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Exhibit 2.8
Final Version
STOCK PURCHASE OPTION CONTRACT
Stock Purchase Option Contract which is entered into on this 5th day of October,
1999, by Bidasoa, B.V., a Dutch-registered company, represented by ATC
Management B.V., a Dutch-registered company, represented by Xx. Xxxxx
Xxxxxxxxxxxxx and Xx. Xxxx Xxxxx (hereinafter Bidasoa), and Telefonica, S.A., a
Spanish-registered company, represented by Mr. Xxxxx Xxxxxx Romeral (hereinafter
"Telefonica, S.A.").
REPRESENTATIONS
I. Telefonica, S.A. represents, through its agent:
1. It is a Spanish-registered company, duly organized pursuant to the
laws of Spain.
2. It is interested in formalizing this Stock Purchase Option Contract
(hereinafter the "Contract") to grant Bidasoa the option of
acquiring TN Shares (defined below) pursuant to the terms and
conditions specified herein.
3. It is the majority shareholder of Terra Networks, S.A., a Spanish
company ("TN") whose line of business includes but is not limited to
providing services of Internet access (ISP) and Portal, Services of
Financial Information by electronic Media and "Business to Business"
e-commerce service, all focused on the residential, SOHO, financial
and corporate market, and that it is interested in expanding its
share of that market in Mexico, with the intention, in the near
future, of pooling the aforementioned businesses with other similar
businesses at the world level and making a placement and initial
public offering of its shares (IPO) and subsequent admission of such
shares to trading on the Spanish Stock Exchanges, the NASDAQ or on
stock exchanges of other countries.
II. Bidasoa represents through its agent:
1. It is a Dutch-registered company, duly organized pursuant to the
laws of The Netherlands.
2. It has an interest in entering into this Contract with Telefonica,
S.A., for the purpose of having the option to acquire the "TN
Shares" that are defined below and
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that are the subject of this contract, once the conditions specified
herein have been met.
This Contract contains the terms and conditions pursuant to which Bidasoa shall
have the right to purchase, if it exercises the option that is provided in this
contract, and Telefonica, S.A. shall have the obligation to sell to Bidasoa, on
the Closing Date (as defined below), the TN Shares.
DEFINITIONS
For the purposes of this contract, unless expressly indicated herein to the
contrary, the words, terms and phrases listed below shall have the indicated
meaning:
"TN Shares" shall mean common shares issued or to be issued by the company Terra
Networks S.A., fully subscribed, paid in and free of any encumbrance, charge or
allocation, that are registered so that, observing the restrictions that are
established in this Contract with respect to said shares, they will have the
characteristics necessary to be sold as of the Closing Date (which is defined
below) on the Spanish Stock Exchanges (which is defined below) or on the NASDAQ
(which is defined below), at Bidasoa's discretion, having an offering value
pursuant to the subscription offering price of the institutional tranche of the
IPO equal to US$220,000,000 (two hundred twenty million dollars).
"Spanish Stock Exchanges" shall mean the financial markets for buying and
selling securities admitted to stock exchange listing, located in Spain and
controlled by the Spanish National Commission on the Securities Market.
"Bidasoa" shall have the meaning that is indicated in the introductory paragraph
of this contract.
"Closing" shall mean the act by means of which Telefonica, S.A. transfers the
full ownership of the TN Shares, free of any encumbrance and limitation of
ownership, to Bidasoa, and the act by means of which Bidasoa pays the Price of
the TN Shares.
"Contract" shall mean this Stock Purchase Option Contract.
"Purchase Contract" shall mean the Purchase Contract signed today between
Bidasoa, party of the first part, as seller, and Telefonica Servicios y
Contenidos por la Red, S.A., party of the second part, as buyer (hereinafter
Telefonica SCR" or "Teleline") which is for the purpose of transferring in the
year 1999 all Terra shares with voting right representing 25% of its capital.
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"Stock Administration Deposit Contract" shall mean the Stock Administration
Deposit Contract that is attached to this contract, marked as Exhibit A.
"Controller" shall mean any company that owns at least ninety-nine percent (99%)
of the shares of another company to which this term refers.
"Depository" shall mean Banco Argentaria, a Spanish-registered financial
institution.
"Business day" or "Business Days" shall mean any day that is not a Saturday,
Sunday or a day on which banks are permitted to close in any of the cities of
Madrid, Spain, Monterrey, Nuevo Xxxx, Mexico, or Amsterdam, Holland.
"Dollar" or "Dollars" shall mean the currency of legal tender in the United
States of America.
"Euro" or "Euros" shall mean the currency of legal tender in Spain and the
European Community.
"Closing Date" shall mean the date on which the Closing occurs pursuant to the
provisions of Clause Five of this Contract.
"Subsidiary" shall mean any company whose shares are owned for at least
ninety-nine percent (99%) by another company that in turn owns at least
ninety-nine percent (99%) of the shares of the company to which this term
refers.
"IPO" or "Initial Public Offering" shall mean the primary or secondary placement
and initial public offering of TN shares, and their subsequent admission to
listing on any of the stock markets or exchanges of Spain, the United States of
America or any other country, and on NASDAQ.
"Mexico" shall mean the United Mexican States.
"NASDAQ" shall mean National Association of Securities Dealers Automated
Quotations, an information system operated by the National Association of
Securities Dealers of the United States of America, which provides quotations of
prices of securities that are traded outside of established securities exchanges
(over-the-counter) by securities dealers.
"Parties" shall mean Bidasoa and Telefonica, S.A.
"Peso" or "Pesos" shall mean the currency of legal tender in Mexico.
"Price" shall mean the sum of US$220,000,000.00 (Two hundred twenty million
dollars 00/100), which Bidasoa must pay as consideration for the TN shares
pursuant to
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Clause 2.2 of this Contract if it exercises the purchase option covered under
this Contract on the TN Shares.
"Institutional Price per Share" shall mean the price accepted by TN as the
offering price per share of the shares issued by it that are offered to
institutional investors as part of the IPO that is being conducted, as
applicable, on the Spanish Stock Exchanges, the NASDAQ, or the securities
exchanges of any other countries, on the date on which the IPO is conducted.
"Direct Subsidiary" shall mean any company whose shares are owned for at least
ninety-nine percent (99%) by another company to which this term refers.
"Telefonica, S.A." shall mean Telefonica, S.A., a Spanish-registered company
with head office at Xxxx Xxx, 00, or any affiliate or subsidiary thereof or
company controlled by it, holding shares of stock in TN.
"Terra Networks," "Terra Networks, S.A." and "TN" shall mean Terra Networks
S.A., a Spanish corporation, owning 100% minus one of the Terra shares.
"Terra" shall mean Terra Networks Mexico, S.A. de C.V., a Mexican-registered
company, organized pursuant to public instrument number 6,232, the execution of
which was witnessed by Xxxxxxx Xxxxxxxx Xxxxx, Esq., Notary Public Number 123
for the City of Monterrey, Nuevo Xxxx, on September 10, 1999, the first
certified copy of which is duly recorded in the Public Register of Property and
Commerce of the City of Monterrey, Nuevo Xxxx, under Number 2468, no page
number, Volume 431, Book No. 3, Second Auxiliary, Instruments of Commercial
Companies, Commerce Section.
"Dollar/Euro Exchange Rate" shall mean the exchange rate between the Dollar and
the Euro, published by Banco de Espana for a specific Business Day.
CLAUSES
By virtue of the agreements and covenants set forth herein, the parties express
their intent as follows:
Clause One. TN Stock Purchase Option.
