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EXHIBIT 10.7
EXECUTION COPY
AMENDED AND RESTATED
PUERTO RICO MANAGEMENT AGREEMENT
Dated as of March 2, 1999
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TABLE OF CONTENTS
PAGE
ARTICLE I APPOINTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II GENERAL SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.02 Management and Operating Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.01 Responsibility of GTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.02 Strategic Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.03 Organizational Structure and Designation of Personnel . . . . . . . . . . . . . . . . . . . . 6
3.04 Legal Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.01 Fee for Management Expertise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.02 Reimbursable Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.03 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE V ADDITIONAL SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.01 Additional Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.02 Fees and Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.01 Indemnification by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.02 Indemnification by GTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.03 Disclaimer of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.04 Limitation on Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII DURATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.01 Initial Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.02 Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.03 Use of Management Expertise After Termination . . . . . . . . . . . . . . . . . . . . . . . . 11
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ARTICLE VIII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.01 Termination by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8.02 Termination by GTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.03 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.04 Non-fulfillment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9.01 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9.02 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9.03 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.04 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.05 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.06 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.07 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.08 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.09 No Authority to Bind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.10 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.11 Director Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.13 Effect of Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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AMENDED AND RESTATED
PUERTO RICO MANAGEMENT AGREEMENT
AMENDED AND RESTATED PUERTO RICO MANAGEMENT AGREEMENT dated as of
March 2, 1999 by and among TELECOMUNICACIONES DE PUERTO RICO, INC., a Puerto
Rico corporation ("Company"), PUERTO RICO TELEPHONE COMPANY, INC., a Puerto
Rico corporation ("PRTC"), and GITI SERVICES PUERTO RICO INCORPORATED, a Puerto
Rico corporation ("GTE").
W I T N E S S E T H:
WHEREAS, GTE Holdings (Puerto Rico) LLC ("Purchaser"), a limited
liability company organized under the laws of Delaware, the Company, GTE
International Telecommunications Incorporated, a Delaware corporation ("GITI"),
and the Puerto Rico Telephone Authority ("PRTA"), a public corporation and
government instrumentality of the Commonwealth of Puerto Rico ("Puerto Rico"),
have entered into an Amended and Restated Stock Purchase Agreement dated July
21, 1998, as amended from time to time (the "Stock Purchase Agreement"),
pursuant to which Purchaser initially acquired 40.01% plus one share of the
Company's issued and outstanding shares of common stock;
WHEREAS, the Company owns 100% of the capital stock of CELULARES
TELEFONICA, INC., a Puerto Rico corporation ("CTI") and PRTC;
WHEREAS, GITI owns 100% of the capital stock of Purchaser;
WHEREAS, GTE has the management, technical and financial capability,
and is committed, to develop and maintain the Company's telecommunications
system as a technologically advanced, efficient system for the benefit of
Puerto Rico and its citizens;
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WHEREAS, the Company, PRTC and its Affiliates desire to benefit from,
and GTE desires to provide the Company, PRTC and its Affiliates with, access to
management, policy, operational and marketing experience, of GTE and its
affiliates, including GITI (collectively, the "Management Expertise"), insofar
as such Management Expertise is necessary or beneficial for the Company and
Purchaser to meet their commitment to the development and maintenance of the
Company's telecommunications system; and
WHEREAS, the Management Expertise to be provided pursuant to this
Agreement will be provided by GTE and its affiliates and received by the
Company, PRTC and its Affiliates in Puerto Rico.
NOW THEREFORE, in consideration of the foregoing, it is agreed by and
among the parties hereto as follows:
ARTICLE I
APPOINTMENT
1.01 Appointment. PRTC hereby appoints GTE to manage and advise,
and provide proprietary and other Management Expertise within Puerto Rico on
all significant aspects of the operations and administration of the businesses
of PRTC and its Affiliates, subject to the terms and conditions hereof, the
Stock Purchase Agreement, the Shareholders Agreement of even date herewith
among the Company and its shareholders (the "Shareholders Agreement"), the
Certificates of Incorporation and Bylaws of the Company and each such Affiliate
of the Company, and the general authority, supervision and control of the
Company acting through its Board of Directors.
