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Exhibit 10.11
EXECUTION COPY
SHARE OPTION AGREEMENT
dated as of
March 2, 1999
among
PUERTO RICO TELEPHONE AUTHORITY
TELECOMUNICACIONES DE PUERTO RICO, INC.
GTE HOLDINGS (PUERTO RICO) LLC
and
GTE INTERNATIONAL TELECOMMUNICATIONS INCORPORATED
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TABLE OF CONTENTS
Page
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ARTICLE I GRANT OF OPTION...............................................3
1.01 Option..............................................................3
1.02 Manner of Exercise..................................................4
1.03 Closing.............................................................5
1.04 Actions at Closing..................................................6
1.05 Adjustments.........................................................6
ARTICLE II REPRESENTATIONS AND WARRANTIES AND COVENANTS OF
THE AUTHORITY................................................10
2.01 Existence and Power................................................10
2.02 Corporate Authorization............................................11
2.03 Governmental Authorization.........................................11
2.04 Non-Contravention..................................................12
2.05 Title..............................................................13
2.06 Finders' Fees......................................................13
2.07 Restrictions on Option Shares......................................14
2.08 Savings Clause.....................................................15
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER AND STRATEGIC
PURCHASER....................................................15
3.01 Organization and Existence; Capitalization.........................15
3.02 Corporate Authorization............................................15
3.03 Governmental Authorization.........................................16
3.04 Non-Contravention..................................................16
3.05 Finders' Fees......................................................17
3.06 Available Funds; Strategic Purchaser...............................17
3.07 Purchase for Investment............................................17
3.08 Ability to Complete the Transaction................................18
3.09 Certain Understandings of Strategic Purchaser and Purchaser........18
3.10 Legal Compliance...................................................19
ARTICLE IV COVENANTS OF THE PARTIES.....................................20
4.01 Further Actions....................................................20
4.02 Certain Filings....................................................21
4.03 Public Announcements...............................................21
ARTICLE V CONDITIONS TO CLOSING........................................22
5.01 Conditions to the Obligations of Each Party........................22
5.02 Conditions to Obligations of Purchaser and Strategic Purchaser.....24
5.03 Conditions to Obligation of the Authority..........................25
(i)
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ARTICLE VI INDEMNIFICATION..............................................27
6.01 Indemnification by Authority.......................................27
6.02 Indemnification by Purchaser and Strategic Purchaser...............27
6.03 Indemnification Claim..............................................28
6.04 Notice of Claim....................................................29
6.05 Indemnitor's Obligations...........................................30
6.06 Date of Notice of Claim............................................31
6.07 Consent of Indemnitee..............................................31
6.08 Subrogation........................................................31
ARTICLE VII TERMINATION..................................................31
7.01 Grounds for Termination............................................31
7.02 Effect of Termination..............................................33
ARTICLE VIII MISCELLANEOUS................................................33
8.01 Survival...........................................................33
8.02 Notices............................................................34
8.03 Amendments; No Waivers.............................................36
8.04 Expenses...........................................................36
8.05 Successors and Assigns.............................................37
8.06 Governing Law......................................................37
8.07 Counterparts; Effectiveness........................................37
8.08 Entire Agreement...................................................38
8.09 Captions; Definitions..............................................38
8.10 Jurisdiction and Immunity..........................................38
8.11 Third Party Beneficiaries; Parties Bound...........................39
8.12 Endorsement of Stock Certificates..................................40
(ii)
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SHARE OPTION AGREEMENT
SHARE OPTION AGREEMENT dated as of March 2, 1999 by and among Puerto Rico
Telephone Authority (the "Authority"), a public corporation and government
instrumentality of the Commonwealth of Puerto Rico ("Puerto Rico"),
Telecomunicaciones de Puerto Rico, Inc., a Puerto Rico corporation (the
"Company"), GTE Holdings (Puerto Rico) LLC, a Delaware limited liability company
("Purchaser") and GTE International Telecommunications Incorporated, a Delaware
corporation (the "Strategic Purchaser").
WHEREAS, Act Xx. 00 xx xxx Xxxxxxxxxxx xx Xxxxxx Xxxx, approved on August
4, 1997 ("Act No. 54") authorized the Negotiating Committee for the Sale of the
Assets of the Authority (the "Negotiating Committee") to negotiate the sale of
the Authority's assets;
WHEREAS, pursuant to an Amended and Restated Stock Purchase Agreement
dated as of July 21, 1998 among the Authority, Purchaser and Strategic
Purchaser, to which the Company became a party on March 2, 1999(as amended, the
"Stock Purchase Agreement"), approved by Joint Resolution No. 209 of June 24,
1998 (the "Joint Resolution," and together with Act No. 54, the "Authorizing
Legislation"), Purchaser acquired 400,101 shares of the Common Stock, par value
$0.01 per share (the "Shares"), of
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the Company from the Authority constituting 40.01% plus one share of the
outstanding Shares;
WHEREAS, Purchaser and Popular, Inc. jointly acquired 10,000 Shares from
the Authority constituting 1.0% of the outstanding Shares, and jointly
contributed such Shares on the date hereof to the Trust;
WHEREAS, on the date hereof, the Authority contributed 30,000 Shares,
constituting 3.0% of the outstanding Shares, to the Trust;
WHEREAS, on the date hereof, the Authority sold 30,000 Shares,
constituting 3.0% of the outstanding Shares, to the Trust;
WHEREAS, on the date hereof, Popular, Inc. acquired 99,900 Shares from the
Authority constituting 9.99% of the outstanding Shares;
WHEREAS, the Authority remains the owner of 429,999 Shares, constituting
all of the remaining outstanding Shares;
WHEREAS, the Stock Purchase Agreement contemplates, and the Joint
Resolution approved, the Authority granting to Purchaser an option to acquire an
additional 150,000 Shares, constituting 15% of the outstanding Shares on the
Stock Purchase Agreement Closing Date (respectively, the "Option" and, as
adjusted pursuant to Section 1.05 hereof, the "Option Shares");
WHEREAS, Strategic Purchaser organized Purchaser for the purpose of
entering into the transactions contemplated herein
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and in the Stock Purchase Agreement and is the owner of 100% of the equity
interest in Purchaser (the "Purchaser Interests");
WHEREAS, the Authority and Purchaser desire to set forth the terms and
conditions of the Option;
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
Authority, the Company, Purchaser and Strategic Purchaser agree as follows:
ARTICLE I
GRANT OF OPTION
1.01 Option. Upon the terms and subject to the conditions of this
Agreement, the Authority hereby grants to Purchaser the irrevocable option to
acquire from the Authority up to 150,000 Shares, at any time on or before the
third anniversary of the date hereof (the "Expiration Date") at an exercise
price of $1,148.40 per Share, as adjusted pursuant to Section 1.05 (the
"Exercise Price"). With respect to each Option exercise, Purchaser may designate
that an amount of Option Shares, in the aggregate not to exceed the Pro Rata
Portion of Option Shares otherwise issuable to Purchaser upon such exercise, be
issued at the Closing to Popular, Inc. (the "Minority Shareholder"), in the
amounts designated in the Option Notice (as defined below). In addition, from
the period 30 days prior to, and concluding on, the Expiration Date, the
Purchaser
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shall be entitled to exercise the Option (a "Minority Shareholder Exercise"), on
behalf of the Minority Shareholder, with respect to that number of Option Shares
equal to the Pro Rata Portion of Option Shares, if any, then subject to the
unexercised portion of the Option. A Minority Shareholder Exercise shall
preclude any further exercises with respect to the Option.