1.1. TN Stock Purchase Option. Subject to the suspensive condition that the IPO
occur within 1999 and within this same year the purchase be consummated
and the price be paid as stipulated in the Purchase Contract, Telefonica,
S.A. grants to Bidasoa a purchase option over the TN Shares, and Bidasoa
acquires the option to purchase if it so decides and exercises its right
pursuant to the provisions of this
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contract and pays the price [ILLEGIBLE] the TN Shares, which will be
transferred, free of encumbrances, charges and allocations, and including
each and every one of the corporate and economic rights inherent in them.
1.2. Gratuitous Nature of Option Right. The parties expressly state that the
option right that Telefonica, S.A. grants to Bidasoa is free of charge,
and the granting of it shall not engender any consideration.
1.3. Exercise of Option Right and Price of Purchase of TN Shares. The purchase
price to be paid by Bidasoa if its option is exercised shall be the sum of
US$220,000,000.00 (two hundred twenty million dollars) as consideration
for the TN Shares that are to be transferred to it. Bidasoa agrees to pay
such consideration simultaneously with the transfer of ownership of the TN
Shares to Bidasoa, free of any encumbrance, allocation or limitation of
ownership. Bidasoa's obligation to pay the purchase price of the TN Shares
shall be subject to the suspensive condition that it receives from
Teleline the full payment of the price that, in the amount of
US$220,000,000.00 (Two hundred twenty million dollars), Teleline is to pay
to it under the Purchase Contract.
1.4. Number of Shares. The number of TN Shares that Bidasoa is to receive if it
exercises the TN stock purchase option shall be determined by dividing the
sum of US$220,000,000.00 (Two hundred twenty million dollars 00/100) in
currency of legal tender of the United States of America by the
Institutional Price per Share, using the Dollar/Euro Exchange Rate on the
date on which the IPO is conducted. Bidasoa's acquisition and holding of
TN Shares shall conform to the provisions of Clause Two of this Contract.
Clause Two. Bidasoa Obligations derived from Stock Subscription
Bidasoa shall assume the following obligations, with respect to Telefonica,
S.A., as to the TN Shares for which it subscribes in the event that it exercises
the option granted through this Contract.
2.1. Restrictions on Sale of TN Shares. Bidasoa shall be prevented from
transferring any of the TN Shares that it acquires under this Contract, on
Spanish Stock Exchanges, on the NASDAQ or on any other capital markets,
for six (6) months following the date of the IPO or the date on which
Bidasoa acquires the TN Shares, whichever happens first. After that time
period, Bidasoa may transfer TN Shares that it acquires under this
Contract in the following amounts: (i) from the seventh to the twelfth
months following the IPO or the Closing Date, whichever occurs first, it
may have transferred up to 25% (Twenty-five percent) of those TN Shares;
(ii) from the thirteenth to the eighteenth months following the IPO or the
Closing Date, whichever occurs first, it may have transferred up to 50%
(Fifty percent) of those TN Shares; (iii) from the nineteenth to the
twenty-fourth months following the IPO or the Closing Date, whichever
occurs first, it may have transferred up to 75%
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(Seventy-five percent) of those TN Shares; and (iv) after the
twenty-fourth month following the IPO or the Closing Date, whichever
occurs first, it may have transferred all of those TN Shares;
2.2 Preemptive Right. At any time as of the Closing Date on which Bidasoa
acquires TN Shares, Telefonica, S.A. shall have a preemptive right for
acquiring any TN Shares that Bidasoa offers for sale. Such right may be
exercised through Telefonica, S.A. or by any third party that is
designated, with respect to all TN Shares that Bidasoa offers for sale.
Before transferring any TN Share, Bidasoa must notify Telefonica, S.A. of
its desire to transfer them, including the terms and conditions to which
such transfer would be subject. In such event, Telefonica, S.A., shall
have five (5) Business Days in which to notify Bidasoa as to whether or
not it wishes to exercise its preemptive right. After that time period,
with no response from Telefonica, S.A. or if Telefonica, S.A. declines to
exercise its right, Bidasoa shall be at liberty to transfer its TN Shares
for thirty (30) Business Days after any of these eventualities occurs,
under terms and conditions no less favorable for Bidasoa than those
established in the original offering. Should it exercise its preemptive
right to acquire such TN Shares, Telefonica, S.A. shall have the same
period of thirty (30) Business Days in which to formalize the acquisition,
pursuant to the terms and conditions established in the Bidasoa offering.
2.3. Exception to Preemptive Right. Notwithstanding the provisions of Clause
2.2 above, Bidasoa may at any time transfer the TN Shares or any portion
thereof that Bidasoa acquires under this Contract to any Subsidiary,
Direct Subsidiary or Controller of Bidasoa, on the understanding that such
Subsidiary, Direct Subsidiary or Controller must expressly and with
advance notice to Telefonica, S.A., assume each and every one of the
obligations that correspond to Bidasoa under this Contract and the rights
of Telefonica, S.A. derived from this Contract shall not be adversely
affected by virtue of such transfer.
2.4. Exercise of Voting Right. Bidasoa agrees to exercise the voting right that
it has as a holder of the TN Shares that it acquires under this Contract
pursuant to the instructions that it receives from Telefonica, S.A., on
the understanding that in resolutions that in a discriminate fashion
adversely affect only the interests of Bidasoa as a holder of the TN
Shares, Bidasoa shall not be required to vote pursuant to the instructions
that it receives from Telefonica, S.A.
2.5. TN Stock Administration Deposit Contract. To guaranty performance of the
various obligations that Bidasoa assumes under this Contract, Bidasoa
agrees to deliver any TN Shares that it comes to acquire under this
Contract to the Depository, pledging them in the manner stipulated in the
Stock Administration Deposit Contract.
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2.6. Payments. The payment that Bidasoa is to make to Telefonica, S.A. in cash
shall be made through transfer of funds immediately available in Dollars,
in the amount designated by Telefonica, S.A. in writing for that purpose.
Clause Three. Representations and Warranties of Bidasoa.
Bidasoa represents and warrants that, as of today's date:
3.1. Formation. Bidasoa is a company duly organized, with valid existence
pursuant to the laws of the Kingdom of The Netherlands.
3.2. Company Authorization. Bidasoa has powers and the proper corporate
authorizations to enter into this contract and to conduct the transactions
stipulated in it; Bidasoa's signing, delivery and performance of this
contract has been duly authorized by all necessary corporate authorities;
this contract has been duly signed and delivered by Bidasoa and, should it
exercise the option, shall constitute a valid and legally binding
obligation for Bidasoa, enforceable pursuant to its terms, unless such
enforceability is limited by bankruptcy, insolvency, reorganization or
similar rights that generally affect the rights of the creditors, or by
general equity principles.
3.3. There are no Restrictions. Bidasoa is not a party to any major contract or
any judgment, award, mandate, document, relief or decree, nor is it
subject to or bound by them, from any court of law, government agency or
arbitrator, that might conflict with or be infringed by its signing,
delivery or performance of this contract and the acquisition of the TN
Shares if it exercises its option. All required third-party consents shall
be obtained before the Closing Date.
Clause Four. Representations and Warranties of Telefonica, S.A.
Telefonica, S.A. represents that it warrants, on today's date and on the Closing
Date:
4.1. Formation. Telefonica, S.A. is a company duly organized, with valid
existence pursuant to the laws of Spain.
