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Exhibit 2.2
STOCK PURCHASE AGREEMENT
"COMPANIA DE TELEFONOS DE CHILE
TRANSMISIONES REGIONALES S.A."
AND
"TELEFONICA INTERACTIVA CHILE LIMITADA"
In Xxxxxxxx de Chile, on October 4, 7 [4 circled, handwritten 7], 1999, appear:
Xxxxx Xxxxxx Xxxxxxxx, representing COMPANIA DE TELEFONOS DE CHILE S.A.
TRANSMISIONES REGIONALES S.A., hereinafter referred to as "CTC Mundo" or the
"Seller", a telecommunications company, both domiciled for purposes hereof at
Nueva xx Xxxx 72, 11th Floor, district of Providencia, in this city, and Xxxxx
Xxxxxxx Xxxx, representing Telefonica Interactiva Chile Limitada, hereinafter
referred to as the "Buyer", an investment company, both domiciled for purposes
hereof at Xxxxx Xxxxxx Xx. 000, 00xx Xxxxx, in the district and city of
Santiago, who state as follows:
ONE: The Seller owns shares, hereinafter referred to as the "Shares", in
"Proveedora de Servicios de Conectividad S.A.", hereinafter also referred to as
the "Company", corresponding to 95% of the validly issued shares of the Company.
Furthermore, according to a shareholder agreement executed on June 18, 1997, the
Seller shall have, from July 1, 2000 until June 30, 2001, an option to purchase
the remaining 5% of the shares of the Company owned by Red Universitaria
Nacional (the "Reuna Shares").
If the Seller should purchase the 5% Reuna Shares prior to July 1, 2000, the
Seller agrees to notify the Buyer in writing on the day following the purchase.
The Seller agrees to transfer the Reuna Shares to the Buyer within no more than
two business days following the date of the
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notification, without this stock transfer conferring the right to any additional
price whatsoever in favor of the seller, as agreed in clause THREE of this
Agreement.
TWO: The Seller, represented as indicated in the recitals above, hereby sells,
assigns and transfers the Shares to the Buyer which buys, accepts and acquires
such shares through its representative, Xxxxx Xxxxxxx Xxxx, who states that he
received it [sic] to his entire satisfaction. Furthermore, the Seller must
transfer the Reuna Shares to the Buyer by no later than July 15, 2000.
THREE: The Buyer acquires the shares of the Company at the price of US$
40,000,000 (forty million U.S. dollars) (hereinafter referred to as the
"Price"), which includes the price of the Reuna Shares that the Seller promised
to transfer in accordance with the previous clause. The Price shall be paid
within sixty days from today, in the equivalent in domestic current at the
dollar exchange rate in effect on the date of actual payment. This price shall
accrue interest at 8% per annum between today and the actual payment date. In
the event of delay in payment, the maximum interest allowed by law for this type
of obligation shall accrue.
If there is a public offering to subscribe shares of Terra Networks (hereinafter
the "Public Offering") prior to the expiration of said term, the payment shall
be accelerated and made on the same day as such offering.
In order to guarantee the above-mentioned payment, the buyer pledges in favor of
the seller, which accepts, all of the shares covered by this transaction; actual
delivery of the pledge is made herein, symbolically, by means of signing this
agreement and delivering a copy hereof. The pledge shall end by means of
payment, without requiring an express statement of termination.
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FOUR: The parties agree that the sale does not include corporate customers of
Proveedora de Servicios de Conectividad S.A., which the buyer must assign, at no
cost, to the seller or the company or the person appointed by the company within
the term of sixty days from today.
FIVE: The Buyer agrees to contribute to the Company, within the term of 60 days
from the date of this agreement, either as a capital contribution or as a loan,
sufficient funds all of the net debt existing between the Company and Compania
de Telecomunicaciones de Chile S.A. and its subsidiaries, which amounts to US$
9,691,485 as of today.
SIX: Representations and Warranties of the Seller. Today the Seller represents
and warrants to the Buyer the following:
The Company is a corporation, duly organized and existing under the laws of the
Republic of Chile, with the necessary legal standing to own and hold its assets
and engage in its business as it does herein.
