{"id":43211,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-and-plan-of-reorganization-terra-networks-sa-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-reorganization-terra-networks-sa-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-reorganization-terra-networks-sa-and.html","title":{"rendered":"Agreement and Plan of Reorganization &#8211; Terra Networks SA and Lycos Inc."},"content":{"rendered":"<pre>\n\n                     AGREEMENT AND PLAN OF REORGANIZATION\n\n                                by and between\n\n                             TERRA NETWORKS, S.A.\n\n                                      and\n\n                                  LYCOS, INC.\n\n                           Dated as of May 16, 2000\n\n\n\n\n\n                               TABLE OF CONTENTS\n\n                                                                          Page\n\n                     AGREEMENT AND PLAN OF REORGANIZATION\n\n                                   ARTICLE I\n\n                          THE REINCORPORATION MERGER\n\n1.1     The Reincorporation Merger......................................     1\n1.2     Reincorporation Effective Time..................................     2\n1.3     Effects of the Reincorporation Merger...........................     2\n1.4     Conversion of Lycos Common Stock................................     2\n1.5     Options.........................................................     2\n1.6     Articles of Incorporation.......................................     3\n1.7     ByLaws..........................................................     3\n1.8     Tax and Accounting Consequences.................................     3\n1.9     Board of Directors; Management..................................     3\n                                                                             \n                                  ARTICLE II\n                                                                             \n                              THE SHARE EXCHANGE\n                                                                             \n2.1     The Share Exchange..............................................     3\n2.2     Exchange Effective Time.........................................     4\n2.3     Effects of the Share Exchange...................................     4\n2.4     Conversion of Lycos Virginia Common Stock.......................     4\n2.5     Terra Capital Stock.............................................     5\n2.6     Options.........................................................     5\n2.7     Tax and Accounting Consequences.................................     6\n                                                                             \n                                  ARTICLE III\n                                                                             \n                              EXCHANGE OF SHARES\n                                                                             \n3.1     Terra to Make Shares Available..................................     6\n3.2     Exchange of Shares..............................................     6\n                                                                             \n                                  ARTICLE IV\n                                                                             \n                    REPRESENTATIONS AND WARRANTIES OF LYCOS\n                                                                             \n4.1     Corporate Organization..........................................     8\n4.2     Capitalization..................................................     9\n4.3     Authority; No Violation.........................................    10\n4.4     Consents and Approvals..........................................    11\n4.5     SEC Reports and Financial Statements............................    11\n4.6     Broker's Fees...................................................    12\n4.7     Absence of Certain Changes or Events............................    13\n\n\n                                     -i-\n\n\n\n\n\n4.8     Legal Proceedings...............................................    13\n4.9     Taxes and Tax Returns...........................................    13\n4.10    Employees.......................................................    14\n4.11    Compliance with Applicable Law..................................    16\n4.12    Certain Contracts...............................................    16\n4.13    Environmental Liability.........................................    17\n4.14    State Takeover Laws.............................................    17\n4.15    Intellectual Property; Proprietary Rights; Employee Restrictions    17\n4.16    Insurance.......................................................    19\n4.17    Opinions........................................................    19\n4.18    Lycos Information...............................................    19\n                                                                             \n                                   ARTICLE V\n                                                                             \n                        REPRESENTATIONS AND WARRANTIES\n                                                                             \n                                   OF TERRA\n                                                                             \n5.1     Corporate Organization..........................................    19\n5.2     Capitalization..................................................    20\n5.3     Authority; No Violation.........................................    21\n5.4     Consents and Approvals..........................................    22\n5.5     SEC Reports and Financial Statements............................    22\n5.6     Broker's Fees...................................................    23\n5.7     Absence of Certain Changes or Events............................    23\n5.8     Legal Proceedings...............................................    24\n5.9     Taxes and Tax Returns...........................................    24\n5.10    Employees.......................................................    25\n5.11    Compliance with Applicable Law..................................    25\n5.12    Certain Contracts...............................................    25\n5.13    Environmental Liability.........................................    26\n5.14    Intellectual Property; Proprietary Rights; Employee Restrictions    27\n5.15    Insurance.......................................................    28\n5.16    Opinions........................................................    28\n5.17    Terra Information...............................................    28\n5.18    Telefonica Ownership............................................    29\n                                                                             \n                                  ARTICLE VI\n                                                                             \n                   COVENANTS RELATING TO CONDUCT OF BUSINESS\n                                                                             \n6.1     Conduct of Businesses Prior to the Effective Time...............    29\n6.2     Lycos Forbearances..............................................    29\n6.3     Terra Forbearances..............................................    31\n6.4     Taxes...........................................................    32\n                                                                            \n\n                                     -ii-\n\n\n\n\n                                  ARTICLE VII\n                                                                            \n                             ADDITIONAL AGREEMENTS\n\n7.1     Regulatory Matters..............................................    32\n7.2     Access to Information...........................................    33\n7.3     Shareholder and Terra Board Approvals...........................    34\n7.4     Affiliates......................................................    35\n7.5     Stock Exchange Listing..........................................    35\n7.6     Employee Benefit Plans..........................................    35\n7.7     Indemnification; Directors' and Officers' Insurance.............    36\n7.8     Additional Agreements...........................................    36\n7.9     Advice of Changes...............................................    37\n7.10    Exemption from Liability Under Section 16(b)....................    37\n7.11    Reasonable Best Efforts.........................................    37\n7.12    Acquisition Proposals...........................................    37\n7.13    Board of Directors..............................................    88\n7.14    Capital Increase................................................    38\n7.15    Transfer Taxes..................................................    39\n7.16    Lycos Virginia..................................................    39\n7.17    Employee Stock Purchase Plan....................................    39\n7.18    State Takeover Laws.............................................    39\n                                                                            \n                                 ARTICLE VIII\n                                                                        \n                             CONDITIONS PRECEDENT\n\n8.1     Conditions to Each Party's Obligation to Effect the \n          Reincorporation Merger and the Share Exchange.................    39\n8.2     Conditions to Obligations of Lycos..............................    41\n8.3     Conditions to Obligations of Terra..............................    41\n                                                                            \n                                  ARTICLE IX\n                                                                        \n                           TERMINATION AND AMENDMENT\n\n9.1     Termination.....................................................    42\n9.2     Effect of Termination...........................................    43\n9.3     Amendment.......................................................    44\n9.4     Extension; Waiver...............................................    44\n                                                                            \n                                   ARTICLE X\n                                                                        \n                              GENERAL PROVISIONS\n\n10.1    Closing.........................................................    45\n10.2    Nonsurvival of Representations, Warranties and Agreements.......    45\n10.3    Expenses........................................................    45\n10.4    Notices.........................................................    45\n10.5    Interpretation..................................................    47\n\n\n                                     -iii-\n\n\n\n\n\n10.6    Counterparts....................................................    47\n10.7    Entire Agreement................................................    47\n10.8    Governing Law...................................................    47\n10.9    Publicity.......................................................    47\n10.10   Assignment; Third Party Beneficiaries...........................    47\n10.11   Submission to Jurisdiction; Waivers; Consent to Service of \n          Process.......................................................    47\n10.12   Enforcement of Agreement........................................    48\n10.13   Waiver of Jury Trial............................................    48\n                                                                            \n                                                                                \n                                                                            \nExhibit 6.5 - Form of Affiliate Letter Addressed to Terra\n\n                                     -iv-\n\n\n\n\n\n                            INDEX OF DEFINED TERMS\n\n                                          Section                   Page No.\n                                          \nAcquisition Proposal................      7.12                        38\nAgreement...........................      Recitals                     1\nAuthorized Agent....................      10.11(c)                    48\nBoard Reports.......................      7.1(b)                      32\nCERCLA..............................      4.13                        17\nClosing.............................      10.1                        45\nClosing Date........................      10.1                        40\nCode................................      Recitals                    1\nCommercial Registry.................      2.3                         4\nConfidentiality Agreement...........      7.2(b)                      34\nDepositary..........................      3.1                         6\nDepositary Agreement................      2.4                         5\nDGCL................................      1.1                         1\nERISA...............................      4.10(a)                     15\nESPP................................      7.17                        39\nExchange Act........................      4.5(b)                      12\nExchange Agent......................      3.1                         6\nExchange Effective Time.............      2.2                         4\nExchange Fund.......................      3.1                         6\nExchange Ratio......................      2.4                         4\nF-4.................................      4.4                         11\nGovernmental Entity.................      4.4                         11\n\n\n                                     -v-\n\n\n\n\n\nHSR Act.............................      4.4                         11\nIRS.................................      4.9(a)                      14\nLiens...............................      4.2(b)                      6\nLycos...............................      Recitals                    1\nLycos 1999 10-K.....................      4.5(b)                      12\nLycos Benefit Plans.................      4.10(a)                     15\nLycos Board.........................      Recitals                    1\nLycos Capital Stock.................      4.2(a)                      9\nLycos Common Certificate............      1.4(b)                      2\nLycos Common Stock..................      1.4(a)                      2\nLycos Contract......................      4.12(a)                     17\nLycos Disclosure Schedule...........      4.1                         8\nLycos DRIP..........................      4.2(a)                      19\nLycos Employees.....................      7.6(a)                      35\nLycos ERISA Affiliate...............      4.10(a)                     15\nLycos ESPP..........................      4.2(a)                      16\nLycos Insiders......................      7.10                        37\nLycos Preferred Stock...............      4.2(a)                      9\nLycos Rights........................      4.2(a)                      9\nLycos SEC Reports...................      4.5(a)                      12\nLycos Stock Plans...................      4.2(a)                      10\nLycos Stockholder Approval..........      4.3(a)                      10\nLycos Stockholder Meeting...........      7.3(a)                      34\n\n\n                                     -vi-\n\n\n\n\n\nLycos Virginia......................      Recitals                    1\nLycos Virginia Articles.............      1.6                         3\nLycos Virginia By-Laws..............      1.7                         3\nLycos Virginia Certificate..........      2.1                         4\nLycos Virginia Common Certificates..      1.4(b)                      2\nLycos Virginia Common Stock.........      1.4(a)                      2\nMaterial Adverse Effect.............      4.1(a)                      9\nNew Benefit Plans...................      7.6(a)                      31\nNasdaq..............................      5.4                         22\nNSEC................................      5.4                         22\nProspectus..........................      5.4                         22\nProxy Statement.....................      4.4                         11\nReincorporation Effective Time......      1.2                         2\nReincorporation Merger..............      Recitals                    1\nRepresentatives.....................      7.12                        34\nRequisite Regulatory Approvals......      8.1(c)                      35\nRestraints..........................      8.1(e)                      40\nSCL.................................      2.1                         4\nSCME................................      2.4(a)                      4\nSection 16 Information..............      7.10                        37\nSecurities Act......................      4.5(a)                      12\nShare Exchange......................      Recitals                    1\nShareholder Transfer Tax............      7.15                        35\n\n\n                                    -vii-\n\n\n\n\n\nSpanish GAAP........................      5.5(b)                      23\nSubsidiary..........................      4.1(a)                      9\nSurviving Corporation...............      1.1                         1\nTax.................................      4.9(c)                      14\nTaxes...............................      4.9(c)                      14\nTermination Fee.....................      9.2(b)                      38\nTerra...............................      Recitals                    1\nTerra ADSs..........................      2.4                         4\nTerra Articles......................      5.1(a)                      20\nTerra Average Price.................      2.4(a)                      4\nTerra Board.........................      Recitals                    1\nTerra By-Laws.......................      5.1(a                       20\nTerra Capital Stock.................      5.2(a)                      20\nTerra Common Stock..................      1.4(a)                      2\nTerra Contract......................      5.12(a)                     26\nTerra Disclosure Schedule...........      Article V                   19\nTerra Employment Benefit Plans......      5.10                        25\nTerra Registration Statement........      5.5(b)                      23\nTerra Rights........................      5.2(a)                      20\nTerra Rights Agreement..............      1.4(a)                      3\nTerra SEC Reports...................      5.5(a)                      22\nTerra Shareholder Approval..........      5.3(c)                      34\nTerra Shares........................      5.2(a)                      20\n\n\n                                    -viii-\n\n\n\n\n\nTerra Stock Plans...................      5.2(a)                      20\nTransfer Tax........................      7.15                        39\nVSCA................................     Recitals                      1\n\n\n                                     -ix-\n\n\n\n\n                     AGREEMENT AND PLAN OF REORGANIZATION\n\n          AGREEMENT AND PLAN OF REORGANIZATION, dated as of May 16, 2000 (this\n\"Agreement\"), by and between Terra Networks, S.A., a company organized under\nthe laws of the Kingdom of Spain (\"Terra\"), and Lycos, Inc., a Delaware\ncorporation (\"Lycos\").\n\n                             W I T N E S S E T H :\n\n          WHEREAS, the Boards of Directors of each of Terra (the \"Terra\nBoard\") and Lycos (the \"Lycos Board\") have approved the strategic business\ncombination transaction provided for herein in which Lycos will, subject to\nthe terms and conditions set forth herein, merge with and into a newly formed,\nwholly owned subsidiary of Lycos incorporated in Virginia (\"Lycos Virginia\"),\nwith Lycos Virginia surviving such merger (the \"Reincorporation Merger\"),\nwhich shall be immediately followed by a statutory share exchange pursuant to\nthe Virginia Stock Corporation Act (the \"VSCA\") such that Lycos will become a\nwholly owned subsidiary of Terra (the \"Share Exchange\" and, together with the\nReincorporation Merger, the \"Reorganization\");\n\n          WHEREAS, it is the intent of the parties hereto that, for U.S.\nfederal income tax purposes, each of the Reincorporation Merger and the Share\nExchange shall constitute a \"reorganization\" within the meaning of Section\n368(a) of the Internal Revenue Code of 1986, as amended (the \"Code\"), and that\nthis Agreement shall constitute a \"plan of reorganization\" for the purposes of\nSections 354 and 361 of the Code;\n\n          WHEREAS, for U.S. federal income tax purposes, it is intended that\nthe Share Exchange result in no gain recognition to the shareholders of Lycos\nVirginia pursuant to Section 367(a) of the Code; and\n\n          WHEREAS, the parties desire to make certain representations,\nwarranties and agreements in connection with the Reorganization and also to\nprescribe certain conditions to the Reorganization;\n\n          NOW, THEREFORE, in consideration of the mutual covenants,\nrepresentations, warranties and agreements contained herein, and intending to\nbe legally bound hereby, the parties agree as follows:\n\n                                  ARTICLE I\n\n                          THE REINCORPORATION MERGER\n\n          1.1       The Reincorporation Merger. Subject to the terms and\nconditions of this Agreement, in accordance with the General Corporation Law\nof Delaware (the \"DGCL\") and the VSCA, at the Reincorporation Effective Time\n(as defined in Section 1.2), Lycos shall merge with and into Lycos Virginia.