4.2. Company Authorization. Telefonica, S.A. has powers and the corporate
authorizations to enter into this contract and to conduct the transactions
stipulated in it; Telefonica, S.A.'s signing, delivery and performance of
this contract has been duly authorized by all necessary corporate
authorities for Telefonica, S.A.; has been duly signed and delivered by
Telefonica, S.A. and, should Bidasoa exercise its option, shall bind
Telefonica, S.A. to transfer the TN Shares pursuant to this contract,
enforceable pursuant to its terms, unless such enforceability is limited
by bankruptcy, insolvency, reorganization or
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similar rights that generally affect the rights of the creditors, or by
general equity principles.
4.3. There are no Restrictions. Bidasoa is not a party to any major contract or
any judgment, award, mandate, document, relief or decree, nor is it
subject to or bound by them, from any court of law, government agency or
arbitrator, that might conflict with or be infringed by its signing,
delivery or performance of the agreements or that might obstruct the
realization thereof. All required third-party consents shall be obtained
before the Closing Date.
4.4. Best Effort for IPO. TN has made its best effort to conduct the IPO.
Clause Five. Exercise of Purchase Option and Closing Date.
5.1. Bidasoa may exercise its purchase option as of the date of this Contract
and until the fifth Business Day prior to the date indicated in the IPO
for confirmation of purchase orders by the institutional investors. The
option shall be exercised by delivering to Telefonica, S.A. a document
written pursuant to the model in Exhibit B, signed by a duly accredited
agent of Bidasoa. The exercise of the Option shall constitute for Bidasoa
the obligation to purchase the TN Shares and to pay the price agreed in
this contract and for, Telefonica, S.A., the obligation to sell the TN
Shares to Bidasoa for that price established in clause 1.3 of this
Contract on the Closing Date.
5.2. The Closing Date shall coincide with the closing date of the Purchase
Contract.
5.3. Location of Closing. The Closing shall take place in the TN offices in
Madrid, Spain, or at any other location that Telefonica, S.A. and Bidasoa
agree to in writing.
5.4. Documents to be Delivered by Telefonica, S.A. On the Closing Date,
Telefonica, S.A. shall deliver the following to Bidasoa or cause the
following to be delivered to Bidasoa on its behalf:
5.4.1. The certificates representing the TN Shares to be transferred,
which delivery shall be accomplished directly to the Depository
pursuant to the Stock Administration Deposit Contract.
5.4.2. The Opinion of Telefonica's legal advisors pursuant to Exhibit C
which, signed by the parties, is attached to this contract.
Clause Six. Resolutory Condition.
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Extinction of purchase option and sale obligation once the option is exercised,
if the Closing does not take place in 1999: Notwithstanding the prior
notification of exercise of the option by Bidasoa, if for any reason the IPO
does not occur in 1999, or the purchase/sale of the Terra Shares between
Teleline and Bidasoa pursuant to the Purchase Contract is not consummated in
1999, this option shall terminate and become void, and the parties shall be
released from any purchase/sale obligation and payment for the TN Shares, with
no liability for it.
Clause Seven. Effects of Exercise of Option and Specific Performance of Delivery
Obligation.
Subject to the fulfillment of the conditions stipulated in Clause One of this
Contract, Bidasoa's exercise of the option shall presuppose formalization of the
Purchase Contract over the TN Shares, and Telefonica, S.A. shall be required, in
the capacity of seller, to deliver the TN Shares and to consummate the transfer
of their ownership at the Closing, pursuant to the provisions of this Contract.
Telefonica, S.A. expressly accepts the possibility of the specific performance
of its delivery obligation in the event of nonperformance on its part.
Clause Eight. Expenses.
Telefonica, S.A., as party of the first part, and Bidasoa, as party of the
second part, shall assume their own expenses connected with the negotiation,
drafting, signing, delivery and performance of this Contract and the contracts
stipulated hereby. Bidasoa, as party of the first part, and Telefonica, S.A., as
party of the second part, represent and warrant to the other party that the
negotiations connected with this Contract and the transactions stipulated herein
have been carried out in such fashion that they shall not give rise to any valid
claim against the other Party, Terra, TN or Teleline for brokerage commissions,
intermediation commissions or other similar payments.
Clause Nine. Confidentiality.
No press release shall be issued, nor shall the terms of this Contract be
disclosed to third parties without the mutual authorization of Bidasoa and
Telefonica, S.A., except for any information that is necessary or appropriate to
disclose in connection with TN's IPO. Telefonica, S.A. and Bidasoa may agree as
to the time and nature of the announcement of the transaction that will be made
to the employees of each party.
Clause Ten. General Provisions.
10.1. Cooperation. Each Party hereto shall make its best effort to make or cause
to be made, and to cooperate with the other Party hereto, to the extent
necessary, as to all the shares, and to make or cause to be made, pursuant
to applicable laws, all
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things necessary, appropriate or advisable for conducting or exercising
the transactions stipulated by this Contract.
10.2. Waivers. Bidasoa's nonperformance of any of its obligations or agreements
set forth herein may be waived only by Telefonica, S.A., in writing.
Nonperformance of Telefonica, S.A., of its obligations or agreements set
forth in herein may be waived only by Bidasoa, in writing.
10.3. Notices. All notices and other communications that are required or
permitted under this Contract shall be made in writing and sent to their
addressee by fax, which must be confirmed by original document signed by
an authorized agent of the Party giving the notice or communication, that
is sent by DHL, Federal Express or other global express courier service
that offers delivery times equal to or better than those of the companies
mentioned, on the understanding that the communication or notice shall be
effective as of the faxing date but only if the signed original
communication or notice is delivered to its recipient within two (2)
Business Days following the faxing date. If the original notice or
communication is not received within that time period, it shall be
effective until the Business Day on which such original notice or
communication is delivered.
Such notices or communications must in all cases be sent to the following
addresses:
(i) If addressed to Bidasoa:
Olympic Plaza
Xxxx Roeskstraat 123
Amsterdam: Xxxxx Xxxxxxxxxxxxx
Fax #: (00) 00-000-0000
With copy for:
Xxxxxxxx Xxxxxxxx X.
Xxxxx 000
Xxxxxxx Xxxxx xxx Xxxxxxxx
00000 San Xxxxx Xxxxx Xxxxxx, X.X.
Mexico
Fax #: (00-0) 000-0000
and also copy for:
Xxxxxxxxx Renovables
Xxxxxxx 00, Xxxx 0
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Xxxxxxx Xxxxxxxxxxx
00000 Xxxxxx, X.X.
(xx) If addressed to Telefonica, S.A. or to TN:
Telefonica, S.A.
Xxxx Xxx, 00
00000 Xxxxxx, Xxxxx
Attention: Assistant Secretary General
with copies to: Terra Networks, S.A.
Edificio Atica No. 1
Avenida de Europa Xx. 00
00000 Xxxxxxx xx Xxxxxxx (Xxxxxx), Xxxxx
Attention: Ms. Xxxxxxxx Lomana
and to
Xxxxx & XxXxxxxx Abogados, S.C.
Oficinas en el Parque - piso 10
Blvd. Xxxxxxx X. Xxxxxxxxx 1884 Pte.
64650 Monterrey, Nuevo Xxxx
Attention: Xx. Xxxxxx Xxxxx Bunsow
Fax # (0) 000-0000
Such names and addresses may be changed by written notice to each person
indicated above.
Notwithstanding the foregoing provisions in this Clause, the Parties may choose
to give any notice or communication by personally delivering the corresponding
document to the appropriate address pursuant to the above, in which case such
communication or notice shall be effective on the date of delivery thereof, and
the signature in acknowledgment of receipt of the employee or agent of the
recipient performing such function must be obtained.
10.4. Applicable Laws and Dispute Resolution. This Contract shall be governed
and interpreted pursuant to the laws of Mexico.
