EXHIBIT 8
---------
EXECUTION VERSION
Dated 31 January 2006
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
and
FIRST PACIFIC COMPANY LIMITED
and
METRO PACIFIC CORPORATION
and
METRO ASIA LINK HOLDINGS, INC.
and
METRO PACIFIC RESOURCES, INC.
and
LAROUGE B.V.
and
METRO PACIFIC ASSETS HOLDINGS, INC.
and
NTT COMMUNICATIONS CORPORATION
and
NTT DOCOMO, INC.
CO-OPERATION AGREEMENT
Linklaters
00xx Xxxxx, Xxxxxxxxx Xxxxx
Xxxxxx Xxxx
Xxxx Xxxx
Telephone (000) 0000 0000
Facsimile (000) 0000 0000/2810 1695
Ref KMTM/CTD
Contents
Clause Heading Page
1 Interpretation............... ..........................................2
2 Effective date and notice...............................................4
3 Principles of co-operation; Exercise of rights..........................4
4 Exercise of rights by DoCoMo and NTT....................................7
5 Permitted Transfers of PLDT Shares......................................8
6 Certain corporate undertakings under Existing Agreements upon Transfer
of PLDT Shares amounting to the First Minimum Shareholding Threshold
from NTT to DoCoMo.....................................................10
7 Amendments to Existing Agreements......................................13
8 Further amendments to Existing Agreements - DoCoMo holds the Second
Minimum Shareholding Threshold.........................................13
9 Additional rights in favour of DoCoMo..................................15
10 Restriction on share acquisitions......................................18
11 Support................................................................20
12 Provision of PLDT's financial information..............................20
13 Termination............................................................21
14 General................................................................23
i
This Agreement is made on 31 January 2006 by and among:
(1) PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, a company established under
the laws of the Philippines and having its principal office at Xxxxx
Cojuangco Building, Makati Avenue, Makati City, Metro Manila,
Philippines ("PLDT");
(2) FIRST PACIFIC COMPANY LIMITED, a company incorporated under the laws of
Bermuda and having its principal place of business at 24th Floor, Two
Exchange Square, 0 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxx Xxxx ("FPC");
(3) METRO PACIFIC CORPORATION, a corporation established under the laws of
the Republic of the Philippines and having its principal place of
business at 00xx Xxxxx, XXX Xxxxxxxx, Xxxxxxx Corner Xxxx Xxxx Street,
Legazpi Village, Makati City, Metro Manila, Philippines ("Metro");
(4) METRO ASIA LINK HOLDINGS, INC, a corporation established under the laws
of the Republic of the Philippines and having an office at 00xx Xxxxx,
XXX Xxxxxxxx, Xxxxxxx Corner Xxxx Xxxx Street, Legazpi Village, Makati
City, Metro Manila, Philippines ("MALH");
(5) METRO PACIFIC RESOURCES, INC., a corporation established under the laws
of the Republic of the Philippines and having an office at 18th Floor,
Liberty Centre, 104 H.V. de la Costa Street, Salcedo Village, Makati
City, Metro Manila, Philippines ("MPRI");
(6) LAROUGE B.V., a company incorporated under the laws of the Netherlands
and having its registered office at Xxxxx 00, 0000 XX Xxxxxxxxx, xxx
Xxxxxxxxxxx ("LBV");
(7) METRO PACIFIC ASSETS HOLDINGS, INC., a corporation incorporated under
the laws of the Republic of the Philippines and having its principal
place of business at 00xx Xxxxx, Xxxxxxx Xxxxxx, 000 H.V. de la Costa
Street, Salcedo Village, Makati City, Metro Manila, Philippines
("MPAH");
(8) NTT COMMUNICATIONS CORPORATION, a corporation established under the
laws of Japan and having its principal place of business at 0-0
Xxxxxxxxxx-xxx, 0-Xxxxx, Xxxxxxx-xx, Xxxxx 000-0000, Xxxxx ("NTT"); and
(9) NTT DOCOMO, INC, a company incorporated under the laws of Japan and
having its principal place of business at 00-0 Xxxxxx-xxx 0-Xxxxx,
Xxxxxxx-Xx, Xxxxx 000-0000 Xxxxx ("DoCoMo").
Recitals:
(A) FPC, Metro, MALH, MPRI, LBV, MPAH, NTT Communications Capital (UK)
Limited ("NTT Capital") and NTT were the original parties to a
Shareholders Agreement made on 24 March 2000 ("Shareholders Agreement")
and FPC, Metro, MALH, MPRI, LBV, MPAH and NTT remain parties to the
Shareholders Agreement. PLDT, FPC, Metro, MALH, MPRI and NTT are
parties to a Stock Purchase and Strategic Investment Agreement dated 28
September 1999, as amended by the First Amendment thereto dated 8 March
2000 and the Second Amendment thereto dated 24 March 2000 ("Strategic
Agreement"). NTT and PLDT are parties to an Advisory Services Agreement
dated 24 March 2000, as amended by an Amendment thereto dated 31 March
2003 and a Second Amendment thereto dated 31 March 2005 (the "Advisory
Services Agreement").
(B) The Shareholders Agreement and Strategic Agreement, among other things,
regulate the relationship among the Parties (other than DoCoMo) in
relation to their respective shareholdings (if any) in PLDT.
1
(C) NTT Capital has transferred all of its PLDT Shares to NTT and has not
retained any rights or obligations under the Shareholders Agreement and
has been liquidated and dissolved, and as such, the Parties hereto
acknowledge and agree that NTT Capital shall not be a party to this
Agreement to effect the purposes herein.
(D) DoCoMo is in negotiation with NTT to acquire PLDT Shares from NTT, and
is in discussion with PLDT and SMART to study the possibility and
feasibility of entering into certain strategic business relationships
in the field of mobile communication services.
(E) PLDT, FPC, Metro, MALH, MPRI, LBV, MPAH and NTT agree that, in
connection with DoCoMo's acquisition of PLDT Shares from NTT, they will
grant DoCoMo certain benefits on the terms and subject to the
conditions set out in this Agreement.
It is agreed as follows:
1 Interpretation
In this Agreement (including the Recitals), unless the context
otherwise requires, the provisions in this Clause 1 apply:
1.1 Definitions
"Acting Party" means (i) until the Handover Date, NTT and (ii) from and
after the Handover Date, DoCoMo;
"Advisor" has the meaning given to it in the Advisory Services
Agreement;
"Affiliate" has the meaning given to it in the Strategic Agreement;
"Business Day" has the meaning given to it in the Shareholders
Agreement;
"COA" has the meaning given to it in the Advisory Services Agreement;
"Committee" shall mean any committee established or to be established
by resolutions of the board of directors of PLDT or SMART or
administrative orders issued by the chief executive officer of PLDT or
SMART or otherwise;
"Competing Business" has the meaning given to it in the Strategic
Agreement;
"Effective Date" has the meaning given to it in Clause 2.2;
"Existing Agreements" means the Shareholders Agreement and the Strategic
Agreement;
"Existing Encumbrances" has the meaning given to it in Clause 9.2.1;
"First Minimum Shareholding Threshold" means ownership of full legal
and beneficial title to not less than 12,633,486 PLDT Shares;
"FPC Parties" means FPC, Metro, MALH, MPRI, LBV and MPAH;
"GAAP" means, with respect to any jurisdiction, the generally accepted
accounting principles in such jurisdiction;
"Handover Date" means 1 July 2006;
"Joint Mancom" means the management committee comprising senior members
of the management of each of PLDT and SMART, which is appointed by the
president of PLDT for the purpose of co-ordinating management functions
within the PLDT Group, and in particular to facilitate communication
between management of the PLDT Group companies;
2
"NTT Holding" means Nippon Telegraph and Telephone Corporation, a
corporation organised and existing under the laws of Japan;
"Parties" means the parties to this Agreement and "Party" means any one
of them;
"Person" has the meaning given to it in the Strategic Agreement;
"PLDT Advisory Board" means the advisory board comprised of PLDT
Advisory Board Members;
"PLDT Advisory Board Member" means an individual who has been appointed
as such by the board of directors of PLDT and who is given the right to
attend and participate in, but not the right to cast any vote at, the
meetings of the board of directors of PLDT;
"PLDT Group" means PLDT and its Subsidiaries;
"PLDT Mancom" means the management committee comprised of senior
members of the management of PLDT, which is appointed by the president
of PLDT for the purpose of overseeing operational matters of PLDT and
ePLDT, Inc.;
"PLDT MRSB" means the Major Requisition Screening Body established to
review and approve the capital expenditures and operational expenses of
PLDT which exceed thresholds specified by the board of PLDT, and to
evaluate and endorse items that require higher approval authority as
stipulated by the board of PLDT;
"PLDT Shares" means shares of common capital stock of PLDT;
"PLDT Shareholders" means the PLDT shareholders holding PLDT Shares;
"Preemption Reply" means (i) the decision of NTT referred to in the
final paragraph of Section 9.9 of the Strategic Agreement as notified
to PLDT, (ii) a First Offer Reply (as defined in clause 9(A)(ii) of the
Shareholders Agreement) or (iii) a PTIC Offer Reply (as defined in
clause 10(B)(ii) of the Shareholders Agreement), as the case may be;
"PTIC" has the meaning given to it in the Shareholders Agreement;
"Registration Rights Agreement" means the agreement dated 24 March 2000
between NTT, NTT Capital and PLDT;
"Second Minimum Shareholding Threshold" means ownership of full legal
and beneficial title to not less than seventeen and a half per cent.
(17.5%) of all PLDT Shares issued and outstanding from time to time;
"SMART" means SMART Communications, Inc, a corporation organised and
existing under the laws of the Philippines and having its principal
office at SMART Tower, 0000 Xxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxx Xxxxxx,
Xxxxxxxxxxx;
"SMART Mancom" means the management committee comprising senior members
of the management of SMART, which is appointed by the president of
SMART for the purpose of overseeing operational matters of SMART;
"SMART MRP" means the Materials Requirement Planning body established
to review and approve the capital expenditures and operational expenses
of SMART which exceed thresholds specified by the board of SMART, and
to evaluate and endorse items that require higher approval authority as
stipulated by the board of SMART;
3
"SMART Shareholders" means the holders of shares of common capital stock
of SMART;
"Subsidiary" has the meaning given to it in the Shareholders Agreement;
"Transaction Information" means:
(i) the number of PLDT Shares Transferred from NTT to DoCoMo
(or a Subsidiary or nominee);
(ii) the date of each such Transfer;
(iii) DoCoMo's direct and/or indirect voting power in respect
of the PLDT Shares upon completion of such Transfer; and
(iv) NTT's direct and/or indirect voting power in respect of
the PLDT Shares upon completion of such Transfer; and
"Transfer" has the meaning given to it in the Shareholders Agreement
and "Transferred" shall be construed accordingly.
Capitalized terms used in this Agreement and not otherwise defined
herein shall be used as defined in the Existing Agreements.
1.2 Headings
Headings shall be ignored in construing this Agreement.
2 Effective date and notice
2.1 Except Clauses 3.3, 5.1, 5.2, 9.1.3(ii), 13.1, 13.3 and 14 which shall
become effective on and from the date of this Agreement, this Agreement
is conditional upon the Transfer by NTT to DoCoMo of the full legal and
beneficial title to PLDT Shares held as at the date of this Agreement
by NTT amounting to the First Minimum Shareholding Threshold.