\nLycos Virginia shall be the surviving corporation (the \"Surviving\nCorporation\") in the Reincorporation Merger and shall continue its corporate\nexistence under the laws of the Commonwealth of Virginia. Upon consummation of\nthe Reincorporation Merger, the separate corporate existence of Lycos shall\nterminate.\n\n          1.2       Reincorporation Effective Time. The Reincorporation Merger\n\n\n\n\n\nshall become effective in accordance with the Plan of Merger set forth in\nAnnex B hereto on the Closing Date (as defined in Section 10.1) at the time\nthat is specified in the certificate of merger relating to the Reincorporation\nMerger issued by the Virginia State Corporation Commission (the\n\"Reincorporation Effective Time\").\n\n          1.3       Effects of the Reincorporation Merger. At and after the\nReincorporation Effective Time, the Reincorporation Merger shall have the\neffects set forth in the DGCL and the VSCA.\n\n          1.4       Conversion of Lycos Common Stock. (a) At the \nReincorporation Effective Time, by virtue of the Reincorporation Merger and\nwithout any action on the part of Lycos, Lycos Virginia or any holder of\ncommon stock, par value $0.01 per share, of Lycos (\"Lycos Common Stock\"), each\nshare of Lycos Common Stock issued and outstanding immediately prior to the\nReincorporation Effective Time shall be converted into one share of common\nstock, par value $0.01 per share, of Lycos Virginia (\"Lycos Virginia Common\nStock\").\n\n          (b)       All of the shares of Lycos Common Stock converted into\nshares of Lycos Virginia Common Stock pursuant to Section 1.4(a) shall no\nlonger be outstanding and shall automatically be canceled and shall cease to\nexist as of the Reincorporation Effective Time, and each certificate\npreviously representing any such shares (\"Lycos Common Certificate\") shall\nthereafter represent, without the requirement of any exchange thereof, that\nnumber of shares of Lycos Virginia Common Stock into which such shares of\nLycos Common Stock represented by such Lycos Common Certificate have been\nconverted pursuant to Section 1.4(a) (such certificates following the\nReincorporation Merger, the \"Lycos Virginia Common Certificates\").\n\n          1.5       Options. Lycos and Lycos Virginia shall take all requisite\naction such that, at the Reincorporation Effective Time, each option granted\nby Lycos to purchase shares of Lycos Common Stock that is outstanding and\nunexercised immediately prior thereto shall cease to represent a right to\nacquire shares of Lycos Common Stock and shall be converted automatically into\nan option to purchase a number of shares of Lycos Virginia Common Stock equal\nto the number of shares of Lycos Common Stock subject to such option\nimmediately prior to the Reincorporation Effective Time at an exercise price\nper share of Lycos Virginia Common Stock equal to the exercise price per share\nof Lycos Common Stock in effect immediately prior to the Reincorporation\nEffective Time and otherwise subject to the terms of the Lycos Stock Plans (as\ndefined in Section 4.2) under which such options were issued and the\nagreements evidencing grants thereunder (including accelerated vesting\nprovisions under such agreements evidencing grants thereunder or under any\nemployment agreements between employees of Lycos and Lycos). The adjustment\nprovided herein with respect to any options that are \"incentive stock options\"\n(as defined in Section 422 of the Code) shall be and is intended to be\neffected in a manner which is consistent with Section 424(a) of the Code. The\nduration and other terms of the new option shall be the same as the original\noption except that all references to Lycos shall be deemed to be references to\nLycos Virginia. Notwithstanding anything to the contrary herein, each option\ngranted by Lycos to a non-employee director prior to the Reincorporation\nEffective Time shall be fully vested, to the extent not already vested, as of\nthe Reincorporation Effective Time.\n\n          1.6   Articles of Incorporation. Subject to the terms and conditions\nof \n\n\n                                     -2-\n\n\n\n\nthis Agreement, at the Reincorporation Effective Time, the Articles of\nIncorporation of Lycos Virginia (the \"Lycos Virginia Articles\") in effect\nimmediately prior to the Reincorporation Merger shall be shall be the Articles\nof Incorporation of the Surviving Corporation until thereafter amended in\naccordance with applicable law (it being understood and agreed that the Lycos\nVirginia Articles shall be substantially consistent with the Restated\nCertificate of Incorporation of Lycos as in effect immediately prior to the\nReincorporation Effective Time with such changes as are required by the VSCA\nand otherwise as proposed by Terra and not reasonably objected to by Lycos).\nThe Lycos Virginia Articles shall provide that authorization of a share\nexchange pursuant to Section 13.1-718 of the VSCA shall require the approval\nof a majority of all of the votes entitled to be cast on such matter by\nholders of Lycos Virginia Common Stock.\n\n          1.7       ByLaws. Subject to the terms and conditions of this\nAgreement, at the Reincorporation Effective Time, the Bylaws of Lycos Virginia\n(the \"Lycos Virginia By-Laws\") in effect immediately prior to the\nReincorporation Merger shall be the Bylaws of the Surviving Corporation until\nthereafter amended in accordance with applicable law (it being understood and\nagreed that the Lycos Virginia By-Laws shall be substantially consistent with\nthe Restated By-Laws of Lycos as in effect immediately prior to the\nReincorporation Effective Time with such changes as are required by the VSCA\nand otherwise as proposed by Terra and not reasonably objected to by Lycos).\n\n          1.8       Tax and Accounting Consequences. It is intended that the\nReincorporation Merger shall constitute a \"reorganization\" within the meaning\nof Section 368(a) of the Code and that this Agreement shall constitute a \"plan\nof reorganization\" for the purposes of Sections 354 and 361 of the Code.\n\n          1.9       Board of Directors; Management. The directors and officers\n\nof Lycos immediately prior to the Reincorporation Effective Time shall be the\ndirectors and officers of Lycos Virginia, each to hold office in accordance\nwith the Lycos Virginia Articles until their respective successors are duly\nelected or appointed and qualified.\n\n\n                                  ARTICLE II\n\n                              THE SHARE EXCHANGE\n\n          2.1       The Share Exchange. Subject to the terms and conditions of\nthis Agreement, in accordance with the VSCA and the Spanish Corporation Law of\n1989 (Texto Refundido de la Ley de Sociedades Anonimas) (the \"SCL\"), at the\nExchange Effective Time, pursuant to the provisions of Section 13.1-172 of the\nVSCA, Lycos Virginia shall become a wholly owned subsidiary of Terra through\nthe exchange of each outstanding Tiger Share (as defined in Section 5.2) (such\nshares to be issued in the form of Terra ADSs (as defined in Section 2.4)\nexcept as otherwise provided in Section 2.4) determined in accordance with\nSection 2.4(a). The separate corporate existence of each of Lycos Virginia and\nTerra shall continue following the Share Exchange.\n\n          2.2       Exchange Effective Time. The Share Exchange shall become\neffective (the \"Exchange Effective Time\") in accordance with the Plan of Share\nExchange set \n\n\n                                     -3-\n\n\n\n\nforth in Annex A hereto on the Closing Date at the time that is\nspecified in the certificate of share exchange relating to the Share Exchange\nissued by the Virginia State Corporation Commission and that Terra receives\nthe Lycos Virginia Certificate in exchange for the Terra Shares being issued\npursuant to Section 2.3(a). As used in this Agreement, \"Lycos Virginia\nCertificate\" shall mean the certificate representing the shares of Lycos\nVirginia Common Stock being received by Terra pursuant to the terms hereof.\n\n          2.3       Effects of the Share Exchange. At and after the Exchange\nEffective Time, the Share Exchange shall have the effects set forth in the\nVSCA. The Share Exchange shall be effected in accordance with Articles 153(a)\nand 155 of the SCL by the Terra Board's execution of the approval of the\nshareholders of Terra to increase the share capital of Terra against a\ncontribution in kind (Aumento con aportaciones no dinerarias) and shall be\nregistered pursuant to the Deed of Capital Increase with the Commercial\nRegistry (Registro Mercantil) for the Province of Madrid (the \"Commercial\nRegistry\"). The Deed of Capital Increase shall be delivered to the Settlement\nand Clearing System, for the new shares to be registered in the name of the\nDepositary (as defined below), and to the Spanish Stock Exchange, for the\nadmission authorization of the Terra Shares to be listed.\n\n          2.4       Conversion of Lycos Virginia Common Stock. Subject to\nSection 3.2(e), at the Exchange Effective Time, by virtue of the Share\nExchange and without any action on the part of Lycos Virginia or any holder of\nLycos Virginia Common Stock, each share of Lycos Virginia Common Stock issued\nand outstanding immediately prior to the Exchange Effective Time shall be\nexchanged for that number of shares of Terra Capital Stock (as defined in\nSection 5.2) determined by dividing (i) $97.55 by (ii) the average closing\nprice (rounded to the nearest thousandth of a dollar, or if there shall not be\na nearest thousandth, the next higher thousandth) of Terra Shares (the \"Terra\nAverage Price\") on the Continuous Market Exchange (Systema de Interconexion\nBursatil-Mercado Continuo) (the \"SCME\") for the ten full SCME trading days\nending on the tenth SCME trading day prior to the Closing Date (excluding the\nClosing Date), each closing price expressed in U.S. dollars using the noon\nbuying rate of Euro for U.S. dollars as reported by the U.S. Federal Reserve\nas of each day on which such average closing price is measured (such quotient,\nas it may be adjusted as provided herein, the \"Exchange Ratio\"); provided,\nhowever, that if the Terra Average Price is equal to or greater than $68.06,\nthe Exchange Ratio shall be 1.433, and if the Terra Average Price is equal to\nor less than $45.37, the Exchange Ratio as shall be 2.150. The Terra Shares to\nbe issued in exchange for the shares of Lycos Virginia Common Stock exchanged\nhereunder shall be registered in the name of the Depositary by the Settlement\nand Clearing System and then delivered (x) in the form of American depositary\nshares representing Terra Shares (\"Terra ADSs\"), and such Terra ADSs shall be\nissued in accordance with the Depositary Agreement, dated as of November 15,\n1999, by and between Terra, Citibank, N.A., as depositary, and the holders of\nTerra ADSs (as such agreement may be amended to deposit the Terra Shares being\nissued pursuant hereto and to deliver the Terra ADSs being delivered hereto)\nor a depositary agreement to be entered into after the date of this Agreement\nin form and substance not reasonably objected to by Lycos (the \"Depositary\nAgreement\") or (y) if and to the extent elected by any holder in the manner\nprovided in Section 3.2(b), in the form of Terra Shares, in account entry\nform, rather than Terra ADSs. Following the Exchange Effective Time, each\nLycos Virginia Common Certificate exchanged for Terra Shares pursuant to this\nSection 2.4 shall cease to represent shares of Lycos Virginia Common Stock and\nshall thereafter represent only the right to receive (i) a receipt issued in\naccordance with the Depositary Agreement representing the number of whole\nTerra ADSs or such number of Terra Shares in account entry form and (ii) cash\nin lieu of fractional \n\n\n                                     -4-\n\n\n\n\nTerra ADSs or Terra Shares, in each case, into which the shares of Lycos\nVirginia Common Stock represented by such Lycos Virginia Common Certificate\nhave been converted pursuant to this Section 2.4 and Section 3.2(e),\nrespectively. Certificates previously representing shares of Lycos Virginia\nCommon Stock shall be exchanged for receipts representing whole Terra ADSs or\nTerra Shares in account entry form and cash in lieu of fractional Terra ADSs\nTerra Shares issued and paid in consideration therefor upon the surrender of\nsuch Lycos Virginia Common Certificates in accordance with Section 3.2,\nwithout any interest thereon. If, prior to the Exchange Effective Time, the\noutstanding shares of Terra Capital Stock, Lycos Common Stock or Lycos\nVirginia Common Stock shall have been changed into or exchanged for a\ndifferent number or kind of shares or securities as a result of a merger,\nconsolidation or other business combination, of a reorganization,\nrecapitalization or reclassification, or of a stock dividend, stock split,\nreverse stock split or other similar change in capitalization, an appropriate\nand proportionate adjustment shall be made to the Exchange Ratio to provide to\nthe stockholders of Lycos the same economic effect, including any premiums, as\ncontemplated by this Agreement prior to such event.\n\n          2.5       Terra Capital Stock. At and after the Effective Time, each\nshare of Terra Capital Stock issued and outstanding immediately prior to the\nClosing Date shall remain an issued and outstanding share of Terra Capital\nStock and shall not be affected by the Share Exchange.\n\n          2.6       Options. (a) At the Exchange Effective Time, each option\ngranted by Lycos Virginia to purchase shares of Lycos Virginia Common Stock\nthat is outstanding and unexercised immediately prior thereto shall cease to\nrepresent a right to acquire shares of Lycos Virginia Common Stock and shall\nbe converted automatically into an option to purchase Terra ADSs in an amount\nand at an exercise price determined as provided below (and otherwise subject\nto the terms of the Lycos Stock Plans and the agreements evidencing grants\nthereunder):\n\n          (b)       The number of Terra ADSs to be subject to the new option\nshall be equal to the product of the number of shares of Lycos Virginia Common\nStock subject to the original option and the Exchange Ratio, provided that any\nfractional Terra ADS resulting from such multiplication shall be rounded to\nthe nearest whole share; and\n\n          (c)       The exercise price per Terra ADS under the new option shall\nbe equal to the exercise price per share of Lycos Virginia Common Stock under\nthe original option divided by the Exchange Ratio, provided that such exercise\nprice shall be rounded to the nearest whole cent.\n\n          (d)       The adjustment provided herein with respect to any options\nthat are \"incentive stock options\" (as defined in Section 422 of the Code)\nshall be and is intended to be effected in a manner that is consistent with\nSection 424(a) of the Code. The duration and other terms of the new option\nshall be the same as the original option, except that all references to Lycos\nor Lycos Virginia shall be deemed to be references to Terra.\n\n          2.7       Tax and Accounting Consequences. It is intended that the\nShare Exchange shall constitute a \"reorganization\" within the meaning of\nSection 368(a) of the Code and not result in gain recognition to the\nshareholders of Lycos Virginia pursuant to Section 367(a) of the Code, and\nthat this Agreement shall constitute a \"plan of reorganization\" for the\npurposes of Sections 354 and 361 of the Code.\n\n\n                                     -5-\n\n\n\n\n                                 ARTICLE III\n\n                              EXCHANGE OF SHARES\n\n          3.1       Terra to Make Shares Available. Promptly following the\nExchange Effective Time, Terra shall provide (i) to Citibank, N.A., as\ndepositary (or to such other depositary as Terra may select and which shall\nnot be reasonably objected to by Lycos) (the \"Depositary\"), the Terra Shares\nbeing issued in the form of Terra ADSs in accordance with this Article III and\ncash in lieu of any fractional Terra Shares, and the Depositary shall deposit\nwith a bank or trust company appointed by Lycos (which shall pay all fees of\nsuch bank or trust company) and not reasonably objected to by Terra (the\n\"Exchange Agent\"), for the benefit of the holders of Lycos Virginia Common\nCertificates, for exchange in accordance with this Article III, receipts\nrepresenting the Terra ADSs, and cash in lieu of any fractional Terra ADSs and\n(ii) to the Exchange Agent, the Terra Shares being issued in account entry\nform in accordance with this Article III and cash in lieu of any fractional\nTerra Shares, for the benefit of the holders of Lycos Virginia Common\nCertificates, for exchange in accordance with this Article III, the Terra\nShares in account entry form and cash in lieu of any fractional Terra Shares\n(such cash, receipts for Terra ADSs and Terra Shares in account entry form,\ntogether with any dividends or distributions with respect thereto, being\nhereinafter referred to as the \"Exchange Fund\"), to be issued pursuant to\nSection 2.3 and paid pursuant to Section 3.2(a) in exchange for outstanding\nshares of Lycos Virginia Common Stock.\n\n          3.2       Exchange of Shares. (a) As soon as practicable after the\nExchange Effective Time, and in no event later than five business days\nthereafter, the Exchange Agent shall mail to each holder of record of one or\nmore Lycos Virginia Common Certificates (i) a letter of transmittal, which\nshall specify that delivery shall be effected, and risk of loss and title to\nthe Lycos Virginia Common Certificates shall pass, only upon delivery of the\nLycos Virginia Common Certificates to the Exchange Agent), and which letter of\ntransmittal shall include a form of election by which each such holder may\nelect to receive all or any part of the Terra ADSs to which such holder is\nentitled in the form of Terra Shares in account entry form, rather than in the\nform of Terra ADSs (such Terra Shares or Terra ADSs to be received by a holder\npursuant to this Agreement being referred to as \"Terra Stock\") and (ii)\ninstructions for use in effecting the surrender of the Lycos Virginia Common\nCertificates i exchange for receipts representing the Terra ADSs or Terra\nShares in account entry form and any cash in lieu of fractional shares into\nwhich the shares of Lycos Virginia Common Stock represented by such Lycos\nVirginia Common Certificate or Lycos Virginia Common Certificates shall have\nbeen converted pursuant to this Agreement. Upon proper surrender of a Lycos\nVirginia Common Certificate or Lycos Virginia Common Certificates for exchange\nand cancellation to the Exchange Agent, together with such properly completed\nletter of transmittal, duly executed, the holder of such Lycos Virginia Common\nCertificate or Lycos Virginia Common Certificates shall be entitled to receive\nin exchange therefor, as applicable, (i) a receipt representing that number of\nwhole Terra ADSs or Terra Shares in account entry form to which such holder of\nLycos Virginia Common Stock shall have become entitled pursuant to the\nprovisions of Article II and (ii) a check representing the amount of any cash\nin lieu of fractional shares that suc holder has the right to receive in\nrespect of the Lycos Virginia Common Certificate or Lycos Virginia Common\nCertificates surrendered pursuant to the provisions of this Article III. No\ninterest will be paid or accrued on any cash in lieu of fractional shares or\non any unpaid dividends and distributions payable to holders of Certificates.\nUpon proper surrender of a Lycos Virginia Common Certificate or Lycos Virginia\nCommon Certificates for exchange and cancellation to \n\n\n                                     -6-\n\n\n\n\n\nthe Exchange Agent, the Exchange Agent shall contribute such certificates to\nTerra for Terra's Board of Directors to execute the Capital Increase against\nsuch contribution in kind. The Deed of Capital Increase shall be registered\npursuant to the Deed of Capital Increase with the Commercial Registry and\ndelivered to the Settlement and Clearing System, for the new shares to be\nregistered in the name of the Exchange Agent who will then issue Terra Stock.\n\n          (b)       No dividends or other distributions declared with respect\nto Terra Stock shall be paid to the holder of any unsurrendered Lycos Virginia\nCommon Certificate until the holder thereof shall surrender such Lycos\nVirginia Common Certificate in accordance with this Article III. After the\nsurrender of a Lycos Virginia Common Certificate in accordance with this\nArticle III, the record holder thereof shall be entitled to receive any such\ndividends or other distributions, without any interest thereon, that\ntheretofore had become payable with respect to Terra Stock represented by such\nCertificate.\n\n          (c)       If any receipt representing Terra ADSs or Terra Shares in\naccount entry form are to be issued in a name other than that in which the\nLycos Virginia Common Certificate or Lycos Virginia Common Certificates\nsurrendered in exchange therefor is or are registered, it shall be a condition\nof the issuance thereof that the Lycos Virginia Common Certificate or Lycos\nVirginia Common Certificates so surrendered shall be properly endorsed (or\naccompanied by an appropriate instrument of transfer) and otherwise in proper\nform for transfer, and that the person requesting such exchange shall pay to\nthe Exchange Agent in advance any transfer or other taxes required by reason\nof the issuance of a receipt representing Terra ADSs or Terra Shares in\naccount entry form in any name other than that of the registered holder of the\nLycos Virginia Common Certificate or Lycos Virginia Common Certificates\nsurrendered, or required for any other reason, or shall establish to the\nsatisfaction of the Exchange Agent that such tax has been paid or is not\npayable.