10.5. Any dispute, claim or conflict arising from this Contract or connected
with it, or with the interpretation or violation of it, shall be submitted
to arbitration pursuant to the rules of the International Chamber of
Commerce in Paris insofar as such rules are not incompatible with this
paragraph. The decision on the award of the arbitrators may be confirmed
in any court of law that has jurisdiction for it or such court of law
confirming the award may be asked to enforce it, if necessary. The
arbitration petition shall be made within a reasonable time period
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calculated as of the onset of the claim, the dispute or any other matter
in doubt, and under no circumstances shall it be done after the date on
which the filing of the equity or legal actions, based on such claim,
dispute or any other matter in doubt, is time-barred under the applicable
statute of limitations.
10.6. The arbitral tribunal shall be composed of three arbitrators, one of whom
shall be appointed by each one of the Parties hereto. The two arbitrators
appointed in this manner shall designate a third arbitrator, on the
understanding, however, that if the two arbitrators fail to reach an
agreement as to the appointment of the third arbitrator, either
arbitrator may ask the International Chamber of Commerce in Paris to make
the appointment.
10.7. The location of the arbitration shall be the City of Dallas, Texas, and
it shall be conducted in the English and/or Spanish languages, without
distinction.
10.8. Each Party hereby waives the requirement of a hand-delivered notice of
arbitration, and agrees that it may be done in writing, by certified or
registered mail, with confirmation of receipt, to the address indicated
in this Contract, and any petition made in such manner shall be
considered made on the tenth Business Day following, calculated as of
when such petition has been placed in the mail.
10.9. Any legal action filed as support for the arbitration regarding this
Contract, including precautionary measures, shall be submitted to the
appropriate judicial authority. Each one of the Parties hereto (a)
accepts, generally and unconditionally, the exclusive jurisdiction of
said court and any related court of appeals, and irrevocably waives any
objection that now or in the future it might have as to the venue of any
dispute, legal action or lawsuit filed in such courts, or as to such
courts' being an inappropriate venue.
10.10. Counterparts. This Contract may be signed simultaneously in one or more
counterparts, each one of which shall be considered an original, but all
of them together shall constitute one and the same instrument.
10.11. Headings. The headings of the various clauses that this Contract contains
are solely for reference purposes and shall not in any way affect the
meaning or interpretation of this Contract.
10.12. Indivisible Contract. This Contract, including its exhibits and the
documents indicated herein, shall constitute the entire Contract and the
agreements of the parties hereto as to the subject contained herein.
There are no restrictions, undertakings, representations, absolute
warranties, warranties or commitments other than the ones expressly
stipulated or indicated herein. This Contract replaces all previous
contracts and agreements made between the Parties as to said subject.
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10.13. Amendments and Changes. This Contract may be amended or changed only with
the written agreement of the Parties hereto.
10.14. Binding Nature: Benefits. This Contract shall benefit the Parties hereto
and their respective successors and assignees, and shall be binding on
them; nothing included in this Contract expressly or implicitly has the
intent of granting any person other than the Parties hereto or their
respective successors and assignees any right, recourse, obligation or
liability under this Contract or by reason of it.
10.15. Transfer. This Contract may not be transferred by any of the Parties
hereto, except with the advance written consent of the other Parties
hereto.
10.16. Transfer Taxes. Income Tax by reason of this transaction or the sale,
transfer or delivery of the Shares, shall be payable and shall be assumed
by Bidasoa.
10.17. Best Knowledge and Belief. For the purposes of this Contract, the phrase
"to the best of Bidasoa's best knowledge and belief" when applied to a
representation or warranty made by Bidasoa, shall be considered as
meaning "to the best of Bidasoa's knowledge and belief" after proper
investigation; and "knowledge and belief" as used in that phrase shall be
considered as including all matters that Bidasoa or any officer of the
Subsidiary in actuality were familiar with or should have been familiar
with after a proper investigation.
10.18. Language. The Parties agree that this Contract may also be signed in the
English language, on the understanding that, in the event of any
difference, in the opinion of any of the parties, as to the content or
one or the other version, in all cases this version in Spanish shall
prevail.
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IN WITNESS WHEREOF, the Parties hereto have signed this Contract on the
date indicated
TELEFONICA, S.A.
[signature]
Mr. Xxxxx Xxxxxx Romeral
Assistant General Manager
Assistant Secretary General and
Secretary of the Board of Telefonica, S.A.
BIDASOA, B.V.
[signature] [signature]
By: ATC Management BV By: ATC Management BV
Xx. Xxxxx Xxxxxxxxxxxxx Xx. Xxxx Xxxxx
Agent Agent
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EXHIBIT A
Subject to Change by the Trustee
AGREEMENT ON DEPOSIT OF SHARES FOR PURPOSES OF ADMINISTRATION
Agreement on Deposit of Shares for Purposes of Administration entered into this
___ day of ___________________ of _______ by Bidasoa, B.V., a Dutch company,
represented by Mr. ________________________ and Mr. ________________________,
(herein after "Bidasoa") and Terra Networks, S.A., a Spanish company represented
by Mr. ________________________, (hereinafter "TN-Espana"), and
________________________, represented in this act by its
________________________, Mr. ________________________ (hereinafter the
"Trustee"), in accordance with the following recitals, definitions, and clauses.
RECITALS
I. The Trustee states that it is a financial institution duly established
and in existence in accordance with the laws of the kingdom of Spain,
and that it has the appropriate authorization from the Banco de Espana
to carry out operations involving the custody of securities. The
Trustee agrees to participate as a trustee in this Agreement.
II. Bidasoa states that it is a Dutch company, duly established in
accordance with the laws of Holland, and that it is the owner and
registered stockholder of the totality of the common, registered Class
A shares (hereinafter "Class A Shares of TN-Mexico"), with full voting
rights, representing 25 % of the capital stock of Terra Networks
Mexico, S.A. de C.V., a Mexican company (hereinafter "TN-Mexico").
III. TN-Espana declares that it is a Spanish company, and that it is the
owner and registered stockholder of the totality of the Class B
preferred, registered shares, with limited voting rights, representing
75% of the total capital stock of TN-Mexico.
IV. Bidasoa and TN-Espana jointly state that:
A. On September 10, 1999 they incorporated, as founding
shareholders, a Mexican corporation named Terra Network, S.A.
de C.V., pursuant to Public Recording No. 6,232, granted
before Atty. Xxxxxxx Xxxxxxxx Xxxxx, Notary Public Number 123
in and for the city of Monterrey, Nuevo Xxxx, whose first
official copy is duly recorded with the Public Registry of
Property and Commerce in the city of Monterrey, Nuevo Xxxx,
under No. 2468, with no Page No., Volume 431, Second Auxiliary
Book No. 3 for Public Recordings of Commercial Companies,
Commercial Section.
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16
B. That Terra Network, S.A. de C.V. was incorporated with a
capital stock of 50,000.00 pesos (Fifty Thousand pesos), legal
currency of the United Mexican States, subscribed and paid up
in full by (i) Bidasoa, which subscribed and paid up the
totality of the 1,250 Common, Registered Class A Shares of
TN-Mexico, with a par value of 10.00 pesos (ten pesos 00/100)
each and full voting rights, represented by No. 1-A stock
certificates, which shares represented 25% of the
corporation's total capital stock, and (ii) TN-Espana, which
subscribed and paid up the totality of the 3,750 Preferred,
Registered Class B Shares, with a par value of 10.00 pesos
(ten pesos 00/100) each and limited voting rights, represented
by No. 1-B stock certificates, which shares represented 75% of
the corporation's total capital stock.