2.2 Each of NTT and DoCoMo undertakes to provide a written notice to PLDT
and each of the FPC Parties at the same time, confirming that the
condition in Clause 2.1 has been satisfied and stating the Transaction
Information, within five (5) Business Days of such Transfer. For the
avoidance of doubt, the rights and obligations of the Parties under
this Agreement (except Clauses 3.3, 5.1, 5.2, 9.1.3(ii), 13.1, 13.3 and
14) will not be effective or enforceable until the date on which the
written notice in accordance with this Clause 2.2 are provided by
DoCoMo to PLDT and the FPC Parties (the "Effective Date").
3 Principles of co-operation; Exercise of rights
3.1 Upon Clause 2.1 being satisfied, references in the Existing Agreements
to NTT shall be construed to be references to NTT and DoCoMo,
references in the Existing Agreements to NTT Group shall be construed
to be references to NTT and its Subsidiaries and DoCoMo and its
Subsidiaries, and references in the Existing Agreements to an NTT Party
shall be construed as references to NTT and its Permitted Transferee
(as that term is defined in the Shareholders Agreement) and DoCoMo and
its Permitted Transferee,
3.1.1 except:
(a) to the extent that the contrary is expressly stated in this
Agreement;
(b) with respect to the approvals, consents, waivers, decisions and
other acts of NTT carried out before the Effective Date; or
4
(c) where such construction would produce an absurd result; and
3.1.2 provided that:
(a) where a proper construction thereof so permits, such references
shall, except to the extent of the obligations of PLDT and/or
the FPC Parties expressly set forth in this Agreement or the
Existing Agreements (as amended by this Agreement), be construed
in a manner which does not (i) increase the combined rights of
NTT and DoCoMo beyond those which NTT had prior to the Effective
Date and (ii) increase the obligations of PLDT or the FPC
Parties beyond those which they had respectively or collectively
before the Effective Date; and
(b) nothing in this Clause 3.1 shall restrict the Right of NTT or
DoCoMo to enforce its indemnification rights or exercise any
other available remedy provided in the Existing Agreements for
breach of the Existing Agreements, except that neither NTT nor
DoCoMo shall be entitled to recover from PLDT or any of the FPC
Parties under this Agreement or any Existing Agreement more than
once in respect of the same losses suffered; and
(c) notwithstanding the foregoing:
(i) references to NTT Group in Section 8.3(d) of the
Strategic Agreement shall be construed in light of
Clause 7.1.1;
(ii) references to NTT in Section 11.4 of the Strategic
Agreement shall be construed in light of Clause 7.1.3;
(iii) references to NTT in Sections 11.5 and 11.6 of the
Strategic Agreement shall be construed in light of
Clause 3.4;
(iv) references to NTT in Clause 3 of the Shareholders
Agreement shall be construed in light of Clause 6.2;
(v) references to NTT in Clause 4 of the Shareholders
Agreement shall be construed in light of Clause 6.3;
(vi) references to NTT is Clause 5(A) of the Shareholders
Agreement and Section 8.4 of the Strategic Agreement
shall be construed in light of Clause 7.1.2;
(vii) references to NTT in Clauses 8, 9 and 10 of the
Shareholders Agreement shall be construed in light of
the provisions of Clauses 4.2, 5.4 and 5.5 and
references to NTT Group in Clause 9(B) shall be
construed as references to NTT and its Subsidiaries or
DoCoMo and its Subsidiaries, whomever is proposing to
sell PLDT Shares;
(viii) references to NTT Parties in Clauses 11(C) and 11(F) of
the Shareholders Agreement shall be construed to be
references to NTT and its Permitted Transferee to which
a transfer of Covered Shares has been made pursuant to
Clause 11(B) or DoCoMo and its Permitted Transferee to
which a transfer of Covered Shares has been made
pursuant to Clause 11(B);
5
(ix) references to NTT in Clause 11(C) of the Shareholders
Agreement shall be construed as references to NTT and
its Subsidiaries or DoCoMo and its Subsidiaries, as the
case may be;
(x) references to NTT Group in Clause 8(A) and 11(D) of the
Shareholders Agreement shall be construed as references
to NTT and its Subsidiaries or DoCoMo and its
Subsidiaries, as the case may be, and shall be construed
in light of the provisions of Clauses 4.2, 5.4 and 5.5;
(xi) references to NTT Party in Clause 11(F) of the
Shareholders Agreement shall be construed as references
to NTT and its Permitted Transferee or DoCoMo and its
Permitted Transferee, as the case may be; and references
to NTT Parties in Clause 20(B)(ii) of the Shareholders
Agreement shall be construed as references to NTT and
its Subsidiaries or DoCoMo and its Subsidiaries, as the
case may be, and references to NTT in Clause 20(B)(ii)
of the Shareholders Agreement shall be construed as
references to NTT and its Subsidiaries in respect of
rights exercised by NTT and to DoCoMo and its
Subsidiaries in respect of rights exercised by DoCoMo.
3.2 Notwithstanding anything to the contrary in this Agreement and the
Existing Agreements, the Parties hereby agree that in no event shall
DoCoMo be bound by or become liable for or entitled to the benefit of,
any of the representations, warranties, obligations or entitlements
under clause 15 (Representations and Warranties) of the Shareholders
Agreement and sections 2 (Purchase of SMART Shares), 3 (Subscription for
NTT PLDT Cash Shares), 4 (Initial Closing; Initial Closing Actions), 5
(Final Closing; Final Closing Actions), 6 (Representations and
Warranties), 7 (Covenants and Undertakings), 11.1 (Reorganization of
SNMI's Business), 11.2 (Acquisition of Minority Interests on Infocom),
13 (Indemnification) to the extent the indemnification provisions
therein apply to events, circumstances, representations, warranties or
obligations which occurred, were given or accrued (as the case may be),
and have ceased to have effect, before the Effective Date, and 14
(Taxes; Costs and Expenses) of the Strategic Agreement and any of
schedules 1 through 9, 11 and 12 attached thereto. Without prejudice to
the rights of PLDT or any of the FPC Parties to pursue any or all legal
remedies for any breach by NTT or any other member of the NTT Group of
the provisions of the Existing Agreements, PLDT and the FPC Parties
hereby acknowledge and agree that DoCoMo shall not, solely as a
consequence of its entering into and performing its obligations under
this Agreement, be liable for any such breach accrued and not discharged
on or before the Effective Date.
3.3 Except for NTT Capital no longer being a party to the Shareholders
Agreement as described in Recital C herein and DoCoMo's addition as a
party to each of the Existing Agreements pursuant to and on the terms
and subject to the conditions set out in this Agreement, the parties to
each of the Existing Agreements remain subject to the Existing
Agreements, as modified, varied or amended by this Agreement.
3.4 As soon as possible and in any event within sixty (60) calendar days
immediately after the Effective Date, DoCoMo and the other Parties who
are respectively parties to the Advisory Services Agreement, the
Conventional International Telecommunications Services Agreement dated
24 March 2000 between NTT and PLDT, the Internet Services Agreement
6
dated 24 March 2000 between NTT and PLDT, the Tradename and Trademark
Agreement dated 24 March 2000 between NTT and PLDT and the Arcstar
Service Provider Agreement dated 24 March 2000 between PLDT and NTT
Worldwide Telecommunications Corporation (and all agreements ancillary
thereto) will review and hold discussions with one another in good
faith with a view to determining whether any such agreement need to be
amended in light of the provisions of this Agreement, and if and only
to the extent any such amendment is identified and agreed by the
relevant parties to such agreement and DoCoMo, such relevant Parties
will procure such amendment.
3.5 NTT and PLDT agree that as soon as possible and in any event within
sixty (60) calendar days immediately after the Effective Date, NTT and
PLDT will amend the Registration Rights Agreement to increase NTT's
present entitlement to require four (4) Demand Registrations (as that
terms is defined in the Registration Rights Agreement) to six (6)
Demand Registrations, and will otherwise, together with DoCoMo, review
and hold discussions with one another in good faith with a view to
determining whether any additional amendment(s) to the Registration
Rights Agreement are required to be made, and if and only to the extent
any such further amendment(s) is/are identified and agreed by each of
NTT, DoCoMo and PLDT, such relevant Parties will procure such
amendment(s).
3.6 Notwithstanding any provisions in this Agreement or the Existing
Agreements to the contrary, NTT and DoCoMo agree that NTT and DoCoMo
will not both be entitled to claim in respect of any matter to the
extent that a loss could only be properly incurred by one or the other
of NTT and DoCoMo.
4 Exercise of rights by DoCoMo and NTT
4.1 Subject to Clause 3.2 and the other provisions of this Clause 4, NTT
and DoCoMo agree, covenant and undertake with each other and with PLDT
and each of the FPC Parties that on and from the Effective Date, in
respect of any exercise of the rights of NTT and DoCoMo set forth in
(i) sections 8.4, 9, 10.2, 10.3, 10.5, 10.6, 10.7, 11.2, 12.3 or 17.13
of the Strategic Agreement or (ii) clauses 3(B), 3(D), 4(A), 4(B),
5(D), 5(G), 5(H), 6, 9(A), 10(B), 11(A) or 13(A)(ii) of the
Shareholders Agreement, NTT and DoCoMo shall discuss between themselves
the manner in which such rights shall be exercised, whereupon the
Acting Party shall give notice in accordance with the relevant
provisions of the Existing Agreements to PLDT and the FPC Parties of
the decision regarding the exercise of such rights.
4.2 Subject to Clause 3.2 and the successive provisions of this Clause 4,
with respect to the exercise of rights under (i) section 9.9 of the
Strategic Agreement granting NTT and DoCoMo pre-emptive rights in
respect of certain new issuances of PLDT Shares, (ii) clause 9(A) of
the Shareholders Agreement granting NTT and DoCoMo first refusal rights
with respect to certain Transfers of PLDT Shares by the FPC Parties and
PTIC and (iii) clause 10(B) of the Shareholders Agreement granting NTT
and DoCoMo first refusal rights with respect to certain transfers of
PTIC Shares by the PTIC Shareholders (as set out in the Shareholders
Agreement), NTT and DoCoMo shall, within the time periods provided for
giving a Preemption Reply, consult with each other regarding the
exercise of the relevant rights. NTT and DoCoMo agree that DoCoMo shall
be entitled to purchase all, or some only, of the PLDT Shares or PTIC
Shares which may be purchased by NTT or DoCoMo pursuant to such clauses
and section, and that if DoCoMo decides not to purchase some or all of
such PLDT Shares or PTIC Shares, then NTT shall have the option to
purchase some or all of the PLDT Shares or PTIC Shares not to be
7
acquired by DoCoMo. If a Preemption Reply is given, it shall be given
by the Acting Party.
4.3 NTT and DoCoMo agree, covenant and undertake with each other and with
PLDT and each of the FPC Parties that NTT shall unconditionally, fully
and irrevocably assign and delegate to DoCoMo, on the Handover Date,
NTT's rights to nominate and provide the COA pursuant to the provisions
of the Advisory Services Agreement.