\n\n          (d)       After the Exchange Effective Time, there shall be no\ntransfers on the stock transfer books of Lycos Virginia of the shares of Lycos\nVirginia Common Stock that were issued and outstanding immediately prior to\nthe Exchange Effective Time. If, after the Exchange Effective Time, Lycos\nVirginia Common Certificate are presented for transfer to the Exchange Agent,\nthey shall be cancelled and exchanged for receipts representing Terra ADSs or\nTerra Shares in account entry form as provided in this Article III.\n\n          (e)       Notwithstanding anything to the contrary contained herein,\nno receipts or scrip representing fractional Terra ADS or Terra Shares in\naccount entry form shall be issued upon the surrender for exchange of Lycos\nVirginia Common Certificates, no dividend or distribution with respect to\nTerra Stock shall be payable on or with respect to any fractional share, and\nsuch fractional share interests shall not entitle the owner thereof to vote or\nto any other rights of a shareholder of Terra. In lieu of the issuance of any\nsuch fractional share, Terra shall pay to each former shareholder of Lycos\nVirginia who otherwise would be entitled to receive such fractional share an\namount in cash determined by multiplying (i) the Terra Average Price by (ii)\nthe fraction of a Terra ADS or Terra Share (rounded to the nearest thousandth\nwhen expressed in decimal form) to which such holder would otherwise be\nentitled to receive pursuant to Section 2.3.\n\n          (f)       Any portion of the Exchange Fund that remains unclaimed by\nthe shareholders of Lycos Virginia for 12 months after the Exchange Effective\nTime shall be paid to Terra. Any former shareholders of Lycos Virginia who\nhave not theretofore complied with this \n\n\n                                     -7-\n\n\n\n\n\nArticle III shall thereafter look only to Terra for payment of the Terra\nStock, cash in lieu of any fractional shares and any unpaid dividends and\ndistributions on the Terra Stock deliverable in respect of each share of Lycos\nVirginia Common Stock, as the case may be, such shareholder holds as\ndetermined pursuant to this Agreement, in each case, without any interest\nthereon. Notwithstanding the foregoing, none of Lycos, Lycos Virginia, Terra,\nthe Exchange Agent or any other person shall be liable to any former holder of\nshares of Lycos Virginia Common Stock for any amount delivered in good faith\nto a public official pursuant to applicable abandoned property, escheat or\nsimilar laws.\n\n          (g)       In the event any Lycos Virginia Common Certificate shall\nhave been lost, stolen or destroyed, upon the making of an affidavit of that\nfact by the person claiming such Lycos Virginia Common Certificate to be lost,\nstolen or destroyed and, if reasonably required by Terra, the posting by such\nperson of a bond in such amount as Terra may determine is reasonably necessary\nas indemnity against any claim that may be made against it with respect to\nsuch Lycos Virginia Common Certificate, the Exchange Agent will issue in\nexchange for such lost, stolen or destroyed Lycos Virginia Common Certificate\nthe receipt representing Terra ADSs or Terra Shares in account entry form as\nprovided pursuant to this Agreement and any cash in lieu of fractional shares\ndeliverable in respect thereof pursuant to this Agreement.\n\n\n                                  ARTICLE IV\n\n                   REPRESENTATIONS AND WARRANTIES OF LYCOS\n\n          Except as disclosed in the Lycos disclosure schedule delivered to\nTerra concurrently herewith (the \"Lycos Disclosure Schedule\"), Lycos hereby\nrepresents and warrants to Terra as follows:\n\n          4.1       Corporate Organization. (a) Lycos is a corporation duly\norganized, validly existing and in good standing under the laws of the State\nof Delaware. Lycos has the corporate power and authority to own or lease all\nof its properties and assets and to carry on its business as it is now being\nconducted, and is duly licensed or qualified to do business in each\njurisdiction in which the nature of the business conducted by it or the\ncharacter or location of the properties and assets owned or leased by it makes\nsuch licensing or qualification necessary, except where the failure to be so\nlicensed or qualified would not and would not reasonably be expected to have,\neither individually or in the aggregate, a Material Adverse Effect (as defined\nbelow) on Lycos. As used in this Agreement, the term \"Material Adverse Effect\"\nmeans, with respect to Lycos, Terra or the Surviving Corporation, as the case\nmay be, a material adverse effect on (i) the business, results of operations\nor financial condition of such party and its Subsidiaries taken as a whole or\n(ii) the ability of such party to timely consummate the transactions\ncontemplated hereby; provided, however, that Material Adverse Effect shall not\nbe deemed to include the impact of any change, event, occurrence, condition or\neffect relating to (a) the United States, Spanish or global economy or\nsecurities markets in general, (b) the execution and delivery of this\nAgreement or the consummation of the transactions contemplated hereby or the\nannouncement thereof or (c) such party's industry in general and not\nspecifically relating to Lycos or Terra, as the case may be, or its respective\nSubsidiaries (as defined below). As used in this Agreement, the word\n\"Subsidiary,\" when used with respect to any party, means any corporation,\npartnership, limited liability company or other organization, whether\nincorporated or unincorporated, which is consolidated with such party for\nfinancial reporting \n\n\n                                     -8-\n\n\n\n\n\npurposes. True and complete copies of the Lycos Certificate and the Lycos\nBy-Laws, in each case, as in effect as of the date of this Agreement, have\npreviously been made available by Lycos to Terra.\n\n          (b)       Each Lycos Subsidiary (i) is duly organized and validly\nexisting under the laws of its jurisdiction of organization, (ii) is duly\nqualified to do business and in good standing in all jurisdictions (whether\nfederal, state, local or foreign) where its ownership or leasing of property\nor the conduct of its business requires it to be so qualified and in which the\nfailure to be so qualified would have a Material Adverse Effect on Lycos and\n(iii) has all requisite corporate power and authority to own or lease its\nproperties and assets and to carry on its business as now conducted.\n\n          4.2       Capitalization. (a) The authorized capital stock of Lycos\nconsists of (i) 300,000,000 shares of Lycos Common Stock, of which, as of May\n15, 2000, 112,192,815 shares were issued and outstanding and 2,024,799 shares\nwere held in treasury, and (ii) 5,000,000 shares of preferred stock, par value\n$0.01 per share (the \"Lycos Preferred Stock\" and together with the Lycos\nCommon Stock, the \"Lycos Capital Stock\"), of which no shares are issued or\noutstanding as of the date of this Agreement. All of the issued and\noutstanding shares of Lycos Common Stock have been duly authorized and validly\nissued and are fully paid, nonassessable and free of preemptive rights, with\nno personal liability attaching to the ownership thereof. As of the date of\nthis Agreement, except as described in this Section 4.2(a) and except pursuant\nto the terms of options issued pursuant to the Lycos Stock Plans (as defined\nbelow), Lycos does not have and is not bound by any outstanding subscriptions,\noptions, warrants, calls, commitments or agreements of any character calling\nfor the purchase or issuance of any shares of Lycos Capital Stock or any other\nequity securities of Lycos or any securities representing the right to\npurchase or otherwise receive any shares of Lycos Capital Stock (collectively,\nthe \"Lycos Rights\"). As of the date of this Agreement Lycos had outstanding\nwarrants providing for the issuance of 18,000 shares of Lycos Common Stock. As\nof May 15, 2000, no shares of Lycos Capital Stock were reserved for issuance,\nexcept for 913,595 shares of Lycos Common Stock reserved for issuance in\nconnection with the Lycos, Inc. 1996 Employee Stock Purchase Plan (the \"Lycos\nESPP\") and 14,514,427 shares of Lycos Common Stock reserved for issuance upon\nthe exercise of stock options pursuant to the Lycos, Inc. 1995 Stock Option\nPlan, Lycos, Inc. 1996 Stock Option Plan, Lycos, Inc. 2000 Stock Option Plan,\nLycos, Inc. 1996 Non-Employee Director Stock Option Plan, 1995 Tripod Stock\nOption Plan, 1995 WiseWire Stock Option Plan, 1996 WiseWire Stock Option Plan\nor 1995 WhoWhere? Stock Option Plan (the \"Lycos Stock Plans\"). From May 15,\n2000 to and including the date of this Agreement, Lycos has not issued any\nshares of its capital stock or any securities convertible into or exercisable\nor exchangeable for any shares of its capital stock. As of the date of this\nAgreement, there are no outstanding bonds, debentures, notes or other\nindebtedness or other securities of Lycos having the right to vote (or\nconvertible into, or exchangeable or exercisable for, securities having the\nright to vote) on any matters on which stockholders of Lycos may vote. There\nare no voting, sale, transfer or other similar agreements to which Lycos is a\nparty with respect to the Lycos Capital Stock or any other securities of Lycos\nthat are convertible into or exchangeable or exercisable for shares of the\nLycos Capital Stock. In any event, the maximum number of shares of Lycos\nVirginia Common Stock that will be outstanding (on a fully diluted basis) at\nthe Exchange Effective Time shall be not more than 158,568,703.\n\n          (b)       As of the date of this Agreement, Lycos owns, directly or\nindirectly, all of the issued and outstanding shares of capital stock and\nother equity ownership\n\n\n                                     -9-\n\n\n\n\n\ninterests of each of the Lycos Subsidiaries, free and clear of any liens,\npledges, charges, encumbrances and security interests whatsoever (\"Liens\"),\nand all of such shares and equity ownership interests are duly authorized and\nvalidly issued and are fully paid, nonassessable and free of preemptive\nrights, with no personal liability attaching to the ownership thereof. No\nLycos Subsidiary has or is bound by any outstanding subscriptions, options,\nwarrants, calls, commitments or agreements of any character calling for the\npurchase or issuance of any shares of capital stock or any other equity\nsecurity of such Subsidiary or any securities representing the right to\npurchase or otherwise receive any shares of capital stock or any other equity\nsecurity of such Subsidiary. There are no voting, sale, transfer or other\nsimilar agreements to which any Lycos Subsidiary is a party with respect to\nits capital stock or any other securities of it that are convertible or\nexchangeable into or exercisable for shares of the capital stock of any Lycos\nSubsidiary. Section 4.2(b) of the Lycos Disclosure Schedule sets forth a list\nas of the date of this Agreement of all material investments of Lycos in\ncorporations, joint ventures, partnerships, limited liability companies and\nother entities other than its Subsidiaries.\n\n          4.3       Authority; No Violation. (a) Lycos has full corporate\npower and authority to execute and deliver this Agreement and upon receipt of\nthe Lycos Stockholder Approval (as defined below) will have full corporate\npower and authority to consummate the transactions contemplated hereby. The\nexecution and delivery of this Agreement and the consummation of the\ntransactions contemplated hereby have been duly and validly approved by\nunanimous vote of the Board of Directors of Lycos. The Board of Directors of\nLycos has directed that this Agreement and the transactions contemplated\nhereby be submitted to Lycos's stockholders for adoption at a special meeting\nof such stockholders and, except for the adoption of this Agreement by the\naffirmative vote of the holders of a majority of the outstanding shares of\nLycos Common Stock (the \"Lycos Stockholder Approval\"), no other corporate\nproceedings on the part of Lycos are necessary to approve this Agreement and\nto consummate the transaction contemplated hereby. This Agreement has been\nduly and validly executed and delivered by Lycos and (assuming due\nauthorization, execution and delivery by Terra) constitutes a valid and\nbinding obligation of Lycos, enforceable against Lycos in accordance with its\nterms.\n\n          (b)       Neither the execution and delivery of this Agreement by\nLycos nor the consummation by Lycos of the transactions contemplated hereby,\nnor compliance by Lycos with any of the terms or provisions hereof, will (i)\nviolate any provision of the Lycos Certificate or Lycos By-Laws or any\nprovision of any comparable organizational documents of any Lycos Subsidiary\n(ii) assuming that the consents and approvals referred to in Section 4.4 are\nduly obtained, (x) violate any statute, code, ordinance, rule, regulation,\njudgment, order, writ, decree or injunction applicable to Lycos, any of its\nSubsidiaries or any of their respective properties or assets or (y) violate,\nconflict with, result in a breach of any provision of or the loss of any\nbenefit under, constitute a default (or an event which, with notice or lapse\nof time, or both, would constitute a default) under, result in the termination\nof or a right of termination or cancellation under, accelerate the performance\nrequired by, or result in the creation of any Lien upon any of the respective\nproperties or assets of Lycos or any of its Subsidiaries under any of the\nterms, conditions or provisions of any note, bond, mortgage, indenture, deed\nof trust, license, lease, agreement or other instrument or obligation to which\nLycos or any of its Subsidiaries is a party, or by which they or any of their\nrespective properties or assets may be bound or affected, except (in the case\nof clause (ii) above) for such violations, conflicts, breaches or defaults\nwhich, either individually or in the aggregate, have not had and would not\nreasonably be expected to have a Material Adverse Effect on Lycos.\n\n\n                                     -10-\n\n\n\n\n\n          4.4       Consents and Approvals. Except for (i) the filings\nrequired under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as\namended (the \"HSR Act\") and the expiration or termination of any applicable\nwaiting period and the filing of a notification with the European Commission\nunder Council Regulation (EEC) No. 4064\/89 or similar antitrust filings or\nnotifications in other jurisdictions, as applicable, (ii) the filing with the\nSecurities and Exchange Commission (the \"SEC\") of the proxy statement (the\n\"Proxy Statement\") in definitive form relating to the special meeting of\nLycos's stockholders to be held in connection with this Agreement and the\ntransactions contemplated hereby and the filing and declaration of\neffectiveness of the registration statement of Terra on Form F-4 (the \"F-4\")\nin which the Proxy Statement will be included as a prospectus of Terra, and\nany filings required under applicable state securities or \"blue sky\" laws,\n(iii) the filing of the certificate of merger and other appropriate merger\ndocuments as required by the DGCL and the filing of the articles of merger and\narticles of share exchange and other appropriate merger and share exchange\ndocuments required by the VSCA and the issuance by the Virginia State\nCorporation Commission of the certificate of merger and certificate of\nexchange pursuant to the VSCA and (iv) the Lycos Stockholder Approval, no\nconsents or approvals of or filings or registrations with any court,\nadministrative agency or commission or other governmental or regulatory\nauthority or instrumentality (each a \"Governmental Entity\"), or of or with any\nthird party, are necessary in connection with the execution and delivery by\nLycos of this Agreement and the consummation by Lycos of the transactions\ncontemplated hereby and compliance by Lycos with any of the provisions hereof\nother than those the failure of which to obtain or make have not had and would\nnot reasonably be expected to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Lycos.\n\n          4.5       SEC Reports and Financial Statements.\n\n          (a)       Lycos and its subsidiaries have filed with the SEC all\nforms, reports, schedules, registration statements and definitive proxy\nstatements required to be filed by them with the SEC since August 1, 1998 (as\namended since the time of their filing and prior to the date of this\nAgreement, collectively, the \"Lycos SEC Reports\") and has heretofore made\navailable to Terra complete and correct copies of all such forms, reports,\nschedules, registration statements, and proxy statements. As of their\nrespective dates, the Lycos SEC Reports complied in all material respects with\nthe requirements of the Securities Exchange Act of 1934, as amended, including\nthe rules and regulations of the SEC promulgated thereunder (the \"Exchange\nAct\"), or the Securities Act of 1933, as amended, including the rules and\nregulations of the SEC promulgated thereunder (the \"Securities Act\")\napplicable, as the case may be, to such Lycos SEC Reports, and none of the\nLycos SEC Reports contained any untrue statement of a material fact or omitted\nto state a material fact required to be stated therein or necessary to make\nthe statements made therein, in light of the circumstances under which they\nwere made, not misleading.\n\n          (b)       Lycos has previously made available to Terra copies of the\nconsolidated balance sheet of Lycos and its Subsidiaries as of July 31, for\neach of the fiscal years 1997, 1998 and 1999, and the related consolidated\nstatements of income, changes in stockholders' equity and cash flows for the\nfiscal years 1997 through 1999, inclusive, as reported in Lycos's Annual\nReport on Form 10-K for the fiscal year ended July 31, 1999 (the \"Lycos 1999\n10-K\") filed with the SEC under the Exchange Act in each case accompanied by\nthe audit report of KPMG LLP, independent public accountants with respect to\nLycos. The July 31, 1999 consolidated balance sheet of Lycos (including the\nrelated notes, where applicable) included in\n\n\n                                     -11-\n\n\n\n\n\nthe Lycos 1999 10-K fairly presents in all material respects the consolidated\nfinancial position of Lycos and its Subsidiaries as of the date thereof, and\nthe other financial statements referred to in this Section 4.5(b) (including\nthe related notes, where applicable) fairly present in all material respects\nthe results of the consolidated operations and changes in stockholders' equity\nand cash flows of Lycos and its Subsidiaries for the respective fiscal periods\nor as of the respective dates therein set forth; each of such statements\n(including the related notes, where applicable) complies in all material\nrespects with applicable accounting requirements and with the published rules\nand regulations of the SEC with respect thereto; and each of such statements\n(including the related notes, where applicable) has been prepared in all\nmaterial respects in accordance with U.S. generally accepted accounting\nprinciples (\"U.S. GAAP\") consistently applied during the periods involved,\nexcept, in each case, as indicated in such statements or in the notes thereto.\nExcept as fully reflected or reserved against in the July 31, 1999\nconsolidated balance sheet of Lycos (including the related notes, where\napplicable) included in the Lycos 1999 10-K, since July 31, 1999 through to\nand including the date of this Agreement, neither Lycos nor any of its\nsubsidiaries has incurred any liabilities or obligations of any nature\nwhatsoever (absolute, accrued, fixed, contingent or otherwise), other than\nliabilities incurred in the ordinary course of business consistent with past\npractice since the date of such balance sheet and which have not had and would\nnot reasonably be expected to have a Material Adverse Effect on Lycos. The\nbooks and records of Lycos and its Subsidiaries have been, and are being,\nmaintained in all material respects in accordance with U.S. GAAP and any other\napplicable legal and accounting requirements and reflect only actual\ntransactions.\n\n          4.6       Broker's Fees. Neither Lycos nor any Lycos Subsidiary nor\nany of their respective officers or directors has employed any broker or\nfinder or incurred any liability for any broker's fees, commissions or\nfinder's fees in connection with any of the transactions contemplated by this\nAgreement, except Credit Suisse First Boston, whose fees and expenses will be\npaid by Lycos.\n\n          4.7       Absence of Certain Changes or Events. (a) Except as\npublicly disclosed in Lycos SEC Reports filed prior to the date hereof, since\nJuly 31, 1999, no event or events have occurred that have had or could\nreasonably be expected to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Lycos.\n\n          (b)       Except as publicly disclosed in Lycos SEC Reports filed\nprior to the date hereof, from July 31, 1999 to the date of this Agreement,\nLycos and its Subsidiaries have carried on their respective businesses in all\nmaterial respects in the ordinary course.\n\n          (c)       From July 31, 1999 to the date of this Agreement, neither\nLycos nor any of its Subsidiaries has (i) except for normal increases for\nemployees (other than officers subject to the reporting requirements of\nSection 16(a) of the Exchange Act) made in the ordinary course of business\nconsistent with past practice or as required by applicable law, increased the\nwages, salaries, compensation, pension, or other fringe benefits or\nperquisites payable to any executive officer, employee, or director from the\namount thereof in effect as of July 31, 1999, granted any severance or\ntermination pay, entered into any contract to make or grant any severance or\ntermination pay, or paid any bonus, in each case, other than the customary\nyear-end bonuses for fiscal 1998 and 1999 in amounts consistent with past\npractice and other than agreements expressly contemplated by or permitted\nunder this Agreement, (ii) granted any stock appreciation rights or granted\nany rights to acquire any shares of its capital stock to any executive\nofficer, director or employee, in each case, other than grants to employees\n(other than \n\n\n                                     -12-\n\n\n\n\nofficers subject to the reporting requirements of Section 16(a) of the\nExchange Act) made in the ordinary course of business consistent with past\npractice under the Lycos Stock Plans and other than grants expressly\ncontemplated by or permitted under this Agreement or (iii) suffered any\nstrike, work stoppage, slow-down, or other labor disturbance.