1
Exhibit 2.14
MEMORANDUM OF UNDERSTANDING
By this Memorandum of Understanding ("the Memorandum"), prepared on October 22,
1999,
the party of the first part,
TAETEL, S.L. a company established and operating according to the laws of Spain,
with principal place of business at Xxxxx Xxxxxxx xx Xxxxxxxxx 0, Xxxxxx, Xxxxx,
herein represented by Xx. Xxxxxx Xxxxxx Diez xx Xxxxxx ("Taetel");
and the party of the second part,
MLSP - Comercio e Participacoes Ltda., a limited-liability company duly
organized and operating pursuant to the laws of the Federative Republic of
Brazil, with principal place of business at Rua Coronel Camisao 237/601 in the
Higienopolis district of the city of Porto Alegre, State of Rio Grande do Sul,
Corporate Taxpayer Identification No. 02.429.422/0001-02, with Articles of
Association duly recorded with the Commercial Registry of the State of Rio
Grande do Sul on March 24, 1998 under No. 00.000.000.000, herein represented by
its managing partners Xxxxxx Xxxxxxxxx Xxxxxx, a Brazilian citizen, married, an
electronic engineer, holder of Identity Card RG No. 8000873409 SSP-RS,
Individual Taxpayer No. 000.000.000-00, residing and domiciled in the city of
Porto Alegre, Rio Grande do Sul at Xxx Xxxxxxx Xxxxxxx 000, Xxx. 000, and
Xxxxxxx Xxxxx Xxxxxxx, a Brazilian citizen, divorced, an electronic engineer,
holder of Identity Card RG No. 4007554423 SSP-RS, Individual Taxpayer No.
000.000.000-00, residing and domiciled in the city of Porto Alegre, Rio Grande
do Sul, at Rua Dr. Vale, 605, Apt. 202-B ("MLSP").
XXXXXX XXXX XXXXX DE XXXXX, a Brazilian citizen, married, a systems analyst,
holder of Identity Card RG No. 5002912995 SSP-RS, Individual Taxpayer No.
000.000.000-00, residing and domiciled in the city of Porto Alegre, Rio Grande
do Sul at Rua Xxxxxxxxxxx Xxxxxxx 423, Apt. 401 ("Xxxxxx");
XXXXXXX XXXXX XXXXXXX, a Brazilian citizen, divorced, an electronic engineer,
holder of Identity Card RG No. 4007554423 SSP-RS, Individual Taxpayer No.
000.000.000-00, residing and domiciled in the city of Porto Alegre, Rio Grande
do Sul, at Xxx Xx. Xxxx, 000, Xxx. 202-B ("Xxxxxxx"); and
2
XXXXXX XXXXXXXXX XXXXXX, a Brazilian citizen, married, an electronic engineer,
holder of Identity Card RG No. 8000873409 SSP-RS, Individual Taxpayer No.
000.000.000-00, residing and domiciled in the city of Porto Alegre, Rio Grande
do Sul at Xxx Xxxxxxx Xxxxxxx 000, Xxx. 000, ("Xxxxxx");
Taetel, MLSP, and Xxxxxx are each hereinafter designated individually as a
"Party" and together as "Parties," and Xxxxxxx and Xxxxxx are hereinafter
designated as "Consenting Intervenors;"
(i) WHEREAS MLSP and Xxxxxx are shareholders in Terra Networks Brasil S.A. (the
new corporate name of Nutec Informatica S.A.), a corporation with principal
place of business in Porto Alegre, state of Rio Grande do Sul, at Xxx Xxxxxxxx
0000, Xxxxxxxxx Taxpayer Identification No. 91.088.328/0001-67 (hereinafter
"Terra Brasil"), MLSP owning 102,197 shares of common stock, presently
representing approximately 3 percent of the total capital of Terra Brasil, and
Xxxxxx owning 34,066 shares of preferred stock, presently representing
approximately 1 percent of the total capital of Terra Brasil;
(ii) WHEREAS Telefonica Interactiva Brasil Ltda., a limited-liability company
whose principal place of business is in the city and state of Sao Paulo at Xxx
xx Xxxxxxxxxx, 000, 0xx xxxxx, Xxxx 00-X, Corporate Taxpayer Identification No.
03.185.736/0001-70 ("TIB") owns 3,270,303 shares of Terra Brasil, of which
3,221,301 are shares of common stock and 49,002 are shares of preferred stock,
presently representing approximately 96 percent of the total capital of Terra
Brasil;
(iii) WHEREAS on June 15, 1999, TIB, MLSP, and Xxxxxx signed a Shareholders
Agreement that entered into force on August 5, 1999, establishing rules
governing their mutual relationships as shareholders of Terra Brasil and
conditions related to the transfer of their respective holdings in Terra Brasil
(hereinafter "Shareholders Agreement");
(iv) WHEREAS, furthermore, any entity that directly or indirectly controls Terra
Brasil could, between now and December 31, 1999, implement a process of public
distribution of shares through an Initial Public Offering ("IPO").