The Company groups together the Internet activities that the Seller has been
developing, in the past and present, and the elements and assets pertaining
thereto, currently used to provide its services, remain with the company; such
assets and the value thereof are detailed in the inventory attached as Appendix
5 (b).
The Seller is the owner of the Shares, which are not subject to any encumbrance
or lien, and there are no pending lawsuits, litigation, actions or proceedings
which affect them or may affect them, except the requests of other CTC
shareholders indicated in order to request a General Shareholders Meeting and/or
exercise other actions with respect to this transaction, of which the buyer
states that it is aware. The Shares constitute 95% of the validly issued stock
of the Company. Except for the exchange right that the Seller is entitled to
request with respect to
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Reuna, by which the remaining 5% of the shares of the Company owned by Reuna may
be acquired by the Seller or the person appointed by the Seller, there is no
option, guarantee, convertible amount, agreement or commitment that the Company
or its shareholders may have granted by which a person or entity is absolutely
or conditionally entitled to acquire any of the shares of the Company.
The Seller has full authority and power to enter into this Agreement and perform
the transactions stipulated herein. The performance and granting of this
Agreement and the consummation of the transactions stipulated herein have been
duly and validly authorized by the Board of Directors of the Seller. This
Agreement constitutes a legal, valid and binding agreement for the Seller, which
may be enforced according to its terms and conditions. It is not necessary to
present nor obtain any permit, authorization, consent or approval from any
public agency or authority for the Seller to perform the transactions stipulated
in this Agreement.
Except for those cases indicated in Appendix 5 (e) and as indicated in this
Agreement, there are no pending actions, lawsuits, claims or investigations, to
the best of the knowledge of the Seller, which are threatened against or with
respect to the Company or any of its goods or assets, which may jeopardize the
capacity of the Company to do business.
The Company has submitted all tax declarations required by applicable Chilean
law and has paid all taxes it owes according to such declarations, as well as
all property taxes, and all municipal charges due pursuant to the Law on
Municipal Revenue. Furthermore, the provisions existing for payment of taxes due
as of today are adequate. There are no actions underway by any authority with
regard to taxes or duties, nor grounds to do so.
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The Company is not party to contracts, agreements or commitments exceeding US$
1,000,000 or with a term of more than 2 years from today, with the exception of
those indicated in Appendix 5 (h).
Except as indicated in Appendix 5 (h), there are no contracts with related
parties for an amount exceeding US$ 100,000.
Labor benefits and compensation for severance for workers of the Company are
stipulated in their labor agreements and contracts and in the law.
The Company has insurance to cover its property and employees for the amounts
and under the conditions which are customary for companies of the same size and
in similar businesses.
The title of the Company to all property which it owns is clear of any
encumbrance, lien or litigation.
The Seller has delivered to the Buyer the financial statements of the Company as
at July 31, 1999 (the "Financial Statements"), which are complete and correct in
all important aspects and which accurately reflect the financial situation of
the Company on the date indicated therein (subject to normal auditing
adjustments). Since the date of these Financial Statements, there have been no
significant adverse changes in business, the financial situation, earnings from
operations or the projections of the Company, nor has the Company declared,
made, paid or reserved, directly or indirectly, any amount or other assets to
distribute dividends or make other distributions to its shareholders, has not
purchased or redeemed shares of its capital stock nor has granted any option,
guarantee or right to purchase such shares of capital stock. The Company does
not have any commitments or obligations of any type whatsoever, whether due,
existing, continent or otherwise, other than those indicated in the Financial
Statements.
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The Company has all permits and authorizations required in order to engage in
its business. No licenses or concessions of any type whatsoever are required for
providing Internet services.
SEVEN: Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller as follows:
The Buyer is a corporation, duly organized and existing under the laws of the
Republic of Chile, with the necessary legal standing to own and hold its assets
and engage in its business as it does herein.
The Buyer has the authority and power to enter into this Agreement and to
perform its obligations. This Agreement was duly granted by the Buyer and
constitutes a valid, legal contract which may be enforced according to its terms
and conditions.