1.02 Manner of Exercise.
(a) Other than with respect to the Minority Shareholder Exercise,
the Option may be exercised, in whole or in part at any time on or prior to the
Expiration Date, by delivery by Purchaser of written notice (the "Option
Notice") thereof (the date of receipt thereof being the "Exercise Date" for such
exercise) to the other parties hereto not less than 60 days prior to the
Expiration Date on not more than three occasions, each exercise to be for not
less than the lesser of 1/3 of the initial number of Option Shares and the
remaining Option Shares subject to the Option.
(b) In the case of the Minority Shareholder Exercise, the Option may
be exercised by delivery of written notice thereof to the other parties hereto
not less than twenty (20) days prior to the Expiration Date.
(c) In the event that transactions contemplated therein shall not
have been consummated within five (5) business
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days, or such other date, if any, as the Authority and Purchaser shall agree in
writing, after the conditions to a Closing have been met or waived, due to a
breach of this Agreement by the Purchaser, then, by notice given by the
Authority to the Purchaser, the Option shall expire as to the Option Shares
scheduled to be purchased at such Closing and such Option Shares shall no longer
be subject to the Option or this Agreement; it being understood that if the
Minority Shareholder does not consummate, within such five (5) business day
period, the purchase of Option Shares it has elected to purchase, (i) at the
election of Purchaser, the Purchaser may decide to purchase some or all of such
Option Shares and (ii) the Option shall expire only as to such Option Shares not
purchased by Purchaser pursuant to clause (i) above.
1.03 Closing. The closing of each Option exercise (each a "Closing") shall
take place at the offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, within five (5) business
days after satisfaction or waiver of the conditions set forth in Article V, or
such other time or place, after satisfaction or waiver of the conditions set
forth in Article V, as Purchaser and the Authority may agree (the date of each
Closing being hereinafter called a "Closing Date").
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1.04 Actions at Closing. At each Closing, the parties shall take the
following actions in the following order:
(a) The parties shall deliver the documents referred to in Article
V;
(b) Purchaser and, if applicable, the Minority Shareholder shall
deliver to the Authority, the Exercise Price for the Option Shares being
acquired by such Person in immediately available funds by wire transfer to an
account of the Authority with a bank in New York City designated by the
Authority prior to such Closing Date.
(c) The Authority shall deliver to Purchaser (and the Minority
Shareholder if so designated in the Option Notice) certificates for the Option
Shares then being acquired, duly endorsed or accompanied by stock powers duly
endorsed in blank, with any required transfer stamps affixed thereto.
1.05 Adjustments.
(a) Any dividend or other distribution (whether in cash, stock or
otherwise) on the Option Shares to be sold pursuant hereto with a record date
after the date of this Agreement and prior to the applicable Closing Date for
such Option Shares shall be delivered by the Authority to the purchaser of such
Option Shares on the Closing Date (or as soon as practicable thereafter if the
payment or distribution date
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occurs subsequent to the applicable Closing Date), except for the Company's
regular quarterly dividend.
(b) The number of Option Shares and the per Share exercise price
hereunder shall be appropriately adjusted in the event of any stock dividends,
split-ups, recapitalizations, combinations, exchanges of shares or the like or
any other action occurring prior to each Closing Date that would have the effect
of changing or diluting the respective rights and obligations hereunder, it
being understood that the Option Shares constitute, as of the date hereof, 15%
of the issued and outstanding Shares.
(c) In the event that, within 180 days after a Closing Date, any of
Purchaser, holders of Purchaser Interests or their respective affiliates or any
member of the Purchaser Group who directly or indirectly acquires Option Shares
in connection with an exercise of the Option (the "Purchaser Entities"), shall,
directly or indirectly (i) sell, assign, transfer or in any other fashion
voluntarily or involuntarily dispose of, by merger, consolidation or otherwise
(other than a merger of the ultimate parent of such Purchaser Entity), or (ii)
enter into a definitive sales agreement or arrangement with respect to any such
disposition, in any transaction or series of related transactions to an
unaffiliated third party, any Shares or Purchaser Interests acquired directly
from the Authority, the
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Purchaser or any other member of the Purchaser Group (any such event, agreement
or arrangement being a "Transfer"), upon the closing of such Transfer (the
"Transfer Closing Date"), the Exercise Price with respect to any previously
exercised Option within such 180-day period shall be increased, and, if the
selling Purchaser Entity does not pay, the Purchaser shall pay to the Authority
in immediately available federal funds on the Transfer Closing Date, the
Supplemental Exercise Price multiplied by the number of Option Shares previously
acquired by the Purchaser Group within such 180-day period. The Supplemental
Exercise Price shall be the per Share amount, if any, by which the per Share
consideration received (directly or indirectly) in the Transfer (the "Transfer
Price") exceeds 110% of the Exercise Price (subject to adjustment thereof
pursuant to Section 1.05(b) above in the case of events described therein
occurring after the Closing Date with respect thereto as if such events had
occurred prior to the Closing Date and Section 1.05(d) hereof). Notwithstanding
any other provision of this Section 1.05(c), (i) an Option Share received upon
exercise of an Option may be subject to payment of a Supplemental Exercise Price
on but one occasion, and (ii) a Transfer shall result in the application of a
Supplemental Exercise Price, if any, to not more than the number of Option
Shares that is equal to the number of Shares involved in such Transfer. Not less
than 15
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days prior to any such Transfer Closing Date, or five days after execution of
definitive agreements with respect to a Transfer, whichever shall first occur,
the Purchaser shall notify the Authority of the Transfer, the Transfer Price and
form of consideration, the Transfer Closing Date and all other material terms
and conditions of the Transfer. In the event that the Authority and Purchaser
disagree as to the Transfer Price or the Supplemental Exercise Price (due to the
Transfer Price being paid other than solely in cash, the Transfer being an
indirect disposition of Shares or otherwise), then the Authority and Purchaser
shall select a mutually acceptable investment banking firm to determine the
appropriate Transfer Price and the Supplemental Exercise Price, failing which
the Authority and the Purchaser shall each select an investment banking firm,
which investment banking firm shall select a third investment banking firm which
shall determine the appropriate Transfer Price and the Supplemental Exercise
Price. The costs of the third investment banking firm shall be borne 50% by each
of the Authority and the Purchaser.
