC, all the rates, government regulations and
existing procedures related to the sale of Cellular Radio Service. Such rates,
regulations and procedures will be incorporated as a reference to such
agreement.
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The acceptance of a potential subscriber for the purpose of compensation depends
on:
A. The proper completion of all the documents required by PRTC.
B. The approval of the customer credit analysis.
C. The receipt and approval of any deposit or cash advanced required by
PRTC.
ARTICLE 10. TERMINATION FOR JUST CAUSE
Any of the parties will have the right to terminate this Agreement due to just
cause and it will be in effect after it notifies the termination to the other
party, if the other party (1) has done any false representation or omission in
the negotiation to establish this Agreement; (2) Transfer this Agreement without
authorization; (3) Receive a notification of violation of the terms and/or
conditions of this Contract or any license or permit required to such other
party or to its employees in the management of its business of CRS and it does
not correct such violation during the term that specifies such notification or
in the thirty (30) days after the receipt of such notification, the first that
expires.
ARTICLE 11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Puerto Rico. Both parties agree to defend, indemnify, and
hold harmless each other, assignee, employees, agents, and legal distributors,
against any and all claims, including costs and attorney fees incurred in the
defense for bodily injury or property damage caused by acts, negligence or
omission of the other party, its agents, subcontractors or employees.
These provisions in no way substitute for the insurance required in this
Agreement and have no intention in acting as insurance.
ARTICLE 12. INSURANCE
During the term of this contract, DISTRIBUTOR shall acquire commercial general
liability, property, and personal damage insurance (including death and bodily
harm) to cover any and all damages caused by the operation of its business. Such
policy or policies shall have a limit of not less than $300,000 per person for
bodily injury and death, and $300,000 for property damage. Such policy or
policies shall be written by a responsible insurance company or companies
licensed to do business in Puerto Rico. DISTRIBUTOR shall name PRTC as
additional insured in such policies. Such policy or policies shall provide that
they will not be canceled, altered, or non renewed, or convey a "hold harmless
agreement" without at least thirty (30) days prior written notice to PRTC. PRTC
could request DISTRIBUTOR with ninety (90) days prior written notice, to
increase the insurance coverage according to inflation, or high reclamations
that make insufficient the recovery limits herein established. DISTRIBUTOR shall
provide evidence of the existence of such policy or policies. PRTC requests
automobile insurance coverage for $100,000/$300,000 for bodily injury and
$100,000 for property damage.
ARTICLE 13. RESPONSIBILITY AND INDEMNIFICATION
Neither of the parties is responsible for agreements or representations done by
persons not authorized in this Contract. The parties are responsible for any
bodily injury or property damage
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caused directly or indirectly by the other, according to the prevailing law,
including the balancing of responsibility determined by a court of law. Each of
the parties will defend and indemnify the other against any reclamation, suit,
payment, action or judgment related to the operation of the other, that could be
a result of the acts or omissions of the party that indemnifies. Both parties
have the power to defend itself in actions brought against them, under its cost
without affecting the rights expressed in Article 11. This indemnification will
be sustained in full force and effect even if this Contract is terminated or
expires.
ARTICLE 14. TERM OF AGREEMENT
This Agreement is effective on the date signed by DISTRIBUTOR and accepted in
writing by PRTC and Xxxxx continue in full force and effect for the period
established in Article 3 or as expressed in Article 10.
ARTICLE 15. NOTICES
All notices shall be sent to:
To PRTC:
PUERTO RICO TELEPHONE COMPANY
CELLULAR SALES DIVISION
PO BOX 360998
SAN XXXX, PR 00936-998
To DISTRIBUTOR:
CORTELCO PUERTO RICO, INC.
PO BOX 363665
SAN XXXX, PR 00936-3665
Or to any other address both parties provide.
ARTICLE 16. ASSIGNMENT
This Agreement shall not be assigned by any of the parties without the prior
written consent of the other party.
ARTICLE 17. TAXES
As per Executive Order of the Governor from June 18, 1991, Administrative
Bulletin No. OE 1991-24, the subscriber states that the following information is
necessary for the delivery of its services.
Certifies and guarantees that at the time of signature of this Contract, the
income tax form for the previous five (5) years of this Contract has been filed
and that no contributions are owed to the
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Commonwealth of Puerto Rico and that in the case that contributions are pending,
there is a payment plan.
DISTRIBUTOR certifies and guarantees that at the time of signature of this
Contract, all contributions for unemployment, disability, and driver's social
security, are duly paid; and that in the case that contributions are pending,
there is a payment plan.
DISTRIBUTOR expressly recognizes that the previous condition is of essence for
the signature of this Agreement and in the case this would not be correct, PRTC
shall leave without effect the same and proceed to claim all monies received
under this Agreement. DISTRIBUTOR shall also proceed to request from the
subcontractors the information herein stated and to notify PRTC about this
particular.
THEREFORE, it is mutually agreed that the representatives sign as follow:
PUERTO RICO TELEPHONE COMPANY DISTRIBUTOR
By: /s/ Xxxxx Xxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxx
---------------------------- ----------------------------------
Name: Xxxxx Xxxxx Xxxxxxxx Xxxxx Xxxxxxx
Vice President and General Manager
Num. Seg. Patronal 066-023-7596
Date: 12/19/95
DISTRIBUTOR AGREEMENT
PUERTO RICO TELEPHONE COMPANY
CELLULAR SALES DIVISION
COMMISSIONS
Number of subscriptions Cellular number
1-25 $200.00 each
26-49 $250.00 each
50-99 $275.00 each
100-149 $300.00 each
150 + $325.00 each
Notes:
1. New tariffs are effective November 1, 1995
2. Previous commissions are based on 30 calendar days as specified in
Article I, DEFINITIONS. Subscriptions given on a specified time of
work will not be effective for subsequent periods of work.
3. Compensation will be paid as Article 5 states. DISTRIBUTORS shall
provide PRTC the serial number. If the information given is incorrect,
PRTC will not activate the system.
4. PRTC shall pay commissions as herein stated. If DISTRIBUTOR reaches a
new scale, its Commission will be incremented. For the first 25 it
will be paid $200.00; the next 25, $250.00; the next 50, $275.00; the
next 50, $300.00 and once reached 150, $325.00 for any 150 customers
in a term of 30 days as described in Article I.
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