EIGHT: Actions in relation to Representations and Warranties
Action regarding Representations and Warranties. The parties represent that the
representations and warranties provided were determining and essential factors
in the execution of this agreement and, by signing, they indicate their trust in
such representations and warranties and indicate that they may suffer damages if
such declarations and warranties are incorrect or are not properly performed.
Consequently, the parties agree that any damages resulting from misstatement of
such representations and warranties or from nonperformance or partial
performance of any obligation as required by this Agreement must be indemnified
in favor of the party suffering such damages, and that such indemnification
shall include all court costs and legal or other fees which may arise out of the
investigation of any claim, notwithstanding the additional right of the affected
party to demand the nonperforming party to hold it harmless from
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third party claims that may be filed against the diligent party, based upon a
fact constituting a violation of the representations and warranties made in this
Agreement.
Standards and procedures. The right of one of the parties to file actions for
damages as indicated in this clause or to defend itself against actions filed,
notwithstanding any investigation made in representation or known by either of
the parties hereto, shall be subject to the following rules: (i) The
representations and warranties of the parties contained in the clauses shall
remain in full force for a term of three (3) years from today, except if any of
such representations and warranties are fraudulent, in which case the term for
collection shall be extended until expiration of the latest statute of
limitations according to general rules; and (ii) the representations and
warranties of the Seller relative to the tax liability of the company as
provided by Clause Six shall remain in full force in favor of the Buyer until
expiration of the latest statute of limitations for collection of the tax or
taxes due, which are application in tax matters, as declared and warranted in
the same clause.
NINE: Arbitration. In the event of any dispute which may arise concerning the
validity, interpretation or performance of this Agreement, the validity or
interpretation of this Clause Nine relative to the competence of the arbitrator
appointed pursuant to this clause, or concerning the rights or obligations of
the parties arising out of this Agreement, such disputes shall be settled by an
arbitrator, who shall be Xxxx Xxxxxx Xxxxxx or, if he is unable or unwilling to
perform this duty, the arbitrator shall be Xxxxxxx Rivandeneira Xxxxxxx or, if
he is unable or unwilling to perform this duty, then the arbitrator shall be
Xxxx Xxxxxx Xxxx Zegers or, if he is unable or unwilling to perform this duty,
the arbitrator shall be selected by the Representatives. If the Representatives
are unable to reach an agreement on the arbitrator within twenty-five (25) days
from a determination that none of the arbitrators listed above are willing or
able to perform the duty, the arbitrator shall then be appointed by the Ordinary
Civil Court of Santiago, and the
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arbitrator appointed shall be a person who has been a tenured professor in a
commercial or civil law school of the Universidad Catolica xx Xxxxxxxx [Santiago
Catholic University] or the University of Chile in Xxxxxxxx, Chile, for at least
five consecutive years, or a like period over the past ten years. Any of these
arbitrators shall act ex aequo et xxxx with regard to matters of procedure and
grounds and shall render a decision within no more than 180 days from the date
of appointment. The decision of the arbitrator shall be definitive and not
subject to appeal, and the parties hereto waive any other recourse that may
apply. Enforcement of the arbitration award may be requested before any
competent court.
TEN: Notices
All notifications, requests, demands and other communications between the
parties to this agreement shall be in writing and addressed to the party at the
following address (or another address which has been advised in a similar
manner), and must be delivered in person, by certified or registered mail, with
pre-paid postage or with return receipt requested or by fax, with a certified
mail confirmation.
For the Seller:
Compania de Telefonos de Chile S.A.
Transmisiones Regionales S.A.
Xxxxxxx Xxxx Xx. 00, 00xx Xxxxx, Xxxxxxxx
Xxx: Xxxxx Xxxxxx Xxxxxxxx
Fax: 0000000
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For the Buyer:
Telefonica Interactiva Chile Limitada Added [handwritten]
Moneda 000, 00xx Xxxxx, Xxxxxxxx
Xxx: Xxxxx Xxxxxxx Xxxx
Fax: (000) 000 00 00
with copy to:
TERRA NETWORKS, S.A.