(d) The per Share Exercise Price hereunder shall be reduced by a
fraction not exceeding one (1), (i) the numerator of which is (x) the amount of
any Adverse Consequences from Included Claims (each as defined in the Stock
Purchase Agreement) which are not paid to Purchaser or the Affiliated
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Group by reason of the limitations imposed by Section 10.04 of the Stock
Purchase Agreement (but only to the extent such Adverse Consequences have been
agreed to in good faith in writing by the Purchaser and the Authority or
determined by a final non-appealable order of a court of competent jurisdiction,
in either case on or prior to the applicable Exercise Date) multiplied by (y)
the percentage of the outstanding Shares then owned by the Purchaser Group and
(ii) the denominator of which is the Purchase Price (as defined in the Stock
Purchase Agreement) paid at the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE AUTHORITY
The Authority hereby represents, warrants and covenants to Purchaser,
Strategic Purchaser and the Minority Shareholder that:
2.01 Existence and Power. The Authority is validly existing as a public
corporation under the laws of Puerto Rico and has all requisite power, authority
and legal right to conduct its affairs as currently conducted. The Authority has
heretofore made available to Purchaser true and complete copies, as currently in
effect, of the official act creating the Authority (the "Authority Act") and the
bylaws of the Authority.
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2.02 Corporate Authorization.
(a) The execution, delivery and performance by the Authority of this
Agreement are within the Authority's powers and have been duly authorized by the
Governing Board of the Authority and, upon execution thereof, will be duly
executed and delivered by the Authority. All requirements established by the
Authorizing Legislation in order for the transactions contemplated hereby to be
consummated have been met.
(b) This Agreement constitutes the valid and binding agreement of
the Authority, enforceable against it in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally, by
general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
2.03 Governmental Authorization. The execution, delivery and performance
by the Authority of this Agreement require no action by or in respect of, or
filing with, any Puerto Rico or United States Governmental Authority other than:
(i) compliance with any applicable requirements of the Communications Act of
1934, as amended (the "Communications Act") and any rules, regulations,
practices and policies ("FCC Rules") promulgated by the FCC, including those
relating to the transfer of control of
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the licenses, permits, authorizations and certificates (the "FCC Licenses")
granted by the FCC; (ii) compliance with any applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"); (iii) compliance with any applicable requirements of the
Telecommunications Regulatory Board of Puerto Rico; and (iv) such other actions,
consents or filings, the failure to obtain or undertake would not materially
hinder or restrict the practical realization by Purchaser of its rights
hereunder.
2.04 Non-Contravention. The execution, delivery and performance by the
Authority of this Agreement do not and will not: (i) contravene or conflict with
(a) the Authorizing Legislation, (b) the Authority Act or the bylaws of the
Authority or the Company; (ii) assuming compliance with the requirements
referred to in Section 2.03(i) - (iii), contravene or conflict with or
constitute a violation of any provision of any Puerto Rico or United States law,
regulation, judgment, injunction, order or decree binding upon or applicable to
the Authority; (iii) contravene, constitute a default under or breach of, or
result in the termination or suspension of, any material agreement, contract or
other instrument binding upon the Authority or the Affiliated Group or any
material license, franchise, permit or other similar authorization held by the
Authority or the Affiliated Group; or (iv) result in the
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creation or imposition of any Lien other than as provided in this Agreement on
any asset of the Authority or the Affiliated Group, except, with respect to
matters referred to in (ii), (iii) and (iv) above, such contraventions,
conflicts, violations, defaults, breaches, terminations, suspensions or Liens
that occur as a result of the identity or specific legal or regulatory status of
Strategic Purchaser or Purchaser or any other facts that specifically relate to
the business or activities in which Strategic Purchaser or Purchaser is or
proposes to be engaged (other than the business or activities of the Affiliated
Group as presently conducted) or the financing documents of the Affiliated
Group.
2.05 Title. After giving effect to the transactions contemplated in the
Stock Purchase Agreement, the Authority is the record and beneficial owner of
429,999 Shares. The Authority will transfer and deliver to each purchaser of
Option Shares at each Closing valid title to the Option Shares being then
purchased free and clear of any Lien.
2.06 Finders' Fees. There is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Puerto Rico, the Government Development Bank for Puerto Rico, GDB Holdings
Corporation, the Affiliated Group or the Authority, who might be entitled to any
fee or commission from Purchaser, Strategic Purchaser, the
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Affiliated Group, or any of their respective affiliates upon consummation of the
transactions contemplated herein.
2.07 Restrictions on Option Shares. During the term of this Agreement, the
Authority agrees that it will not sell, assign, pledge or otherwise dispose of,
or grant any proxies (other than to the Purchaser) with respect to, any Option
Shares then subject to the Option, or enter into any contract, option or other
arrangement or understanding with respect to the sale, pledge, assignment or
other disposition, directly or indirectly (all the foregoing being a
"Disposition"), of any Option Shares (other than pursuant to this Agreement or
other than any such Disposition or other arrangement or understanding that is
subject to Purchaser's rights hereunder). It is understood and agreed that the
Option Shares then subject to the Option owned by Puerto Rico Entities shall be
owned by entities from and after the date hereof which either do not have, or
have irrevocably waived, to the fullest extent permitted by law, all sovereign
immunity to which they or their properties may be entitled, including but not
limited to sovereign immunity from process, suit, jurisdiction, judgment,
attachment in aid of execution, and execution, but not immunity from prejudgment
attachment. The Puerto Rico Entities party hereto which own Option Shares then
subject to the Option shall provide to Purchaser an opinion of counsel
reasonably satisfactory to
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Purchaser as to such status of such entities, and such an opinion will be
provided to Purchaser prior to the Transfer of Option Shares then subject to the
Option to another Puerto Rico Entity.