4.4 PLDT and the FPC Parties shall be entitled to rely on any notice
referred to in Clause 4.1 or Clause 4.2 given in accordance with Clause
4.1, as if it had been provided by both NTT and DoCoMo and, regardless
of any difference, disagreement, dissension or dispute between NTT and
DoCoMo, the decision of the Acting Party, as notified in accordance
with Clause 4.1 to PLDT and/or the FPC Parties, as the case may be,
will be final and conclusive for purposes of this Agreement and the
Existing Agreements, and each of PLDT and the FPC Parties shall be
entitled to ignore any conflicting notice, action or inaction (express
or implied) by DoCoMo or NTT (where it is not the Acting Party) and to
assume, where no notice or no valid notice is received from the Acting
Party in accordance with Clause 4.1, that NTT and DoCoMo have decided
(i) not to exercise the relevant rights or (ii) to withhold their
consent or approval (as the case may be). Each of NTT and DoCoMo
agrees, solely for the benefit of the other, that in circumstances
where DoCoMo or NTT (not being at the relevant time the Acting Party)
must exercise rights or take action in order to give effect to a notice
given by the Acting Party under Clause 4.1 or 4.2, it will use its
reasonable commercial efforts to do so. Each of NTT and DoCoMo agrees,
covenants and undertakes to the other and to PLDT and each of the FPC
Parties to coordinate with each other in respect of the exercise of the
rights of NTT and DoCoMo referred to in Clause 4.1 above, and to have
regard to NTT's and DoCoMo's respective interests in relation to any
exercise of such rights.
4.5 NTT and DoCoMo hereby agree and warrant to PLDT and each of the FPC
Parties that none of PLDT and any of the FPC Parties will incur any
liability whatsoever towards NTT and/or DoCoMo under this Agreement or
any of the Existing Agreements or otherwise in taking or refraining
from taking any action in accordance with any notice given to PLDT and
the FPC Parties by the Acting Party in accordance with Clause 4.1.
4.6 Any obligation in the Existing Agreements for PLDT and/or any of the
FPC Parties to notify, inform, consult, deliver, offer, provide,
exercise, give, grant, discuss, show, disclose to, obtain the approval
of or the consent of, NTT and/or DoCoMo, shall be deemed to be
satisfied by PLDT and/or any of the FPC Parties (as the case may be)
notifying, informing, consulting delivering, offering, providing,
exercising, giving, granting, discussing, showing, disclosing to,
obtaining the approval of or the consent of, the Acting Party in
accordance with this Clause 4. Nothing in this Agreement shall operate
to affect the right that each of NTT and DoCoMo may have independent of
the Existing Agreement or this Agreement, including, without
limitation, the right to receive, as a shareholder of PLDT, notice of
shareholders meetings from PLDT.
4.7 References in this Clause 4.2 to the Shareholders Agreement and the
Strategic Agreements are to such agreements as amended by this
Agreement.
5 Permitted Transfers of PLDT Shares
5.1 Notwithstanding any provision in the Existing Agreements to the
contrary, any Transfer of PLDT Shares from NTT to DoCoMo (including the
initial transfer of PLDT Shares from NTT to DoCoMo to which this
8
Agreement (other than Clauses 3.3, 5.1, 5.2, 9.1.3(ii), 13.1, 13.3 and
14) is conditional as set out in Clause 2.1) will be deemed to be a
Transfer to a Permitted Transferee, and will not trigger FPC's right of
first offer pursuant to the Shareholders Agreement, or result in a
default or constitute a ground for termination of any of the Existing
Agreements, or provide a basis for the exercise by PLDT of its right to
terminate the Strategic Arrangements under the Strategic Agreement, the
Advisory Services Agreement, the Conventional International
Telecommunications Services Agreement dated 24 March 2000 between NTT
and PLDT, the Internet Services Agreement dated 24 March 2000 between
NTT and PLDT, the Tradename and Trademark Agreement dated 24 March 2000
between NTT and PLDT or the Arcstar Service Provider Agreement dated 24
March 2000 between PLDT and NTT Worldwide Telecommunications Corporation
(and all agreements ancillary thereto). Each of DoCoMo and NTT agrees to
provide a written notice to PLDT and each of the FPC Parties at the same
time, stating the Transaction Information, within five (5) Business Days
of any such Transfer pursuant to this Clause 5.1.
5.2 Subject to Clause 3.2 above, DoCoMo and NTT hereby agree with and
undertake to PLDT and each of the FPC Parties that all PLDT Shares held
beneficially and legally by DoCoMo as a result of a Transfer
contemplated in Clause 5.1 shall be subject to, and DoCoMo and NTT
shall be severally liable for and bound by, the covenants in the
Existing Agreements, as amended by this Agreement, that apply to NTT
(including, without limitation, FPC's right of first offer on disposal)
as if DoCoMo were NTT and a party to such agreements.
5.3 Subject to Clause 3.2 above, DoCoMo hereby agrees and undertakes to
PLDT and each of the FPC Parties that any additional PLDT Shares
acquired by DoCoMo other than from NTT shall be deemed to be subject
to, and DoCoMo shall be severally liable for and bound by, the
covenants in the Existing Agreements, as amended by this Agreement, as
if such PLDT Shares were PLDT Shares held by NTT pursuant to the
Shareholders Agreement and the Strategic Agreement, and that DoCoMo
shall provide prompt written notice to NTT, PLDT and each of the FPC
Parties at the same time, stating that such an acquisition has occurred
and the number of PLDT Shares acquired by DoCoMo, DoCoMo's direct or
indirect voting power in respect of the PLDT Shares on completion of
the acquisition, and the date of completion of the acquisition, and in
any event within five (5) Business Days of completion of such
acquisition.
5.4 Notwithstanding any provision in the Existing Agreements to the
contrary, the Parties agree that any Transfer of NTT's remaining PLDT
Shares (after the transfer in Clause 2.1) to any Person shall be
subject to a superior right of first offer hereby granted to DoCoMo,
subject to Clause 10. Clause 9(B) of the Shareholders Agreement shall
apply mutatis mutandis to the exercise of the right of first offer by
DoCoMo on any Transfer of NTT's remaining PLDT Shares as provided for
in this Clause 5.4. Each of DoCoMo and NTT agrees to provide a written
notice to PLDT and each of the FPC Parties at the same time, stating
the Transaction Information, within five (5) Business Days of
completion of such Transfer.
5.5 Each of the Parties hereby agrees that in the event DoCoMo proposes to
Transfer any PLDT Shares (subject to Clause 9.2) which would result in
NTT and DoCoMo holding, in the aggregate, less than ten per cent. (10%)
of the PLDT Shares then issued and outstanding, then NTT shall have a
right of first offer to purchase such Shares from DoCoMo on terms and
conditions no less favourable to DoCoMo than those on which DoCoMo
proposes to Transfer such PLDT Shares. Such right shall be superior to
any right of first refusal which any of the FPC Parties may have in
9
respect of such proposed Transfer under the Shareholders Agreement. Any
Transfer from DoCoMo to NTT pursuant to the exercise by NTT of its
rights under this Clause 5.5 shall not give rise to a right of first
offer by the FPC Parties under the Shareholder Agreement and shall be a
Transfer to a Permitted Transferee.
5.6 Upon any Transfer of PLDT Shares from NTT to DoCoMo, other than the
initial transfer to which this Agreement is conditional as set out in
Clause 2.1, the Parties shall discuss in good faith with a view to
amending this Agreement as appropriate to effect the assignment of the
right to nominate individuals for appointment as directors of PLDT and
SMART in accordance with the new shareholding ratio of PLDT Shares as
between NTT and DoCoMo on terms agreed in writing by all the Parties.
5.7 For the avoidance of doubt, in the event DoCoMo or NTT, as the case may
be, does not exercise its right of first offer pursuant to Clause 5.4
or Clause 5.5, FPC shall have the right of first offer on NTT's
Transfer of such PLDT Shares or DoCoMo's Transfer of such PLDT Shares,
as the case may be, pursuant to Clause 9(B) of the Shareholders
Agreement.
5.8 Each of NTT and DoCoMo hereby agrees, for the benefit of the FPC
Parties, that any Transfer of PLDT Shares from DoCoMo and/or any of its
Affiliates to NTT and/or any of its Affiliates, other than a Transfer
pursuant to Clause 5.5, shall not be a Transfer to a Permitted
Transferee.
6 Certain corporate undertakings under Existing Agreements upon Transfer
of PLDT Shares amounting to the First Minimum Shareholding Threshold
from NTT to DoCoMo
6.1 Each of NTT, PLDT and the FPC Parties hereby grants DoCoMo the rights
specified in Clauses 6.2.1 through 6.2.5 and 6.3 and each of DoCoMo,
PLDT and the FPC Parties hereby grants NTT the rights specified in
Clause 6.2.6.
6.2 PLDT board appointment
6.2.1 In respect of NTT's right to nominate two (2) directors to the
board of PLDT pursuant to the Existing Agreements, NTT and each
of the FPC Parties shall, to the extent of the power conferred
by the PLDT Shares owned, directly or indirectly, by it from
time to time and to the extent permissible under Philippines
laws or regulations:
(i) cast (or refrain from casting as appropriate) its votes
as a PLDT Shareholder,
(ii) lobby (as a PLDT Shareholder) the directors of PLDT; and
(iii) otherwise use its reasonable efforts as a PLDT
Shareholder,
to procure a vote in favour of any resolution put to the
meeting of PLDT Shareholders for the purpose of replacing one
(1) existing NTT nominee on the board of PLDT with one (1)
DoCoMo nominee.
6.2.2 Upon the holdings of PLDT Shares by NTT, DoCoMo and their
respective Subsidiaries reaching in aggregate twenty per cent.
(20%) of the PLDT Shares then issued and outstanding, and
thereafter for so long as DoCoMo, NTT and their respective
Subsidiaries in the aggregate continue to hold PLDT Shares
amounting to at least the Second Minimum Shareholding
Threshold, NTT and each of the FPC Parties shall, to the extent
of the power conferred by the PLDT Shares owned by it from time
10
to time and to the extent permissible under Philippines laws or
regulations:
(i) cast (or each of refrain from casting as appropriate)
its votes as a PLDT Shareholder,
(ii) lobby (as a PLDT Shareholder) the directors of PLDT; and
(iii) otherwise use its reasonable efforts as a PLDT
Shareholder,
to procure a vote in favour of any resolution put to the
meeting of PLDT Shareholders for the purpose of effecting the
election of one (1) additional DoCoMo nominee (who must be a
Philippines national) as a director of PLDT; provided that
DoCoMo's rights under this Clause 6.2.2 shall not be
extinguished for a twelve (12) month period where NTT, DoCoMo
and their respective Subsidiaries in aggregate hold PLDT Shares
amounting to less than the Second Minimum Shareholding
Threshold but ownership of full legal and beneficial title to
more than fifteen per cent. (15%) of all PLDT Shares issued and
outstanding from time to time if (a) failure by NTT, DoCoMo and
their respective Subsidiaries in aggregate to maintain at least
the Second Minimum Shareholding Threshold arises from NTT,
DoCoMo and/or their respective Subsidiaries not taking up or
exercising any of their rights or entitlements in the event of
any issue, offer for subscription, offer for sale, placing,
rights issue, open offer, capitalisation issue, consideration
issue, or exchange of PLDT Shares which is conducted on a basis
which is pro rata for all holders of PLDT Shares and (b) NTT
and DoCoMo take their respective reasonable efforts to restore
promptly their aggregate holdings of PLDT Shares to the Second
Minimum Shareholding Threshold, and provided that DoCoMo's
rights under this Clause 6.2.2 shall be extinguished
automatically if NTT and DoCoMo fail to restore their aggregate
holdings of PLDT Shares to the Second Minimum Shareholding
Threshold within twelve (12) months of their aggregate holdings
of PLDT Shares falling below the Second Minimum Shareholding
Threshold.