Edificio Atica, No. 1
Via de las Dos Xxxxxxxxx 00
Xxxxxxx xx Xxxxxxx 00000 Xxxxxx (Xxxxx)
Att: Xxxxxxxx Xxxxxx
with copy to: Xxxx Xxxxxxxxx Xxxxxxxxx (Estudio [Law Firm of] Philipi
Yrarrazaval Xxxxxx & Xxxxxx)
Fax: (000) 000 00 00
ELEVEN: For all purposes of this Agreement, the parties select special domicile
in the city and district of Santiago. This Agreement is governed by Chilean law.
TWELVE: This Agreement and the appendices hereto constitute the entire agreement
between the parties and supersede any other prior agreement between the parties
regarding the same matter.
THIRTEEN: This agreement is signed in two exact copies with the same date, each
party retaining one copy.
[signed] -----------------------------------------
Xxxxx Xxxxxx Xxxxxxxx Xxxxx Xxxxxxx Xxxx
for CTC Mundo S.A. for Telefonica Interactiva Xxxxx Xxxxxxxx
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Xx Xxxxxxxx xx Xxxxx, on October 4, 1999, between COMPANIA DE TELECOMUNICACIONES
DE CHILE S.A. ("CTC"), a Chilean telecommunications company, represented by its
President, Xxxxxxx Xxxxx Xxxxxx, both domiciled for this purpose at Providencia
111; COMPANIA DE TELEFONOS DE CHILE - TRANSMISIONES REGIONALES S.A. ("CTC
Mundo"), represented by its President, Xxxxx Xxxxxx Xxxxxxxx, both domiciled for
this purpose at Providencia 111, Xxxxxxxx, and TERRA NETWORKS S.A. ("TN"), a
Spanish telecommunications company domiciled at Edificio Atica No. 1, Xxx xx xxx
Xxx Xxxxxxxxx 00, Xxxxxxx xx Xxxxxxx 00000 Madrid (Spain), represented by Xxxx
Xxxxx Xxxxx de Buruaga, with the same domicile, whose identity shall be verified
further on, and state:
ONE. By means of a private instrument dated today signed by CTC Mundo and
Telefonica Interactiva Chile Ltda. (hereinafter "TI Chile"), CTC Mundo sold to
Telefonica Interactiva Chile Ltda., all the shares it owns, currently amounting
to 95% of the shares issued (with the agreement to sell the remaining 5%) in the
Chilean telecommunications company named "Proveedora de Servicios de
Conectividad S.A." ("CTC Internet"), a company which provides Internet access
services, and other additional and related services. Furthermore, CTC Mundo
shall have an option to invest the sales price of its shares of CTC Internet in
TN shares.
TWO: Pursuant to the interest of TN to incorporate CTC Internet S.A., a method
to expand its strategy of developing the Internet business in South America and
the related interest of CTC in receiving part of the profits that will ensue if
it participates in this strategy as a shareholder of TN, each party assumes the
following commitments:
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ONE. CTC.
CTC and CTC Mundo shall provide CTC Internet with all telecommunications
services, and supplemental and related services (such as billing, collection,
commercial distribution and other similar services) that they currently provide
or will provide in the future, at market conditions and, in all cases, at
conditions that are at least equal to the most favorable terms that it provides
such services to third parties when requested by CTC Internet. This obligation
of CTC and CTC Mundo shall also extend to services provided through
subsidiaries. Lastly, since CTC and CTC Mundo are affiliated, they will act
diligently and in good faith in order to ensure that such companies provided the
services required by CTC Internet under the same conditions as they are obliged
to do themselves, as if they provided the services directly.
CTC Mundo and CTC agree to preferably use the services of CTC Internet to
develop their business activities related to Internet products and services for
residential customers. The commitment of CTC and CTC Mundo to preferably use CTC
Internet to provide these services shall be subject to said services being
provided by CTC Internet at market conditions and, in all cases, at conditions
that are at least equal to the most favorable terms that it provides such
services to third parties when requested by CTC, CTC Mundo or the companies they
control.
TWO. TN.
TN agrees to ensure that its Chilean subsidiary, CTC Internet, preferably uses
the telecommunications services provided by CTC, CTC Mundo, or their respective
subsidiaries, to the extent that they are provided to CTC Internet under the
terms indicated in item One above.