2.08 Savings Clause. The Transfer of the Option Shares to the Purchaser
pursuant to, and in accordance with, the GDB Holdings Corporation Guaranty of
Option Agreement or the GDB Holdings Corporation Guaranty of the Stock Purchase
Agreement of even date herewith shall not constitute a breach of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND STRATEGIC PURCHASER
Purchaser and Strategic Purchaser each hereby, jointly and severally,
represent and warrant to the Authority that:
3.01 Organization and Existence; Capitalization. Each of Purchaser and
Strategic Purchaser is a Person duly incorporated or formed, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
formation.
3.02 Corporate Authorization.
(a) The execution, delivery and performance by each of Purchaser and
Strategic Purchaser of this Agreement are within the corporate or other powers
of each of them and have
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been duly authorized by all necessary corporate or other action on the part of
each of them.
(b) This Agreement constitutes a valid and binding agreement of each
of Purchaser and Strategic Purchaser, enforceable against each in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or affecting
creditors generally, by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
3.03 Governmental Authorization. The execution, delivery and performance
by Purchaser and Strategic Purchaser of this Agreement require no action by or
in respect of, or filing with, or consent of any Governmental Authority, other
than: (i) compliance with any applicable requirements of the HSR Act; (ii)
compliance with any applicable requirements of the Communications Act or FCC
Rules; and (iii) compliance with any applicable requirements of the
Telecommunications Regulatory Board of Puerto Rico.
3.04 Non-Contravention. The execution, delivery and performance by each of
Purchaser and Strategic Purchaser of this Agreement do not and will not (i)
contravene or conflict with the certificate of incorporation or bylaws or other
formation
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documents of Purchaser and Strategic Purchaser, or (ii) assuming compliance with
the matters referred to in Section 3.03, contravene or conflict with any
provision of any law, regulation, judgment, injunction, order or decree binding
upon Purchaser or Strategic Purchaser.
3.05 Finders' Fees. There is no investment banker, broker, finder or other
intermediary acting for or on behalf of Purchaser, Strategic Purchaser or any of
their respective affiliates, partners, agents or representatives other than the
Affiliated Group who might be entitled to any fee or commission from any member
of the Authority or the Affiliated Group or Puerto Rico or any instrumentality
thereof upon consummation of the transactions contemplated herein.
3.06 Available Funds; Strategic Purchaser. Purchaser will on each Closing
Date have sufficient funds available to purchase the Option Shares and to
fulfill all of its financial obligations arising under this Agreement. The
Authority shall have the right to require Strategic Purchaser to pay any
Exercise Price then due in the event Purchaser fails to timely pay the same.
3.07 Purchase for Investment. Purchaser is purchasing the Option Shares
for investment for its own account and not with a view to, or for sale in
connection with, any distribution thereof. Any Option Shares purchased by
Purchaser pursuant
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hereto shall be deemed part of Purchaser's "Initial Ownership Interest" for
purposes of the Shareholders Agreement, and shall become subject to the terms
and conditions of the Shareholders Agreement.
3.08 Ability to Complete the Transaction. To the knowledge of Purchaser
and Strategic Purchaser, there is no fact or circumstance which might reasonably
be expected to result in Purchaser's or Strategic Purchaser's inability to (a)
obtain any licenses, authorizations, consents or approvals from third Persons or
Governmental Authorities required in order for Purchaser or Strategic Purchaser
to consummate the transactions contemplated by this Agreement, (b) comply with
any applicable requirements or conditions set forth in Section 3.03 hereof, or
(c) otherwise comply with this Agreement.
3.09 Certain Understandings of Strategic Purchaser and Purchaser.
Strategic Purchaser and Purchaser acknowledge that they have had sufficient
opportunity to make whatever investigation they have deemed necessary and
advisable for purposes of determining whether or not to enter into this
Agreement and consummate the transactions contemplated herein, and acknowledge
and agree that, except to the extent of the express representations, warranties,
agreements and covenants contained in this Agreement, Purchaser and Strategic
Purchaser have executed and delivered this Agreement and are consummating
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the transactions contemplated by this Agreement solely in reliance upon their
own investigation and without any other express or implied warranties
whatsoever. Strategic Purchaser and Purchaser acknowledge that no
representations or warranties are made by the Authority as to any announced or
future changes in any Governmental Authority statutes, rules, regulations,
programs, plans or constraints (collectively, "Governmental Action") which are
or may become applicable to or have an effect upon the businesses, operations,
or financial condition of any members of the Affiliated Group.
3.10 Legal Compliance. Purchaser and Strategic Purchaser each represents
that it has complied with the requirements of Article 8(e) of Act No. 54 and
each certifies that as of the date hereof:
(a) All tax returns, statements, reports and forms which were
required to be filed by the Strategic Purchaser, GTE Corporation and/or GTE
Corporation's consolidated subsidiaries (the "GTE Companies") within the past
five years with respect to their respective activities in Puerto Rico
(collectively, the "Returns") have been filed in accordance with any applicable
Puerto Rican laws. All the GTE Companies have timely paid taxes payable to any
Puerto Rico Governmental Authority (including payments in respect of
unemployment benefits, workmen's compensation, social security for chauffeurs
and withholding of
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employee taxes), if any, shown as due and payable on the Returns that have been
filed, except as described in writing to the Authority. There is no action,
suit, proceeding, audit or claim now proposed or pending, or to the knowledge of
Purchaser and Strategic Purchaser, proposed, against or with respect to any of
the GTE Companies in respect of any tax payable to any Puerto Rico Governmental
Authority.
(b) 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 official or employee,
participating in the privatization process contemplated in the Authorizing
Legislation while discharging his/her public service duties.