C. That Bidasoa and TN-Espana held a Special and Regular General
Shareholders' Meeting of Terra Network, S.A. de C.V., where,
among the other resolutions, a resolution was approved
changing the company's name to Terra Networks Mexico, S.A. de
C.V. (hereinafter "TN-Mexico"), and the company's capital
stock was increased by the sum of 564,378,000.00 pesos (Five
Hundred Sixty-Four Million, Three Hundred Seventy-Eight
Thousand pesos 00/100), equivalent on that date to the sum of
U. S. $60,000,000.00 (Sixty Million dollars 00/100). This
increase was subscribed by (i) Bidasoa, which subscribed and
paid up 25% (twenty-five percent) of said increase, that is,
the totality of the Class A Shares of TN-Mexico, with full
voting rights, issued in relation to the increase and
represented by No. 2-A and 3-A share certificates, each
representing half of the Class A shares issued in relation to
the capital increase, and (ii) TN-Espana, which subscribed and
paid up 75% (seventy-five percent) of said increase, that is,
the totality of the Class B shares, with limited voting
rights, issued in relation to the increase, represented by No.
2-B share certificates.
D. On October 5, 1999, Bidasoa and TN-Espana entered into a
Agreement for the Sale of Shares (hereinafter the "Agreement
for the Sale of Class A Shares of TN-Mexico"), a copy of which
is attached to this Deposit Agreement, signed by the parties
and marked as Attachment A, which forms an integral part of
this Deposit Agreement. Thereunder, TN-Espana is to acquire
from Bidasoa the totality of the Class A Shares issued by
TN-Mexico at the time of its incorporation and in relation to
the capital increase approved at the Special and Regular
General Shareholders' Meeting referred to in the preceding
paragraph (hereinafter the "Class A Shares of TN-Mexico"),
once certain suspensive conditions have been met, which are
set forth in the Agreement for the Sale of Class A Shares of
TN-Mexico.
E. In accordance with the Agreement for the Sale of Class A
Shares of TN-Mexico, as consideration for the purchase of the
Class A Shares of TN-Mexico, TN-Espana agrees to pay Bidasoa:
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1. The sum of US$15,000,000.00 (Fifteen Million Dollars
00/100) in ready money as an advance, and Bidasoa in
this act acknowledges that it has received said sum
on today's date to its full satisfaction (hereinafter
the "Advance"), and
2. Once the suspensive conditions for the sale of the
Class A Shares of TN-Mexico have been met, and
simultaneous to conveyance of the ownership thereof
to TN-Espana, free of any encumbrance, reservation,
or restriction of dominion whatsoever, the Remaining
Price (defined below) or the New Remaining Price
(defined below), as applicable, may be paid by
TN-Espana to Bidasoa using shares issued by TN-Espana
(hereinafter the "TN-Espana Shares") provided that
this is appropriate pursuant to Clause Two of the
Agreement for the Sale of Class A Shares of
TN-Mexico.
F. Clauses 2.4.5 and 2.6 of the Agreement for the Sale of Class A
Shares of TN-Mexico set forth that a Conditional Deposit shall
be established on the TN-Espana Shares, in order to secure
performance of the obligations assumed by Bidasoa in the
above-mentioned Agreement.
DEFINITIONS
For effects hereof, unless expressly set forth to the contrary in this
agreement, the terms, phases, and words listed below shall have the following
meanings:
"Class A Shares of TN-Mexico" means the totality of the common, registered Class
A shares issued by TN-Mexico with a par value of 10.00 pesos (ten pesos 00/100)
each and full voting rights, represented by No. 1-A, 2-A, and 3-A stock
certificates issued by TN-Mexico. These shares are fully subscribed and paid up
by Bidasoa, and represent 25% of the capital stock of TN-Mexico.
"Deposited Shares" shall have meaning defined under Clause 1.1 hereof.
"Class A Shares of TN-Espana" shall mean the common shares issued in the past,
present, or future by TN-Espana, fully subscribed, paid up, free of any
encumbrance, charge, or reservation, and registered in such a way that, while
observing the restrictions set forth herein on the sales of said shares, they
are entitled to be sold as of the Date of Closing (defined below) on Spanish
Stock Markets (defined below), or on NASDAQ (defined below), at Bidasoa's
option.
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"Advance" means the amount of US$15,000,000.00 (Fifteen Million Dollars 00/100)
in ready money, which shall be paid to Bidasoa by TN-Espana in accordance with
the terms of Clause 1.2 of the Agreement for the Sale of Class A Shares of
TN-Mexico.
"Arbitrators" refers to arbitrators designated to decide such controversies as
may arise in relation to the Agreement for the Sale of Class A Shares of
TN-Mexico, pursuant to Clause 14.4 of said agreement.
"Investment Bank" means a world-class investment bank selected by Bidasoa and
TN-Espana in accordance with the Agreement for the Sale of Class A Shares of
TN-Mexico.
"Spanish Stock Markets" means finance markets for the purchase and sale of
securities accepted for trade, located in Spain and controlled by the National
Securities Market Commission of Spain.
"Closing" means the act through which Bidasoa conveys full ownership over the
Class A Shares of TN-Mexico, free of any encumbrance or restriction of dominion,
to TN-Espana, and the act through which TN-Espana makes payment of the Remaining
Price (defined below) or the New Remaining Price (defined below), as applicable,
to Bidasoa.
"Agreement" means this Agreement on Deposit of Shares for Purposes of
Administration.
"Agreement for the Sale of Class A Shares of TN-Mexico" shall have the meaning
defined in Recital IV.D hereof.
"Share Lien Agreement" means the Share Lien Agreement entered into on October 5,
1999 between the Parties, in accordance with the terms of Clause 2.6 of the
Agreement for the Sale of Class A Shares of TN-Mexico.
"Controlling Company" shall mean any company owning at least ninety-nine percent
(99%) of the shares of another company to which said term refers.
"Trustee" means ________________________, a Spanish financial institution.
"Banking Day" or "Banking Days" means any day other than a Saturday, a Sunday,
or a day on which banks are permitted to close in one or more of the cities of
Madrid, Spain; Monterrey, Nuevo Xxxx, Mexico; or Amsterdam, Holland.
"Dollar" or "Dollars" means the legal currency of the United States of America.
"Date of Closing" means the date on which the Closing takes place in accordance
with the terms of Clause Five of the Agreement for the Sale of Class A Shares of
TN-Mexico.
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"Affiliate" shall mean any company whose shares are at least ninety-nine percent
(99%) owned by another company, which, in turn, owns at least ninety-nine
percent (99%) of the shares of the company to which said term refers.
"IPO" or "Initial Public Offering" means the initial primary or secondary offer
and placement of the shares of TN-Espana, and their subsequent acceptance for
trade on any of the securities markets or exchanges of Spain, the United States
of America or any other country, as well as NASDAQ.
"Mexico" means the United Mexican States.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotations, a computerized system operated by the National Association of
Securities Dealers of the United States of America, that provides price
quotations for securities traded over-the-counter by securities dealers.
"New Remaining Price" means the price, beyond the Advance, that TN-Espana shall
pay Bidasoa in accordance with the terms of Clause 2.3 of the Agreement for the
Sale of Class A Shares of TN-Mexico, which would be applicable should the
Closing occur after December 31, 1999, including, if applicable, TN-Espana
Shares.
"Parties" means Bidasoa and TN-Espana.
"Peso" or "Pesos" means the legal currency of Mexico.