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THREE. Term. The term of this Agreement is ten (10) years from today, provided
that TN remains the majority shareholder, directly or indirectly, of CTC
Internet.
FOUR. Nonperformance. Nonperformance of the obligations arising out of this
Agreement shall not entitle the other party to terminate this Agreement, but
only to demand enforcement and the respective compensation for damages.
FIVE. Arbitration. In the event of any dispute which may arise concerning the
validity, interpretation or performance of this Agreement, the validity or
interpretation of this Clause Five relative to the competence of the arbitrator
appointed pursuant to this clause, or concerning the rights or obligations of
the parties arising out of this Agreement, such disputes shall be settled by an
arbitrator, who shall be Xxxx Xxxxxx Xxxxxx or, if he is unable or unwilling to
perform this duty, the arbitrator shall be Xxxxxxx Rivandeneira Xxxxxxx or, if
he is unable or unwilling to perform this duty, then the arbitrator shall be
Xxxx Xxxxxx Xxxx Zegers or, if he is unable or unwilling to perform this duty,
the arbitrator shall be selected by the parties. If the parties are unable to
reach an agreement on the arbitrator within twenty-five (25) days from a
determination that none of the arbitrators listed above are willing or able to
perform the duty, the arbitrator shall then be appointed by the Ordinary Civil
Court of Santiago, and the arbitrator appointed shall be a person who has been a
tenured professor in a commercial or civil law school of the Universidad
Catolica xx Xxxxxxxx [Santiago Catholic University] or the University of Chile
in Santiago, Chile, for at least five consecutive years, or a like period over
the past ten years. Any of these arbitrators shall act ex aequo et xxxx with
regard to matters of procedure and grounds and shall render a decision within no
more than 180 days from the date of appointment. The decision of the arbitrator
shall be definitive and not subject to appeal, and the parties hereto waive any
other recourse that may apply. Enforcement of the arbitration award may be
requested before any competent court.
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SIX: Notices
All notifications, requests, demands and other communications between the
parties to this agreement shall be in writing and addressed to the party at the
following address (or another address which has been advised in a similar
manner), and must be delivered in person, by certified or registered mail, with
pre-paid postage or with return receipt requested or by fax, with a certified
mail confirmation.
For CTC:
Compania de Telefonos de Chile S.A.
Xxxxxxx Xxxxxxxxxxx 000, 00xx Xxxxx, Xxxxxxxx
Xxx: Xxxxxxx Xxxxx Xxxxxx
Fax: 0000000
For CTC Mundo:
Compania de Telefonos de Chile S.A.
Transmisiones Regionales S.A.
Xxxxxxx Xxxx Xx. 00, 00xx Xxxxx, Xxxxxxxx
Xxx: Xxxxx Xxxxxx Xxxxxxxx
Fax: 0000000
TERRA NETWORKS, S.A.
Edificio Atica, No. 1
Via de las Dos Xxxxxxxxx 00
Xxxxxxx xx Xxxxxxx 00000 Xxxxxx (Xxxxx)
Att: Xxxxxxxx Xxxxxx
with copy to: Xxxx Xxxxxxxxx Xxxxxxxxx (Estudio [Law Firm of] Philipi
Yrarrazaval Xxxxxx & Xxxxxx)
Fax: (000) 000 00 00
SEVEN: For all purposes of this Agreement, the parties select special domicile
in the city and district of Santiago. This Agreement is governed by Chilean law.
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EIGHT: This Agreement and the appendices hereto constitute the entire agreement
between the parties and supersede any other prior agreement between the parties
regarding the same matter, with the exception of the Agreement of Intent
executed on June 21, 1999 between TN and CTC Mundo.
NINE: This agreement is signed in two exact copies with the same date, each
party retaining one copy.
[signed] [signed]
Xxxxxxx Xxxxx Xxxxxx Xxxxx Xxxxxx Xxxxxxxx
for CTC S.A. for CTC Mundo S.A.
[signed]
Xxxx Xxxxx Xxxxx de Buruaga
for Terra Networks S.A.
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