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Exhibit 2.22
TELEFONICA TERRA NETWORKS
AGREEMENT FOR OPTION TO SUBSCRIBE SHARES
This Agreement for an Option to Subscribe Shares is entered into by and between:
(i) TELEFONICA DEL PERU, S.A.A., identified under no. 10001749 of the Unified
Taxpayers Registry (Registro Unico de Contribuyentes - RUC), with
corporate offices at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, in the province
and department of Lima, Peru; represented herein by ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, in his capacity as General Manager, as authorized in a special
power of attorney bearing on this agreement, and identified with Alien
Identification Card No. N-87010; hereinafter referred to as "TELEFONICA."
(ii) TERRA NETWORKS, S.A., a corporation founded under the laws of Spain,
identified under Tax ID No. A-82/196060, with corporate offices at Via de
las 2 ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇▇) ▇▇▇▇▇ ▇▇▇▇▇,
represented herein by ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ de Buruaga in his capacity as
Chairman and Chief Executive, identified with National ID Card No.
14801736-W, who warrants that he has sufficient authority to enter into
this agreement; hereinafter referred to as "TERRA."
This Agreement for an Option to Subscribe Shares is entered into according to
the following terms and conditions:
ONE. - OPTION
By this instrument, TERRA grants TELEFONICA an option to subscribe in TERRA
shares in an amount equaling US$30,000,000.00 (thirty million and ▇▇/▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ dollars). TELEFONICA shall have to exercise this option one day prior to
the time the documents are registered with the supervisory bodies for the Stock
Exchanges entailed in this transaction. TERRA shall have to give five (5) days
advance notice of this date.
In the event TELEFONICA fails to exercise the option by the deadline and
according to the agreed terms, it shall lose its right to do so.
To this end, the share price of the TERRA shares shall be the institutional
price set for the public offering of subscription stipulated above. To this end,
the "Institutional Price" shall be understood to refer to the price accepted by
TERRA as the share price for the shares issued by Terra that are offered to
institutional investors as part of the Initial Public Offering held in the Stock
Exchanges of Spain, NASDAQ and the stock exchanges of other countries.
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TWO. - TRANSFER OF TERRA SHARES
2.1 Restrictions on the Transfer. TELEFONICA hereby undertakes not to transfer
any of its TERRA Shares to any other person, for a period of one (1) year
following the date hereof.
2.2 Pre-Emptive Right. After the one-year period described above has elapsed,
any transfers made by TELEFONICA to third parties of its shares in TERRA
shall be subject to a pre-emptive right which shall apply as set forth
below:
If, at any time, TELEFONICA wishes to transfer its shares in TERRA, it
must submit an offer in writing (the "Offer") to sell all and no fewer
than all of its TERRA Shares (the "Shares Offered") to TERRA. The Offer
must mention the Shares Offered that it proposes to sell, the total number
of TERRA Shares held by TELEFONICA, the terms and conditions, including
the proposed selling price and any other significant fact relating to the
proposed sale. The Offer must also state that TERRA may acquire, in
accordance with the terms of this Agreement, all the Shares Offered for
the price and in accordance with the other terms and conditions of the
Offer, including any deferral of payment (if applicable).
2.2.1 Decision to Buy, Close. If TERRA chooses to buy the Shares Offered
for the price proposed by the Seller, it must give notice of this
fact in writing within ten (10) calendar days following the date on
which the Offer was received. Said notice, together with the Offer,
shall constitute a valid, legally binding and enforceable agreement
to sell and purchase the Shares Offered. This option shall be
subject to obtaining any regulatory approvals that may be needed and
to expiry of any waiting periods required under applicable law. The
parties agree to work together to make the presentations and obtain
the approvals needed for TERRA to be able to exercise its rights
under this Agreement. The sale of the Shares Offered to TERRA in
accordance with this Section must take place at 11:00 a.m., Peruvian
Time, at TELEFONICA'S offices or whatever other place is agreed by
the parties on the later of the following dates (i) the tenth day
following the date the notice sent by TERRA in which it chooses to
purchase the Shares Offered is received, or (ii) the [tenth (10)]
business day after all the regulatory approvals needed for said
transaction have been obtained and any applicable waiting period has
expired. The sale shall be completed when TELEFONICA hands over to
TERRA the certificates representing the Shares Offered which are to
be purchased, together with a transfer of shares, and when TERRA
hands over to TELEFONICA the selling price thereof in cash or in the
form of bank documents representing funds that are immediately
available.