\n\n          4.8       Legal Proceedings. (a) Except as publicly disclosed in\nLycos SEC Reports filed prior to the date hereof, as of the date of this\nAgreement, neither Lycos nor any of its Subsidiaries is a party to any, and\nthere are no pending or, to the best of Lycos's knowledge, threatened, legal,\nadministrative, arbitral or other proceedings, claims, actions or governmental\nor regulatory investigations of any nature against Lycos or any of its\nSubsidiaries or challenging the validity or propriety of the transactions\ncontemplated by this Agreement as to which, in any such case, there is a\nreasonable probability of an adverse determination and which, if adversely\ndetermined, either individually or in the aggregate, would reasonably be\nexpected to have a Material Adverse Effect on Lycos.\n\n          (b)       As of the date of this Agreement, there is no injunction,\norder, judgment, decree or regulatory restriction imposed upon Lycos, any of\nits Subsidiaries or the assets of Lycos or any of its Subsidiaries that has\nhad, or would reasonably be expected to have, either individually or in the\naggregate, a Material Adverse Effect on Lycos or the Surviving Corporation.\n\n          4.9       Taxes and Tax Returns. (a) Each of Lycos and its \nSubsidiaries has duly filed all U.S. federal, state, local, and foreign\ninformation returns and Tax returns required to be filed by it on or prior to\nthe date of this Agreement and has duly paid or made provisions for the\npayment of all Taxes which have been incurred by it or are due from it to U.S.\nfederal, state, local, and foreign taxing authorities on or prior to the date\nof this Agreement (including, without limitation, if and to the extent\napplicable, those due in respect of its properties, income, business, capital\nstock, franchises, licenses, sales and payrolls) other than (i) Taxes which\nare not yet delinquent or are being contested in good faith and have not been\nfinally determined, or (ii) information returns, Tax returns, Taxes or other\ngovernmental charges as to which the failure to file, pay or make provision\nfor would not reasonably be expected to, either individually or in the\naggregate, have a Material Adverse Effect on Lycos. The federal income Tax\nreturns of Lycos and its Subsidiaries are being examined by the Internal\nRevenue Service (the \"IRS\") for the fiscal years ended on July 31, 1996, 1997\nand 1998 and no liabilities with respect to deficiencies are reasonably\nexpected to be asserted as a result of such examination other than\ndeficiencies that would not reasonably be expected to have, either\nindividually or in the aggregate, a Material Adverse Effect on Lycos. To\nLycos's knowledge, there are no material disputes pending with respect to, or\nclaims asserted for, Taxes or assessments upon Lycos or any of its\nSubsidiaries for which Lycos does not have adequate reserves other than\ndisputes, claims, assessments or inadequacies that would not reasonably be\nexpected to have, either individually or in the aggregate, a Material Adverse\nEffect on Lycos.\n\n          (b)       Except for actions expressly contemplated by Articles I,\nII, III and VII of this Agreement, neither Lycos nor any of its Subsidiaries\nhas taken or agreed to take any action, or intends or plans to take any action\nor knows of any agreement, plan or intention to take any action that is\nreasonably likely to (i) prevent either of the Reincorporation Merger and the\nShare Exchange from constituting a reorganization described in Section 368(a)\nof the Code or (ii) result in gain recognition to the shareholders of Lycos\nVirginia pursuant to Section 367(a) of the Code.\n\n\n                                     -13-\n\n\n\n\n\n          (c)       As used in this Agreement, the term \"Tax\" or \"Taxes\"\nmeans all Spanish, U.S. federal, state, province, local, and foreign income,\nexcise, gross receipts, gross income, ad valorem, profits, gains, property,\ncapital, sales, transfer, use, value-added, payroll, employment, severance,\nwithholding, duties, intangibles, franchise, backup withholding, and other\ntaxes, charges, levies or like assessments together with all penalties and\nadditions to tax and interest thereon.\n\n          (d)       No disallowance of a deduction under Section 162(m) of\nthe Code for employee remuneration of any amount paid or payable by Lycos or\nany of its Subsidiaries under any contract, plan, program, arrangement or\nunderstanding in effect prior to the Exchange Effective Time would be\nreasonably likely to have, individually or in the aggregate, a Material\nAdverse Effect on Lycos.\n\n          4.10      Employees. (a) The Lycos Disclosure Schedule sets forth\na true and complete list of each material employee or director benefit or\ncompensation plan, arrangement or agreement, and all material bonus,\nincentive, deferred compensation, vacation, stock purchase, stock option,\nseverance, employment, change of control or fringe benefit plan, program or\nagreement that is maintained, or contributed to, as of the date of this\nAgreement (the \"Lycos Benefit Plans\") by Lycos, any of its Subsidiaries or by\nany trade or business, whether or not incorporated (a \"Lycos ERISA\nAffiliate\"), all of which together with Lycos would be deemed a \"single\nemployer\" within the meaning of Section 4001 of the Employee Retirement Income\nSecurity Act of 1974, as amended (\"ERISA\").\n\n          (b)       Lycos has heretofore made available to Terra true and \ncomplete copies of each of the Lycos Benefit Plans and certain related\ndocuments, including, but not limited to, (i) the actuarial report for such\nLycos Benefit Plan (if applicable) for each of the last two years, (ii) the\nmost recent annual report (Form 5500 Series) and accompanying schedule and\n(iii) the most recent determination letter from the IRS (if applicable) for\nsuch Lycos Benefit Plan.\n\n          (c)       Except as have not or would not reasonably be expected to\nresult, individually or in the aggregate, in a Material Adverse Effect on\nLycos, (i) each of the Lycos Benefit Plans has been operated and administered\nin all respects in compliance with applicable laws, including, but not limited\nto, ERISA and the Code, (ii) each of the Lycos Benefit Plans intended to be\n\"qualified\" within the meaning of Section 401 (a) of the Code is so qualified\nand is listed on the Lycos Disclosure Schedule, and there are no existing\ncircumstances or any events that have occurred that are reasonably likely to\nadversely affect the qualified status of any such Lycos Benefit Plan, (iii)\nwith respect to each Lycos Benefit Plan that is subject to Title IV of ERISA,\nthe present value of accrued benefits under such Lycos Benefit Plan, based\nupon the actuarial assumptions used for funding purposes in the most recent\nactuarial report prepared by such Lycos Benefit Plan's actuary with respect to\nsuch Lycos Benefit Plan, did not, as of its latest valuation date, exceed the\nthen current value of the assets of such Lycos Benefit Plan allocable to such\naccrued benefits, (iv) no Lycos Benefit Plan provides benefits, including,\nwithout limitation, death or medical benefits (whether or not insured), with\nrespect to current or former employees or directors of Lycos or its\nSubsidiaries beyond their retirement or other termination of service, other\nthan (A) coverage mandated by applicable law, (B) death benefits or retirement\nbenefits under any \"employee pension plan\" (as such term is defined in Section\n3(2) of ERISA), (C) deferred compensation benefits accrued as liabilities on\nthe books of Lycos or its Subsidiaries or (D) benefits the full cost of which\nis borne by the current or former\n\n\n                                     -14-\n\n\n\n\n\nemployee or director (or his beneficiary), (v) no liability under Title IV of\nERISA has been incurred by Lycos, its Subsidiaries or any Lycos ERISA\nAffiliate that has not been satisfied in full, and no condition exists that\npresents a material risk to Lycos, its Subsidiaries or any Lycos ERISA\nAffiliate of incurring a liability thereunder, (vi) no Lycos Benefit Plan is\nor was a \"multiemployer plan\" (as such term is defined in Section 3(37) and\nSection 4001(a)(3) of ERISA) or a \"multiple employer plan\" (as such term is\ndefined in Section 4063 of ERISA), (vii) all contributions or other amounts\npayable by Lycos or its Subsidiaries as of the Reincorporation Effective Time\nwith respect to each Lycos Benefit Plan in respect of current or prior plan\nyears have been paid or accrued in accordance with U.S. GAAP and Section 412\nof the Code, (viii) none of Lycos, its Subsidiaries or, to the knowledge of\nLycos, any other person, including any fiduciary, has engaged in a transaction\nin connection with which Lycos, its Subsidiaries or any Lycos Benefit Plan is\nreasonably likely to be subject to either a material civil penalty assessed\npursuant to Section 409 or 502(i) of ERISA or a material tax imposed pursuant\nto Section 4975 or 4976 of the Code, and (ix) to the best knowledge of Lycos\nthere are no pending, threatened or anticipated claims (other than routine\nclaims for benefits) by, on behalf of or against any of the Lycos Benefit\nPlans or any trusts related thereto and (ix) each Lycos Benefit Plan that is\nan employee welfare benefit plan under Section 3(1) of ERISA is either\nunfunded or is funded through an insurance company contract and is not a\n\"welfare benefit fund\" as defined in Section 419 of the Code.\n\n          (d)       Neither the execution and delivery of this Agreement nor\nthe consummation of the transactions contemplated hereby will (either alone or\nin conjunction with any other event) (i) except as set forth in a report\nprepared by Ernst &amp; Young LLP, which has been provided to Terra prior to the\ndate hereof, result in any payment (including, without limitation, severance,\nunemployment compensation, \"excess parachute payment\" (within the meaning of\nSection 280G of the Code), forgiveness of indebtedness or otherwise) becoming\ndue to any director or any employee of Lycos or any of its affiliates from\nLycos or any of its affiliates under any Lycos Benefit Plan or otherwise, (ii)\nincrease any benefits otherwise payable under any Lycos Benefit Plan or (iii)\nresult in any acceleration of the time of payment or vesting of any such\nbenefits.\n\n          (e)       Except as have not or would not reasonably be expected to\nresult, individually or in the aggregate, in a Material Adverse Effect on\nLycos, all Lycos Benefit Plans subject to the laws of any jurisdiction outside\nof the United States (i) have been maintained in accordance with all\napplicable requirements, (ii) if they are intended to qualify for special tax\ntreatment meet all requirements for such treatment, and (iii) if they are\nintended to be funded and\/or book-reserved are fully funded and\/or book\nreserved, as appropriate, based upon reasonable actuarial assumptions.\n\n          4.11      Compliance with Applicable Law. Except as publicly\ndisclosed in Lycos SEC Reports filed prior to the date hereof, Lycos and each\nof its Subsidiaries hold all licenses, franchises, permits and authorizations\nnecessary for the lawful conduct of their respective businesses under and\npursuant to each, and have complied in all respects with and are not in\ndefault in any material respect under any, applicable law, statute, order,\nrule, regulation, policy and\/or guideline of any Governmental Entity relating\nto Lycos or any of its Subsidiaries, except where the failure to hold such\nlicense, franchise, permit or authorization or such noncompliance or default\nhas not had and would not reasonably be expected to have, either individually\nor in the aggregate, a Material Adverse Effect on Lycos.\n\n\n                                     -15-\n\n\n\n\n\n          4.12      Certain Contracts. (a) As of the date of this Agreement,\nneither Lycos nor any of its Subsidiaries is a party to or bound by any\ncontract, arrangement, commitment or understanding (whether written or oral)\n(i) with respect to the employment of any directors, officers or employees,\nother than in the ordinary course of business consistent with past practice,\n(ii) which, upon the consummation or stockholder approval of the transactions\ncontemplated by this Agreement will (either alone or upon the occurrence of\nany additional acts or events) result in any payment (whether of severance pay\nor otherwise) becoming due from Terra, Lycos, the Surviving Corporation, or\nany of their respective Subsidiaries to any officer or employee thereof, (iii)\nwhich is a \"material contract\" (as such term is defined in Item 601(b)(10) of\nRegulation S-K of the SEC) to be performed after the date of this Agreement\nthat has not been filed or incorporated by reference in the Lycos SEC Reports,\n(iv) which materially restricts the conduct of any line of business by Lycos\nor upon consummation of the Reincorporation Merger will materially restrict\nthe business of the Surviving Corporation or Terra, (v) with or to a labor\nunion or guild (including any collective bargaining agreement) or (vi)\n(including any stock option plan, stock appreciation rights plan, restricted\nstock plan or stock purchase plan) any of the benefits of which will be\nincreased, or the vesting of the benefits of which will be accelerated, by the\noccurrence of any stockholder approval or the consummation of any of the\ntransactions contemplated by this Agreement, or the value of any of the\nbenefits of which will be calculated on the basis of any of the transactions\ncontemplated by this Agreement. Lycos has previously made available to Terra\ntrue and correct copies of all employment and deferred compensation agreements\nin effect as of the date of this Agreement which are in writing and to which\nLycos or any of its Subsidiaries is a party. Each contract, arrangement,\ncommitment or understanding of the type described in this Section 4.12(a),\nwhether or not set forth in the Lycos Disclosure Schedule, is referred to\nherein as a \"Lycos Contract,\" and neither Lycos nor any of its Subsidiaries\nknows of, or has received notice of, any violation of the above by any of the\nother parties thereto which has had or would reasonably be expected to have,\neither individually or in the aggregate, a Material Adverse Effect on Lycos.\n\n          (b)       (i) As of the Date of this Agreement, each Lycos Contract\nis valid and binding on Lycos or any of its Subsidiaries, as applicable, and\nin full force and effect, (ii) Lycos and each of its Subsidiaries has in all\nmaterial respects performed all obligations required to be performed by it to\ndate under each Lycos Contract, except where such noncompliance would not\nreasonably be expected to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Lycos, and (iii) no event or condition exists which\nconstitutes or, after notice or lapse of time or both, will constitute, a\nmaterial default on the part of Lycos or any of its Subsidiaries under any\nsuch Lycos Contract, except where such default, either individually or in the\naggregate, would not reasonably be expected to have a Material Adverse Effect\non Lycos.\n\n          4.13      Environmental Liability. There are no legal,\nadministrative, arbitral or other proceedings, claims, actions, causes of\naction, private environmental investigations or remediation activities or\ngovernmental investigations of any nature seeking to impose, or that could\nreasonably result in the imposition, on Lycos of any liability or obligation\narising under common law or under any local, state or federal environmental\nstatute, regulation or ordinance including, without limitation, the\nComprehensive Environmental Response, Compensation and Liability Act of 1980,\nas amended (\"CERCLA\"), pending or threatened against Lycos, which liability or\nobligation, either individually or in the aggregate, has had or would\nreasonably be expected to \n\n\n                                     -16-\n\n\n\n\n\nhave a Material Adverse Effect on Lycos. To the knowledge of Lycos, there is\nno reasonable basis for any such proceeding, claim action or governmental\ninvestigation that would impose any liability or obligation that could\nreasonably be expecte to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Lycos. Lycos is not subject to any agreement,\norder, judgment, decree, letter or memorandum by or with any court,\ngovernmental authority, regulatory agency or third party imposing any\nliability or obligation with respect to the foregoing that will have or would\nreasonably be expected to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Lycos.\n\n          4.14      State Takeover Laws. The Board of Directors of Lycos has\napproved the transactions contemplated by this Agreement for purposes of\nSection 203 of the DGCL such that the restrictions contained in Section 203 of\nthe DGCL will not apply to this Agreement or any of the transactions\ncontemplated hereby.\n\n          4.15      Intellectual Property; Proprietary Rights; Employee\nRestrictions. (a) All Intellectual Property Rights used by Lycos or its\nSubsidiaries in their respective businesses are owned by Lycos or such\nSubsidiaries by operation of law, have been validly assigned to Lycos or such\nSubsidiaries or Lycos otherwise has the right to use such Intellectual\nProperty Rights in its business as currently conducted except for such\nfailures that would not reasonably be expected to have, either individually or\nin the aggregate, a Material Adverse Effect on Lycos. Lycos or one of its\nSubsidiaries has exclusive ownership of or a license to use all Intellectual\nProperty Rights used by Lycos or its Subsidiaries in Lycos's business as\npresently conducted, including all other registered Intellectual Property\nRights used in connection with or contained in all versions of Lycos's World\nWide Web sites and all licenses, assignments and releases of Intellectual\nProperty Rights of others without which Lycos or its Subsidiaries could not\noffer the services they currently offer or has obtained any licenses, releases\nor assignments reasonably necessary to use all third parties' Intellectual\nProperty Rights in works embodied in its services, except, for such failures\nas, either individually or in the aggregate, have not had and would not\nreasonably be expected to have a Material Adverse Effect on Lycos. The present\nbusiness activities or products of Lycos do not infringe any Intellectual\nProperty Rights of others, except as have not had and would not reasonably be\nexpected to have a Material Adverse Effect on Lycos. To its knowledge, as of\nthe date of this Agreement Lycos has not received any notice or other claim\nfrom any person asserting that any of Lycos's present activities infringe or\nmay infringe any Intellectual Property Rights of such person, except for such\nnotices or claims which, either individually or in the aggregate, would not\nreasonably be expected to have a Material Adverse Effect on Lycos.\n\n          (b)       Except as have not had and would not reasonably be expected\nto have a Material Adverse Effect on Lycos, (i) Lycos has the right to use all\ntrade secrets, customer lists, hardware designs, programming processes,\nsoftware and other information required for its services or its business as\npresently conducted or contemplated; (ii) Lycos has taken all reasonable\nmeasures to protect and preserve the security and confidentiality of its trade\nsecrets and other confidential information; (iii) all employees and\nconsultants of Lycos or its Subsidiaries involved in the design, review,\nevaluation or development of products or Intellectual Property Rights have\nexecuted nondisclosure and assignment of inventions agreements to protect the\nconfidentiality of Lycos's trade secrets and other confidential information\nand to vest in Lycos exclusive ownership of such Intellectual Property Rights;\n(iv) to the knowledge of Lycos, all trade secrets and other confidential\ninformation of Lycos are not part of the public domain or knowledge, nor, to\nthe knowledge of Lycos, have they been misappropriated by any person having an\nobligation to maintain such trade secrets or other confidential information in\nconfidence for Lycos; (v) to the knowledge of Lycos, no employee or consultant\nof Lycos or any of its Subsidiaries has used any trade secrets or other\nconfidential\n\n\n                                     -17-\n\n\n\n\n\ninformation of any other person in the course of their work for Lycos or any\nsuch Subsidiary.\n\n          (c)       To the knowledge of Lycos, no university, government agency\n(whether federal or state) or other organization sponsored research and\ndevelopment conducted by Lycos or any of its Subsidiaries or has any claim of\nright to or ownership of or other encumbrance upon any of the Intellectual\nProperty Rights of Lycos, except for such claims or other encumbrances that\nwould not reasonably be expected to have a Material Adverse Effect on Lycos.