6.2.3 The DoCoMo nominee(s) to the board of PLDT under either or both
of Clauses 6.2.1 and 6.2.2 may be the COA (if that position is
filled by a nominee of DoCoMo at the time), or another senior
representative of DoCoMo.
6.2.4 In the event that DoCoMo determines not to nominate the one (1)
additional DoCoMo nominee (who must be a Philippines national)
as a director of PLDT (as contemplated in Clause 6.2.2), DoCoMo
shall have, as an alternative to the nomination of such a
director, the right to appoint one (1) other individual to
attend and participate in (but not vote at) the meetings of the
board of PLDT as a PLDT Advisory Board Member; for the
avoidance of doubt, DoCoMo shall have the right to terminate
such appointment and/or replace the individual at any time.
6.2.5 In the event Philippines laws and regulations permit PLDT to
have a higher number of non-Philippines nationals as directors
of PLDT than is the case as at the Effective Date, then NTT,
DoCoMo and FPC will discuss in good faith the manner by which a
higher number of non-Philippines nationals may join as
directors of the board of PLDT as between each of them.
6.2.6 In the exceptional event that the remaining NTT nominee on the
board of PLDT is unable to attend (either in person or by
telephone), for exceptional reasons, a meeting of the board of
PLDT, NTT shall have the right to appoint one (1) other
11
individual, selected from its then existing Advisors to PLDT or
SMART or among its senior employees, to attend such meeting as
an observer; for the avoidance of doubt, NTT shall have the
right to terminate such appointment and/or replace the
individual at any time prior to the meeting.
6.3 SMART board appointments
6.3.1 In respect of NTT's right to nominate two (2) directors to the
board of SMART pursuant to the Existing Agreements, NTT and
each of the FPC Parties shall, to the extent of the power
conferred by the PLDT Shares owned by it from time to time and
to the extent permissible under Philippines laws or
regulations:
(i) cast (or refrain from casting as appropriate) its votes as
a PLDT Shareholder, as applicable,
(ii) lobby (as a PLDT Shareholder) the directors of PLDT; and
(iii) otherwise use its reasonable efforts as a PLDT
Shareholder,
to procure that PLDT casts its vote in favour of any resolution
put to the meeting of SMART Shareholders for the purpose of
replacing one (1) existing NTT nominee on the board of SMART
with one (1) DoCoMo nominee (who must be a Philippines
national).
6.3.2 Upon the holdings of PLDT Shares by NTT, DoCoMo and their
respective Subsidiaries reaching in aggregate twenty per cent.
(20%) of the PLDT Shares then issued and outstanding, and
thereafter for so long as DoCoMo, NTT and their respective
Subsidiaries in the aggregate continue to hold PLDT Shares
amounting to at least the Second Minimum Shareholding
Threshold, NTT and each of the FPC Parties shall, to the extent
of the power conferred by the PLDT Shares owned by it from time
to time and to the extent permissible under Philippines laws or
regulations:
(i) cast (or refrain from casting as appropriate) its votes as
a PLDT Shareholder, as applicable,
(ii) lobby (as a PLDT Shareholder) the directors of PLDT; and
(iii) otherwise use its reasonable efforts as a PLDT
Shareholder,
to procure that PLDT casts its vote in favour of any resolution
put to the meeting of SMART Shareholders for the purpose of
effecting the election of one (1) additional DoCoMo nominee
(who must be a Philippines national) as a director of SMART;
provided that DoCoMo's rights under this Clause 6.3.2 shall not
be extinguished for a twelve (12) month period where NTT,
DoCoMo and their respective Subsidiaries in aggregate hold PLDT
Shares amounting to less than the Second Minimum Shareholding
Threshold but ownership of full legal and beneficial title to
more than fifteen per cent. (15%) of all PLDT Shares issued and
outstanding from time to time if (a) failure by NTT, DoCoMo and
their respective Subsidiaries in aggregate to maintain at least
the Second Minimum Shareholding Threshold arises from NTT,
DoCoMo and/or their respective Subsidiaries not taking up or
exercising any of their rights or entitlements in the event of
any issue, offer for subscription, offer for sale, placing,
rights issue, open offer, capitalisation issue, consideration
issue, or exchange of PLDT Shares which is conducted on a basis
which is pro rata for all holders of PLDT Shares and (b) NTT
12
and DoCoMo take their respective reasonable efforts to restore
promptly their aggregate holdings of PLDT Shares to the Second
Minimum Shareholding Threshold, and provided that DoCoMo's
rights under this Clause 6.3.2 shall be extinguished
automatically if NTT and DoCoMo fail to restore their aggregate
holdings of PLDT Shares to the Second Minimum Shareholding
Threshold within twelve (12) months of their aggregate holdings
of PLDT Shares falling below the Second Minimum Shareholding
Threshold.
6.3.3 In the event that DoCoMo determines not to nominate the one (1)
additional DoCoMo nominee (who must be a Philippines national)
as a director of SMART (as contemplated in Clause 6.3.2), PLDT
shall, upon receiving written notice of such determination from
DoCoMo, use its reasonable efforts to procure that SMART creates
a SMART advisory board whose structure would be substantially
similar to that of the PLDT Advisory Board. On and from the
establishment of the SMART advisory board, DoCoMo shall have the
right to appoint one (1) individual to attend and participate in
(but not vote at) the meetings of the board of SMART as a SMART
advisory board representative; for the avoidance of doubt,
DoCoMo shall have the right to terminate such appointment and/or
replace the individual at any time.
6.3.4 In the event Philippines laws and regulations permit SMART to
have a higher number of non-Philippines nationals as directors
of SMART than is the case as at the Effective Date, then NTT,
DoCoMo and FPC will discuss in good faith the manner by which a
higher number of non-Philippines nationals may join as
directors of the board of SMART as between each of them.
7 Amendments to Existing Agreements
7.1 The Parties who are parties to the Strategic Agreement and DoCoMo
hereby agree to the following amendments to the Strategic Agreement:
7.1.1 Section 8.3(d) of the Strategic Agreement is hereby amended to
provide that Investments made, or the use of Assets allowed, by
DoCoMo and the members of the NTT Group in SMART, SNMI and the
other members of the PLDT Group at any time shall not be
treated as restricted Investments in the Philippines for
purposes of the said section 8.3.
7.1.2 Section 8.4 of the Strategic Agreement and clause 5 of the
Shareholders Agreement are hereby amended to provide that the
relevant parties thereto will use reasonable efforts to procure
that DoCoMo be entitled to appoint one (1) individual to attend
any Committee of PLDT or SMART as a member, advisor or observer
to the extent permitted under applicable laws, regulations and
company articles; for the avoidance of doubt, DoCoMo shall have
the right to terminate such appointment and/or replace the
individual at any time.
7.1.3 Section 11.4 of the Strategic Agreement is hereby deleted in
its entirety and replaced by the provisions set out in Schedule
2 hereto.
8 Further amendments to Existing Agreements - DoCoMo holds the Second
Minimum Shareholding Threshold
8.1 The Parties who are parties to the Strategic Agreement and DoCoMo
hereby agree to the following amendments to the Strategic Agreement,
and the Parties who are parties to the Shareholders Agreement and
DoCoMo agree to the following additional amendments to the Shareholders
13
Agreement; provided always that the obligations created pursuant to
these amendments on PLDT or any of the FPC Parties, and the rights
accruing to DoCoMo pursuant to these amendments shall only take effect
upon the holdings of PLDT Shares by NTT and DoCoMo and their respective
Subsidiaries reaching in aggregate twenty per cent. (20%) of the PLDT
Shares then issued and outstanding, and thereafter for so long as
DoCoMo and NTT and their respective Subsidiaries in aggregate continue
to hold at least the Second Minimum Shareholding Threshold:
8.1.1 Section 9.5 of the Strategic Agreement be amended to provide
additionally that to the extent any Proposed Transaction would
be an Investment in a Person who engaged or proposes to engage
primarily in a business which is or would be in direct
competition for the same or substantially the same business
opportunities or customer base for the same or substantially
the same products or services with a Competing Business carried
on by DoCoMo, or which DoCoMo has announced publicly an
intention (and continues to intend) to carry on, PLDT will first
consult with DoCoMo no later than thirty (30) calendar days
prior to the first submission to the board of PLDT, Joint Mancom
or PLDT Mancom for approval for any such Investment. In such
event, an appropriate and duly authorised representative of
DoCoMo shall be entitled to participate in internal discussions
or meetings in PLDT with respect to such Investment.
8.1.2 Clause 6 of the Shareholders Agreement be amended to provide
additionally that each of NTT, PLDT and each of the FPC Parties
severally agrees and warrants to DoCoMo that, it shall, to the
extent of the power conferred by the PLDT Shares owned by it
from time to time and to the extent permissible under
Philippines laws or regulations:
(i) cast (or refrain from casting as appropriate) its votes as
a PLDT Shareholder, as applicable,
(ii) lobby (as a PLDT Shareholder) the directors of PLDT; and
(iii) otherwise use its reasonable efforts as a PLDT
Shareholder,
to procure that SMART does not (a) cease to carry on its
business, (b) dispose of all its Assets (as defined in the
Strategic Agreement), or any substantial part thereof, (c)
issue any Common Capital Stock (including any securities
convertible to Common Capital Stock), (d) merge or consolidate
with or into any entity, or (e) promote or take any step to
effect winding up or liquidation, without PLDT first consulting
with DoCoMo no later than thirty (30) calendar days prior to
the first submission to the board of PLDT or SMART, or SMART
Mancom for approval for any such action. In such event, an
appropriate and duly authorised representative of DoCoMo shall
be entitled to participate in the internal discussions or
meetings in PLDT or SMART with respect to such intended
action(s).
8.1.3 Section 11.2 of the Strategic Agreement be amended to provide
additionally that in the event PLDT seeks to transfer, and seeks
to cause any member of the PLDT Group to transfer, any SMART
Common Capital Stock to any Person who is not a member of the
PLDT Group, PLDT will first consult with DoCoMo no later than
thirty (30) calendar days prior to the first submission to the
board of PLDT, Joint Mancom or PLDT Mancom for approval for any
such transfer. In such event, an appropriate and duly authorised
representative of DoCoMo shall be entitled to participate in the
14
internal discussions or meetings in PLDT with respect to such
intended transfer,
provided that DoCoMo's rights under this Clause 8.1 shall not be
extinguished for a twelve (12) month period where NTT, DoCoMo and their
respective Subsidiaries in aggregate hold PLDT Shares amounting to less
than the Second Minimum Shareholding Threshold but ownership of full
legal and beneficial title to more than fifteen per cent. (15%) of all
PLDT Shares issued and outstanding from time to time if (a) failure by
NTT, DoCoMo and their respective Subsidiaries in aggregate to maintain
at least the Second Minimum Shareholding Threshold arises from NTT,
DoCoMo and/or their respective Subsidiaries not taking up or exercising
any of their rights or entitlements in the event of any issue, offer
for subscription, offer for sale, placing, rights issue, open offer,
capitalisation issue, consideration issue, or exchange of PLDT Shares
which is conducted on a basis which is pro rata for all holders of PLDT
Shares and (b) NTT and DoCoMo take their respective reasonable efforts
to restore promptly their aggregate holdings of PLDT Shares to the
Second Minimum Shareholding Threshold, and provided that DoCoMo's
rights under this Clause 8.1 shall be extinguished automatically if NTT
and DoCoMo fail to restore their aggregate holdings of PLDT Shares to
the Second Minimum Shareholding Threshold within twelve (12) months of
their aggregate holdings of PLDT Shares falling below the Second
Minimum Shareholding Threshold.