It is understood that GTE's services are limited to offering advisory
assistance, direction and provision of knowledge and experience, while the
Company, PRTC and its Affiliates shall be
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responsible for developing and implementing activities. No provision of this
Agreement shall be read to require GTE or its affiliates to make monetary
contributions or loans to the Company, PRTC or its Affiliates.
1.02 Acceptance. GTE hereby accepts its appointment hereunder and
agrees to make available within Puerto Rico such skills, services and
Management Expertise, to work in good faith and in close cooperation with PRTC
and its Affiliates, and to strengthen the strategic position of PRTC and its
Affiliates in the telecommunications and related industries with the goal of
making it a more business-driven, customer-oriented and technologically
advanced telecommunications operator, capable of providing a broad range of
telecommunications products and services to its customers. GTE agrees that the
businesses of PRTC and its Affiliates are to be operated in a modern and
efficient manner applying Management Expertise in a manner no less favorable to
PRTC and its Affiliates than that which GTE's ultimate parent company
("Parent") applies to such Parent's own wholly owned operations and businesses
in its principal place of business.
ARTICLE II
GENERAL SERVICES
2.01 Services.
(a) GTE agrees to make available to PRTC and its
Affiliates GTE's (and, if necessary, its affiliates') management advice and
services and general legal and regulatory advice.
(b) All the inventions, improvements, discoveries,
software programs and other forms of technology or industrial property carried
out, conceived or developed, during the duration
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of this Agreement, whether in fact or implicitly, as a result of any work
effected by PRTC and its Affiliates, shall be and continue to be the property
of PRTC and its Affiliates.
2.02 Management and Operating Experience. GTE will provide its
services by coordination with Company management and by means of making GTE's
(and, if necessary, its affiliates) management personnel available to PRTC and
its Affiliates, as more fully described in this Agreement, as well as assisting
in the training of existing and future personnel of PRTC and its Affiliates,
including management, technical, sales, marketing, customer service and
administrative personnel.
ARTICLE III
MANAGEMENT
3.01 Responsibility of GTE.
(a) GTE shall be responsible for providing advice and
direction regarding the management, operations, and business of PRTC and its
Affiliates, including, but not limited to, the development and implementation
of general performance policies, the organizational structure, annual budgets
and the business and strategic plans ("Strategic Plans"), as described in
Section 3.02. To this end, PRTC and its Affiliates shall provide to GTE all
the information requested by GTE and unrestricted access to books, records and
other data that GTE deems advisable for exercising its management advisory
responsibilities.
(b) GTE shall make available (or cause to be made
available) to PRTC and its Affiliates experience and information and
theoretical and practical knowledge owned or used by GTE (or its affiliates, as
applicable), in its capacity as a telecommunications provider and service
operator, including those
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methods and procedures GTE (or its affiliates, as applicable), presently knows
and uses, as well as all those resulting from the future development of GTE's
(and, if appropriate, its affiliates') knowledge and experience, with the aim
of improving and enhancing the operations, business and value of the Company
through the application of operating strategies and management policies and
practices.
(c) For the purpose of fulfilling its obligations under
this Article III, GTE shall make (or cause to be made) experienced
representatives of the management of each of its existing organizational areas
and those of its affiliates available to PRTC and its Affiliates and shall
offer to PRTC and its Affiliates, the tangible and intangible benefits arising
from the relationship with GTE and its affiliates including, among other
things, economies of scale in the purchase of equipment and expansion and
modernization of networks. GTE (and, if appropriate, its affiliates) shall
provide follow up and counseling relating both to traffic and operations, as
well as to the commercial aspects and organization of PRTC and its Affiliates.
At all times PRTC and its Affiliates may consult with GTE (and, if appropriate,
its affiliates) and may request advice of GTE on any question relating to its
business activities.
(d) Upon mutual agreement of the Company and GTE, GTE
(or, if appropriate, its affiliates) shall assist in the negotiations for the
Company and its Affiliates to obtain certain technology from outside sources
other than GTE or any Affiliate thereof.
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3.02 Strategic Plans.