2.2.2 Decision Not to Buy. In the event that TERRA were to accept only
part of the Offer, or if the acceptance period expires without any
statement being made that it intends to buy, the Offer shall be
deemed to have been turned down. Only in such an event may
TELEFONICA offer to sell the TERRA shares to third parties,
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subject to the maximum percentage restrictions set out in Section
One above, for a period of ten (10) days following the date on which
the notice of refusal of the Offer was received or was deemed to
have been received, subject to the limitation that the Shares
Offered must be sold for the price and under the same or more
onerous terms than in the Offer. Compliance with said terms must be
checked by the respective general manager of TERRA either when or
before the transfer takes place. If the potential third-party buyer
fails to make the purchase within the same period of time provided
for in the Offer to TERRA in accordance with paragraph (a) above, or
if TELEFONICA wishes to offer its shares in TERRA at a price or
under terms that are not as onerous as the price and terms of the
Offer, the Shares Offered may not be sold, assigned or transferred
unless they have first been offered to TERRA once again, in
accordance with the terms of this Section Two.
THREE. - TERM
This Agreement shall have a term of ten (10) years as from the date hereof. The
above notwithstanding, this Agreement may not be terminated as long as
TELEFONICA remains a shareholder of TERRA.
FINAL PROVISIONS
FOUR. - HEADINGS
The headings used in each Clause are for reference purposes only and shall not
be construed to have any effect on the content or scope of this Agreement.
FIVE. - WAIVERS
Any failure to exercise a right shall not entail a waiver thereof.
SIX. - APPLICABLE LAW
This Agreement shall be construed and governed in accordance with the current
law of the Kingdom of Spain.
SEVEN. - PARTIAL INVALIDITY
In the event that any stipulation or agreement herein is deemed to be invalid or
unenforceable by any arbitration award rendered under the terms of the
Agreement, or by any competent court, said decision shall not affect the
validity of any other provision of this Agreement, provided that they can be
separated.
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EIGHT. - EXPENSES
Each Party shall pay the expenses it has incurred for preparing, formalizing and
carrying out this Agreement.
NINE. - ADDRESS FOR NOTICES
Any notices sent to either of the Parties shall be deemed to have been validly
received by the other party if (i) it is delivered in person or sent by a
messenger, courier or similar service; or (ii) it is sent by fax with
acknowledgement of receipt, on the date of delivery, to the addresses given
below:
To TELEFONICA: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇
Attn.: General Manager
To TERRA: ▇▇▇ ▇▇ ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇
Pozuelo ▇▇ ▇▇▇▇▇▇▇
(Madrid) ▇▇▇▇▇
▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ de Buruaga
These addresses may be changed to new addresses in the city of Lima, giving 15
days' prior written notice to the other party.
TEN. - ARBITRATION AGREEMENT
Any disputes or disagreement between the Parties arising from the interpretation
or performance of this Agreement shall be submitted to an Arbitration Panel made
up of three members, whose decision shall be binding. Each party shall appoint
one arbitrator, and the third arbitrator shall be appointed by the first two
arbitrators so appointed. In the event that no agreement is reached on the
appointment of the third arbitrator, or if either of the parties fails to
appoint its arbitrator within the ten days after being called on to do so by the
other party, the appropriate appointment shall be made by the Lima Chamber of
Commerce.
The arbitration shall be by right and shall be governed by the rules of
procedure laid down by the Arbitration Center of the Lima Chamber of Commerce.
ELEVEN. - GENERAL PROVISIONS
This Agreement may be modified, regulated or terminated only upon the express,
written agreement of the Parties.
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TWELVE. - COPIES
Set out in Lima on October 20, 1999, on two identical copies, one copy each
remaining in the possession of each of the Contracting Parties.
[Illegible signature] [Illegible signature]
TELEFONICA DEL PERU, S.A.A. TERRA NETWORKS S.A.