\nLycos is not aware of any infringement by others of its copyrights or other\nIntellectual Proprietary Rights in any of its technology or services, or any\nviolation of the confidentiality of any of its proprietary information, except\nfor such infringement and violations that would not reasonably be expected to\nhave a Material Adverse Effect on Lycos. To Lycos's knowledge, Lycos is not\nmaking unlawful use of any confidential information or trade secrets of any\npast or present employees of Lycos or any of its Subsidiaries, except for such\nuse that would not reasonably be expected to have a Material Adverse Effect on\nLycos, except for such infringement and violations that would not reasonably\nbe expected to have a Material Adverse Effect on Lycos. For the purposes of\nthis Section 4.15, and except where the context otherwise requires,\nIntellectual Property Rights also includes any and all intellectual property\nrights, licenses, databases, computer programs and other computer software\nuser interfaces, know-how, trade secrets, customer lists, proprietary\ntechnology, processes and formulae, source code, object code, algorithms,\narchitecture, structure, display screens, layouts, development tools,\ninstructions, templates, marketing materials created by Lycos or its\nSubsidiaries, inventions, trade dress, logos and designs.\n\n          4.16      Insurance. Lycos and its Subsidiaries have in effect\ninsurance coverage with reputable insurers or are self-insured, which in\nrespect of amounts, premiums, types and risks insured, constitutes reasonably\nadequate coverage against all risks customarily insured against by companies\nand their subsidiaries comparable in size and operations to Lycos and its\nSubsidiaries which are engaged in Lycos's industry.\n\n          4.17      Opinions. Prior to the execution of this Agreement, Lycos\nhas received an opinion from Credit Suisse First Boston to the effect that as\nof the date thereof and based upon and subject to the matters set forth\ntherein, the Exchange Ratio is fair to the stockholders of Lycos from a\nfinancial point of view. Such opinion has not been amended or rescinded as of\nthe date of this Agreement.\n\n          4.18      Lycos Information. The information relating to Lycos and\nits Subsidiaries that is provided by Lycos or its representatives for\ninclusion in the Proxy Statement, the F-4, the Prospectus and any supplements\nthereto and any circulars or documents issued to shareholders, employees or\ndebenture holders of Terra or in any other document filed with any other\nregulatory agency in connection herewith, will not contain any untrue\nstatement of a material fact or omit to state a material fact necessary to\nmake the statements therein, in light of the circumstances in which they are\nmade, not misleading. The Proxy Statement (except for such portions thereof\nthat relate only to Terra or any of its Subsidiaries) will comply with the\nprovisions of the Exchange Act and the rules and regulations thereunder.\n\n\n                                     -18-\n\n\n\n\n\n                                  ARTICLE V\n\n                        REPRESENTATIONS AND WARRANTIES\n\n                                   OF TERRA\n\n          Except as set forth in the disclosure schedule delivered by Terra to\nLycos concurrently herewith (the \"Terra Disclosure Schedule\"), Terra hereby\nrepresents and warrants to Lycos as follows:\n\n          5.1       Corporate Organization. (a) Terra is a corporation duly\norganized, validly existing and in good standing under the laws of the Kingdom\nof Spain. Terra has the corporate power and authority to own or lease all of\nits properties and assets and to carry on its business as it is now being\nconducted, and is duly licensed or qualified to do business in each\njurisdiction in which the nature of the business conducted by it or the\ncharacter or location of the properties and assets owned or leased by it makes\nsuch licensing or qualification necessary, except where the failure to be so\nlicensed or qualified would not have and would not reasonably be expected to\nhave, either individually or in the aggregate, a Material Adverse Effect on\nTerra. True and complete copies of the Articles of Incorporation of Terra\n(escritura de constitucion) (the \"Terra Articles\") and the Revised Bylaws of\nTerra (estatutos) (the \"Terra By-Laws\"), in each case, as in effect as of the\ndate of this Agreement, have previously been made available by Terra to Lycos.\n\n          (b)       Each Terra Subsidiary (i) is duly organized and validly\nexisting under the laws of its jurisdiction of organization, (ii) is duly\nqualified to do business and in good standing in all jurisdictions (whether\nfederal, state, local or foreign) where its ownership or leasing of property\nor the conduct of its business requires it to be so qualified and in which the\nfailure to be so qualified would have or would reasonably be expected to have\na Material Adverse Effect on Terra, and (iii) has all requisite corporate\npower and authority to own or lease its properties and assets and to carry on\nits business as now conducted.\n\n          5.2       Capitalization. (a) As of May 15, 2000, the authorized\nshare capital of Terra consists solely of 560,000,000 Euros represented by\n280,500,000 ordinary shares (\"Terra Shares\" or \"Terra Capital Stock\"). All of\nthe issued and outstanding shares of Terra Capital Stock have been duly\nauthorized and validly issued and are fully paid and nonassessable, with no\npersonal liability attaching to the ownership thereof. Except as provided by\nthe SCL, no shares of Terra Capital Stock are entitled to preemptive rights,\nand assuming adoption of the resolution regarding preemptive rights referred\nto in Section 5.3, such preemptive rights do not apply to the transactions\ncontemplated hereby. As of the date of this Agreement, except as described in\nthis Section 4.2(a) and except pursuant to the terms of options issued\npursuant to the Terra Employee Stock Option Plan (the \"Terra Stock Plans\"),\nTerra does not have and is not bound by any outstanding subscriptions,\noptions, warrants, calls, commitments or agreements of any character calling\nfor the purchase or issuance of any shares of Terra Capital Stock or any other\nequity securities of Terra or any securities representing the right to\npurchase or otherwise receive any shares of Terra Capital Stock (collectively\nthe \"Terra Rights\"). As of May 15, 2000, no shares of Terra Capital Stock were\nreserved for issuance, except for 14,000,000 shares of Terra Common Stock\nreserved for issuance upon exercise of the options issued pursuant to the\nTerra Employee Stock Option Plan. From May 15, 2000, to and including the date\nof this Agreement, Terra has not issued any shares of its capital stock or any\nsecurities convertible into or exercisable for any shares of its capital\nstock. As of the date of this \n\n\n                                     -19-\n\n\n\n\n\nAgreement, there are no outstanding bonds, debentures, notes or other\nindebtedness or other securities of Terra having the right to vote (or\nconvertible into, or exchangeable or exercisable for, securities having the\nright to vote) on any matter on which stockholders of Terra may vote. There\nare no voting, sale, transfer or other similar agreements to which Terra is a\nparty with respect to the capital stock of Terra or any other securities of\nTerra that are convertible or exchangeable into or exercisable for shares of\nthe capital stock of Terra.\n\n          (b)       Terra owns, directly or indirectly, all of the issued and\noutstanding shares of capital stock or other equity ownership interests of\neach of the Terra Subsidiaries, free and clear of any Liens, and all of such\nshares or equity ownership interests are duly authorized and validly issued\nand are fully paid, nonassessable and free of preemptive rights, with no\npersonal liability attaching to the ownership thereof. No Terra Subsidiary has\nor is bound by any outstanding subscriptions, options, warrants, calls,\ncommitments or agreements of any character calling for the purchase or\nissuance of any shares of capital stock or any other equity security of such\nSubsidiary or any securities representing the right to purchase or otherwise\nreceive any shares of capital stock or any other equity security of such\nSubsidiary. There are no voting, sale, transfer or other similar agreements to\nwhich any Terra Subsidiary is a party with respect to the capital stock of\nsuch Subsidiary or any other securities of any such Subsidiary that are\nconvertible or exchangeable into or exercisable for shares of the capital\nstock of any Terra Subsidiary. Section 5.2(b) of the Terra Disclosure Schedule\nsets forth a list as of the date of this Agreement of the material investments\nof Terra in corporations, joint ventures, partnerships, limited liability\ncompanies and other entities other than its Subsidiaries.\n\n          5.3       Authority; No Violation. (a) Terra has full corporate\npower and authority to execute and deliver this Agreement and upon receipt of\nthe Terra Shareholder Approval (as defined below) will have full corporate\npower and authority to consummate the transactions contemplated hereby. The\nexecution and delivery of this Agreement and the consummation of the\ntransactions contemplated hereby have been duly and validly approved by\nunanimous vote of each of the Board of Directors of Terra. The Board of\nDirectors of Terra has proposed to call the Terra Shareholder Meeting to seek\nthe approval of the shareholders of Terra for the delegation in favor of the\nTerra Board to approve the capital increase required in connection with the\nShare Exchange, including approval in accordance with Section 159 of the SCL\nof a resolution abolishing the preemptive rights of Terra shareholders to\nsubscribe for the shares of Terra Common Stock being issued in the Share\nExchange, which approval shall require the affirmative vote of the holders of\na majority of the outstanding shares of Terra Common Stock present in person\nor represented by proxy at a duly constituted meeting of Terra shareholders at\nwhich meeting, if on first call, a quorum of at least one-half of the issued\nshare capital is present or represented by proxy or, if on second call, a\nquorum of at least one-quarter of the issued share capital is present or\nrepresented by proxy (provided, however, if, on second call, less than\none-half of the issued share capital is present or represented by proxy, the\nmatters being voted upon must be adopted by at least two-thirds of the share\ncapital present or represented at such meeting) (\"Terra Shareholder\nApproval\"), no other corporate proceedings on the part of Terra is necessary\nto approve this Agreement and to consummate the transactions contemplated\nhereby other than the resolution of the Terra Board approving the Capital\nIncrease against contribution in kind of the shares of Lycos Virginia Common\nStock. The affirmative vote of the shares of Terra Capital Stock held by\nTelefonica, S.A. (\"Telefonica\") are sufficient to obtain the Terra Shareholder\nApproval. Neither a withdrawal or a modification of the Terra Board's\nrecommendation relating to this Agreement or any of the transactions\ncontemplated hereby will affect (i) Terra's obligation or ability to call or\nconvene the meeting of its \n\n\n                                     -20-\n\n\n\n\n\nshareholders referred to above or (ii) Telefonica's obligation to vote its\nshares of Terra Capital Stock in favor of the approval of the matters set\nforth in the second sentence of this Section 5.3. This Agreement has been duly\nand validly executed and delivered by Terra and (assuming due authorization,\nexecution and delivery by Lycos) constitutes a valid and binding obligation of\nTerra, enforceable against Terra in accordance with its terms.\n\n          (b)       Neither the execution and delivery of this Agreement by\nTerra nor the consummation by Terra of the transactions contemplated hereby,\nnor compliance by Terra with any of the terms or provisions hereof, will (i)\nviolate any provision of the Terra Articles or By-Laws or (ii) assuming that\nthe consents and approvals referred to in Section 5.4 are duly obtained, (x)\nviolate any statute, code, ordinance, rule, regulation, judgment, order, writ,\ndecree or injunction applicable to Terra or any of Terra's Subsidiaries or any\nof their respective properties or assets or (y) violate, conflict with, result\nin a breach of any provision of or the loss of any benefit under, constitute a\ndefault (or an event which, with notice or lapse of time, or both, would\nconstitute a default) under, result in the termination of or a right of\ntermination or cancellation under, accelerate the performance required by, or\nresult in the creation of any Lien upon any of the respective properties or\nassets of Terra or Terra's Subsidiaries under, any of the terms, conditions or\nprovisions of any note, bond, mortgage, indenture, deed of trust, license,\nlease, agreement or other instrument or obligation to which Terra or any of\nTerra's Subsidiaries is a party, or by which they or any of their respective\nproperties or assets may be bound or affected, except (in the case of clause\n(ii) above) for such violations, conflicts, breaches or defaults which, either\nindividually or in the aggregate, would not have and would not reasonably be\nexpected to have, either individually or in the aggregate, a Material Adverse\nEffect on Terra.\n\n          5.4       Consents and Approvals. Except for (i) the filings\nrequired under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as\namended (the \"HSR Act\"), the expiration or termination of any applicable\nwaiting period, and the filing of a notification with the European Commission\nunder Council Regulation (EEC) No. 4064\/89 or similar antitrust filings or\nnotifications in other jurisdictions, as applicable, (ii) the filing with the\nSEC of the Proxy Statement and declaration of effectiveness of the F-4 in\nwhich the Proxy Statement will be included as a prospectus, and any filings\nrequired under applicable state securities or \"blue sky\" laws, (iii) the\nfiling of the articles of share exchange and other appropriate documents as\nrequired by the VSCA and the issuance by the Virginia State Corporation\nCommission of the certificate of share exchange pursuant to the VSCA, (iv)\nreceipt of the Terra Shareholder Approval, (v) the registration with and\nverification by the National Securities Exchange Commission of Spain (Comision\nNacional del Mercado de Valores) (the \"NSEC\") of a prospectus (folleto)\nrelating to the Share Exchange (the \"Prospectus\"), (vi) the filing of the Deed\nof execution of the Capital Increase against contribution in kind declaring\nthat the capital increase has been subscribed by the Lycos Virginia\nStockholders, the filing of the necessary auditors' report and the filing of\nthe necessary report of the expert designated by the Commercial Registry\nrelating to the fair value of the assets acquired by Terra in the Share\nExchange (vi) the authorization of the listing of Terra Shares on the SCME by\nthe NSEC and the Managing Companies of the Spanish Stock Exchanges and (viii)\nthe filing with and approval of the Nasdaq National Market (the \"NASDAQ\") to\nauthorize the quotation of the ADSs on such market, no consents or approvals\nof or filings or registrations with any Governmental Entity or of or with any\nthird party are necessary in connection with the execution and delivery by\nTerra of this Agreement and the consummation by Terra of the transactions\ncontemplated hereby and compliance by Terra with any of the provisions hereof\nother than those the failure of which to obtain or make have not had and would\nnot reasonably be expected to have a Material Adverse \n\n\n                                     -21-\n\n\n\n\n\nEffect on Terra.\n\n          5.5       SEC Reports and Financial Statements.\n\n          (a)       Terra has filed with the SEC all forms, reports, schedules,\nregistration statements and definitive proxy statements required to be filed\nby them with the SEC since the date of its initial public offering (as amended\nsince the time of their filing and prior to the date of this Agreement, and\ntogether with the Terra Registration Statement (as defined below)\ncollectively, the \"Terra SEC Reports\") and has heretofore made available to\nLycos complete and correct copies of all such forms, reports, schedules,\nregistration statements, and proxy statements. As of their respective dates,\nthe Terra SEC Reports (including, but not limited to, any financial statements\nor schedules included or incorporated by reference therein) complied in all\nmaterial respects with the requirements of the Exchange Act or the Securities\nAct applicable, as the case may be, to such Terra SEC Reports, and none of the\nTerra SEC Reports contained any untrue statement of a material fact or omitted\nto state a material fact required to be stated therein or necessary to make\nthe statements made therein, in light of the circumstances under which they\nwere made, not misleading.\n\n          (b)       Terra has previously made available to Lycos copies of the\nconsolidated balance sheet of Terra and its Subsidiaries for the year ended\nDecember 31, 1999, for the six months ended June 30, 1999, and for the fiscal\nyears ended December 31, 1997 and 1998, and the related consolidated\nstatements of income, changes in stockholders' equity and cash flows for such\nperiods, as previously provided by Terra to Lycos (in the case of information\nas of or for December 31, 1999) and (for all other information) as reported in\nTerra's Registration Statement No. 333-89997 on Form F-1 filed with the SEC on\nOctober 29, 1999, as amended (the \"Terra Registration Statement\"), in each\ncase accompanied by the audit report of Arthur Andersen, independent public\naccountants with respect to Terra. The December 31, 1999 consolidated balance\nsheet of Terra (including the related notes, where applicable) included in the\nTerra Registration Statement fairly presents in all material respects the\nconsolidated financial position of Terra and its Subsidiaries as of the date\nthereof, and the other financial statements referred to in this Section 5.5(b)\n(including the related notes, where applicable) fairly present in all material\nrespects the results of the consolidated operations and changes in\nstockholders' equity and consolidated financial position of Terra and its\nSubsidiaries for the respective fiscal periods or as of the respective dates\ntherein set forth; each of such statements (including the related notes, where\napplicable) complies in all material respects with applicable accounting\nrequirements and with the published rules and regulations of the Spanish Stock\nExchange, the CNMV and the SEC with respect thereto; and each of such\nstatements (including the related notes, where applicable) has been prepared\nin all material respects in accordance with Spanish generally accepted\naccounting principles (\"Spanish GAAP\") consistently applied during the periods\ninvolved, except, in each case, as indicated in such statements or in the\nnotes thereto. The related notes reconciling to U.S. GAAP the consolidated net\nincome and shareholders' equity of Terra and its Subsidiaries comply in all\nmaterial respects with the requirements of the SEC applicable to such\nreconciliation. Except as fully reflected or reserved against in the December\n31, 1999 consolidated balance sheet of Terra (including the related notes,\nwhere applicable) included in the Terra Registration Statement, since December\n31, 1999 through to and including the date of this Agreement, neither Terra\nnor any of its Subsidiaries has incurred any liabilities or obligations of any\nnature whatsoever (absolute, accrued, fixed, contingent or otherwise), other\nthan liabilities incurred in the ordinary course of business consistent with\npast practice since the date of such balance and which have not had and would\n\n\n                                     -22-\n\n\n\n\n\nnot reasonably be expected to have a Material Adverse Effect on Terra. The\nbooks and records of Terra and its Subsidiaries have been, an are being,\nmaintained in all material respects in accordance with Spanish GAAP and any\nother applicable legal and accounting requirements and reflect only actual\ntransactions.\n\n          5.6       Broker's Fees. Neither Terra nor any of its Subsidiaries,\nnor any of their respective officers or directors, has employed any broker or\nfinder or incurred any liability for any broker's fees, commissions or\nfinder's fees in connection with any of the transactions contemplated by this\nAgreement except Lazard Freres &amp; Co., whose fees and expenses will be paid by\nTerra.\n\n          5.7       Absence of Certain Changes or Events. (a) Except as\npublicly disclosed in Terra SEC Reports filed prior to the date hereof, since\nDecember 31, 1999, no event or events have occurred that have had or could\nreasonably be expected to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Terra.\n\n          (b)       Except as publicly disclosed in Terra SEC Reports filed\nprior to the date hereof, from December 31, 1999, to the date of this\nAgreement, Terra and its Subsidiaries have carried on their respective\nbusinesses in all material respects in the ordinary course.\n\n          (c)       Since December 31, 1999, neither Terra nor any of its\nSubsidiaries has (i) except for normal increases for employees (other than\nofficers that would be subject to the reporting requirements of Section 16(a)\nof the Exchange Act if Terra were a U.S. company with reporting obligations\nunder Section 12 of the Exchange Act) made in the ordinary course of business\nconsistent with past practice or as required by applicable law, increased the\nwages, salaries, compensation, pension, or other fringe benefits or\nperquisites payable to any executive officer, employee, or director from the\namount thereof in effect as of December 31, 1999, granted any severance or\ntermination pay, entered into any contract to make or grant any severance or\ntermination pay, or paid any bonus other than the customary year-end bonuses\nfor fiscal 1999 in amounts consistent with past practice, (ii) granted any\nstock appreciation rights or granted any rights to acquire any shares of its\ncapital stock to any executive officer, director or employee other than grants\nto employees (other than officers subject to the reporting requirements of\nSection 16(a) of the Exchange Act) made in the ordinary course of business\nconsistent with past practice under the Terra Stock Plans or (iii) suffered\nany strike, work stoppage, slow-down, or other labor disturbance.