ARTICLE IV
COVENANTS OF THE PARTIES
The parties hereto agree that:
4.01 Further Actions. Subject to the terms and conditions of this
Agreement, each party will use commercially reasonable efforts, upon exercise of
the Option, to take or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable, under applicable laws and regulations
to consummate the transactions contemplated herein. The Company, the Authority,
Strategic Purchaser and Purchaser each agree to execute and deliver, and to
cause the Affiliated
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Group to execute and deliver, such other documents, certificates, agreements and
other writings and to take such other actions as may be necessary or desirable
in order to consummate the transactions contemplated hereby.
4.02 Certain Filings. The Company, the Authority, Strategic Purchaser and
Purchaser shall cooperate with one another, and will cause the Affiliated Group
to cooperate (a) in determining whether any action by or in respect of, or
filing with, any Governmental Authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any third party
contracts, in connection with the consummation of the transactions contemplated
herein and (b) in taking such actions or making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such actions, consents, approvals or waivers including, without limitation, any
such matters required under the Communications Act, FCC Rules and the HSR Act.
4.03 Public Announcements. Except as otherwise required by law, the
Company, the Authority and Purchaser Group shall: (a) prior to issuance of any
press release relating to the transactions contemplated by this Agreement,
submit such press release to the other parties, and obtain the approval thereof,
which approval shall not be unreasonably withheld; and (b) use best efforts to
characterize the other parties, in any other
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public statements made by the party making such statement about the other
parties, on substantially the same basis as in any press release made by the
party making such statement.
ARTICLE V
CONDITIONS TO CLOSING
5.01 Conditions to the Obligations of Each Party. The obligations of the
parties to consummate each Closing are subject to the satisfaction, or waiver
subject to Section 8.03 below, of the following conditions:
(a) Purchaser and Strategic Purchaser shall have received any
required approvals of the Puerto Rico Telecommunications Regulatory Board;
provided that, Purchaser's obligations shall be subject to the further condition
that no burdensome conditions or limitations shall have been imposed in
connection therewith, in the reasonable judgment of Purchaser, on the GTE
Companies, Purchaser or Strategic Purchaser or on the Affiliated Group;
(b) Any applicable waiting period under the HSR Act relating to the
transactions contemplated at such Closing shall have expired; provided that,
Purchaser's obligations shall be subject to the further condition that no
burdensome conditions or limitations shall have been imposed in connection
therewith, in the reasonable judgment of Purchaser, on the GTE Companies,
Purchaser or Strategic Purchaser or on the Affiliated Group;
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(c) No other provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of such
Closing;
(d) All actions or filings under the Communications Act required to
permit the consummation of such Closing, including, but not limited to, FCC
approval, shall have been obtained or made and not revoked or suspended;
provided that, Purchaser's obligations shall be subject to the further condition
that such FCC approval shall neither (i) require or be conditioned upon
Strategic Purchaser's, GTE Corporation's or any of its affiliates' agreement to
or compliance with any term, condition or restriction, in the reasonable
judgment of Strategic Purchaser, that would have an adverse effect on the
business or results of operations of the Affiliated Group or (ii) impose any
term, condition or restriction on the business or operations of GTE Corporation
or its affiliates or result in any waiver of any rights asserted by any of the
foregoing;
(e) All actions by or in respect of the applicable laws, rules and
regulations of any Governmental Authority having jurisdiction over the
transactions contemplated in this Agreement shall have been taken; provided
that, (i) Purchaser's obligations shall be subject to the further condition that
no burdensome conditions or limitations shall have been imposed, in the
reasonable judgment of Purchaser, in connection therewith on
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the GTE Companies, Purchaser or Strategic Purchaser or on the Affiliated Group
and (ii) the only actions by a Puerto Rico Governmental Authority which shall
affect the Authority's obligations are listed in Section 2.03(i) and (iv) of the
Stock Purchase Agreement; and
(f) Approval by any other applicable Governmental Authority shall
have been obtained and not revoked or suspended; provided that, (i) Purchaser's
obligations shall be subject to the further condition that no burdensome
conditions or limitations shall have been imposed, in the reasonable judgment of
Purchaser, in connection therewith on the GTE Companies, Purchaser or Strategic
Purchaser or on the Affiliated Group; and (ii) the only actions by a Puerto Rico
Governmental Authority which shall affect the Authority's obligations are listed
in Section 2.03(i) and (iv) of the Stock Purchase Agreement.
5.02 Conditions to Obligations of Purchaser and Strategic Purchaser. The
obligation of Purchaser and Strategic Purchaser to consummate the Closing is
subject to the satisfaction of the following further conditions:
(a) the representations and warranties of the Authority contained in
this Agreement and in any certificate or other writing delivered by the
Authority pursuant hereto shall be true in all material respects at and as of
the Closing Date, as if made at and as of such time and Purchaser shall have
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received a certificate signed by the Executive Director of the Authority to the
foregoing effect.
(b) the representations and warranties of the Authority set forth in
the Stock Purchase Agreement shall have been true in all material respects as of
the date hereof (but not as of the applicable Closing Date) except to the extent
waived by Purchaser at or prior to the Closing under the Stock Purchase
Agreement.
(c) Purchaser shall have received one or more opinions of counsel to
the Authority, dated the Closing Date, in form and substance reasonably
acceptable to Purchaser. In rendering such opinions, such counsel may rely upon
certificates of public officers as to matters governed by the laws of
jurisdictions other than Puerto Rico or the federal laws of the United States of
America, and upon opinions of counsel reasonably satisfactory to Purchaser,
copies of which opinions shall be contemporaneously delivered to Purchaser, and
as to matters of fact, upon certificates of officers of the Authority and the
Affiliated Group.
5.03 Conditions to Obligation of the Authority. The obligation of the
Authority to consummate each Closing is subject to the satisfaction of the
following further conditions:
(a) the representations and warranties of Purchaser and Strategic
Purchaser contained in this Agreement and in any
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certificate or other writing delivered by Purchaser pursuant hereto shall be
true in all material respects at and as of such Closing Date (except, with
respect to Section 3.10, as otherwise disclosed in writing to the Authority on
such Closing Date), as if made at and as of such time and the Authority shall
have received a certificate signed by the President of Purchaser and the
President (or manager) of Strategic Purchaser to the foregoing effect.