"Remaining Price" means TN-Espana Shares whose Institutional Price per Share
(defined below) in the aggregate is the sum of US$220,000,000.00 (Two Hundred
and Twenty Million Dollars 00/100), which TN-Espana shall pay, beyond the
Advance, as consideration for the Class A Shares of TN-Mexico in accordance with
the terms of Clause 2.2 of the Agreement for the Sale of Class A Shares of
TN-Mexico.
"Institutional Price per Share" means the price accepted by TN-Espana as the
price per share of the stock it issues, offered to institutional investors as
part of the IPO conducted, if applicable, on Spanish Stock Markets, NASDAQ, or
stock exchanges of any other country on the date of the IPO.
"Direct Subsidiary" means any company whose shares are at least ninety-nine
percent (99%) owned by another company to whom said term refers.
"LIBOR Rate" means a simple annual interest rate equivalent to (i) the annual
rate appearing on Page 3750 of the Telerate screen (or of any page replacing it)
as the compound rate offered for interbank deposits in London, for the time
period closest to the one for which the rate is applicable, shown under the
heading "USD" at 11:00 a.m. (London time) two (2) banking days before the date
on which payment of the New Remaining Price is scheduled; or (ii) if the rate
specified in Clause (i) cannot be determined, the annual rate equivalent to the
arithmetic mean of the rates appearing on the page known as the "LIBO" page of
Reuters Monitor Money Rates Services (or any page replacing it) at approximately
11:00 a.m. (London time) two (2) banking days before the date on which payment
of the New Remaining Price is scheduled.
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"Telefonica, S.A." means Telefonica, S.A., a Spanish company, or any affiliate
or subsidiary thereof, which is a stockholder of shares representing the capital
stock of TN-Espana.
"TN-Mexico" means Terra Networks Mexico, S.A. de C.V., a Mexican company,
incorporated pursuant to Public Recording Number 6,232 granted before Atty.
Xxxxxxx Xxxxxxxx Xxxxx, Notary Public Number 123 in and for the city of
Monterrey, Nuevo Xxxx on September 10, 1999, whose first official copy is duly
recorded with the Public Registry of Property and Commerce in the city of
Monterrey, Nuevo Xxxx, under No. 2468, with no Page No., Volume 431, Second
Auxiliary Book No. 3 for Public Recordings of Commercial Companies, Commercial
Section.
CLAUSES
Based on the agreements and covenants set forth herein, the parties express
their will in the following terms:
CLAUSE ONE. ESTABLISHMENT OF DEPOSIT
1.1 Pursuant to Clause 2.4.5 of the Agreement for the Sale of Class A
Shares of TN-Mexico, Bidasoa hereby delivers, in deposit to the
Trustee's administration, the TN-Espana Shares that it receives on
today's date from TN-Espana in payment of the Remaining Price or the
New Remaining Price, as applicable (hereinafter the "Deposited
Shares"), so that the Trustee may administer them in accordance with
the instructions and purposes set forth herein. The signing of this
Agreement formally constitutes a receipt granted by the Trustee in
favor of Bidasoa for the Deposited Shares.
1.2 Bidasoa expressly states that all fruits of any nature generated in
favor of Bidasoa as registered stockholder of the Deposited Shares,
including any dividends or bonus stock issued, also form a part of the
deposit.
1.3 The Parties agree that the Deposited Shares shall remain on deposit to
secure compliance with (i) any obligations arising from the Agreement
for the Sale of Class A Shares of TN-Mexico that are the responsibility
of Bidasoa and that subsist subsequent to the Closing under the terms
thereof, and (ii) the restrictions set forth in Clause 2.4 of the
Agreement for the Sale of Class A Shares of TN-Mexico with respect to
the holding of the Deposited Shares, including but not limited to:
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1.3.1 Restrictions on the sale of the Deposited Shares set forth in
Clause 2.4.1 of the Agreement for the Sale of Class A Shares
of TN-Mexico;
1.3.2 Preemptive rights granted on the Deposited Shares under Clause
2.4.2 of the Agreement for the Sale of Class A Shares of
TN-Mexico; and
1.3.3 The obligation to exercise voting rights derived from the
Deposited Shares so long as Bidasoa is their owner, in
accordance with the instructions received from Telefonica,
S.A. in accordance with the terms of Clause 2.4.4 of the
Agreement for the Sale of Class A Shares of TN-Mexico.
CLAUSE TWO. RELEASE OF DEPOSITED SHARES
The parties agree that the Deposited Shares shall be automatically released from
the deposit established hereunder upon compliance with the terms for lifting the
restrictions on the sale of the Deposited Shares referred to in Clause 1.3.1
hereof, and only in the proportion in which said restrictions are lifted, unless
prior to said date the Arbitrators, as interim equitable relief, have notified
the Trustee that TN-Espana has a well-founded claim with respect to Bidasoa's
performance of its obligations under the Agreement for the Sale of Class A
Shares of TN-Mexico. The trustee shall only release and deliver the Deposited
Shares to Bidasoa to the extent that (i) the Arbitrators notify the Trustee that
TN-Espana's claim is well-founded, without need for said claim at that time to
be fully proven by TN-Espana and (ii) that said claim is for an amount exceeding
the value at that time of the shares that shall remain subsequent to the
corresponding release.
In the event that there are shares whose release is pending and a claim of the
type mentioned herein is received from the Arbitrators, the Trustee may only
retain the portion of the shares pending release whose value corresponds to the
amount claimed.
Even if the Arbitrators have provided notice of a claim, the Trustee, at
Bidasoa's request, shall authorize the sale of shares on which restrictions have
been lifted, but that have been retained by the Trustee in the cases mentioned
herein, provided that the Trustee is ensured that the net proceeds of the sale,
after applicable taxes, shall form part of the Deposit for the effects set forth
herein.
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In the event that as a result of one or more TN-Espana claims filed with the
Trustee by the Arbitrators, the Trustee retains shares after the sales
restrictions have been lifted that are referred to in Clause 2.4.1 of the
Agreement for the Sale of Class A Shares of TN-Mexico, and a final determination
is later made that said claim is not well-founded, TN-Espana shall be obligated
to indemnify Bidasoa through the payment of interest at the LIBOR Rate plus six
(6) percentage points. Said rate shall be applied to the value of the retained
shares or retained amount, as applicable, plus any expenses and/or costs
incurred by Bidasoa in relation to said unfounded retention. The interest
mentioned herein shall be calculated as of the date on which the Trustee placed
the hold on the shares or cash, and up until the same have been delivered to
Bidasoa.
CLAUSE THREE. ENFORCEMENT OF DEPOSIT IN THE EVENT OF A BREACH
The Deposited Shares shall form a part of Bidasoa's net worth, despite being
subject to the deposit established hereunder. Thus, the Deposited Shares shall
at all times be subject to satisfying any obligations that Bidasoa has failed to
perform pursuant to this Agreement or pursuant to the Agreement for the Sale of
Class A Shares of TN-Mexico or applicable law. The Trustee shall abide by all
final orders pronounced by the Arbitrators or by any court that has competent
jurisdiction with respect to the Deposited Shares. The release of the Deposited
Shares shall not limit any right that TN-Espana may have over the same pursuant
to applicable law.
CLAUSE FOUR. TRUSTEE'S AUTHORITY AND OBLIGATIONS
For purposes of performing the role assumed by the Trustee hereunder, the
Trustee is empowered to exercise the following authority:
4.1 Receive the Deposited Shares on deposit, keep them, and deliver them to
whom they correspond pursuant hereto and pursuant to the Agreement for
the Sale of Class A Shares of TN-Mexico, provided that the terms of
Clause Two hereof are met.