\n\n          5.8       Legal Proceedings. (a) Except as publicly disclosed in\nTerra SEC Reports filed prior to the date hereof, as of the date of this\nAgreement neither Terra nor any of its Subsidiaries is a party to any, and\nthere are no pending or, to the best of Terra's knowledge, threatened, legal,\nadministrative, arbitral or other proceedings, claims, actions or governmental\nor regulatory investigations of any nature against Terra or any of its\nSubsidiaries or challenging the validity or propriety of the transactions\ncontemplated by this Agreement as to which, in any such case, there is a\nreasonable probability of an adverse determination and which, if adversely\ndetermined, either individually or in the aggregate, would reasonably be\nexpected to have a Material Adverse Effect on Terra.\n\n          (b)       As of the date of this Agreement, there is no injunction,\norder, judgment, decree, or regulatory restriction imposed upon Terra, any of\nits Subsidiaries or the \n\n\n                                     -23-\n\n\n\n\n\nassets of Terra or any of its Subsidiaries that has had, or would reasonably\nbe expected to have, either individually or in the aggregate, a Material\nAdverse Effect on Terra or the Surviving Corporation.\n\n          5.9       Taxes and Tax Returns. (a) Each of Terra and its\nSubsidiaries has duly filed all Spanish, U.S. federal, state, province and\nlocal, and foreign information returns and Tax returns required to be filed by\nit on or prior to the date of this Agreement and has duly paid or made\nprovisions for the payment of all Taxes which have been incurred by it or are\ndue from it to Spanish, U.S. federal, state, province and local, and foreign\ntaxing authorities on or prior to the date of this Agreement (including,\nwithout limitation, if and to the extent applicable, those due in respect of\nits properties, income, business, capital stock, franchises, licenses, sales\nand payrolls) other than (i) Taxes which are not yet delinquent or are being\ncontested in good faith and have not been finally determined, or (ii)\ninformation returns, Tax returns or Taxes as to which the failure to file, pay\nor make provision for would not reasonably be expected to, either individually\nor in the aggregate, have a Material Adverse Effect on Terra. None of the\nSpanish national income Tax returns of Terra or its subsidiaries have yet been\nexamined by the Spanish national Tax authorities. To Terra's knowledge, there\nare no material disputes pending with respect to, or claims asserted for,\nTaxes or assessments upon Terra or any of its Subsidiaries for which Terra\ndoes not have adequate reserves other than such disputes, claims, assessments\nor inadequacies that would not reasonably be expected to have, either\nindividually or in the aggregate, a Material Adverse Effect on Terra.\n\n          (b)       Except for actions expressly contemplated by Articles I, \nII, III and VII of this Agreement, neither Terra nor any of its Subsidiaries\nhas taken or agreed to take any action, or intends or plans to take any action\nor knows of any agreement, plan or intention to take any action that is\nreasonably likely to (i) prevent either of the Reincorporation Merger and the\nShare Exchange from constituting a reorganization described in Section 368(a)\nof the Code or (ii) result in gain recognition to the shareholders of Lycos\nVirginia pursuant to Section 367(a) of the Code.\n\n          5.10      Employees. Terra has made available to Lycos copies, as of\nthe date of this Agreement, of: (a) the current documentation and rules of\neach of the material employee benefit plans to which Terra and its\nSubsidiaries make or could become liable to make payments for providing\nretirement, death, disability or life assurance benefits (the \"Terra Employee\nBenefit Plans\") (including any draft amendments); (b) the most recently\nprepared explanatory booklets and announcements relating to each of the Terra\nEmployee Benefit Plans; and (iii) the actuarial report for such Terra Employee\nBenefit Plans (if applicable) for each of the last two years. The Terra\nEmployee Benefit Plans are each funded so as to comply with the minimum\nfunding requirement under the Spanish Law 8\/1997 of June 8, the Spanish Royal\nDecree 1307\/1998 of September 30, both regulations as amended and where\napplicable and there are no unfunded liabilities under any such plans that\nwould be reasonably likely to have a Material Adverse Effect on Terra. Each\nTerra Employee Benefit Plan has been administered in accordance with its terms\nand is in compliance with applicable law, other than instances of\nnon-compliance that, individually or in the aggregate, have not had and would\nnot reasonably be expected to have a Material Adverse Effect on Terra.\n\n          5.11      Compliance with Applicable Law. (a) Except as publicly\ndisclosed in Terra SEC Reports filed prior to the date hereof, Terra and each\nof its Subsidiaries hold all material licenses, franchises, permits and\nauthorizations necessary for the lawful conduct \n\n\n                                     -24-\n\n\n\n\n\nof their respective businesses under and pursuant to each, and have complied\nin all respects with and are not in default in any material respect under any,\napplicable law, statute, order, rule, regulation, policy and\/or guideline of\nany Governmental Entity relating to Terra or any of its Subsidiaries, except\nwhere the failure to hold such license, franchise, permit or authorization or\nsuch noncompliance or default, either individually or in the aggregate, would\nnot have and would not reasonably be expected to have a Material Adverse\nEffect on Terra.\n\n          5.12      Certain Contracts. (a) As of the date of this Agreement,\nneither Terra nor any of its Subsidiaries is a party to or bound by any\ncontract, arrangement, commitment or understanding (whether written or oral)\n(i) with respect to the employment of any directors, officers or employees,\nother than in the ordinary course of business consistent with past practice,\n(ii) which, upon the consummation or stockholder approval of the transactions\ncontemplated by this Agreement will (either alone or upon the occurrence of\nany additional acts or events) result in any payment (whether of severance pay\nor otherwise) becoming due from Lycos, Terra, the Surviving Corporation, or\nany of their respective Subsidiaries to any officer or employee thereof, (iii)\nwhich is a \"material contract\" (as such term is defined in Item 601(b)(10) of\nRegulation S-K of the SEC) to be performed after the date of this Agreement\nthat has not been filed or incorporated by reference in the Terra SEC Reports,\n(iv) which materially restricts the conduct of any line of business by Terra\nor upon consummation of the Share Exchange will materially restrict the\nbusiness of Terra; (v) with or to a labor union or guild (including any\ncollective bargaining agreement) or (vi) (including any stock option plan,\nstock appreciation rights plan, restricted stock plan or stock purchase plan)\nany of the benefits of which will be increased, or the vesting of the benefits\nof which will be accelerated, by the occurrence of any stockholder approval or\nthe consummation of any of the transactions contemplated by this Agreement, or\nthe value of any of the benefits of which will be calculated on the basis of\nany of the transactions contemplated by this Agreement. Terra has previously\nmade available to Lycos true and correct copies of all employment and deferred\ncompensation agreements in effect as of the date of this Agreement which are\nin writing and to which Terra or any of its Subsidiaries is a party. Each\ncontract, arrangement, commitment or understanding of the type described in\nthis Section 5.12(a), whether or not set forth in the Terra Disclosure\nSchedule, is referred to herein as a \"Terra Contract,\" and neither Terra nor\nany of its Subsidiaries knows of, or has received notice of, any violation of\nthe above by any of the other parties thereto which has had or would\nreasonably be expected to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Terra.\n\n          (b)       (i) As of the date of this Agreement, each Terra Contract\nis valid and binding on Terra or any of its Subsidiaries, as applicable, and\nin full force and effect, (ii) Terra and each of its Subsidiaries has in all\nmaterial respects performed all obligations required to be performed by it to\ndate under each Terra Contract, except where such noncompliance would not\nreasonably be expected to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Terra, and (iii) no event or condition exists which\nconstitutes or, after notice or lapse of time or both, will constitute, a\nmaterial default on the part of Terra or any of its Subsidiaries under any\nsuch Terra Contract, except where such default, either individually or in the\naggregate, would not reasonably be expected to have a Material Adverse Effect\non Terra.\n\n          5.13      Environmental Liability. There are no legal, administrative,\narbitral or other proceedings, claims, actions, causes of action, private\nenvironmental investigations or remediation activities or governmental\ninvestigations of any nature seeking to impose, or that could reasonably\nresult in the imposition, on Terra of any liability or obligation\n\n\n                                     -25-\n\n\n\n\n\narising under common law or under any U.S., European Union, national, regional\nor local laws, rules or regulations relating to pollution, the environment or\nprotection of human health as it relates to the environment pending or\nthreatened against Terra, which liability or obligation, either individually\nor in the aggregate, has had or would reasonably be expected to have a\nMaterial Adverse Effect on Terra. To the knowledge of Terra, there is no\nreasonable basis for any such proceeding, claim action or governmental\ninvestigation that would impose any liability or obligation that would\nreasonably be expected to have, either individually or in the aggregate, a\nMaterial Adverse Effect on Terra. Terra is not subject to any agreement,\norder, judgment, decree, letter or memorandum by or with Governmental\nAuthority or third party imposing any liability or obligation with respect to\nthe foregoing that will or would reasonably be expected to have, either\nindividually or in the aggregate, a Material Adverse Effect on Terra.\n\n          5.14      Intellectual Property; Proprietary Rights; Employee\nRestrictions. (a) All Intellectual Property Rights used by Terra or its\nSubsidiaries in their respective businesses are owned by Terra or such\nSubsidiaries by operation of law, have been validly assigned to Terra or such\nSubsidiaries or Terra otherwise has the right to use such Intellectual\nProperty Rights in its business as currently conducted except for such\nfailures that would not reasonably be expected to have, either individually or\nin the aggregate, a Material Adverse Effect on Terra. Terra reasonably\nbelieves that the Intellectual Property Rights are sufficient to carry on the\nbusiness of Terra as presently conducted. Terra or one of its Subsidiaries has\nexclusive ownership of or a license to use all Intellectual Property Rights\nused by Terra or its Subsidiaries in Terra's business as presently conducted,\nincluding all other registered Intellectual Property Rights used in connection\nwith or contained in all versions of Terra's World Wide Web sites and all\nlicenses, assignments and releases of Intellectual Property Rights of others\nwithout which Terra or its Subsidiaries could not offer the services they\ncurrently offer or has obtained any licenses, releases or assignments\nreasonably necessary to use all third parties' Intellectual Property Rights in\nworks embodied in its services, except for such failures as, either\nindividually or in the aggregate, have not had and would not reasonably be\nexpected to have a Material Adverse Effect on Terra. The present business\nactivities or products of Terra do not infringe any Intellectual Property\nRights of others, except as have not had and would not reasonably be expected\nto have a Material Adverse Effect on Terra. To its knowledge, as of the date\nof this Agreement Terra has not received any notice or other claim from any\nperson asserting that any of Terra's present activities infringe or may\ninfringe any Intellectual Property Rights of such person except for such\nnotices or claims which, either individually or in the aggregate, would not\nreasonably be expected to have a Material Adverse Effect on Terra.\n\n          (b)       Except as have not had and would not reasonably be expected\nto have a Material Adverse Effect on Terra or as disclosed in the Terra SEC\nReports publicly filed prior to the date of this Agreement, (i) Terra has the\nright to use all trade secrets, customer lists, hardware designs, programming\nprocesses, software and other information required for its services or its\nbusiness as presently conducted or contemplated; (ii) Terra has taken all\nreasonable measures to protect and preserve the security and confidentiality\nof its trade secrets and other confidential information; (iii) all employees\nand consultants of Terra or its Subsidiaries involved in the design, review,\nevaluation or development of products or Intellectual Property Rights have\nexecuted nondisclosure and assignment of inventions agreements to protect the\nconfidentiality of Terra's trade secrets and other confidential information\nand to vest in Terra exclusive ownership of such Intellectual Property Rights;\n(iv) t the knowledge of Terra, all trade secrets and other confidential\ninformation of Terra are not part of the public domain or knowledge, nor, to\nthe knowledge of Terra, have they been \n\n\n                                     -26-\n\n\n\n\n\nmisappropriated by any person having an obligation to maintain such trade\nsecrets or other confidential information in confidence for Terra; (v) to the\nknowledge of Terra, no employee or consultant of Terra or any of its\nSubsidiaries has used any trade secrets or other confidential information of\nany other person in the course of their work for Terra or any such Subsidiary.\n\n          (c)       To the knowledge of Terra, no university, government agency\n(whether federal or state) or other organization sponsored research and\ndevelopment conducted by Terra or any of its Subsidiaries or has any claim of\nright to or ownership of or other encumbrance upon any of the Intellectual\nProperty Rights of Terra, except for such claims or other encumbrances that\nwould not reasonably be expected to have a Material Adverse Effect on Terra.\nTerra is not aware of any infringement by others of its copyrights or other\nIntellectual Proprietary Rights in any of its technology or services, or any\nviolation of the confidentiality of any of its proprietary information, except\nfor such infringement and violations that would not reasonably be expected to\nhave a Material Adverse Effect on Terra. To Terra's knowledge, Terra is not\nmaking unlawful use of any confidential information or trade secrets of any\npast or present employees of Terra or any of its Subsidiaries, except for such\nuse a would not reasonably be expected to have a Material Adverse Effect on\nTerra. For the purposes of this Section 5.14, and except where the context\notherwise requires, Intellectual Property Rights also includes any and all\nintellectual property rights, licenses, databases, computer programs and other\ncomputer software user interfaces, know-how, trade secrets, customer lists,\nproprietary technology, processes and formulae, source code, object code,\nalgorithms, architecture, structure, display screens, layouts, development\ntools, instructions, templates, marketing materials created by Terra or its\nSubsidiaries, inventions, trade dress, logos and designs.\n\n          5.15      Insurance. Terra and its Subsidiaries have in effect\ninsurance coverage with reputable insurers or are self-insured, which in\nrespect of amounts, premiums, types and risks insured, constitutes reasonably\nadequate coverage against all risks customarily insured against by companies\nand their subsidiaries comparable in size and operations to Terra and its\nSubsidiaries which are engaged in Terra's industry.\n\n          5.16      Opinions. Prior to the execution of this Agreement, Terra\nhas received an opinion from Lazard Freres &amp; Co. to the effect that as of the\ndate thereof and based upon and subject to the matters set forth therein, the\nExchange Ratio is fair to the stockholders of Terra from a financial point of\nview. Such opinion has not been amended or rescinded as of the date of this\nAgreement.\n\n          5.17      Terra Information. The information relating to Terra and\nits Subsidiaries to be contained in the Proxy Statement, the F-4, the\nProspectus and any supplements thereto and any circulars or documents issued\nto shareholders, employees or debenture holders of Terra and the information\nrelating to Terra and its Subsidiaries that is provided by Terra and its\nrepresentatives for inclusion in any other document filed with any other\nregulatory agency in connection herewith, will not contain any untrue\nstatement of a material fact or omit to state a material fact necessary to\nmake the statements therein, in light of the circumstances in which they are\nmade, not misleading. The Proxy Statement (except for such portions thereof\nthat relate only to Lycos or any of its Subsidiaries) will comply with the\nprovisions of the Exchange Act and the rules and regulations thereunder. The\nF-4 will comply with the provisions of the Securities Act and the rules and\nregulations thereunder. The Prospectus and any supplements thereto and any\ncirculars or documents issued to shareholders, employees or debenture holders\nof Terra will comply in all material respects with all applicable \n\n\n                                     -27-\n\n\n\n\n\nlaw and all information contained therein (except for such portions thereof\nthat relate only to Lycos or any of its Subsidiaries) and will be\nsubstantially in accordance with the facts and will not omit anything material\nlikely to affect the import of such information.\n\n          5.18      Telefonica Ownership. Telefonica owns beneficially and of\nrecord approximately 66.6% of the outstanding Terra Capital Stock.\n\n\n                                  ARTICLE VI\n                                       \n\n                  COVENANTS RELATING TO CONDUCT OF BUSINESS s\n\n          6.1       Conduct of Businesses Prior to the Effective Time. During\nthe period from the date of this Agreement to the Exchange Effective Time,\nexcept as expressly contemplated or permitted by this Agreement (including the\nTerra Disclosure Schedule and the Lycos Disclosure Schedule), each of Lycos\nand Terra shall, and shall cause each of their respective Subsidiaries to, (a)\nconduct its business in the ordinary course, (b) use reasonable best efforts\nto maintain and preserve intact its business organization, employees and\nadvantageous business relationships and retain the services of its key\nofficers and key employees and (c) take no action that would adversely affect\nor delay the ability of either Lycos or Terra to obtain any necessary\napprovals of any Governmental Entity required for the transactions\ncontemplated hereby or to perform its covenants and agreements under this\nAgreement or to consummate the transactions contemplated hereby.