(a) Within one hundred twenty (120) days of Closing and,
for each subsequent year, at least thirty (but not more than ninety) days prior
to the beginning of the Company's fiscal year, GTE shall use its (and, if
necessary, its affiliates') management expertise and experience to develop a
Strategic Plan for PRTC and its Affiliates and for the approval of the
Company's Board of Directors. GTE shall assist (or cause its affiliates to
assist, if necessary) PRTC and its Affiliates in implementing such Strategic
Plan. Such Strategic Plan shall include:
(i) Business strategies; planning (including
technical, commercial, acquisitions, information systems and real property) and
short, medium and long term timetables for the fulfillment of the plans;
(ii) Financial aspects, with particular emphasis on
the analysis of the financing needs and the utilization of the most suitable
financing sources; improving the Company's return on capital invested; and
assistance regarding the relationship with financial institutions and entities
in order to obtain optimal financing; and
(iii) Administration and human resources, with
particular reference to the adoption of the most advisable administrative,
accounting, tax, budgetary and fiscal practices, methods and controls.
(b) Each Strategic Plan shall be developed by GTE and
presented to the Board of Directors of the Company (the "Board") for its
approval if required by the Shareholders Agreement.
3.03 Organizational Structure and Designation of Personnel.
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(a) GTE shall be responsible for advising the Company on
any restructuring of the organizational structure of the Company and its
Affiliates (the "Organizational Structure") which GTE deems advisable and
proposing to the Company, from time to time, the personnel to occupy positions
within the Company and its Affiliates. At any time, GTE may propose
modifications to the Organizational Structure and propose the replacement of
personnel at any level, including management; provided, however, that any such
action shall strictly comply with all pertinent labor laws, regulations, and
agreements (including the Stock Purchase Agreement and the Shareholders
Agreement). The designation and/or ratification of senior management and
changes in the Organizational Structure shall be subject, where appropriate, to
the approval of the Board in accordance with the Company's By-laws; and
(b) The officers and management employees proposed by GTE
shall, to the knowledge of GTE, have the professional and technical
qualifications to perform the functions that in each case are assigned to them.
GTE shall assess such qualifications on the basis of objective evaluation
methods. Such persons may come from GTE and its affiliates, from the Company
or its Affiliates through internal promotion or from unaffiliated third
parties.
3.04 Legal Compliance. GTE represents that it has complied with the
requirements of Article 8(e) of Act No. 54 and certifies that:
It has not paid and it will not pay any commission or bonus, and it
has not granted any direct or indirect financial benefit, to any public
official or employee, nor to any former public
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official or employee, participating in the privatization process of PRTC while
discharging his/her public service duties.
ARTICLE IV
PAYMENTS
4.01 Fee for Management Expertise. PRTC shall pay GTE as the
exclusive compensation for the services referred to in this Agreement (other
than pursuant to Section 4.02 or Article V), an annual fee (the "Fee") equal to
the amounts set forth in column 1 on Exhibit A; provided, however, that in no
event will the Fee, together with the fee payable for the corresponding period
by PRTC under the U.S. Management Agreement by and among the Company, PRTC, and
GITI, dated as of the date hereof (the "U.S. Management Agreement"), exceed
the Applicable Percentage set forth in Column 2 on Exhibit A of the Company's
EBITDA (as defined in the Technology License Agreement and taking into account
the provision of Section 3.2(b) of the Technology License Agreement) for the
applicable year. The Fee will be paid quarterly on the dates the Royalty is
payable under the Technology License Agreement, and shall be paid to the
account and in the manner set forth in the Technology License Agreement
(including Section 3.2(b) in respect of the Royalty thereunder).
4.02 Reimbursable Expenses. GTE shall be entitled to be reimbursed
from time to time for transportation expenses, meals and lodging expenses
incurred by its personnel in performing its obligations hereunder.
4.03 Withholding Taxes. All payments shall be made after
reduction for any tax required to be withheld by PRTC, provided that the
parties shall consult with each other as to the amount of any such tax required
to be withheld. PRTC shall furnish GTE
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with such proof of payment of such tax as is required by the United States
Internal Revenue Code (and regulations) to support a claim for a credit for
taxes paid.
ARTICLE V
ADDITIONAL SERVICES
5.01 Additional Services. It is expressly understood that GTE
shall, at the request of PRTC, make available (or cause its affiliates to make
available, if necessary) for sale to PRTC and its Affiliates such additional
services (the "Additional Services") that PRTC deems necessary to accomplish
the objectives set forth in this Agreement and that GTE or GITI is capable of
providing subject to the provisions of the Shareholders Agreement.