4.2 So long as this agreement remains in effect, Bidasoa expressly grants
the Trustee the right to exercise all corporate rights corresponding to
it as the registered stockholder of the Deposited Shares.
4.3 The Trustee shall cast its vote on the deposited shares in the same way
as the votes are cast on the shares of TN-Espana that belong to
Telefonica, S.A. For said purpose, it shall make a prior request to
Telefonica, S.A. for written instructions as indicated in Clause 6.3
hereof. If for any reason the Trustee should fail to receive voting
instructions, it must necessarily cast its vote in the same way as
Telefonica, S.A. does, so as to comply with the terms of Clause 2.4.4
of the Agreement for the Sale of Class A Shares of TN-Mexico. It is
nonetheless understood that on resolutions that particularly and
adversely affect the interests of Bidasoa alone as the stockholder of
the TN Shares [sic], the Trustee shall not be obligated to vote in
accordance with the instructions it receives from Telefonica, S.A.
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4.4 So long as this Agreement remains in effect, Bidasoa recognizes that
the deposit includes all economic rights to which it is entitled as the
registered stockholder of the Deposited Shares, especially the right to
dividends. All economic risks generated for Bidasoa on the Deposited
Shares as a TN-Espana stockholder shall be turned over to the party
entitled thereto once the terms of Clause Two hereof have been met.
4.5 The deposit established hereunder shall be extended to and shall
include any certificates of title, securities, tangible or intangible
assets, or funds substituting or corresponding to the deposited shares
in the event of a merger, dissolution, increase or decrease in capital,
share conversion or share swap, transformation, spin-off, or anything
else of a similar nature affecting TN-Espana. For said effects, the
parties agree to grant, when applicable, any and all publicly recorded
and/or non-recorded instruments as may be necessary or beneficial to
formalize the increase in the assets that are the subject of the
previously established deposit.
4.6 Furthermore, the Trustee shall deliver the deposited shares to Bidasoa
as the sales restrictions are lifted that are referred to in Clause
2.4.1 of the Agreement for the Sale of Class A Shares of TN-Mexico.
Said deliveries shall be made upon written request from Bidasoa once
the time periods indicated in the above-referenced Clause 2.4.1 of the
Agreement for the Sale of Class A Shares of TN-Mexico have lapsed,
without need for instructions from TN-Espana.
4.7 To grant such powers of attorney as it deems necessary in favor of the
individuals indicated in writing by TN-Espana, so that they may
represent the shares at the General Shareholders' Meetings of
TN-Espana, and, when necessary, so that they may exercise any other
Corporate and Property Rights inherent to the deposited shares, for
such time as they are included in this deposit.
4.8 The Trustee shall exercise preemptive and preferential rights on the
deposited shares on behalf of the party entitled thereto in accordance
with instructions in said regard received from TN-Espana, pursuant to
Clause 2.4.2 of the Agreement for the Sale of Class A Shares of
TN-Mexico.
4.9 To engage in any other act entrusted to it by TN-Espana and/or Bidasoa,
as corresponds to them, pursuant to the terms of this Agreement, that
are necessary to achieve the objectives hereof.
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4.10 The Trustee shall notify the parties of any request it receives from
either of them.
CLAUSE FIVE. COMMUNICATION TO THE COMPANY
As of the date of the signing of this contract, TN-Espana shall be kept informed
on the deposit of shares established hereunder.
CLAUSE SIX. AUTHORITY OF TN-ESPANA
TN-Espana is authorized to:
6.1 Instruct the Trustee as to the individual or individuals in whose favor
the respective powers of attorney shall be granted for exercising the
Rights over the deposited Shares.
6.2 Engage in all other acts that are consistent and necessary, without any
limitation whatsoever, for carrying out the objectives hereof.
6.3 The parties agree that all instructions given to the Trustee by
TN-Espana through the Secretary of the Board of Directors or such
person as he or she may designate in relation hereto, shall necessarily
be made in writing. The Trustee shall be released from all liability
vis-a-vis the parties hereto and third parties, provided that it acts
in good faith and in accordance with the instructions it is to receive
from TN-Espana pursuant to the terms hereof.
CLAUSE SEVEN. RENDERING OF ACCOUNTS
The Trustee, on a monthly basis, shall prepare a written report to TN-Espana and
Bidasoa on the state of the deposit during the corresponding period, and shall
send said report to the domiciles referred to below within the first five (5)
Banking Days of each month. The parties agree that TN-Espana and Bidasoa shall
have a period of fifteen calendar days counting as of the date of receipt of
said report to make such observations as it sees fit, if any. In the event that
no observation is made within the above-indicated period, their rights to make
any observation thereafter shall be precluded.
CLAUSE EIGHT. TERM
The term hereof shall be as necessary for compliance with its objectives, and it
shall be extinguished once all the TN-Espana Shares have been released in favor
of Bidasoa, and once the applicable time periods have concluded.
CLAUSE NINE. FEES
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Bidasoa and TN-Espana shall pay the following fees to the Trustee:
CLAUSE TEN. DEFENSE OF THE DEPOSITED SHARES
10.1 The Trustee shall not be responsible for activities, acts, or omissions
of the parties or of third parties that impede or hinder compliance
with the objectives hereof. In the event that Bidasoa and/or TN-Espana
should become aware of said circumstance, they shall be obligated to
provide written notice to the Trustee of any situation that could
affect the Deposit of the shares established hereunder. Furthermore,
the Trustee shall not be obligated to defend the deposited shares, but
shall solely be obligated to grant power of attorney to such person or
persons as are indicated in writing for said effects by TN-Espana or
Bidasoa, as applicable, for administrative, court, or any other
proceedings. The Trustee, shall under no circumstance be responsible
for the acts of said attorneys in fact, nor shall it be obligated to
pay the professional fees or expenses arising from their activities.
10.2 In the event of an emergency, the Trustee may engage in such acts as
are indispensable to maintain the deposited shares and the rights
derived from them, without prejudice to the authority referred to in
the immediately preceding paragraph to indicate to the Trustee a
designation of one or more legal agents.
CLAUSE ELEVEN. GENERAL PROVISIONS
11.1 Cooperation. Each of the parties hereto shall make its best efforts
with respect to all the shares to do or have done and to cooperate with
the other party hereto, in the degree necessary, to do or have done, in
keeping with applicable law, anything necessary, appropriate, or
beneficial to carry out and implement the operations indicated
hereunder.
11.2 Waivers. Failure by Bidasoa to comply with one or more of its
obligations or covenants as set forth herein may only be waived by
TN-Espana in writing. Failure by TN-Espana to comply with its
obligations or covenants as set forth herein may only be waived by
Bidasoa in writing.
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11.3 Notifications: All notifications and other communications required or
permitted pursuant hereto shall be made in writing, and shall be sent
to their recipients by fax. The fax shall be confirmed by having the
original writing signed by an authorized representative of the party
making the notification or communication, and sending it via DHL,
Federal Express, or another world express messenger service offering
delivery times better than or equal to those of the above-mentioned
companies. It is understood that the communication or notification
shall go into effect on the date of the sending of the fax, but only if
the original signed notification or communication is delivered to its
recipient within two (2) banking days following the date of the sending
of the fax. In the event that the original notification or
communication is not received within said time period, the same shall
not go into effect until the banking date on which said original
notification or communication is delivered. Said notifications or
communications shall in all cases be sent to the following addresses:
(i) If addressed to Bidasoa:
Olympic Plaza
Xxxx Xxxxxxxxxxx 000
Xxxxxxxxx 0000XX
Xxxxxxxxx: Xxxxx Xxxxxxxxxxxxx
Fax #: (00) 00-000-0000
With a copy to:
Xxxxxxxx Xxxxxxxx X.