(b) The Authority shall have received an opinion of counsel to
Purchaser and Strategic Purchaser, dated the applicable Closing Date in form and
substance reasonably acceptable to Purchaser. In rendering such opinion, such
counsel may rely upon certificates of public officers as to matters governed by
the laws of jurisdictions other than Puerto Rico, New York and corporate laws of
Delaware or the federal laws of the United States of America, and upon opinions
of counsel reasonably satisfactory to the Authority, copies of which shall be
contemporaneously delivered to the Authority, and as to matters of fact, upon
certificates of officers of Purchaser and Strategic Purchaser.
(c) The Authority shall have received all documents it may
reasonably request relating to the existence of Purchaser and the authority of
Purchaser to execute, deliver and
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consummate the applicable transactions at such Closing, all in form and
substance reasonably satisfactory to the Authority.
ARTICLE VI
INDEMNIFICATION
6.01 Indemnification by Authority. The Authority agrees to indemnify,
defend and hold Strategic Purchaser, Purchaser and the Minority Shareholder (the
"Purchaser Indemnitees") harmless from and after each Closing Date from and
against any and all loss (other than loss of profit or consequential damages
suffered by the Purchaser Indemnitees), cost, liability, damage and expenses
(including reasonable attorneys fees and other expenses incident thereto) (the
"Adverse Consequences") resulting from breach of the Authority's
representations, warranties, covenants and agreements contained in this
Agreement; provided, that, the Authority's liability hereunder shall in no event
exceed $40,000,000. Nothing herein shall preclude Purchaser from seeking
specific performance or other equitable remedies hereunder.
6.02 Indemnification by Purchaser and Strategic Purchaser. Strategic
Purchaser and Purchaser, jointly and severally, agree to indemnify, defend and
hold the Authority and the Puerto Rico Governmental Authorities (the "Authority
Indemnitees") harmless from and against any Adverse Consequences the Authority
Indemnitees may suffer resulting from Strategic
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Purchaser's or Purchaser's breach of any of its representations, warranties,
covenants and agreements under this Agreement.
6.03 Indemnification Claim. Upon obtaining knowledge of any claim or
demand which has given rise to, or could reasonably give rise to, a claim for
indemnification hereunder, the party seeking indemnification ("Indemnitee")
shall promptly give written notice (the "Notice of Claim") of such claim or
demand to the other party it is seeking indemnification from ("Indemnitor").
Indemnitee shall furnish to Indemnitor in reasonable detail such information as
Indemnitee may have with respect to such indemnification claim (including, to
the extent determinable, an estimate of any Adverse Consequences that Indemnitee
may suffer as a result thereof) and copies of any summons, complaint or other
pleading which may have been served upon it and any written claim, demand,
invoice, billing or other document evidencing or asserting the same. No failure
or delay by Indemnitee in the performance of the foregoing shall reduce or
otherwise affect the obligation of Indemnitor to indemnify and hold Indemnitee
harmless, except to the extent that such failure or delay shall have adversely
affected Indemnitor's ability to defend against, settle or satisfy any
liability, damage, loss claim or demand for which Indemnitee is entitled to
indemnification hereunder.
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6.04 Notice of Claim. If the claim or demand set forth in the Notice of
Claim given by Indemnitee pursuant to Section 6.03 hereof is a claim or demand
asserted by a third party, Indemnitor shall have fifteen business (15) days
after the Date of Notice of Claim to notify Indemnitee in writing of its
election to defend such third party claim or demand on behalf of the Indemnitee.
If Indemnitor elects to defend such third party claim or demand, Indemnitee
shall make available to Indemnitor and its agents and representatives all
records and other materials which are reasonably required in the defense of such
third party claim or demand and shall otherwise cooperate with, and assist
Indemnitor in the defense of, such third party claim or demand, and so long as
Indemnitor is defending such third party claim in good faith, Indemnitee shall
not pay, settle or compromise such third party claim or demand. If Indemnitor
elects to defend such third party claim or demand, Indemnitee shall have the
right to participate in the defense of such third party claim or demand, at
Indemnitee's own expense. In the event, however, that Indemnitee reasonably
determines that representation by counsel to Indemnitor of both Indemnitor and
Indemnitee may present such counsel with a potential conflict of interest that
would make separate representation inadvisable under generally accepted
standards of professional conduct, or where non-monetary relief is being sought
against Indemnitee by
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a third party, then such Indemnitee may elect to defend such third party claim
or demand and employ separate counsel to represent or defend it in any such
action or proceeding at Indemnitee's own expense; provided, however, that
Indemnitee's defense of such action or proceeding shall not limit Indemnitee's
right to indemnification under this Section 6 if it is ultimately determined
that indemnification is due from Indemnitor. If Indemnitor does not elect to
defend such third party claim or demand or does not defend such third party
claim or demand in good faith, Indemnitee shall have the right, in addition to
any other right or remedy it may have hereunder, at Indemnitor's expense, to
defend such third party claim or demand; provided, however, that (a) Indemnitee
shall not have any obligation to participate in the defense of, or defend, any
such third party claim or demand; and (b) Indemnitee's defense of or its
participation in the defense of any such third party claim or demand shall not
in any way diminish or lessen the obligations of Indemnitor under the agreements
of indemnification set forth in this Section 6.
6.05 Indemnitor's Obligations. Except for third party claims being
defended in good faith, each Indemnitor shall satisfy its obligations hereunder
in cash within thirty (30) days after the Date of Notice of Claim.
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6.06 Date of Notice of Claim. The term "Date of Notice of Claim" shall
mean the date the Notice of Claim is effective pursuant to Section 6.03 hereof.
6.07 Consent of Indemnitee. No claim giving rise to a Notice of Claim
shall be compromised or settled except with the prior written consent of the
Indemnitee, which consent shall not be unreasonably withheld.
6.08 Subrogation. In the event that an Indemnitor makes any payment to any
Indemnitee for indemnification for which such Indemnitee could have collected on
a claim against a third party, the Indemnitor shall be entitled to pursue claims
and conduct litigations on behalf of such Indemnitee and any of its successors,
to pursue and collect on any indemnification or other remedy available to such
Indemnitee thereunder with respect to such claim and generally to be subrogated
to the rights of such Indemnitee.