\n\n          6.2       Lycos Forbearances. During the period from the date of\nthis Agreement to the Exchange Effective Time, except as set forth in the\nLycos Disclosure Schedule and except as expressly contemplated or permitted by\nthis Agreement, Lycos shall not, and shall not permit any of its Subsidiaries\nto, without the prior written consent of Terra (which consent shall not be\nunreasonably withheld):\n\n          (a)       other than in the ordinary course of business, incur any\nindebtedness for borrowed money (other than short-term indebtedness incurred\nto refinance short-term indebtedness, indebtedness of Lycos or any of its\nwholly-owned Subsidiaries to Lycos or any of its Subsidiaries or indebtedness\nincurred to finance investments expressly permitted by Section 6.2(d)),\nassume, guarantee, endorse or otherwise as an accommodation become responsible\nfor the obligations of any other individual, corporation or other entity, or\nmake any loan or advance;\n\n          (b)       (i) adjust, split, combine or reclassify any capital stock;\n(ii) make, declare or pay any dividend, or make any other distribution on, or\ndirectly or indirectly redeem, purchase or otherwise acquire, any shares of\nits capital stock or any securities or obligations convertible (whether\ncurrently convertible or convertible only after the passage of time or the\noccurrence of certain events) into or exchangeable for any shares of its\ncapital stock (except dividends paid by any of the Subsidiaries of Lycos to\nLycos); (iii) grant any stock appreciation rights or grant any individual,\ncorporation or other entity any right to acquire any shares of its capital\nstock, other than pursuant to the Lycos Stock Plans in the ordinary course of\nbusiness and otherwise in accordance herewith; or (iv) issue any additional\nshares of capital stock except (A) pursuant to the exercise of stock options\noutstanding as of the date of this Agreement or issued in compliance with\nSection 6.2(b)(iii), or (B) in the ordinary course of business and consistent\nwith past practice in connection with the Lycos ESPP and the Lycos Stock Plans\nor (C) to \n\n\n                                     -28-\n\n\n\n\n\nfinance acquisitions permitted by Section 6.2(d);\n\n          (c)       sell, transfer, mortgage, encumber or otherwise dispose\nof any of its material properties or assets, including by merger,\nconsolidation or otherwise, to any individual, corporation or other entity\nother than a Subsidiary, or cancel, release or assign any indebtedness to any\nsuch person or any claims held by any such person, in each case other than in\nthe ordinary course of business or pursuant to contracts or agreements in\nforce at the date of this Agreement;\n\n          (d)       except for transactions in the ordinary course of business\nor pursuant to contracts or agreements in force at the date of or permitted by\nthis Agreement or investments in an aggregate amount not in excess of\n$250,000,000, make any material investment either by purchase of stock or\nsecurities, contributions to capital, property transfers or purchase of any\nproperty or assets, in each case, of or to any other individual, corporation\nor other entity other than a Subsidiary thereof;\n\n          (e)       except for transactions in the ordinary course of business,\nterminate, or waive any material provision of any Lycos Contract or make any\nchange in any instrument or agreement governing the terms of any of its\nsecurities, or material lease or contract, other than normal renewals of\ncontracts and leases without material adverse changes of terms;\n\n          (f)       except as required by applicable law, increase, reduce or\nmodify in any manner the compensation or fringe benefits of any of its\nemployees or pay any pension or retirement allowance not required by any\nexisting plan or agreement to any such employees or become a party to, amend\nor commit itself to any pension, retirement, profit-sharing or welfare benefit\nplan or agreement or employment agreement with or for the benefit of any\nemployee other than in the ordinary course of business, or accelerate the\nvesting of, or the lapsing of restrictions with respect to, any stock options\nor other stock-based compensation;\n\n          (g)       settle any material claim, action or proceeding involving\nmoney damages, except in the ordinary course of business;\n\n          (h)       amend its articles of incorporation, its bylaws or\ncomparable governing documents or otherwise take any action to exempt any\nperson or entity (other than Terra or any of its Subsidiaries) or any action\ntaken by such person or entity from any takeover statute or similarly\nrestrictive provisions of Lycos's organizational documents;\n\n          (i)       take any action that is intended or expected to result in\nany of its representations and warranties set forth in this Agreement being or\nbecoming untrue in any material respect at any time prior to the Exchange\nEffective Time, or in any of the conditions to the Share Exchange set forth in\nArticle VIII not being satisfied or in a violation of any provision of this\nAgreement, except, in every case, as may be required by applicable law;\n\n          (j)       implement or adopt any change in its accounting principles,\npractices or methods, other than as may be required by U.S. GAAP or regulatory\nguidelines;\n\n          (k)       renew any current contract or agreement containing any\nmaterial exclusivity provisions or enter into any contract or agreement\ncontaining any material exclusivity provision; or\n\n\n                                     -29-\n\n\n\n\n\n          (l)       agree to take, make any commitment to take, or adopt any\nresolutions of its board of directors in support of, any of the actions\nprohibited by this Section 6.2.\n\n          6.3       Terra Forbearances. During the period from the date of this\nAgreement to the Exchange Effective Time, except as set forth in the Terra\nDisclosure Schedule and except as expressly contemplated or permitted by this\nAgreement, Terra shall not, and shall not permit any of its Subsidiaries to,\nwithout the prior written consent of Lycos (which consent shall not be\nunreasonably withheld):\n\n          (a)       other than in the ordinary course of business, incur any\nindebtedness for borrowed money (other than short-term indebtedness incurred\nto refinance short-term indebtedness, indebtedness of Terra or any of its\nwholly-owned Subsidiaries to Terra or any of its Subsidiaries or indebtedness\nincurred to finance investments expressly permitted by Section 6.3(d)),\nassume, guarantee, endorse or otherwise as an accommodation become responsible\nfor the obligations of any other individual, corporation or other entity, or\nmake any loan or advance;\n\n          (b)       (i) adjust, split, combine or reclassify any capital stock; \n(ii) make, declare or pay any dividend, or make any other distribution on, or\ndirectly or indirectly redeem, purchase or otherwise acquire, any shares of\nits capital stock or any securities or obligations convertible (whether\ncurrently convertible or convertible only after the passage of time or the\noccurrence of certain events) into or exchangeable for any shares of its\ncapital stock (except dividends paid by any of the Subsidiaries of Terra to\nTerra); (iii) grant any stock appreciation rights or grant any individual,\ncorporation or other entity any right to acquire any shares of its capital\nstock, other than pursuant to the Terra Stock Plans in the ordinary course of\nbusiness and otherwise in accordance herewith; or (iv) issue any additional\nshares of capital stock except (A) pursuant to the exercise of stock options\noutstanding as of the date of this Agreement or issued in compliance with\nSection 6.3(b)(iii), or (B) in the ordinary course of business and consistent\nwith past practice in connection with the Terra Stock Plans (as the same may\nbe amended from time to time excluding, however, amendments that would\nincrease the authorized shares thereunder) or (C) to finance acquisitions\npermitted by Section 6.3(d);\n\n          (c)       sell, transfer, mortgage, encumber or otherwise dispose of\nany of its material properties or assets, including by merger, consolidation\nor otherwise, to any individual, corporation or other entity other than a\nSubsidiary, or cancel, release or assign any indebtedness to any such person\nor any claims held by any such person, in each case other than in the ordinary\ncourse of business or pursuant to contracts or agreements in force at the date\nof this Agreement;\n\n          (d)       except for transactions in the ordinary course of business\nor pursuant to contracts or agreements in force at the date of or permitted by\nthis Agreement or investments in an aggregate amount not in excess of\n$500,000,000, make any material investment either by purchase of stock or\nsecurities, contributions to capital, property transfers or purchase of any\nproperty or assets, in each case, of or to any other individual, corporation\nor other entity other than a Subsidiary thereof;\n\n          (e)       amend its articles of incorporation, its bylaws or\ncomparable governing documents, except as contemplated by this Agreement or as\notherwise required to\n\n\n                                     -30-\n\n\n\n\n\nfacilitate actions otherwise permitted hereunder;\n\n          (f)       take any action that is intended or expected to result in\nany of its representations and warranties set forth in this Agreement being or\nbecoming untrue in any material respect at any time prior to the Exchange\nEffective Time, or in any of the conditions to the Share Exchange set forth in\nArticle VIII not being satisfied or in a violation of any provision of this\nAgreement, except, in every case, as may be required by applicable law;\n\n          (g)       implement or adopt any change in its accounting principles,\npractices or methods, other than as may be required by Spanish GAAP or U.S.\nGAAP or regulatory guidelines; or\n\n          (h)       agree to take, make any commitment to take, or adopt any\nresolutions of its board of directors in support of, any of the actions\nprohibited by this Section 6.3.\n\n          6.4       Taxes. Neither Lycos nor Terra shall take any action or\nfail to take any action, which action or failure to take action might\nreasonably be expected to prevent the Reincorporation Merger or the Share\nExchange from qualifying as a reorganization within the meaning of Section\n368(a) of the Code or might reasonably be expected to result in the\nshareholders of Lycos Virginia recognizing gain under Section 367(a) of the\nCode with respect to the Share Exchange. Terra and Lycos Virginia shall comply\nwith the \"reporting requirements\" of Treasury Regulation Section\n1.367(a)-3(c)(6).\n\n\n                                 ARTICLE VII\n\n                             ADDITIONAL AGREEMENTS\n\n          7.1       Regulatory Matters. (a) Lycos and Terra shall promptly\nprepare and file with the SEC the Proxy Statement and Terra shall promptly\nprepare and file with the SEC the F-4, in which the Proxy Statement will be\nincluded as a prospectus. Each of Lycos and Terra shall use their reasonable\nbest efforts to have the F-4 declared effective under the Securities Act as\npromptly as practicable after such filing, and Lycos shall thereafter mail or\ndeliver the Proxy Statement to its stockholders. Terra shall also use its\nreasonable best efforts to obtain all necessary state securities law or \"Blue\nSky\" permits and approvals required to carry out the transactions contemplated\nby this Agreement, and Lycos shall furnish all information concerning Lycos\nand the holders of Lycos Common Stock as may be reasonably requested in\nconnection with any such action.\n\n          (b)       As soon as practicable, (i) the Terra Board of Directors\nshall, with the reasonable assistance of Lycos, prepare reports (Informe del\nconsejo de administracion) to be made available to the holders of Terra Shares\nin accordance with applicable law (the \"Board Reports\") in connection with the\nTerra Shareholder Meeting containing information required by the SCL and (ii)\nTerra shall prepare and arrange to have registered with and verified by the\nNSEC a Prospectus. Terra will use its reasonable best efforts to cause the\nProspectus to receive the required registration with and verification of the\nNSEC as soon as practicable after the date of this Agreement and to cause the\ndefinitive Prospectus to be made available to the holders of Terra Shares in\naccordance with applicable law as soon as reasonably practicable.\n\n\n                                     -31-\n\n\n\n\n\n          (c)       The parties hereto shall cooperate with each other and\nuse their reasonable best efforts to promptly prepare and file all necessary\ndocumentation, to effect all applications, notices, petitions and filings, to\nobtain as promptly as practicable all permits, consents, approvals and\nauthorizations of all third parties and Governmental Entities that are\nnecessary or advisable to consummate the transactions contemplated by this\nAgreement, and to comply with the terms and conditions of all such permits,\nconsents, approvals and authorizations of all such Governmental Entities.\nLycos and Terra shall have the right to review in advance, and, to the extent\npracticable, each will consult the other on, in each case subject to\napplicable laws relating to the exchange of information, all the information\nrelating to Terra or Lycos, as the case may be, and any of their respective\nSubsidiaries, that appears in any filing made with, or written materials\nsubmitted to, any third party or an Governmental Entity in connection with the\ntransactions contemplated by this Agreement. In exercising the foregoing\nrights of review and consultation, each of the parties hereto shall act\nreasonably and as promptly as practicable. The parties hereto agree that they\nwill consult with each other with respect to the obtaining of all permits,\nconsents, approvals and authorizations of all third parties and Governmental\nEntities necessary or advisable to consummate the transactions contemplated by\nthis Agreement and each party will keep the other apprised of the status of\nmatters relating to completion of the transactions contemplated herein.\n\n          (d)       Lycos and Terra shall, upon request, furnish each other\nwith all information concerning themselves, their Subsidiaries, directors,\nofficers and shareholders and such other matters as may be reasonably\nnecessary or advisable in connection with the Proxy Statement, the F-4, the\nBoard Reports and the Prospectus or any other statement, filing, notice or\napplication made by or on behalf of Lycos, Terra or any of their respective\nSubsidiaries to any Governmental Entity in connection with the transactions\ncontemplated by this Agreement.\n\n          (e)       Lycos and Terra shall promptly advise each other upon \nreceiving any communication from any Governmental Entity whose consent or\napproval is required for consummation of the transactions contemplated by this\nAgreement that causes such party to believe that there is a reasonable\nlikelihood that any approval of such Governmental Entity will not be obtained\nor that the receipt of any such approval will be materially delayed.\n\n          7.2       Access to Information. (a) Upon reasonable notice and\nsubject to applicable laws relating to the exchange of information, each of\nLycos and Terra shall, and shall cause each of their respective Subsidiaries\nto, afford to the officers, employees, accountants, counsel and other\nrepresentatives of the other party reasonable access, during normal business\nhours during the period prior to the Exchange Effective Time, to all its\nproperties, books, contracts, commitments and records and, during such period,\neach of Lycos and Terra shall, and shall cause their respective Subsidiaries\nto, make available to the other party (i) a copy of each report, schedule,\nregistration statement and other document filed or received by it during such\nperiod pursuant to the requirements of U.S. federal or Spanish securities laws\nand (ii) all other information concerning its business, properties and\npersonnel as such party may reasonably request. Neither Lycos nor Terra nor\nany of their respective Subsidiaries shall be required to provide such access\nor to disclose such information where such access or disclosure would violate\nor prejudice the rights of Lycos's or Terra's, as the case may be, customers,\njeopardize the attorney-client privilege of the institution in possession or\ncontrol of such information or contravene any law, rule, regulation, order,\njudgment, decree, fiduciary duty or binding agreement entered into prior to\nthe date of this Agreement. The parties hereto will make appropriate\nsubstitute disclosure arrangements under circumstances in which the\nrestrictions of\n\n\n                                     -32-\n\n\n\n\n\nthe preceding sentence apply.\n\n          (b)       Each of Lycos and Terra shall hold all information\nfurnished by or on behalf of the other party or any of such party's\nSubsidiaries or representatives pursuant to Section 7.2(a) in confidence to\nthe extent required by, and in accordance with, the provisions of\nconfidentiality agreement, dated May 12, 2000, by and among Telefonica, Terra\nand Lycos (the \"Confidentiality Agreement\").\n\n          (c)       No investigation by either of the parties or their\nrespective representatives shall affect the representations and warranties of\nthe other set forth herein.\n\n          7.3       Shareholder and Terra Board Approvals. (a) Notwithstanding\nany action taken pursuant to the proviso of the last sentence of this Section\n7.3(a), Lycos shall call a meeting of its stockholders (the \"Lycos Stockholder\nMeeting\") and shall use its reasonable best efforts to cause the Lycos\nStockholder Meeting to be held as soon as reasonably practicable following the\ndate of this Agreement for the purpose of voting upon this Agreement and the\ntransactions contemplated hereby, including, without limitation, the\nReincorporation Merger, and to ratify the actions theretofore taken by Lycos\nas the sole shareholder of Lycos Virginia to approve the Share Exchange\npursuant to Section 7.3(b), and shall use its reasonable best efforts to cause\nsuch meeting to occur as soon as reasonably practicable. Subject to the\nproviso of the last sentence of this Section 7.3(a), the Board of Directors of\nLycos shall use its reasonable best efforts to obtain from such stockholders\nthe vote in favo of the adoption of this Agreement required by the DGCL and,\nas applicable, the rules of the Nasdaq, to consummate the transactions\ncontemplated hereby and the ratification of such stockholders referred to in\nthe preceding sentence. The Lycos Board shall include in the Proxy Statement\nits recommendation to the Lycos stockholders that they adopt this Agreement\nand approve the Reorganization and ratify the actions to be taken by Lycos as\nthe sole shareholder of Lycos Virginia pursuant to Section 7.3(b); provided,\nhowever, that the Lycos Board may, at any time prior to the vote of the\nStockholders of Lycos on the Reorganization, withdraw or modify such\nrecommendation to the extent that it determines, in good faith after\nconsulting with outside legal counsel, that such action is necessary to comply\nwith the fiduciary duties of the Lycos Board under applicable law.\n\n          (b)       Lycos shall incorporate Lycos Virginia as a direct wholly\nowned subsidiary as promptly as practicable after the date of this Agreement\nand shall cause the Lycos Virginia Board to approve and adopt this Agreement\nand the Share Exchange. Lycos, as the sole shareholder of Lycos Virginia,\nshall approve and adopt this Agreement, the Reincorporation Merger and the\nShare Exchange and shall waive any right to dissent (and any notice of such\nright) from the Share Exchange for all purposes of Section 13.1-729 et seq. of\nthe VSCA, in each case prior to the Lycos Stockholder Meeting.\n\n          (c)       Terra shall call a meeting of its stockholders to be held\nas soon as reasonably practicable following the date of this Agreement for the\npurpose of (i) approving the increase in capital of Terra required in\nconnection with the Share Exchange, (ii) approving a resolution abolishing the\npreemptive rights of Terra shareholders and (iii) delegating to the Terra\nBoard the requisite authority to effectuate the Capital Increase following the\ncontribution to Terra of the shares of Lycos Virginia Common Stock (the \"Terra\nShareholder Approval\"), and shall use its reasonable best efforts to cause\nsuch meetings to occur as soon as reasonably practicable. The Terra Board\nshall use its reasonable best efforts to obtain from such stockholders the\nvote in favor of such capital increase and abolishment of preemptive rights as\n\n\n                                     -33-\n\n\n\n\n\nrequired by the SCL.\n\n          7.4       Affiliates. Lycos shall use its reasonable best efforts to\ncause each of its directors and executive officers and any other person who is\nan \"affiliate\" (for purposes of Rule 145 under the Securities Act) of it to\ndeliver to Terra, as soon as practicable after the date of this Agreement, and\nprior to the date of the Lycos Stockholder Meeting, a written agreement, in\nthe form of Exhibit 6.4 hereto.\n\n          7.5       Stock Exchange Listing. (a) Terra shall cause the Terra\nADSs to be issued in the Share Exchange to be approved for listing on the\nNasdaq, subject to official notice of issuance, prior to the Exchange\nEffective Time.\n\n          (b)       Terra shall amend the Depositary Agreement to establish\nthe Terra ADSs to be issued pursuant to the Share Exchange (or, alternatively,\nenter into a new depositary agreement on substantially similar terms).\n\n          7.6       Employee Benefit Plans. (a) For a period of at least one\nyear after the Exchange Effective Time, the Lycos Benefit Plans (other than\nequity or equity-based programs) in effect as of the date of this Agreement\nshall remain in effect with respect to employees of Lycos (or its\nSubsidiaries) covered by such plans at the Exchange Effective Time or such\nPlans may be replaced by substitute plans providing benefits no less favorable\nin the aggregate than the benefits provided for under such Plans at the\nExchange Effective Time. From and after the Exchange Effective Time, Terra\nwill, or will cause Lycos Virginia to, recognize the prior service with Lycos\nor its subsidiaries of each employee of Lycos or any of its subsidiaries as of\nthe Exchange Effective Time (the \"Lycos Employees\") in connection with all\nTerra employee benefit plans in which such Lycos Employees are eligible to\nparticipate following the Exchange Effective Time, for purposes of\neligibility, vesting and levels o benefits (but not for purposes of benefit\naccruals under any defined benefit pension plan). From and after the Effective\nTime, Terra will, or will cause Lycos Virginia to, (i) cause any pre-existing\nconditions or limitations and eligibility waiting periods under any group\nhealth plans of Terra to be waived with respect to the Lycos Employees and\ntheir eligible dependents and (ii) give each Lycos Employee credit for the\nplan year in which the Exchange Effective Time occurs towards applicable\ndeductibles and annual out-of-pocket limits for expenses incurred prior to the\nExchange Effective Time.\n\n          (b)       The foregoing notwithstanding, as of the Exchange Effective\nTime Lycos Virginia agrees to honor in accordance with their terms all\nbenefits vested as of the Exchange Effective Time under the Lycos Benefit\nPlans and all other contractual commitments of Lycos to its current and former\nemployees provided that such Lycos Benefit Plans and contractual commitments\nare maintained and administered after the date of this Agreement not in\nviolation of Section 5.2(b) of this Agreement.\n\n          (c)       Nothing in this Section 7.6 shall be interpreted as\npreventing Lycos Virginia from amending, modifying or terminating any Lycos\nBenefit Plans or other contracts, arrangements, commitments or understandings,\nin accordance with their terms and applicable law, except that Lycos Virginia\nshall in any event comply with its obligations set forth in this Section 7.6.