2
3
(v) WHEREAS, taking into consideration the possibility mentioned in WHEREAS (iv)
above, on August 5, 1999, TIB, MLSP and Xxxxxx signed an Addendum to the
Shareholders' Agreement ("Addendum"), a document used to reformulate the rights
and obligations relating to the issuance and public distribution of shares
through an IPO, on which occasion mechanisms were established to make it
feasible for MLSP and Xxxxxx to acquire an interest in whatever company
participates in the IPO process;
(vi) WHEREAS the Parties wish to stipulate the mechanisms to be used to
implement the operation provided for in the Addendum;
NOW, THEREFORE the parties execute this Memorandum of Understanding according to
the terms and conditions stipulated below:
1. The Agreed Transaction. The Parties acknowledge that between now and December
31, 1999, any company that directly or indirectly controls Terra Brasil, notably
a company within the economic group of Terra Networks, S.A. (new corporate name
of Telefonica Interactiva S.A.), could implement a process of issuance and
public distribution of its shares in a country to be determined (hereinafter the
"IPO Company").
1.1 The Parties further acknowledge that at the time of the execution of the
Addendum, MLSP and Xxxxxx agreed irrevocably and irreversibly to purchase shares
in the IPO Company at the institutional price of the shares issued via the IPO,
and in accordance with Clause 3 of this Memorandum.
1.2 In order that MLSP and Xxxxxx may use the shares they hold in Terra Brasil
to effectively purchase shares in the IPO Company, it was agreed in the Addendum
that the controlling shareholder of TIB, or a company designated by same, would
remit ten million United States dollars (US$10,000,000) for direct investment in
a Brazilian company, which company would be obliged to purchase shares of the
IPO Company with the intention of effecting a purchase and sale of shares with
MLSP and Xxxxxx. It is hereby agreed that for purposes of executing the
transaction here agreed to, the Brazilian company to be used for the purposes
described in this Clause 1.2 shall be Xxxxxxx Participacoes Ltda., a
limited-liability company whose principal place of business is at Xxx xx
Xxxxxxxxxx 000, 0xx xxxxx, Xxxx 00-X, Corporate Taxpayer Identification No.
03.199.518/0001-94 ("Xxxxxxx").
3
4
2. Rights and Obligations of Taetel
2.1 Under the terms of this Memorandum, Taetel agrees to remit to Brazil the sum
of ten million United States dollars (US$10,000,000.00), which sum shall be used
for direct investment in Xxxxxxx. Taetel further agrees to cause Xxxxxxx to
obtain from the Central Bank of Brazil the necessary authorizations for purchase
of shares in the IPO Company at the agreed price pursuant to Clause 3.2.3(b) of
the Shareholders Agreement.
2.2 The shares acquired by Xxxxxxx in the IPO Company shall subsequently be sold
to MLSP and Xxxxxx for the equivalent of US$10,000,000.00 as provided in Clause
2.3 of this Memorandum, with due regard for compliance with the provision of
Clause 3 of this Memorandum.
2.3 MLSP and Xxxxxx acknowledge that Taetel, acting either directly or through
Xxxxxxx, has the right to elect, at its sole discretion, to perform its
obligations under this Memorandum, in return for actual payment of the
contracted price, using new shares, i.e., shares distributed to the public
through the IPO process, or old shares of the IPO Company already existing prior
to the IPO process.
2.3.1 At any rate, Taetel's obligation to deliver shares in the IPO
Company, through Xxxxxxx, can be deemed enforceable only after the
necessary authorizations have been obtained, both from the Central Bank of
Brazil and from the Brazilian securities and exchange commission or
similar body, to negotiate shares of the IPO Company that are traded
privately on the exchanges, and said obligation will only be implemented
simultaneously with the delivery of the shares that MLSP and Xxxxxx hold
in Terra Brasil.
3. Rights and Obligations of MLSP and Xxxxxx
3.1 Under this Memorandum, MLSP and Xxxxxx agree to purchase the shares in the
IPO Company that are acquired by Xxxxxxx pursuant to Clause 2.1 of this
Memorandum, for the equivalent of ten million United States dollars
(US$10,000,000.00), using as base the institutional offer price of the shares in
the IPO process, converted from the Euro to United States dollars at the average
exchange rate prevailing on the day prior to the date of the IPO. That sum shall
be paid to Xxxxxxx using the shares that MLSP and Xxxxxx hold in Terra Brasil.