ARTICLE VII
TERMINATION
7.01 Grounds for Termination.
(a) This Agreement may be terminated at any time:
(i) By mutual written agreement of the Authority and
Purchaser;
(ii) By either the Authority or Purchaser if consummation of
the transactions contemplated herein would
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violate any nonappealable final order, decree or judgment of any court or
Governmental Authority having competent jurisdiction which the parties have used
commercially reasonable efforts to oppose and cause to be dismissed;
(iii) By either the Authority or Purchaser if such other party
is then in material breach of this Agreement, and the terminating party is not
then in material breach of this Agreement; provided, that, the Authority's sole
remedy for Purchaser's failure to purchase Option Shares in accordance with this
Agreement after a given Exercise Date shall be as set forth in Section 1.02(c)
hereof;
(iv) By the Authority to the extent the Option has not been
exercised in full on or prior to the Expiration Date; or
(v) By any party ninety-one (91) days after the Expiration
Date; provided, that, the party terminating this Agreement is not then in
material breach of this Agreement.
The party desiring to terminate this Agreement shall give notice of such
termination to the other parties.
(b) Notwithstanding anything to the contrary contained herein, in
the event that any condition to a Closing set forth in Section 5.01 shall not
have been obtained by the third anniversary of the date hereof, Purchaser's (or
the Minority Shareholder's) right to acquire any Option Shares with
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36
respect to any previously exercised but unclosed Option shall be extended until
the first to occur of five (5) business days after satisfaction or waiver of
such conditions and 90 days after the Exercise Date.
7.02 Effect of Termination. If this Agreement is terminated as permitted
by Section 7.01, such termination shall be without liability of either party (or
any shareholder, director, officer, employee, agent, consultant or
representative of such party) to the other party to this Agreement; provided
that if such termination shall be pursuant to Section 7.01(a)(ii) or (iii) as
the result of the willful failure of any party to fulfill a condition to the
performance of the obligations of the other party or to perform a covenant of
this Agreement or from a willful breach by any party to this Agreement, such
party shall be fully liable for any and all Adverse Consequences (including, but
not limited to, reasonable counsel fees) sustained or incurred by the other
parties as a result of such failure or breach, subject to the limitations set
forth in Article VI hereof.
ARTICLE VIII
MISCELLANEOUS
8.01 Survival. Notwithstanding anything to the contrary contained herein,
Section 1.05(c), Article II, Article III, Article IV, Article VI, Section 8.02,
Section 8.04, Section
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8.06, Section 8.10 and Section 8.11 shall survive each Closing and termination
of this Agreement.
8.02 Notices. All notices, requests and other communications to each party
hereunder 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, 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):
if to the Authority, to:
Puerto Rico Telephone Authority
c/o Government Development Bank
for Puerto Rico
Minillas Xxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: President
with a copy to:
Xxxxxxxxxxx, Xxxxxx & Xxxxxxx
Banco Popular Center
Xxxxx 0000
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx
Akin, Gump, Strauss, Xxxxx & Xxxx L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xx.
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if to the Company, to:
Telecomunicaciones de Puerto Rico, Inc.
1515 Xxxxxxxx X. Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: President
with a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx
if to Purchaser, to:
GTE Holdings (Puerto Rico) LLC
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Fares Xxxxxxx
with a copy to:
GTE International Telecommunications Incorporated
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Fares Xxxxxxx
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx
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if to Strategic Purchaser, to:
GTE International Telecommunications Incorporated
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Fares Xxxxxxx
with a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx
8.03 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived subject
to the requirements of applicable law if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by Purchaser and the
Authority, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
8.04 Expenses. Except as otherwise expressly provided in this Agreement,
all costs and expenses incurred in connection with this Agreement shall be paid
by the party incurring such cost or expense. The Authority shall bear all
transfer and
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other taxes related to the transfer of the Option Shares to Purchaser and the
Minority Shareholder.
8.05 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 prior
written consent of the other parties hereto and compliance with applicable laws
and regulations, except that (i) Purchaser may (subject to applicable laws and
regulations) transfer or assign, in whole or from time to time in part, to one
or more of its wholly owned subsidiaries, its rights and obligations to purchase
the Option Shares, but no such transfer or assignment will relieve Purchaser or
Strategic Purchaser of its obligations hereunder, and (ii) the Authority may
assign its rights hereunder to the Government Development Bank for Puerto Rico
("GDB") and no such assignment shall have the effect of being a delegation of
duties or an assumption of any obligations of the Authority.
8.06 Governing Law. This Agreement shall be construed in accordance with
and governed by the internal laws of Puerto Rico applicable to contracts made
and to be performed in Puerto Rico.
8.07 Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an
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original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto.
8.08 Entire Agreement. Subject to applicable laws and regulations, this
Agreement, constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements, understandings
and negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has been made or
relied upon by either party hereto.
8.09 Captions; Definitions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof. All capitalized terms used in this Agreement which are
not defined in the text of the Agreement shall have the meanings assigned
thereto in Appendix A hereto.
8.10 Jurisdiction and Immunity. Purchaser and the Authority hereby
irrevocably and unconditionally submit to the jurisdiction of the United States
District Court for the District of Puerto Rico and, if such court shall not have
subject matter jurisdiction, in any court of Puerto Rico having
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42
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 Purchaser, Strategic Purchaser and the Authority agree not to
commence any such suit, action or proceeding except in the United States
District Court for the District of Puerto Rico or, if such court shall not have
subject matter jurisdiction, in any court of Puerto Rico having subject matter
jurisdiction. Purchaser, Strategic Purchaser and the Authority 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, if such court shall not have subject matter
jurisdiction, in 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.
8.11 Third Party Beneficiaries; Parties Bound.
(a) No provision of this Agreement shall create any third party
beneficiary rights in any person, nor shall any provision of this Agreement
modify any rights of any third party under any existing law, regulation or
contract with any third party; provided, that, the Authority acknowledges and
agrees that the Minority Shareholder is and will be a third-party beneficiary of
this Agreement with the right to enforce the
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43
rights granted to it directly under this Agreement directly against the
Authority; provided further, that GDB may enforce the rights of the Authority
hereunder as provided in Section 12.05 of the Stock Purchase Agreement.
(b) Purchaser, Strategic Purchaser and the Authority are entering
into the Agreement in their corporate capacity only and no officer, director or
other individual associated therewith or otherwise shall have any personal
liability under this Agreement.