9 Additional rights in favour of DoCoMo
9.1 NTT, PLDT and the FPC Parties hereby grant DoCoMo the additional rights
specified in this Clause 9.1.
i-mode
9.1.1 Subject to necessary approval of, clearance of and registration
with the DITTB (as defined in the Strategic Agreement), DoCoMo
shall and PLDT shall procure that SMART will execute an
agreement between SMART and DoCoMo to implement i-mode on the
agreed terms.
W-CDMA
9.1.2 PLDT and DoCoMo each agree in principle, to collaborate with
each other in the business development, roll-out and use of
W-CDMA mobile communication network ("W-CDMA") on the agreed
terms as set out in Schedule 1 to this Agreement.
Alliance
9.1.3 PLDT will, to the extent of the power conferred by its direct
or indirect shareholding in SMART, procure that SMART will:
(i) become a member of a strategic alliance group for the
purpose of (a) international roaming, including preferred
roaming and the lowest inter operator tariff ("IOT") and
(b) corporate sales and services (the "Alliance") at or
as soon as is reasonably practicable after the inception
of the Alliance, provided that:
(a) members of the Alliance include DoCoMo and a
meaningful number of other international
telecommunications operators; and
15
(b) the Alliance will have a reasonable prospect of
generating meaningful commercial benefits for
its members in the medium term, taking into
account the criteria for entry into the
Alliance, the continuing obligations of members
and other terms of membership, the identity and
geographical reach of the existing and likely
future members, the likely scope and rate of
expansion of membership, the likely growth and
growth rates of roaming traffic and tariff, and
other relevant factors;
(ii) not enter into:
(a) any contract, understanding or arrangement with
any Person (and its Affiliates) carrying on a
Competing Business in Japan; or
(b) any material contract, understanding or
arrangement with any Person (and its Affiliates)
carrying on a Competing Business in the
territories other than in Japan,
relating to preferred roaming or the lowest IOT with
any Person carrying on a Competing Business in Japan
and its Affiliates for a period of six (6) months from
the date of this Agreement, without the prior written
consent of DoCoMo; and
(iii) enter into a business relationship concerning preferred
roaming and lowest IOT with DoCoMo as soon as possible,
but in any event not later than 30 April 2006, on terms
to be negotiated and agreed in good faith.
Advisors
9.1.4 PLDT will, and will to the extent of the power conferred by its
direct or indirect shareholding in SMART use reasonable efforts
to procure that PLDT and SMART will, receive at a minimum the
specified aggregate number of Advisors entitled to be provided
by NTT and DoCoMo (together), in accordance with the timetable
set out below in this Clause 9.1.4, and PLDT, NTT and DoCoMo
agree to review these number and the time periods from time to
time, having due regard to the status and requirements of the
on-going projects in which the Advisors are engaged. The number
of Advisors entitled to be provided by NTT and DoCoMo (together)
hereunder includes the Advisors as at the date of this Agreement
and the additional Advisors to be provided by NTT and DoCoMo
(together) pursuant to this Clause 9.1.4 will be retained on
terms and conditions (including as to cost) which are the same
as, or substantially similar to, those set out in the Advisory
Services Agreement.
Period (all dates inclusive) Aggregate minimum number of
Advisors to be provided by NTT
and DoCoMo (together)
Effective Date to 30 June 2006 9
1 July 2006 to 31 March 2007 8
1 April 2007 to 31 March 2009 6
1 April 2009 and therafter 5
16
Transitional arrangements
9.1.5 The Parties hereby agree and acknowledge that:
(i) the COA, who is currently appointed by NTT but shall be
replaced by a nominee of DoCoMo on or before 1 July
2006 in accordance with Clause 4.3 (or earlier by
mutual agreement between NTT and DoCoMo), is currently
a director of the board of PLDT, an observer at
meetings of the board of SMART, and an advisor to each
of SMART Mancom, PLDT Mancom and Joint Mancom;
(ii) as from the Effective Date, DoCoMo will have the right
to appoint a senior technical advisor to SMART ("Senior
Technical Advisor"), on terms and conditions (including
as to cost) which are the same as, or substantially
similar to, those set out in the Advisory Services
Agreement. For the avoidance of doubt, the Senior
Technical Advisor will constitute one of the Advisors
to be provided by NTT and DoCoMo (together) as set out
in Clause 9.1.4;
(iii) the Senior Technical Advisor will automatically assume
the role of COA upon the replacement of the existing COA
in accordance with Clause 9.1.5(i). At such time, this
new COA will, consistent with the roles of the previous
COA, be entitled to be an observer at meetings of the
board of SMART, an advisor to each of SMART Mancom, PLDT
Mancom and Joint Mancom, and a director of the board of
PLDT (provided DoCoMo has elected to nominate the new
COA as one of its permitted nominee directors to be
nominated to the PLDT board as provided for in Clause
6.2 of this Agreement, and the COA has been so
nominated)and will in addition be a member or an advisor
(as the case may be) to each of PLDT MRSB and SMART MRP,
provided that, from time to time, the COA may delegate
to another DoCoMo Adviser the right to attend meetings
of PLDT MRSB or SMART MRP; and
(iv) prior to becoming the new COA, the Senior Technical
Advisor will be entitled to be an observer at meetings
of the board of SMART, an advisor to each of SMART
Mancom, PLDT Mancom and Joint Mancom, and a director of
the board of PLDT (provided DoCoMo has elected to
nominate the Senior Technical Advisor as one of its
permitted nominees of directors to the PLDT board as
provided for in Clause 6.2 of this Agreement, and the
Senior Technical Advisor has been so nominated and has
not assumed the role of the COA). If the Senior
Technical Advisor has not been nominated as a director
to the board of PLDT, he/she may attend as an observer
at meetings of the board of PLDT for a period of not
longer than eighteen (18) months from the date on which
he/she is appointed Senior Technical Advisor pursuant to
Clause 9.1.5(ii) above. If the Senior Technical Advisor
has been nominated as a director to the board of PLDT,
DoCoMo shall have as an alternative the right to send a
Tokyo-based representative to attend as an observer at
meetings of the board of PLDT for a period of not longer
than eighteen (18) months from the date of this
Agreement.
9.2 Lock-Up
17
9.2.1 Prior to and including the third anniversary of the Effective
Date, DoCoMo shall not without the prior written consent of the
FPC Parties and the FPC Parties shall not without the prior
written consent of DoCoMo, Transfer, or create or permit to
exist any Encumbrance on any of their respective PLDT Shares,
other than an Encumbrance as set out in Schedule 3 hereto (the
"Existing Encumbrances") or Transfer as permitted under the
Shareholders Agreement. For the avoidance of doubt:
(i) DoCoMo's consent is not required with respect to any
Existing Encumbrances on any of the Parties' (other
than DoCoMo's) respective PLDT Shares, provided such
Existing Encumbrances have been previously permitted
under clause 11(A) of the Shareholders Agreement;
(ii) DoCoMo's consent is not required with respect to any
Transfer pursuant to any rights of any third party
under any Existing Encumbrances on any of the FPC
Parties' respective PLDT Shares, provided such Existing
Encumbrances and any third party rights of Transfer
arising thereunder have been previously permitted by
NTT; and
(iii) nothing contained in this Clause 9.2 shall prevent NTT
from transferring its PLDT Shares to DoCoMo, the FPC
Parties or any third party in accordance with the
provisions of this Agreement and the Existing
Agreements.
9.2.2 In the event DoCoMo or a FPC Party receives a notice pursuant
to clause 11(A)(ii)(c) of the Shareholders Agreement in
relation to an Encumbrance or a Transfer other than those
Existing Encumbrances or Transfers contemplated under Clauses
9.2.1(i) and 9.2.1(ii), the obligations of the Party receiving
such a notice under Clause 9.2.1 shall automatically terminate.
10 Restriction on share acquisitions
10.1 Each of NTT and DoCoMo hereby agrees and warrants to each of the FPC
Parties that:
(a) it shall not, and shall procure that its representatives,
advisers, and Subsidiaries and Affiliates and their respective
representatives and advisers shall not, directly or indirectly,
acquire, seek to acquire or enter into any arrangement
concerning PLDT Shares which will or may result in NTT, DoCoMo
and their respective Subsidiaries and Affiliates together
holding, or having legal, beneficial or economic interests in
PLDT Shares which represent in aggregate more than twenty-one
per cent. (21%) of all PLDT Shares issued and outstanding from
time to time, provided that NTT and DoCoMo shall not be liable
for any breach of this Clause 10.1(a) if the aggregate holding
of NTT, DoCoMo and their respective Subsidiaries and Affiliates
exceeds such twenty-one per cent. (21%) limit as a result of any
share repurchase or return of capital by PLDT which is
conducted otherwise than on a basis which is pro rata for all
holders of PLDT Shares; and
(b) where the aggregate holding of NTT, DoCoMo and their respective
Subsidiaries and Affiliates exceeds such twenty-one per cent.
(21%) limit, the Acting Party shall notify promptly the FPC
Parties of that fact setting out the extent of the excess and
shall within twelve (12) months following a notice from FPC,
sell or otherwise transfer its full legal and beneficial title
in respect of all such number of PLDT Shares which represents
the excess above such twenty-one per cent. (21%) limit and
18
pending completion of such sale or transfer, refrain from
exercising any right attached to the number of PLDT Shares
specified in the notice from FPC and all rights attached to the
specified number of PLDT Shares held by it shall be suspended.
10.2 Subject to Clause 10.3, in the event of any breach of Clause 10.1, the
FPC Parties shall have the right to terminate their respective rights
and obligations under this Agreement and the Existing Agreements
forthwith by written notice to each of PLDT, NTT and DoCoMo, provided
that such termination shall be without prejudice to any right, benefit,
liability or obligation which has accrued to the FPC Parties in respect
of any matter, undertaking or condition under any such agreements and
which has not been observed, performed or discharged in full prior to
such termination.
10.3 In the event of any breach of Clause 10.1(a) as a result of some
unintentional act by NTT, DoCoMo or any of their respective
Subsidiaries or Affiliates, the FPC Parties shall have their respective
rights to terminate their rights and obligations under this Agreement
and the Existing Agreements at the end of the twelve (12) months
following the notice from FPC under Clause 10.1(b), where within that
twelve (12) months, the relevant parties have not sold or otherwise
transferred their full legal and beneficial title in respect of all
such number of PLDT Shares which represents the excess above such
twenty-one per cent. (21%) limit.