Xxxxx 000
Xxxxxxx Xxxxx xxx Xxxxxxxx
00000 San Xxxxx Xxxxx Xxxxxx, Nuevo Xxxx
Mexico
Fax #: (00-0) 000-0000
And also copy to:
Xxxxxxxxx Xxxxxxxxx
Xxxxxxx 00, Xxxx 0,
Xxxxxxx Xxxxxxxxxxx,
00000 Xxxxxx, D. F.
(ii) If addressed to TN-Espana:
Terra Networks, S. A.
Xxxx Xxx, 00
00000 Xxxxxx, Xxxxx
Atencion: Secretario General
Fax #:
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With copies to:
Xxxxx & XxXxxxxx Attorneys, S.C.
Oficinas en el Parque - piso 10
Blvd. Xxxxxxx X. Xxxxxxxxx 1884 Pte.
64650 Monterrey, Nuevo Xxxx
Attention: Lic. Xxxxxx Xxxxx Bunsow
Fax # (0) 000-0000
(iii) If addressed to the Trustee:
----------------------------------
----------------------------------
----------------------------------
Said names and addresses may be changed through written notification to each of
the above-indicated persons.
Notwithstanding anything set forth above in this clause, the parties may opt to
make any notification or communication through personal delivery of the
corresponding writing to the appropriate domicile pursuant to the above. In said
case, the communication or notification shall go into effect on the date of
delivery of the same, and a signature to acknowledge receipt shall be taken from
employee or representative of the recipient who has said function.
10.4 *Applicable Law and Dispute Resolution. This Agreement shall be
governed and interpreted in accordance with the laws of Mexico.
10.4.1 Any dispute, claim, or controversy arising from this Agreement
or related thereto, or over the interpretation or violation
thereof, shall be submitted to arbitration in accordance with
the rules of the International Chamber of Commerce of Paris in
the extent to which said laws are not incompatible with this
paragraph. The judgment ratifying the award of the arbitrators
may be pronounced by any court with competent jurisdiction
therefor, or said court may be petitioned to ratify the award
for its execution, as applicable. The arbitration petition
shall be made within a reasonable time period, counting as of
the time that the claim, dispute, or any other question in
doubt arises, but in no case after the date on which the
matter in law or in equity, on the basis of said claim,
dispute, or other question in doubt, would have lapsed under
the applicable statute of limitations.
----------
* Translator's Note: Numbering error reproduced in accordance with the
Spanish original of this document.
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10.4.2 The arbitration panel shall be comprised by three arbitrators,
one of whom shall be designated by each Party hereto. The two
arbitrators so designated shall in turn designate a third
arbitrator, with the understanding, nonetheless, that if the
two arbitrators do not reach an agreement with respect to the
designation of the third arbitrator, either of the arbitrators
may request that the International Chamber of Commerce of
Paris make the designation.
10.4.3 The venue of the arbitration shall be the city of Dallas,
Texas, and the arbitration shall be conducted indistinctly in
English and/or Spanish.
10.4.4 Each of the Parties hereby waives the requirement of a
hand-delivered arbitration notice and agrees that notice may
be made in writing by certified or registered mail, return
receipt requested, to the address indicated in this Agreement.
The Parties further agree that any petition handled in such a
manner shall be deemed made on the tenth following Banking
Day, counting as of the date that it was deposited in the
mail.
10.4.5 Any court proceeding brought in support of the arbitration
with respect to this Agreement, including interim equitable
relief, shall be filed with the competent court authority.
Each of the Parties hereto (a) generally and unconditionally
accepts the exclusive competency of said court and any related
Court of Appeals, and irrevocably waives any objection it
might have now or in the future regarding jurisdiction for any
litigation, court action, or procedure brought in said courts,
or any objection claiming that said courts lack proper
jurisdiction.
10.4.6 Copies. This Agreement may be simultaneously signed in one or
more copies, each of which shall be considered an original,
but all of which together shall constitute one and the same
instrument.
10.4.7 Headings. The headings to the various clauses contained in
this Agreement are for purposes of reference only, and shall
in no way whatsoever effect its meaning or interpretation.
10.4.8 Indivisible Agreement. This Agreement, including its
attachments and the documents mentioned herein, constitute the
entire Agreement and the covenants between the parties hereto
with respect to the objective contained in this Agreement.
There are no other restrictions, promises, representations,
absolute guaranties, warranties, or commitments other than
those expressly set forth or mentioned herein. This Agreement
replaces all contracts and agreements previously made between
the Parties with respect to said objective.
14 [initials]
29
10.4.9 Amendments and Modifications. This Agreement may only be
amended or modified through a written agreement between the
Parties hereto.
10.4.10 Binding Nature. Benefits. This agreement shall enure to the
benefit of the Parties hereof and their respective successors
and assigns, and shall be binding upon them. Nothing expressly
or implicitly included in this Agreement is intended to grant
any person other than the Parties hereto, or their respective
successors and assigns, any right, remedy, obligation, or
liability under this Agreement or arising from it.
10.4.11 Assignment. This Agreement may not be assigned by any of the
parties hereto, except with written consent from its other
Parties.
IN WITNESS WHEREOF, the Parties hereto have signed this Agreement on the date
set forth in the opening hereof.
TRUSTEE
By: _______________________________
Position: _________________________
TN-Espana
TERRA NETWORKS, S.A.
By: _______________________________
Position: _________________________
BIDASOA
BIDASOA, B.V.
By: _______________________________
Position: _________________________
15 [initials]
30
Final Version
Exhibit B
Model of Letter Exercising Option Right
October [ ], 1999
Telefonica, S.A.
Xxxx Xxx, 00
00000 Xxxxxx
Attn.: Assistant Secretary General
Dear Sirs:
This is to inform you that, exercising our option right born of the Option
Contract that we signed with you on October 5, 1999 (hereinafter the
"Contract"), we have hereby decided to purchase the "TN Shares" covered under
the Contract for the total price of US$220,000,000.00 (Two hundred twenty
million dollars), at the Institutional Price per Share, using the Dollar/Euro
Exchange Rate on the date on which the IPO is conducted, pursuant to the
conditions agreed in said Contract.
Sincerely,
BIDASOA, B.V.
by proxy
Signed [ ]
15
31
Final Version
BIDASOA B.V.
Olympic Plaza
Xxxx Xxxxxxxxxxx 000
Xxxxxxxxx 0000XX
Xxxxxxxxx, October 11, 1999
Telefonica, S.A.
Xxxx Xxx, 00
00000 Xxxxxx
Attn.: Assistant Secretary General
Dear Sirs:
This is to inform you that, exercising our option right born of the Option
Contract that we signed with you on October 5, 1999 (hereinafter the
"Contract"), we have hereby decided to purchase the "TN Shares" covered under
the Contract for the total price of US$220,000,000.00 (Two hundred twenty
million dollars), at the Institutional Price per Share, using the Dollar/Euro
Exchange Rate on the date on which the IPO is conducted, pursuant to the
conditions agreed in said Contract.
Sincerely,
BIDASOA, B.V.
by proxy
[signature] [signature]
By: ATC Management BV By: ATC Management BV
Signed Xxxxx Xxxxxxxxxxxxx Signed Xxxx Xxxxx
Received and agreed.
TELEFONICA, S.A.
by proxy
[signature]
-------------------------
Signed Xxxxx Xxxxxx Xxxxx
16