5.02 Fees and Form of Payment. Any agreement to provide such
Additional Services shall be subject to customary arm's length commercial terms
which are fair to PRTC and subject to the provisions of the Shareholders
Agreement.
ARTICLE VI
INDEMNIFICATION
6.01 Indemnification by Company. The Company shall indemnify GTE,
its directors, officers, employees and affiliates from and against any
liability, loss (excluding incidental, special and consequential damages and
loss of profit), damage, claim, action or other cost or expense (including
without limitation, reasonable attorneys fees and expenses) (collectively,
"Losses"), arising out of GTE performing its obligations hereunder, except to
the extent of GTE's willful misconduct.
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6.02 Indemnification by GTE. GTE shall indemnify and hold each of
the Company, PRTC and their Affiliates harmless from and against any Losses
which the Company or its affiliates may suffer as a result of any material
breach of any agreement or undertaking by GTE in this Agreement to the extent
of third party claims against the Company, PRTC or its Affiliates with respect
thereto.
6.03 Disclaimer of Warranties. It is expressly understood that GTE
makes no warranty to the Company or its Affiliates with respect to the
performance or fitness for any purpose of the products or services contemplated
by this Agreement. GTE expressly disclaims all warranties including, without
limitation, the implied warranties of merchantability and fitness for a
particular purpose.
6.04 Limitation on Liability. Notwithstanding any other section
hereof, the parties agree that the Company's and PRTC's sole and exclusive
remedy for any breach or alleged breach by GTE of this Agreement (other than
Article V as to which the separate arrangements with respect thereto shall
govern) other than any breach or alleged breach by GTE of Sections 6.02 and
9.04 shall be to terminate this Agreement and any obligation to make any and
all future payments hereunder.
ARTICLE VII
DURATION
7.01 Initial Term. This Agreement shall become effective as of the
date hereof, and shall have an initial duration of five (5) years.
7.02 Extension. Not less than six months before the expiration of
this Agreement, the parties shall commence bona
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fide negotiations to extend its term. In the event agreement is reached on any
such extension, such extension shall be subject to approval of the Board and
the Board of Directors of PRTC.
7.03 Use of Management Expertise After Termination. Upon
expiration or termination of this Agreement for any reason, PRTC and its
Affiliates may continue utilizing all knowledge or know-how received from
delivery of Management Expertise made available to them by GTE or its
affiliates pursuant to this Agreement without the payment of any additional
compensation to GTE or any of its Affiliates.
ARTICLE VIII
TERMINATION
The parties hereto expressly agree that this Agreement may not be
terminated except by mutual agreement of the Company, GTE and PRTA or as
follows:
8.01 Termination by the Company. The Company may terminate this
Agreement:
(a) upon liquidation or bankruptcy of GTE;
(b) upon material breach of this Agreement by GTE (other
than agreements entered into pursuant to Article V hereof), as covered in
Section 8.04 of this Agreement;
(c) upon revocation or suspension of any material license
of the Company or any of its subsidiaries as a result of the willful misconduct
of GTE;
(d) should GTE Corporation cease to own, directly or
indirectly, more than 50% of GTE International Telecommunications Incorporated
or GITI Services Puerto Rico Incorporated;
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(e) should GITI or GTE Corporation fail to directly or
indirectly have beneficial and economic ownership of more than 20% of the
capital stock of the Company; or
(f) upon termination of the Technology License Agreement
or the U.S. Management Agreement.
8.02 Termination by GTE. GTE may terminate this Agreement upon:
(a) a delay of more than 20 business days in the payment
of the undisputed portion of any Fee; or
(b) non-fulfillment of this Agreement by the Company, as
covered in Section 8.04 of this Agreement.
8.03 Effect of Termination. Except as provided in Section 8.04
below, termination shall be effective immediately upon the occurrence of any
event described in Sections 8.01 and 8.02 above.
8.04 Non-fulfillment. Should any of the parties breach, refuse or
fail to comply with, or shall violate, any material terms or conditions of this
Agreement, said failure, omission or violation shall constitute a breach of
this Agreement. In such case the party not in breach shall notify the other
party of the breach in writing providing a detailed description of the alleged
breach and shall grant the other party a period of ninety (90) days to remedy
said breach, if such breach is capable of being so remedied. Should the
breaching party not remedy said breach within said ninety (90) days, or if such
breach is not capable of being so remedied, the notifying party shall have the
right to terminate this Agreement.