4. Voting Agreement The Parties agree that the purchase and sale agreement will
provide that MLSP and Xxxxxx be required to exercise their respective voting
rights on all IPO Company matters put for decision in a uniform manner and
always in harmony with the vote cast by the controlling shareholder of the IPO
Company, or a company it designates.
4
5
5. The Parties agree that all the terms and conditions agreed to in this
Memorandum link the payment of the price by MLSP and Xxxxxx for purchase of
shares in the IPO Company to the completion of the IPO process and to the
full-fledged admission of the shares in the IPO Company for trading on Spanish
stock exchanges and on the NASDAQ.
6. The Parties agree that if the IPO process is not implemented by the IPO
Company by December 31, 1999, the terms previously agreed to in the Shareholders
Agreement will remain in force between TIB, MLSP and Xxxxxx, and the terms and
conditions assumed under this Memorandum will be disregarded.
7. The Parties hereby commit themselves to signing all the instruments,
applications, forms, powers of attorney or any other document necessary to the
accomplishment of the Agreed Transaction.
8. The Parties acknowledge that this Memorandum does not represent consummation
of the Agreed Transaction or any other arrangement contemplated herein, but that
the Parties are mutually bound to comply with what is stipulated in this
Memorandum.
9. The Parties further commit not to disclose any of the terms and conditions
contained in this Memorandum, and not to reveal any other information pertaining
to the IPO Company or Terra Brasil that they may have learned by virtue of their
compliance with the provisions of this Memorandum without prior written consent
of Taetel, except for publicity essential to implementing the IPO process.
10. All notices, notifications, correspondence, requests and communications
related to this Memorandum shall be deemed valid and effective only if made in
writing and delivered in person against receipt, or sent by mail with return
receipt provided, or by fax, to the addresses and telephone numbers given below,
as well as to the individuals whose names appear below:
5
6
For TAETEL:
TAETEL, S.L.
Attn: Xx. Xxxxxx Xxxxxx Xxxx xx Xxxxxx
Address: Xxxxx Xxxxxxx xx Xxxxxxxxx 0, Xxxxxx, Xxxxx
Fax: (00-00) 000-0000
cc: Machado, Meyer, Sendacz and Opice Attorneys
Attn: Xxxxx X. Xxxxxxx
Address: Xxx xx Xxxxxxxxxx 000, 0xx xxxxx, Xxx Xxxxx, Xxxxxx
Fax: (00) 0000 0000
For Xxxxxx Xxxx Xxxxx de Xxxxx:
Xxx Xxxxxxxxxxx Xxxxxxx 000, Xxx. 000
Xxxxx Alegre/RS
Attn: Xxxxxx Xxxx Xxxxx de Xxxxx
Fax: (000) 000-0000
For MLSP:
MLSP - Comercio e Participacoes Ltda.
x/x Xxxxx Xxxxxxxx Xxxxxx X.X.
Xxx Xxxxxxx, 0000, 12th floor, Brooklin
04565-001 Sao Paulo, SP
Attn: Xxxxxxx Xxxxxxx
Fax: (000) 0000-0000
11. The Parties elect the Central Court of the Judicial District of the capital
of the State of Sao Paulo to resolve any and all questions arising out of this
Memorandum, being favored over any other, however privileged.
12. The Parties hereby represent that they have been properly authorized to
execute this Memorandum, pursuant to their company documents.
6
7
13. No change to this Memorandum shall be considered valid and enforceable
unless it is made in writing and contains the signatures of all the Parties.
This Memorandum is executed in four (4) counterparts of equal tenor and for the
same purpose, each of which being considered as an original, but all of them
together constituting a single document for all intents and purposes of law.
Sao Paulo, October 22, 1999
TAETEL Xxxxxx Xxxx Xxxxx de Xxxxx
________________________________ [s] ______________________________
Xxxxxx Xxxxxx Diez xx Xxxxxx
MLSP COMERCIO E PARTICIPACOES LTDA.
[s] _________________________________ [s] ______________________________
Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxx
Managing Partner Managing Partner
AS CONSENTING INTERVENORS:
[s] _________________________________ [s] ______________________________
Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxx
WITNESSES:
[s] _____________________________________ [s] ______________________________
Name: Xxxxx Xxxxxxx B. Disani Name: Xxxxxx Xxxxxxx Xxxx Xxxxxxxx
XX: 25.269.770-9 SSP/SP RG: 27.066.059-8 SSP/SP
7