8.12 Endorsement of Stock Certificates.
(a) Each of the certificates representing the Option Shares, or any
of them, shall contain the following legend, in addition to those contained in
Section 7.3 of the Shareholders Agreement, for the term of this Agreement:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ISSUED, ACCEPTED AND
HELD SUBJECT TO THE TERMS OF A CERTAIN SHARE OPTION AGREEMENT DATED
AS OF MARCH 2, 1999. A COPY OF SUCH AGREEMENT MAY BE INSPECTED AT
THE PRINCIPAL OFFICE OF THIS CORPORATION. NEITHER THIS CERTIFICATE
NOR THE SHARES REPRESENTED HEREBY ARE SUBJECT TO SALE, TRANSFER OR
OTHER DISPOSITION OR ENCUMBRANCE EXCEPT AS PERMITTED IN SAID
AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY THE ACCEPTANCE HEREOF,
AGREES TO ALL THE TERMS OF SAID AGREEMENT WHICH ARE INCORPORATED
HEREIN."
(b) A copy of this Agreement shall be delivered to the Secretary of
the Company, kept with the corporate records of the Company and shall be shown
by him to any person making inquiry concerning it and having a proper business
purpose.
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(c) The Company agrees that it will not cause or permit the transfer
of any Option Shares to be made on its books unless the transfer is permitted by
this Agreement and has been made in accordance with the terms hereof.
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IN WITNESS WHEREOF, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
GTE HOLDINGS (PUERTO RICO) LLC
By:____________________________________
Name:
Title:
GTE INTERNATIONAL
TELECOMMUNICATIONS INCORPORATED
By:____________________________________
Name:
Title:
PUERTO RICO TELEPHONE AUTHORITY
By:____________________________________
Name:
Title:
TELECOMUNICACIONES DE PUERTO RICO, INC.
By:____________________________________
Name:
Title:
46
APPENDIX A
"Act No. 54" has the meaning set forth in the recitals hereto.
"Adverse Consequences" shall have the meaning set forth in Section 6.01
hereof.
"Affiliated Group" shall mean the Company and its subsidiaries.
"Agreement" means this Agreement and all Exhibits and Schedules hereto.
"Authority" has the meaning set forth in the recitals hereto.
"Authority Act" has the meaning set forth in Section 2.01 hereof.
"Authority Indemnitees" has the meaning set forth in Section 6.02 hereof.
"Authorizing Legislation" has the meaning set forth in the recitals
hereto.
"Closing" has the meaning set forth in Section 1.03 hereof.
"Closing Date" has the meaning set forth in Section 1.03 hereof.
"Communications Act" has the meaning set forth in Section 2.03(i) hereof.
"Company" has the meaning set forth in the preamble hereto.
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"Date of Notice of Claim" has the meaning set forth in Section 6.07
hereof.
"Disposition" has the meaning set forth in Section 2.07 hereof.
"Exercise Date" has the meaning set forth in Section 1.02 hereof.
"Exercise Price" has the meaning set forth in Section 1.01 hereof.
"Expiration Date" has the meaning set forth in the Section 1.01 hereof.
"FCC" means the United States Federal Communications Commission.
"FCC Licenses" has the meaning set forth in Section 2.03(i) hereof.
"FCC Rules" has the meaning set forth in Section 2.03(i) hereof.
"GDB" means the Government Development Bank for Puerto Rico.
"Governmental Action" has the meaning set forth in Section 3.09 hereof.
"Governmental Authority" means any foreign, federal, state, Puerto Rico,
municipal, local or other government or governmental agency, authority, court,
department, commission,
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48
board, agency or instrumentality, including but no limited to the European
Union, or any employee or agent thereof.
"GTE Companies" has the meaning set forth in Section 3.10(a) hereof.
"HSR Act" has the meaning set forth in Section 2.03(ii) hereof.
"Indemnitee" has the meaning set forth in Section 6.03 hereof.
"Indemnitor" has the meaning set forth in Section 6.03 hereof.
"Joint Resolution" has the meaning set forth in the recitals hereto.
"knowledge" means the actual knowledge of any member of the Board of
Directors or senior executive officers with the rank of Senior Vice President or
higher of the Person, and in the case of the Company, Vice Presidents of the
Company with responsibility for finance, accounting, legal, environmental and
human resources matters, and the Treasurer.
"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Minority Shareholder" has the meaning set forth in Section 1.01 hereof.
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49
"Minority Shareholder Exercise" has the meaning set forth in Section 1.01
hereof.
"Negotiating Committee" has the meaning set forth in the recitals hereto.
"Notice of Claim" has the meaning set forth in Section 6.03 hereof.
"Option" has the meaning set forth in the recitals hereto.
"Option Notice" has the meaning set forth in Section 1.02(a) hereof.
"Option Shares" has the meaning set forth in the recitals hereto.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a body corporate, a limited liability
company, an unlimited company, an unlimited liability company, a trust, a joint
venture, an unincorporated organization, or a Governmental Authority.
"Pro Rata Portion of Option Shares" means that number of Option Shares
equal to the number of Option Shares multiplied by a fraction, the numerator of
which is the aggregate number of Shares owned by the Minority Shareholder and
the denominator of which is the number of Shares acquired by the Purchaser Group
on the date hereof.
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"Purchaser" has the meaning set forth in the preamble hereto.
"Purchaser Entities" has the meaning set forth in Section 1.05(c) hereof.
"Purchaser Group" means Purchaser, Strategic Purchaser, Popular, Inc. and
any of their respective affiliates, partners, agents and representatives other
than the Affiliated Group.
"Purchaser Indemnitees" shall have the meaning set forth in Article 6.01
hereof.
"Purchaser Interests" has the meaning set forth in the recitals hereto.
"Returns" has the meaning set forth in Section 3.10(a) hereto.
"Shareholders Agreement" means the Shareholders Agreement dated as of the
date hereof among the Authority, the Company, Purchaser, Strategic Purchaser and
the Minority Shareholder.
"Shares" has the meaning set forth in the recitals hereto.
"Stock Purchase Agreement" has the meaning set forth in the recitals
hereof.
"Strategic Purchaser" has the meaning set forth in the preamble hereto.
"Supplemental Exercise Price" has the meaning set forth in Section 1.05(c)
hereof.
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"Transfer" has the meaning set forth in Section 1.05(c) hereof.
"Transfer Closing Date" has the meaning set forth in Section 1.05(c)
hereof.
"Transfer Price" has the meaning set forth in Section 1.05(c) hereof.
"Trust" means the employee plan and trust contemplated in Section 8.02(l)
in the Stock Purchase Agreement.
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