10.4 Each of PLDT, NTT and DoCoMo hereby agrees that the restriction and
right of termination in Clauses 10.1, 10.2 and 10.3 respectively are
solely for the benefit of the FPC Parties and shall terminate only:
10.4.1 When:
(i) the rights and obligations of the FPC Parties under
this Agreement and the Existing Agreements terminate
pursuant to Clause 10.2 or 10.3;
(ii) the rights and obligations of DoCoMo and NTT and their
respective Subsidiaries under this Agreement and the
Shareholders Agreement terminate and the Strategic
Arrangements (as defined under the Strategic Agreement)
between NTT, DoCoMo and PLDT terminate, pursuant to
Clause 13.2.1;
(iii) the rights and obligations of the FPC Parties and their
Subsidiaries under this Agreement and the Existing
Agreements terminate pursuant to Clause 13.2.2; or
(iv) this Agreement terminates pursuant to Clause 13.1; or
10.4.2 when FPC and its Subsidiaries and Affiliates together hold or
have legal, beneficial or economic interests in PLDT Shares
which represent in aggregate less than twenty-one per cent.
(21%) of all PLDT Shares issued and outstanding from time to
time; provided that (a) the restriction and right of termination
in Clauses 10.1, 10.2 and 10.3 respectively shall not terminate
where such parties together hold or have interests in PLDT
Shares which represent in aggregate less than twenty-one per
cent. (21%) but more than eighteen and a half per cent. (18.5%)
of all PLDT Shares issued and outstanding from time to time; and
(b) such parties restore their aggregate holdings of PLDT Shares
to such twenty-one per cent. (21%) level (or more) within
twelve (12) months of the date they first fall below the
twenty-one per cent. (21%) level.
19
11 Support
Each of NTT, DoCoMo and each of the FPC Parties hereby agrees and
warrants that it will, to the extent permissible under applicable laws
and regulations of the Philippines and other jurisdictions, cast its
votes as a PLDT Shareholder in support of any resolution proposed at
meetings of PLDT Shareholders by the board of directors of PLDT whose
purpose is to safeguard PLDT from a Hostile Transferee, it being
understood and agreed, however, that if, in the reasonable
determination of NTT, DoCoMo, or a FPC Party such action would or might
violate any applicable law or regulation, then such a Party shall not
be bound by its obligation under this Clause 11. PLDT agrees that such
a resolution of the board of the directors of PLDT will only be
proposed if it is a reasonable resolution based on proper grounds,
having regard to the interest of PLDT as a whole and the proper
exercise by the directors of PLDT of their fiduciary duties to PLDT.
For the purposes of this Clause 11, a "Hostile Transferee" shall mean
any Person (other than NTT, DoCoMo, FPC or any of their respective
Affiliates) determined to be so by the board of directors of PLDT and
shall include, without limitation, a Person who announces an intention
to acquire, seeks to acquire or acquires thirty per cent. (30%) or more
of the PLDT Shares then issued and outstanding from time-to-time or
having (by itself or together with itself) acquired thirty per cent.
(30%) or more of such PLDT Shares announces an intention to acquire,
seeks to acquire or acquires a further two per cent. (2%) of such PLDT
Shares (a) at a price per share which is less than the fair market
value of a PLDT Share as determined by the board of PLDT as advised by
a professional financial advisor, (b) which is subject to conditions
which are subjective or which could not reasonably be satisfied, (c)
without making an offer for all PLDT Shares not held by it and/or its
Affiliates and/or Persons who, pursuant to an agreement or
understanding (whether formal or informal), actively cooperate to
obtain or consolidate Control over PLDT, (d) whose offer for PLDT
Shares is unlikely to succeed or (e) whose intention is otherwise not
bona fide; provided that, no Person shall be a Hostile Transferee
unless prior to making such determination, the board of directors of
PLDT shall have used reasonable efforts to discuss with NTT and DoCoMo
in good faith regarding whether such Person should be considered a
Hostile Transferee.
12 Provision of PLDT's financial information
12.1 If DoCoMo and/or NTT Holding (together with DoCoMo, the "NTT Holding
Group" for the purpose of this Clause 12) are required in the
preparation of its statutory financial statements under and in
accordance with GAAP in the United States ("U.S. GAAP") to reflect
their respective interests in PLDT Shares using the equity method, PLDT
shall provide DoCoMo with all financial information in relation to PLDT
that is necessary to satisfy such reporting obligations, including the
information below;
(i) To be provided within ninety (90) calendar days
following the end of each relevant quarterly fiscal
period (ended on 31 March, 30 June, 30 September of
every calendar year):
(a) unaudited year-to-date consolidated financial
statements in accordance with GAAP in the
Philippines ("Philippines GAAP"); and
(b) unaudited and summarized year-to-date
consolidated financial statements in accordance
with U.S. GAAP, which include at least PLDT's
net income and shareholders' equity for the
relevant fiscal period;
20
(ii) To be provided by no later than 10 April of every
calendar year:
(a) audited annual consolidated financial statements
in accordance with Philippines GAAP in respect
of the preceding calendar year; and
(b) unaudited and summarized annual consolidated
financial statements in accordance with U.S.
GAAP, which at least include PLDT's net income
and shareholders' equity in respect of the
preceding calendar year;
(iii) To be provided by no later than 10 September of every
calendar year:
(a) audited consolidated financial statements in
accordance with U.S. GAAP in respect of the
preceding calendar year;
(b) audit report in accordance with the generally
applicable auditing standards in the United
States furnished and attached to Clause 12.1
(iii)(a) by PLDT's independent auditor; and
(c) consent letter furnished by PLDT's independent
auditor in respect of Clause 12.1(iii)(b);
Once NTT Holding Group is no longer required to account for
PLDT as an equity-method affiliate in its statutory financial
statements under and pursuant to U.S. GAAP, PLDT shall provide
year-to-date financial information specified in Clause 12.1(i)
or (ii), depending on the timing of the change such NTT Holding
Group's accounting treatment of PLDT, for the quarterly fiscal
period immediately after the change.
12.2 DoCoMo shall ensure that all incremental costs and expenses reasonably
incurred by PLDT and other members of the PLDT Group with respect to
preparing and providing the U.S. GAAP-based information pursuant to
Clauses 12.1(i), (ii) and/or (iii) will be reimbursed promptly and in
full by the NTT Holding Group.
12.3 If NTT Holding Group is required to include separate financial
statements of PLDT in its filings with the U.S. SEC pursuant to
Regulation S-X, PLDT shall provide the documents specified in Clauses
12.1(iii)(a), (b) and (c) for three (3) fiscal years after the last
fiscal year of the NTT Holding Group in which PLDT is significant to
NTT Holding Group as determined pursuant to Regulation S-X.
12.4 DoCoMo hereby agrees and undertakes for itself and on behalf of NTT
Holding that PLDT will not incur any liability whatsoever towards
DoCoMo and/or NTT Holding in failing to perform any of PLDT's
obligations under this Clause 12 where such failure arises from the
default of any third party(ies), any event(s) beyond the control of
PLDT or any event(s) not reasonably foreseeable by PLDT.
13 Termination
13.1 This Agreement shall continue in full force and effect without limit in
point of time until the earliest of:
13.1.1 the termination of this Agreement pursuant to a written
agreement of the Parties;
13.1.2 the adoption of an effective resolution or issuance of a
binding order for the winding-up of PLDT other than to effect a
scheme of merger or amalgamation; and
21
13.1.3 the termination of the Shareholders Agreement and the Strategic
Agreement for whatever reason,
provided that this Agreement shall cease to have effect as regards any
Party who ceases to hold any PLDT Shares save for and only to the
extent of provisions which are expressed to continue in force after
termination.
13.2 The Parties who are parties to the Shareholders Agreement hereby agree
to delete clauses 14(A) and 14(C) of the Shareholders Agreement thereof
in its entirety, and the Parties agree as follows:
13.2.1 If DoCoMo and NTT and their respective Subsidiaries cease to
own, in aggregate, full legal and beneficial title to PLDT
Shares representing at least ten per cent. (10%) of all PLDT
Shares issued and outstanding from time to time, their
respective rights and obligations under this Agreement and the
Shareholders Agreements shall terminate and the Strategic
Arrangements (as defined in the Strategic Agreement) between
NTT, DoCoMo and PLDT shall terminate pursuant to Section 12.2
thereof, provided that in the event that aggregate ownership of
PLDT Shares of DoCoMo and NTT and their respective Subsidiaries
is reduced below such ten per cent. (10%) threshold as a result
of PLDT Shares which were not Outstanding (as defined in the
Shareholders Agreement) (as defined in the Shareholders
Agreement) becoming Outstanding, no rights and obligations
under this Agreement and the Existing Agreements shall
terminate unless, on the sixtieth (60th) calendar day following
written notice by PLDT to both NTT and DoCoMo notifying that
NTT and DoCoMo and their respective Subsidiaries have ceased to
own, in aggregate, PLDT Shares representing at least ten per
cent. (10%) of PLDT Shares issued and outstanding from time to
time, NTT and DoCoMo and their respective Subsidiaries do not
own, in aggregate, PLDT Shares amounting such ten per cent.
(10%).
13.2.2 If the FPC Parties and their respective Subsidiaries cease to
have, directly or indirectly, effective voting power in
respect of PLDT Shares representing at least eighteen and a
half per cent. (18.5%) of all PLDT Shares issued and
outstanding from time to time, their respective rights and
obligations under this Agreement and the Existing Agreements
shall terminate, provided that in the event that effective
voting power in respect of PLDT Shares of the FPC Parties and
their respective Subsidiaries is reduced below such eighteen
and a half per cent. (18.5%) threshold as a result of PLDT
Shares which were not Outstanding (as defined in the
Shareholders Agreement) becoming Outstanding, no rights and
obligations under this Agreement and the Existing Agreements
shall terminate unless, on the sixtieth (60th) calendar day
following written notice by PLDT to the FPC Parties notifying
that the FPC Parties and their respective Subsidiaries have
ceased to have, directly or indirectly, effective voting power
in respect of PLDT Shares representing at least eighteen and a
half per cent. (18.5%) of all PLDT Shares issued and
outstanding from time to time, the FPC Parties and their
respective Subsidiaries do not have, directly or indirectly,
effective voting power in respect of such eighteen and a half
per cent. (18.5%).
13.3 Termination of this Agreement in relation to any Party shall be without
prejudice to any right, benefit, liability or obligation which has
accrued to such Party in respect of any matter, undertaking or
condition under this Agreement and which has not been observed,
performed or discharged in full by the Party prior to such termination.
22
14 General
14.1 Conflict with the Existing Agreements
To the extent of any inconsistency between the provisions of this
Agreement and the provisions of the Existing Agreements, the provisions
of this Agreement shall prevail and accordingly the Parties shall
exercise all their voting and other rights and powers in respect of
PLDT so as to give effect to the provisions of this Agreement.
14.2 No partnership
Nothing in this Agreement shall be deemed to constitute a partnership
among the Parties nor constitute any Party the agent of any other Party
for any purpose. Notwithstanding anything provision to the contrary in
this Agreement, the obligations and liability of NTT and DoCoMo under
this Agreement shall be several (but not joint and several or
solidary), and the obligations and liability of PLDT and the FPC
Parties under this Agreement shall be several (but not joint and
several or solidary).
14.3 No Waiver
No delay or omission by any Party to exercise any right or power under
this Agreement or pursuant to applicable law shall impair such right or
power to be construed as a waiver thereof. A waiver by any Party of any
covenant or breach shall not be construed to be a waiver of any other
covenant or succeeding breach.
14.4 Entire Agreement
This Agreement contains the entire agreement among the Parties with
respect to the subject matters hereof and supersedes all prior
agreements and undertakings among the Parties relating to the subject
matters hereof.
14.5 Variation
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the Parties.