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ARTICLE IX
GENERAL PROVISIONS
9.01 Amendments. This Agreement may be amended only with the prior
written agreement of all the parties hereto, and no course of action by or on
behalf of any party shall be construed as an explicit or implicit amendment of
this Agreement or any of its provisions. No amendment shall be made hereto
which materially adversely affects the economic rights of the Company or PRTC
except with the prior written consent of the PRTA.
9.02 Jurisdiction. The parties hereby irrevocably and
unconditionally submit to the jurisdiction of the United States District Court
for the District of Puerto Rico or, if such court does not have subject matter
jurisdiction, in any court of Puerto Rico having subject matter jurisdiction
for purposes of any suit, action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement, and the parties agree
not to commence any such suit, action or proceeding except in such courts. Each
party hereby agrees that service of any process, summons, notice or document by
U.S. registered mail addressed to it shall be effective service of process for
any such action, suit or proceeding. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any such suit,
action or proceeding in the United States District Court for the District of
Puerto Rico or any court of Puerto Rico having subject matter jurisdiction and
hereby further and irrevocably waive and agree not to plead or claim in any
such court that any such suit, action or proceeding has been brought in an
inconvenient forum.
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9.03 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the written consent of the other party hereto and compliance with
applicable laws and regulations; provided, however, that PRTA may assign its
rights hereunder to the Government Development Bank for Puerto Rico ("GDB") and
that no such assignment shall have the effect of being a delegation of duties
or an assumption of any obligations of PRTA. The Company's and PRTC's consent
to the assignment of this Agreement by GTE to any of GTE Corporation's direct
or indirect wholly owned subsidiaries may not be unreasonably withheld;
provided, that, no such assignment shall relieve GTE of any of its obligations
hereunder.
9.04 Confidentiality.
(a) (i) All non-public documentation, information and
Management Expertise of GTE (the "GTE Information") made available to the
Company or its Affiliates by GTE in order to fulfill its obligations under this
Agreement shall be kept strictly confidential by the Company and its Affiliates
and their personnel and any other person who has had access to such GTE
Information through the Company, and such GTE Information shall not be
disclosed to third parties without GTE's express written consent. All such GTE
Information shall continue to be owned by GTE but this shall not affect the
receiving party's right to continue using such GTE Information on a
non-exclusive, confidential basis after termination of this Agreement pursuant
to Section 7.03 hereof;
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(ii) All non-public documentation and information of
the Company and its subsidiaries (the "Company Information") obtained by GTE in
the course of performing its obligations hereunder shall be treated as strictly
confidential and shall not be disclosed to third parties without the Company's
express written consent. All such Company Information shall continue to be
owned by the Company; and
(iii) This section shall continue in full force and
effect for five (5) years after the expiration of this Agreement.
(b) In the event that any party or an affiliate thereof
is requested pursuant to, or required by, applicable law, regulation or legal
process to disclose any GTE Information or Company Information, as the case may
be, the other parties shall immediately be informed of the matter in advance.
Only that portion of the GTE Information or Company Information, as the case
may be, that is, upon the advice of counsel, legally required shall be
furnished, and all reasonable efforts shall be made to obtain reliable
assurance (in the form of a court order or other reasonable assurance) that, to
the maximum extent possible under the circumstances, confidential treatment
will be accorded to such portion of GTE Information or Company Information, as
the case may be, required to be disclosed.
9.05 Applicable Law. This Agreement is subject to and shall be
construed in accordance with the internal laws of Puerto Rico applicable to
contracts made and to be performed in Puerto Rico.
9.06 Severability. Every provision of this Agreement is intended
to be severable and if any term or all or part of any provision hereof is held
by judicial decision to be invalid, such
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invalidity shall not affect the validity of the remainder of this Agreement.
9.07 Notices. Any notice or other communication under this
Agreement shall be in writing and shall be considered given when delivered in
person, sent by telefax transmission or mailed by certified mail, return
receipt requested, or nationally recognized overnight deliver service, to the
parties at the following addresses or telefax numbers (or at such other address
or telefax number as a party may specify by notice to the others in accordance
with this provision):
If to the Company or PRTC, at:
0000 Xxxxxxxx X. Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
Telephone:
Telecopy:
Attention: President
with a copy to (for so long as PRTA or any other Puerto Rico
Entity is a party beneficiary of this Agreement):
Government Development Bank
for Puerto Rico
Minillas Xxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: President
Xxxxxxxxxxx, Xxxxxx & Xxxxxxx
Banco Popular Center
Xxxxx 0000
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx
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Akin, Gump, Strauss, Xxxxx & Xxxx L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xx.