14.6 Assignment
The Parties shall not assign or transfer all or any part of their
rights or obligations under this Agreement nor any benefit arising
under or out of this Agreement without the prior written consent of the
other Parties (such consent not to be unreasonably withheld).
14.7 Further assurance
At any time after this Agreement becomes effective, the Parties shall,
and shall use all reasonable endeavours to procure that any necessary
third Party shall, at the cost of the relevant Party execute such
documents and do such acts and things as that Party may reasonably
require for the purpose of giving to that Party the full benefit of all
the provisions of this Agreement.
14.8 Invalidity
If any provision in this Agreement shall be held to be illegal, invalid
or unenforceable, in whole or in part, under any enactment or rule of
law, such provision or part shall to that extent be deemed not to form
part of this Agreement but the legality, validity and enforceability of
the remainder of this Agreement shall not be affected.
23
14.9 Counterparts
This Agreement may be entered into in any number of counterparts, all
of which taken together shall constitute one and the same instrument.
Any Party may enter into this Agreement by signing any such
counterpart.
14.10 Notices
14.10.1 Any notice or other communication in connection with this
Agreement shall be in writing in English (a "Notice") and shall
be sufficiently given or served if delivered or sent:
In the case of PLDT, to:
Address: Xxxxx Xxxxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx
Fax: x000 000-0000
Attention: The Corporate Secretary
in the case of FPC, to:
Address: 24th Floor, Two Exchange Square,
0 Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxx Xxxx
Fax: x000 0000-0000
Attention: The Company Secretary
in the case of Metro, to:
Address: 00xx Xxxxx, XXX Xxxxxxxx,
Xxxxxxx Corner Xxxx Xxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx
Fax: x000 000 0000 or x000 000 0000
Attention: Att. Xxxxxxx X. Xxxxxx
The Corporate Secretary
with a copy to FPC
Address: 24th Floor, Two Exchange Square,
0 Xxxxxxxxx Xxxxx
Xxxxxxx
00
Xxxx Xxxx
Fax: x000 0000-0000
Attention: The Company Secretary
in the case of MALH, to:
Address: 00xx Xxxxx, XXX Xxxxxxxx,
Xxxxxxx Corner Xxxx Xxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx
Fax: x000 000 0000 or x000 000 0000
Attention: Att. Xxxxxxx X. Xxxxxx
The Corporate Secretary
with a copy to FPC
Address: 24th Floor, Two Exchange Square,
0 Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxx Xxxx
Fax: x000 0000-0000
Attention: The Company Secretary
in the case of MPRI, to:
Address: 00xx Xxxxx, Xxxxxxx Centre
000 X.X. xx xx Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx
Fax: x000 000 0000 or x000 000 0000
Attention: Att. Xxxxxxx X. Xxxxxx
The Corporate Secretary
with a copy to FPC
Address: 24th Floor, Two Exchange Square,
0 Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxx Xxxx
Fax: x000 0000-0000
25
Attention: The Company Secretary
in the case of LBV, to:
Address: Xxxxx 00
0000 XX Xxxxxxxxx
xxx Xxxxxxxxxxx
Fax: x00 00 000 00 00 or 00 00 000
Attention: MeesPierson Intertrust B.V. for the attention of
Xx. Xxxxxx Xxx xxx Xxxxx/Xx. Xxxxx Xxxxxxx with
a copy to FPC
Address: 24th Floor, Two Exchange Square,
0 Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxx Xxxx
Fax: x000 0000-0000
Attention: The Company Secretary
in the case of MPAH, to:
Address: 18th Floor, Liberty Centre
000 X.X. xx xx Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx
Fax: x000 000 0000 or x000 000 0000
Attention: Att. Xxxxxxx X. Xxxxxx
The Corporate Secretary
with a copy to FPC
Address: 24th Floor, Two Exchange Square,
0 Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxx Xxxx
Fax: x000 0000-0000
Attention: The Company Secretary
in the case of NTT, to:
Address: 0-0 Xxxxxxxxxx-xxx, 0-Xxxxx Xxxxxxx-xx, Xxxxx
000-0000, Xxxxx
26
Fax: x000-0000-0000
Attention: General Manager, Legal Department
with a copy to Skadden, Arps, Xxxxxxx & Xxxx LLP
Address: 0-0-0 Xxxxxxxx, Xxxxxx-xx, Xxxxx
000-0000, Xxxxx
Fax: x000-0000-0000
Attention: Managing Partner
in the case of DoCoMo, to:
Address: 41st floor, 00-0 Xxxxxx-xxx 0-Xxxxx,
Xxxxxxx-Xx, Xxxxx 000-0000 Xxxxx
Fax: x00-0-0000-0000
Attention: Managing Director, Global Business Department
or to such other address or fax number as the relevant Party
may have notified to the other Parties in accordance with this
Clause.
14.10.2 Any Notice may be delivered by hand or sent by fax or prepaid
post (airmail in the case of international service). Without
prejudice to the foregoing, any Notice shall conclusively be
deemed to have been received on the next Business Day in the
place to which it is sent (if sent by fax) or seventy-two (72)
hours from the time of posting (if sent by post) or at the time
of delivery (if delivered by hand).
14.11 Governing law
This Agreement shall be governed by and construed in accordance with
the laws of the Philippines.
14.12 Dispute resolution
14.12.1 Any dispute, controversy, claim or difference arising out of or
in connection with this Agreement including any dispute
regarding the breach, termination or validity hereof
("Dispute") shall, upon written request ("Request") of any
Party, be referred to senior representatives of the relevant
Parties for resolution through mutual consultation. The senior
representatives shall meet as soon as practicable and attempt
in good faith to resolve the Dispute.
14.12.2 Any Dispute that is not resolved within thirty (30) calendar
days after receipt by a Party of a Request shall be referred to
and finally settled by arbitration in accordance with the
Arbitration Rules of the United Nations Commission on
International Trade Law (the "UNCITRAL Arbitration Rules") as
then in force, with such modifications as provided for herein;
provided that, the foregoing shall not prevent any of the
Parties hereto from seeking injunctive or similar preliminary
or provisional relief from a court of competent jurisdiction in
accordance with the applicable law. The arbitration shall have
its seat in Singapore, where, unless otherwise directed by the
arbitration tribunal, all hearings in the arbitration shall
27
take place. The arbitration proceedings shall be conducted in
the English language.
14.12.3 The arbitration tribunal shall be composed of three
arbitrators. The Party or Parties initiating arbitration (the
"Claimant") shall (if more than one, jointly) appoint one (1)
arbitrator in its or their notice of arbitration. The Party or
Parties responding to the notice of arbitration (the
"Respondent") shall (if more than one, jointly) appoint one (1)
arbitrator within thirty (30) calendar days from receipt of the
notice of arbitration. The two Party-appointed arbitrators
shall, within thirty (30) calendar days from the appointment of
the second arbitrator, appoint the third arbitrator who shall
be the chairman of the arbitration tribunal. The third
arbitrator shall not have the same citizenship or nationality
as any of the Parties. In the event that the Parties
constituting the Claimant and/or the Respondent (as the case
may be) are unable to agree on their respective arbitrators,
then all of the arbitrators shall be appointed by the
International Court of Arbitration of the International Chamber
of Commerce. In the event of any default in the appointment of
the third arbitrator by the two Party-appointed arbitrators
within the time limit specified herein the third arbitrator
shall be appointed by the Secretary-General of the
International Court of Arbitration of the International Chamber
of Commerce. Every arbitrator must be and must remain, at all
times, independent of the Parties involved in the arbitration.
14.12.4 The arbitration hearing shall commence as soon as is reasonably
practicable and in any event not later than ninety (90)
calendar days following the appointment of the last of the
three (3) arbitrators and the award shall be rendered as soon
as is reasonably practicable and in any event no later than
thirty (30) calendar days following the closing of the
arbitration proceedings. Notwithstanding Clause 14.11, any
arbitration proceedings commenced under this Clause 14.12 shall
be governed by the laws of Singapore. The arbitration tribunal
shall have the power to extend any time period contained
herein.
14.12.5 All direct costs of the arbitration proceedings, including fees
and expenses of the arbitrators and the costs of translation
for the hearing, shall be born equally by the Parties to the
arbitration; other costs, including counsel and witness fees,
shall be borne by the Party incurring such costs. The
arbitration tribunal shall not be empowered to award punitive,
multiple or exemplary or any other form of damages
non-compensatory, and the Parties hereby waive any right to
such damages. The arbitration tribunal shall have the authority
to award any remedy or relief proposed by the Claimant or the
Respondent in accordance with the provisions of this Agreement
including, without limitation, a declaratory judgment or
specific performance of any obligation created under this
Agreement or an injunction. An award by the arbitrators shall
be final and binding upon the Parties to the arbitration, and,
to the fullest extent permitted under applicable laws, shall
not be subject to appeal and the Parties hereby waive any right
to appeal. The award may be entered as a judgment and enforced
in any court of competent jurisdiction. Except to the extent
28
required by law or a court or administrative order or award, or
for the enforcement of any arbitral award rendered hereunder,
no party, arbitrator, representative, counsel, witness or other
Person involved in the arbitration proceedings may disclose or
confirm to any other Person any information about the
arbitration proceedings, including the names of the parties and
the arbitrators, the nature and amount of the claims, the
financial conditions of any Party, documents prepared for the
arbitration, testimony given at the hearing, the expected date
of the hearing or the award made.
14.12.6 By agreeing to arbitration, the Parties do not intend to
deprive any court of competent jurisdiction of the authority to
issue a pre-arbitral injunction, pre-arbitral attachment or
other order in aid of arbitration proceedings and the
enforcement of any award.
14.12.7 Without prejudice to any provisional remedies in aid of
arbitration as may be available under a court with competent
jurisdiction, the arbitration tribunal shall have full
authority to grant provisional remedies or to order any Party
to request that a court modifies or vacates any preliminary or
provisional relief previously issued by a court and to award
damages for the failure of any Party to respect the arbitration
tribunal's orders to that effect.
14.12.8 If at any time two or more arbitrations are commenced and are
pending in relation to Disputes which arise out of or in
connection with this Agreement and/or any of the Existing
Agreements and it appears to the arbitral tribunal constituted
in the arbitration that was initiated first in time (the "First
Arbitration") that there are issues of fact or law common to
the arbitrations and that it is expedient for the Disputes to
be resolved in the same proceedings, and that no Party would be
prejudiced materially (through undue delay or otherwise) as a
result of the arbitrations being consolidated, then, upon the
written request of any Party to any such arbitration, that
arbitral tribunal (the "Consolidating Arbitral Tribunal") may,
by procedural order, direct that the arbitration(s) to resolve
any of the other Disputes shall be consolidated with the First
Arbitration. If the Consolidating Arbitral Tribunal so orders,
the Parties to each Dispute which is a subject of the
Consolidating Arbitral Tribunal's order shall be treated as
having consented to the Dispute being finally decided:
(i) by the Consolidating Arbitral Tribunal;
(ii) in accordance with the procedure, at the seat and in
the language by which the First Arbitration is being
conducted, save as otherwise agreed by all Parties to
the consolidated proceedings or, in the absence of such
agreement, as ordered by the Consolidating Arbitral
Tribunal; and
(iii) the parties agree to dismiss any arbitration, solely to
the extent that the subject of such arbitration has
been consolidated into, and survives as a part of, the
First Arbitration.
14.12.9 This Clause 14.12 shall survive termination or expiry of this
Agreement.
29
In witness whereof this Agreement has been duly executed.
SIGNED by
on behalf of
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY /s/ X. X. Xxxxxxxx
in the presence of:
SIGNED by
on behalf of
FIRST PACIFIC COMPANY LIMITED /s/ X. X. Xxxxxxxxxx
in the presence of:
SIGNED by
on behalf of
METRO PACIFIC CORPORATION /s/ X. X. Xxxxxxxxxx
in the presence of:
SIGNED by
on behalf of
METRO ASIA LINK HOLDINGS, INC. /s/ X. X. Xxxxxxxxxx
in the presence of:
SIGNED by
on behalf of
METRO PACIFIC RESOURCES, INC. /s/ X. X. Xxxxxxxxxx
in the presence of:
30
SIGNED by
on behalf of
LAROUGE B.V. /s/ X. X. Xxxxxxxxxx
in the presence of:
SIGNED by
on behalf of
METRO PACIFIC ASSETS HOLDINGS, INC. /s/ X. X. Xxxxxxxxxx
in the presence of:
SIGNED by
on behalf of
NTT COMMUNICATIONS CORPORATION /s/ Hiromi Wasai
in the presence of:
SIGNED by
on behalf of
NTT DOCOMO, INC /s/ Xxxxx Xxxxxxxx
in the presence of:
31
Schedule 1
W-CDMA in-principle agreed terms
1.1 SMART shall, and PLDT shall ensure that SMART shall, roll out a
nationwide W-CDMA service in the Philippines, subject to SMART
successfully having obtained all necessary governmental licenses,
permits and consents to adopt the W-CDMA for its third generation
mobile communication services.
1.2 SMART shall, and PLDT shall ensure that SMART shall, use its best
endeavours to maintain and roll out the W-CDMA frequencies in the
following ranges throughout the Philippines:
1920 - 1980 MHz Uplink
2110 - 2170 MHz Downlink
1.3 SMART shall, and PLDT shall ensure that SMART shall, roll out the
W-CDMA coverage in the Philippines in accordance to the following
schedule, as far as practicable and having regard to market forces:
Metro Next 10 Largest Coverage of
Manila Metropolitan Areas Population (%)
-----------------------------------------------------------------------------------------------------
(i) within 9 months after the date |X| |X| -
of the Approval
-----------------------------------------------------------------------------------------------------
(ii) within 18 months after the date - |X| 40%
of the Approval
-----------------------------------------------------------------------------------------------------
(iii) within 24 months after the date - - 60%
of the Approval
-----------------------------------------------------------------------------------------------------
(iv) within 36 months after the date - - 80%
of the Approval
-----------------------------------------------------------------------------------------------------
1.4 The term "Next 10 Largest Metropolitan Areas" means Metro Cebu, Davao
City, Zamboanga, Antipolo, General Xxxxxx, Cagayan De Oro, Bacolod,
Iloilo, Baguio, Tarlac, Angeles, Iligan, and the term "Coverage of
Population" means the proportion of the Philippines population from
time to time which based on their normal place of residency, are
potentially able to obtain connectivity to SMART's W-CDMA.
1.5 SMART shall, and PLDT shall ensure that SMART shall, procure handset
terminals incorporating chipsets which enable such handsets to
interconnect with DoCoMo's W-CDMA.
1.6 SMART shall, and PLDT shall ensure that SMART shall, periodically
report to its management committee the status of its roll out of the
W-CDMA, including, but not limited to, coverage, network capacity,
traffic, service quality (quality status against target Key Performance
Indicator), record of major fault, number of subscribers and sales
forecasts.
1.7 SMART shall, and PLDT shall ensure that SMART shall, consult with
DoCoMo concerning its overall roll out of the W-CDMA.
32
1.8 DoCoMo shall cooperate with the PLDT Group in the field of the
collaboration through dispatch of the Advisors to be entered into
between DoCoMo and the PLDT Group.
33
Schedule 2
Amended section 11.4 of the Strategic Agreement
Section 11.4
i) In case PLDT intends to enter into any contractual arrangement with any
Person relating to the operation of a Competing Business in Japan
involving joint branding, the provision, production or marketing of
telecommunications or multimedia products or services, or cooperation
in, or sharing of, research and development of technology or other
Intellectual Property, PLDT will:
a) from the date of this Agreement until 30 June 2006, first
provide NTT and if NTT declines, then provide DoCoMo, with
the same opportunity to enter into such agreement with PLDT
upon the same terms being considered by PLDT; and
b) from 1 July 2006, first provide DoCoMo and if DoCoMo
declines, then provide NTT, with the same opportunity to
enter into such agreement with PLDT upon the same terms
being considered by PLDT,
provided always that PLDT will not be under any obligation to contract
with NTT and/or DoCoMo with respect to any such Competing Business in
Japan if, in the reasonable opinion of PLDT disclosed to NTT and/or
DoCoMo (as the case may be) in reasonable detail, it will not fully
realise its expected benefits under such arrangement by contracting
with NTT or DoCoMo or it is necessary for PLDT to maintain a
relationship with a Person other than NTT or DoCoMo pursuant to
reasonable business arrangements in furtherance of PLDT's strategic
objectives from time to time.
ii) In case PLDT, SMART or SMART's Subsidiaries intends to enter into any
contractual arrangement on or after 1 July 2006 with any Person who is
engaged in a Competing Business in competition with DoCoMo (as assessed
having regard to DoCoMo's then existing business) and who has been
notified as such to PLDT in writing by DoCoMo (whether through the COA
replaced by DoCoMo pursuant to Clause 4.3 or another duly authorised
representative) (collectively, the "DoCoMo Competing Person"), in
relation to the operation of a Competing Business in the Philippines,
and involving joint branding, the provision, production or marketing of
telecommunications or multimedia products or services, or cooperation
in, or sharing of, research and development of technology or other
Intellectual Property, PLDT will, or PLDT shall use its reasonable
efforts to procure that SMART or its Subsidiaries will, first provide
DoCoMo with the same opportunity to enter into such agreement with
PLDT, SMART or SMART's Subsidiaries, as the case may be, upon the same
terms being considered by PLDT, SMART or SMART's Subsidiaries. as the
case may be; provided that PLDT will not be under any obligation to
contract, or to cause SMART or SMART's Subsidiaries to contract, with
DoCoMo with respect to any such Competing Business in the Philippines
if, in the reasonable opinion of PLDT disclosed to NTT and/or DoCoMo
(as the case may be) in reasonable detail, (i) it will not fully
realise its expected benefits under such arrangement by contracting
with DoCoMo or (ii) it is necessary for PLDT to maintain a relationship
with a Person other than NTT or DoCoMo pursuant to reasonable business
arrangements in furtherance of PLDT's strategic objectives from time to
time or (iii) the board of PLDT, SMART or SMART's Subsidiaries, as the
case may be, determines that to be in the best interests of its company
to enter into such arrangements with a Person other than DoCoMo.
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iii) Each of DoCoMo and PLDT agrees that it will, from time to time, discuss
with the other strategic developments in their respective businesses,
with a view to identifying opportunities for mutually beneficial future
arrangements between DoCoMo, the PLDT Group and each of their
respective Affiliates.
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Schedule 3
The Existing Encumbrances
Exchangeable Notes into PLDT Shares
On 12 January 2005, First Pacific Finance Limited ("FPFL"), a
wholly-owned subsidiary of FPC, entered into a subscription agreement
with UBS AG, whereby UBS AG agreed to subscribe for U.S. $199,000,000
zero coupon guaranteed exchangeable notes due 2010, exchangeable into
PLDT Shares (the "Exchangeable Notes"). The Exchangeable Notes are
unconditionally and irrevocably guaranteed by FPC, and were issued at
the issue price of 100 per cent. (100%) of the aggregate principal
amount thereof, and in the denomination of US$10,000 each.
The holder of each Exchangeable Note has the right to exchange such
Exchangeable Note at any time during the exchange period for a pro rata
share of the exchange property, initially comprising 340.9091 PLDT
Shares (subject to adjustment) for each US$10,000 principal amount of
Exchangeable Note (the "Exchange Property"). Assuming full exchange of
the Exchangeable Notes at the initial value, the Exchangeable Notes
will be exchanged into 6,784,091 PLDT Shares (subject to adjustment),
representing approximately 4.0 per cent. (4%) of outstanding PLDT
Shares as at 12 January 2005.
NTT was notified of the proposed issue of Exchangeable Notes, and NTT
issued a letter to FPC in response dated 6 December 2004 which, among
other things, unconditionally and irrevocably waived any rights of NTT
(including prohibitions on transfers and rights of first refusal) under
the Shareholders Agreement relating to the issue of the Exchangeable
Bonds and the transfer of PLDT Shares on exercise of exchange rights
thereunder.
The initial Exchange Property, being the underlying PLDT Shares, was
deposited by LBV in a custody account maintained with The Hongkong and
Shanghai Banking Corporation Limited as custodian. The Exchange
Property is not subject to any direct security interest in favour of
the holders of the Exchangeable Notes. LBV and UBS Limited have entered
into an International Securities Lenders Association Global Master
Lending Agreement dated 14 January 2005, and an International
Securities Lenders Association Global Master Lending Agreement dated 18
January 2005 (each, a "Securities Lending Agreement" and together the
"Securities Lending Agreements") in order to facilitate stock lending
arrangements with respect to the PLDT Shares forming the initial
Exchange Property. On 21 January 2005, 700,000 PLDT Shares were lent
pursuant to the Securities Lending Agreement dated 18 January 2005, of
which 417,000 PLDT Shares are outstanding as of 12 January 2006 and
more PLDT Shares may be lent under the Securities Lending Agreements
from time to time. On 14 July 2005, PLDT distributed dividends on the
PLDT Shares held as Exchange Property of US $2,538,594.28. On 28
December 2005, PLDT distributed dividends on the PLDT Shares held as
Exchange Property of US$2,681,963.69. Total dividends to date with
respect to the PLDT Shares held as Exchange Property relating to the
accounting year ended 31 December 2005 were US$5,220,557.97 which
resulted in a capital distribution (as defined in the trust deed
regulating the Exchangeable Notes) equivalent to US$1,265,911.77. In
accordance with the terms and conditions of the Exchangeable Notes,
this amount has been applied by LBV to purchase 36,671 additional PLDT
Shares, on The Philippine Stock Exchange Inc., between 29 December 2005
to 3 January 2006, which have been added to the Exchange Property.
Future dividends payments by PLDT may also give rise to additional PLDT
Shares being acquired and added as Exchange Property under the terms
and conditions of the Exchangeable Notes.
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As of 4 January 2006, the holder of each Exchangeable Note had a right
to exchange such Exchangeable Note at any time during the exchange
period for a pro rata share of the Exchange Property, comprising
342.7519 PLDT Shares (subject to adjustment) for each US$10,000
principal amount of Exchangeable Notes. Assuming full exchange of the
Exchangeable Notes at the revised amount of the Exchange Property, the
Exchangeable Notes would be exchangeable into 6,820,762 PLDT Shares
(subject to adjustment), representing approximately 3.8 per cent. of
outstanding PLDT Shares as at 4 January 2006.
Further details of the Exchangeable Notes are publicly available,
including a detailed Schedule 13 D/A which was filed in the United
States of America pursuant to the Securities Exchange Act (USA) on or
about 18 January 2005.
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