If to GTE, at:
GITI Services Puerto Rico Incorporated
X.X. Xxx 0000000
Xxx Xxxx Xxxxxx Xxxx 00000-0000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxxx Xxxxxxx
with a copy to:
GTE International Telecommunications Incorporated
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Mr. Fares Xxxxxxx
9.08 Third Party Beneficiaries. Except as specifically stated
herein, nothing in this Agreement shall be deemed to create any right with
respect to any person that is not a party to this Agreement; provided, that,
any subsidiary of the Company may enforce the Company's rights hereunder;
provided, further, that, so long as the PRTA or any other instrumentality of
the Government of Puerto Rico (a "Puerto Rico Entity") owns or controls at
least 10% of the shares of capital stock of the Company (owned as of the date
hereof or acquired hereafter directly from the Company or its successors), such
Puerto Rico Entities shall be deemed third party beneficiaries of this
Agreement and shall be entitled to enforce the provisions hereof
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for the benefit of the Company, including but not limited to Article VIII
hereof, directly, without first making demand upon the Company to do so; and
provided, further, that GDB may enforce the rights of PRTA hereunder as
provided in Section 12.05 of the Stock Purchase Agreement.
9.09 No Authority to Bind. GTE shall have no authority to enter
into contracts or otherwise incur obligations on behalf of or bind the Company
or any of its subsidiaries, except as otherwise expressly approved by the
Board.
9.10 Defined Terms.
(a) Unless otherwise defined herein, capitalized terms
used in this Agreement shall have the meanings ascribed to such terms in the
Stock Purchase Agreement or as set forth in Section 8.14 of the Technology
License Agreement.
(b) "Affiliates" when used in reference to the Company or
PRTC shall mean the Company and subsidiaries of the Company.
9.11 Director Approval. Any action or decision required or
permitted to be taken or not taken by the Company or any of its subsidiaries
pursuant to Section 7.02 and Article VIII may only be taken or not taken by the
Company or such subsidiary (as applicable) upon the approval thereof by a
majority of the disinterested directors of the Company.
9.12 Counterparts. This Agreement may be signed in multiple
counterparts, subject to the execution of at least one of such counterparts by
each of the parties hereto.
9.13 Effect of Amendment. This Amended and Restated Puerto Rico
Management Agreement supersedes the Puerto Rico Management Agreement signed on
March 2, 1999.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
TELECOMUNICACIONES DE PUERTO RICO, INC.
By:________________________________
Name:_________________________________________
_______________________________
Title:________________________________________
_______________________________
PUERTO RICO TELEPHONE COMPANY, INC.
By:___________________________________________
_______________________________
Name:_________________________________________
_______________________________
Title:________________________________________
_______________________________
GITI SERVICES PUERTO RICO INCORPORATED
By:___________________________________________
_______________________________
Name:_________________________________________
_______________________________
Title:________________________________________
_______________________________
By:___________________________________________
_______________________________
Name:_________________________________________
_______________________________
Title:________________________________________
_______________________________
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GTE International Telecommunications Incorporated agrees to cause GTE Services
Puerto Rico Incorporated to supply the Management Expertise (if necessary, by
supplying such Management Expertise to GTE Services Puerto Rico Incorporated) on
the terms and conditions provided in Article II hereof and otherwise
unconditionally guarantee all of the obligations of GTE Services Puerto Rico
Incorporated hereunder.
GTE INTERNATIONAL TELECOMMUNICATIONS
INCORPORATED
By:___________________________________________
_______________________________
Name:_________________________________________
_______________________________
Title:________________________________________
_______________________________
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EXHIBIT A
(Puerto Rico)
Column 1 Column 2
------------------ ----------------
Applicable
Percentage
Year Fee of EBITDA
----------- ------------------ ----------------
1 $9,860,000 8%
2 $8,259,000 8%
3 $7,425,000 7%
4 $7,989,000 7%
5 $6,878,000 6%
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