\n\n          7.7       Indemnification; Directors' and Officers' Insurance. (a)\nIn the event of any threatened or actual claim, action, suit, proceeding or\ninvestigation, whether civil, \n\n\n                                     -34-\n\n\n\n\n\ncriminal or administrative, including, without limitation, any such claim,\naction, suit, proceeding or investigation in which any individual (an\n\"Indemnified Party\") who is now, or has been at any time prior to the date of\nthis Agreement, or who becomes prior to the Exchange Effective Time, a\ndirector or officer of Lycos or Lycos Virginia or any of their respective\nSubsidiaries is, or is threatened to be, made a party based in whole or in\npart on, or arising in whole or in part out of, or pertaining to (i) the fact\nthat he or she is or was a director or officer of Lycos or Lycos Virginia or\nany of their respective Subsidiaries or (ii) this Agreement or any of the\ntransactions contemplated hereby, whether in any case asserted or arising\nbefore or after the Exchange Effective Time, the parties hereto agree to\ncooperate and use their best efforts to defend against and respond thereto. It\nis understood and agreed that after the Exchange Effective Time, Terra shall\nindemnify and hold harmless, pursuant to the Lycos Certificate, the Lycos\nBy-Laws, the Lycos Virginia Articles, the Lycos Virginia By-Laws and\nindemnification agreements and otherwise as and to the fullest extent\npermitted by law, each such Indemnified Party against any losses, claims,\ndamages, liabilities, costs, expenses (including reasonable attorney's fees\nand expenses), judgments, fines and amounts paid in settlement in connection\nwith any such threatened or actual claim, action, suit, proceeding or\ninvestigation, and shall advance costs and expenses to any Indemnified Party\nin advance of the final disposition of any claim, suit, proceeding or\ninvestigation to the fullest extent permitted by law upon receipt of any\nundertaking required by applicable law.\n\n          (b)       For a period of six years after the Exchange Effective\nTime, Lycos Virginia shall, and Terra shall cause Lycos Virginia to maintain\nin effect policies of directors' and officers' liability insurance with\ncoverage in amount and scope at least as favorable as Lycos's existing\npolicies with respect to claims arising from facts or events that occurred\nprior to the Exchange Effective Time; provided, however, that during such\nperiod, Lycos Virginia shall in no event be required to expend pursuant to\nthis Section 7.7(b) more than an amount per year equal to 200% of current\npremiums paid by Lycos for such insurance, which current premium amount is set\nforth in Section 7.7(b) of the Lycos Disclosure Schedule. \n\n          (c)       In the event Terra or any of its successors or assigns (i)\nconsolidates with or merges into any other person and shall not be the\ncontinuing or surviving corporation or entity of such consolidation or merger,\nor (ii) transfers or conveys all or substantially all of its properties and\nassets to any person, then, and in each such case, to the extent necessary,\nproper provision shall be made so that the successors and assigns of Terra\nassume the obligations set forth in this Section 7.7.\n\n          (d)       The provisions of this Section 7.7 shall survive the\nExchange Effective Time and are intended to be for the benefit of, and shall\nbe enforceable by, each Indemnified Party and his or her heirs and\nrepresentatives.\n\n          7.8       Additional Agreements. In case at any time after the\nExchange Effective Time any further action is necessary or desirable to carry\nout the purposes of this Agreement or to vest Lycos Virginia with full title\nto all properties, assets, rights, approvals, immunities and franchises of any\nof the parties to the Reincorporation Merger, the proper officers and\ndirectors of each party to this Agreement and their respective Subsidiaries\nshall take all such necessary action as may be reasonably requested by Terra\nor Lycos Virginia.\n\n          7.9       Advice of Changes. Lycos and Terra shall each promptly\nadvise the other party of any change or event (i) having a Material Adverse\nEffect on it or (ii) that it \n\n\n                                     -35-\n\n\n\n\n\nbelieves would or would be reasonably likely to cause or constitute a material\nbreach of any of its representations, warranties or covenants contained\nherein.\n\n          7.10      Exemption from Liability Under Section 16(b). Assuming that\nLycos delivers (as defined below) to Terra the Section 16 Information\nreasonably in advance of the Exchange Effective Time, the Board of Directors\nof Terra, or a committee of Non-Employee Directors thereof (as such term is\ndefined for purposes of Rule 16b-3(d) under the Exchange Act), shall\nreasonably promptly thereafter and in any event prior to the Effective Time\nadopt a resolution providing that the receipt by the Lycos Insiders (as\ndefined below) of Terra Stock in exchange for shares of Lycos Common Stock,\nand of options to purchase Terra Stock upon conversion of options to purchase\nshares of Lycos Common Stock, in each case pursuant to the transactions\ncontemplated hereby and to the extent such securities are listed in the\nSection 16 Information provided by Lycos to Terra prior to the Exchange\nEffective Time, are intended to be exempt from liability pursuant to Section\n16(b) under the Exchange Act such that any such receipt shall be so exempt.\n\"Section 16 Information\" shall mean information accurate in all respects\nregarding the Lycos Insiders, the number of shares of Lycos Common Stock held\nby each such Lycos Insider and expected to be exchanged for Terra Common Stock\nin the Reincorporation Merger, and the number and description of the options\nto purchase shares of Lycos Common Stock held by each such Lycos Insider and\nexpected to be converted into options to purchase shares of Terra Common Stock\nin connection with the Reincorporation Merger. \"Lycos Insiders\" shall mean\nthose officers and directors of Lycos who are subject to the reporting\nrequirements of Section 16(a) of the Exchange Act and who are listed in the\nSection 16 Information.\n\n          7.11      Reasonable Best Efforts. Subject to the terms and\nconditions of this Agreement, each of Terra and Lycos agrees that it shall use\nits reasonable best efforts in good faith to take, or cause to be taken, all\nactions, and to do, or cause to be done, all things necessary, proper or\ndesirable, or advisable under applicable laws, so as to permit consummation of\nthe Reorganization as promptly as practicable and otherwise to enable\nconsummation of the transactions contemplated hereby including, without\nlimitation, using its reasonable best efforts to obtain (and cooperating with\nthe other party hereto to obtain) any consent, authorization, order or\napproval of, or any exemption by, any Governmental Authority and any other\nthird party that is required to be obtained by Lycos or Terra or any of their\nrespective Subsidiaries in connection with the Reorganization and the other\ntransactions contemplated by this Agreement.\n\n          7.12      Acquisition Proposals. Lycos will not, and will not permit\nor cause any of its Subsidiaries or any of the officers and directors of it or\nits Subsidiaries to, and shall direct and cause its and its Subsidiaries'\nemployees, agents and representatives (including any advisor, investment\nbanker, attorney or accountant retained by it or any of its Subsidiaries)\n(\"Representatives\") not to, directly or indirectly, initiate, solicit,\nencourage or otherwise facilitate any inquiries or the making of any proposal\nor offer with respect to a merger, reorganization, share exchange,\nconsolidation or similar transaction involving, or any purchase of 15% or more\nof the voting securities of Lycos or 15% or more of the consolidated assets of\nLycos and its Subsidiaries (any such proposal or offer being hereinafter\nreferred to as an \"Acquisition Proposal\"). Lycos will not, and will not permit\nor cause any of its Subsidiaries or any of the officers and directors of it or\nits Subsidiaries to and shall direct and cause its and its Subsidiaries'\nemployees, agents and Representatives not to, directly or indirectly, engage\nin any negotiations concerning, or provide any confidential information or\ndata to, or have any discussions with, any Person relating to an Acquisition\nProposal, whether made before or after \n\n\n                                     -36-\n\n\n\n\n\nthe date of this Agreement, or otherwise facilitate any effort or attempt to\nmake or implement an Acquisition Proposal; provided, however, that (A) Lycos\nmay, and may authorize and permit its employees, agents and Representatives\nto, furnish or cause to be furnished confidential information and may\nparticipate in such negotiations and discussions, (B) the Lycos Board may take\nthe actions described in the last sentence of Section 7.3(a) as permitted\nthereby, (C) the Lycos Board may recommend an Acquisition Proposal to the\nLycos stockholders and (D) may terminate this Agreement pursuant to Section\n9.1(g) of this Agreement in order to immediately thereafter enter into a\ndefinitive agreement with respect to such Acquisition Proposal, in each case,\nif the Lycos Board determines, in good faith after consulting with outside\nlegal counsel, that such action is necessary to comply with the fiduciary\nduties of the Lycos Board under applicable law, provided that prior to\nfurnishing non-public information to any such party, Lycos shall have entered\ninto a confidentiality agreement on customary terms as advised by outside\nlegal counsel; provided, further, however, that nothing contained in this\nAgreement shall prevent Lycos or the Lycos Board from (x) complying with Rule\n14e-2 promulgated under the Exchange Act or (y) making any disclosure to the\nLycos stockholders required by applicable law. Lycos will immediately cease\nand cause to be terminated any existing activities, discussions or\nnegotiations with any parties conducted heretofore with respect to any of the\nforegoing. Lycos agrees that it will take the necessary steps to promptly\ninform the individuals or entities referred to in the first sentence hereof of\nthe obligations undertaken in this Section 7.12. Lycos will notify Terra\npromptly if any such inquiries, proposals or offers are received by, any such\ninformation is requested from, or any such discussions or negotiations are\nsought to be initiated or continued with, any of its officers, directors or\nits Representatives indicating, in connection with such notice, the name of\nsuch Person and the material terms and conditions of any proposals or offers.\nLycos also will promptly request each Person that has heretofore executed a\nconfidentiality agreement in connection with its consideration of an\nAcquisition Proposal to return all confidential information heretofore\nfurnished to such Person by or on behalf of it or any of its Subsidiaries.\n\n          7.13      Board of Directors. The parties will take such actions with\nrespect to the Terra Board as are necessary to cause the Terra Board, from and\nafter the Exchange Effective Time, to be comprised of not more than 15\nmembers, of which three shall be Robert J. Davis, Edward M. Philip and one\nmember of the Lycos Board selected by Lycos prior to the Exchange Effective\nTime and reasonably acceptable to Terra.\n\n          7.14      Capital Increase. The Terra Board shall execute the\napproval of the shareholders of Terra to increase the share capital of Terra\nagainst a contribution in kind (Aumento con aportaciones no dinerarias) and\nshall register such action pursuant to the Deed of Capital Increase with the\nCommercial Registry immediately following receipt of the Lycos Virginia\nCertificate.\n\n          7.15      Transfer Taxes. All stock transfer, real estate transfer,\ndocumentary, stamp, recording and other similar Taxes (including interest,\npenalties and additions to any such Taxes) (\"Transfer Taxes\") incurred in\nconnection with the Reorganization shall be paid by the party incurring such\ntax and the parties hereto shall cooperate in preparing, executing and filing\nany tax returns with respect to such Transfer Taxes. Notwithstanding the\nforegoing, any Transfer Taxes incurred by the shareholders of either Lycos or\nLycos Virginia in connection with the Reorganization (\"Shareholder Transfer\nTaxes\") shall be paid by Lycos Virginia out of its own funds. No funds will be\nsupplied, directly or indirectly, by Terra for the purpose of paying\nShareholder Transfer Taxes, nor will Terra, directly or indirectly, reimburse\n\n\n                                     -37-\n\n\n\n\n\nLycos Virginia for any such payment of Shareholder Transfer Taxes.\n\n          7.16      Lycos Virginia. Lycos and Terra agree that Lycos Virginia\nshall become a party to this Agreement for all purposes hereunder as soon as\npracticable after the formation of Lycos Virginia, and Lycos shall cause Lycos\nVirginia to become a party to this Agreement for all purposes hereunder as\nsoon as practicable after such formation.\n\n          7.17      Employee Stock Purchase Plan. Lycos shall take all\nnecessary action to provide that the \"purchase period\" commencing February 1,\n2000 under the ESPP shall be the final purchase period under such plan and\nthat the last day of such final purchase period shall occur on the earlier of\n(1) the date on which such purchase period would terminate according to the\nterms of the ESPP and (2) the last day of the payroll period immediately prior\nto the Exchange Effective Time.\n\n          7.18      State Takeover Laws. The Lycos will cause the Board of\nDirectors of Lycos Virginia to approve the transactions contemplated by this\nAgreement for purposes of Sections 13.1-725 et seq. and 13.1-728.1 et seq. of\nthe VSCA such that the provisions of such Sections will not apply to this\nAgreement or any of the transactions contemplated hereby.\n\n\n                                 ARTICLE VIII\n\n                             CONDITIONS PRECEDENT\n\n          8.1       Conditions to Each Party's Obligation to Effect the\nReincorporation Merger and the Share Exchange. The respective obligations of\nthe parties to effect each of the Reincorporation Merger and the Share\nExchange shall be subject to the satisfaction at or prior to the Effective\nTime of the following conditions:\n\n          (a)       Shareholder Approval. The Lycos Stockholder Approval and\nthe Terra Shareholder Approval each shall have been obtained.\n\n          (b)       Listing. The Terra ADSs to be issued to the stockholders of\nLycos Virginia upon consummation of the Share Exchange shall have been\nauthorized for quotation on the Nasdaq, subject to official notice of\nissuance.\n\n          (c)       HSR Act; EC Merger Regulations; Deed of Execution. The\nwaiting period (and any extension thereof) applicable to the Reincorporation\nMerger or the Share Exchange under the HSR Act shall have been terminated or\nshall have expired, any required approval of the Reincorporation Merger or the\nShare Exchange of the European Commission under Counsel Regulation (EEC) No.\n4064\/89 shall have been obtained and the execution of the Deed of execution of\nCapital Increase, the filing of the necessary auditors' report and the filing\nof the necessary report of the expert designated by the Commercial Registry\nrelating to the fair value of the assets acquired by Terra in the Share\nExchange shall have been filed or made.\n\n          (d)       F-4. The F-4 shall have become effective under the\nSecurities Act and no stop order suspending the effectiveness of the F-4 shall\nhave been issued and no proceedings for that purpose shall have been initiated\nor threatened by the SEC.\n\n\n                                     -38-\n\n\n\n\n\n          (e)       No Injunctions or Restraints; Illegality. No (i) order,\ninjunction, writ or decree issued by any court or agency of competent\njurisdiction or other legal restraint or prohibition preventing the\nconsummation of the Reorganization or any of the other transactions\ncontemplated by this Agreement shall be in effect and (ii) statute, rule,\nregulation, order, injunction, writ or decree shall have been enacted,\nentered, promulgated or enforced by any Governmental Entity that prohibits, or\nmakes illegal consummation of the Reorganization (collectively, \"Restraints\").\n\n          (f)       Federal Tax Opinion. Lycos shall each have received the \nopinion of Cravath, Swaine &amp; Moore, and Terra shall have received the opinion\nof Wachtell, Lipton, Rosen &amp; Katz, in form and substance reasonably\nsatisfactory to Lycos and Terra, respectively, dated the Closing Date,\nsubstantially to the effect that, for U.S. tax purposes on the basis of facts,\nrepresentations and assumptions set forth in each such opinion that are\nconsistent with the state of facts existing at the Reincorporation Effective\nTime and at the Exchange Effective Time:\n\n                    (i)       Each of the Reincorporation Merger and the Share\nExchange will constitute a reorganization within the meaning of Section 368(a)\nof the Code;\n\n                    (ii)      Lycos and Lycos Virginia will each be a party to\nthe reorganization within the meaning of Section 368(b) of the Code with\nrespect to the Reincorporation Merger and Lycos Virginia and Terra will each\nbe a party to the reorganization within the meaning of Section 368(b) of the\nCode with respect to the Share Exchange;\n\n                    (iii)     No gain or loss will be recognized by Lycos or\nLycos Virginia as a result of the Reincorporation Merger or by Lycos Virginia\nas a result of the Share Exchange; and\n\n                    (iv)      No gain or loss will be recognized by\nshareholders of Lycos who exchange all of their Lycos Common Stock solely for\nshares of Lycos Virginia Common Stock pursuant to the Reincorporation Merger\nand no gain or loss will be recognized by shareholders of Lycos Virginia who\nexchange all of their Lycos Virginia Common Stock solely for Terra Stock\npursuant to the Share Exchange (except with respect to cash received in lieu\nof a fractional share interest in Terra Stock).\n\n          In rendering such opinions, counsel may require and rely upon\nrepresentations contained in certificates of officers of Lycos, Lycos Virginia\nand Terra and may assume that any shareholder of Lycos that is a U.S. person\nand a \"five percent transferee shareholder\" as defined in Treas. Reg.ss.\n1.367(a)-3(c)(5)(ii) will enter into a five-year gain recognition agreement in\nthe form provided in Treas. Reg.ss. 1.367(a)-8.\n\n          (g)       Prospectus Verification. The Prospectus shall have been\nverified by, and registered with, the NSEC.\n\n          8.2       Conditions to Obligations of Lycos. The obligation of Lycos\nto effect each of the Reincorporation Merger and the Share Exchange is also\nsubject to the satisfaction, or waiver by Lycos, at or prior to the Effective\nTime, of the following conditions:\n\n          (a)       Representations and Warranties. The representations and\nwarranties of Terra set forth in this Agreement shall be true and correct in\nall material respects as of the date of this Agreement and (except to the\nextent such representations and warranties speak \n\n\n                                     -39-\n\n\n\n\n\nas of an earlier date) as of the Closing Date as though made on and as of the\nClosing Date; provided, however, that for purposes of this Section 8.2(a),\nTerra's representations and warranties shall be deemed to be true and correct\nunless the failure or failures of such representations and warranties to be so\ntrue and correct, either individually or in the aggregate, and without giving\neffect to any qualification as to materiality or Material Adverse Effect set\nforth in such representations or warranties, has had or would reasonably be\nexpected to have a Material Adverse Effect on Terra or the Surviving\nCorporation. Lycos shall have received a certificate signed on behalf of Terra\nby the Chief Executive Officer and the Chief Financial Officer of Terra to the\nforegoing effect.\n\n          (b)       Performance of Obligations of Terra. Terra shall have\nperformed in all material respects all obligations required to be performed by\nit under this Agreement at or prior to the Closing Date, and Lycos shall have\nreceived a certificate signed on behalf of Terra by the Chief Executive\nOfficer and the Chief Financial Officer of Terra to such effect.\n\n          (c)       Completion of Rights Offering. Terra shall have completed,\nand received the proceeds from, a rights offering in respect of Terra Shares\ncontemplated by the Rights Offering Agreement (as defined below) for aggregate\nvalue, including a par value plus premium to be paid in by the subscribers, of\n2.2 billion Euros;\n\n          (d)       Entry into Wireless Agreement. Terra and Telefonica\nMoviles, S.A., shall have entered into a definitive agreement with respect to\nthe matters set forth on Schedule 8.2 hereto.\n\n          (e)       Performance of Obligations of Telefonica. Telefonica shall\nhave performed in all material respects all obligations required to be\nperformed by it under the Rights Offering Agreement dated the date hereof\nbetween Telefonica, Terra and Lycos at or prior to the Closing Date.\n\n          8.3       Conditions to Obligations of Terra. The obligation of\nTerra to effect the Share Exchange is also subject to the satisfaction or\nwaiver by Terra at or prior to the Reorganization Effective Time of the\nfollowing conditions:\n\n          (a)       Representations and Warranties. The representations and\nwarranties of Lycos set forth in this Agreement shall be true and correct in\nall material respects as of the date of this Agreement and (except to the\nextent such representations and warranties speak as of an earlier date) as of\nthe Closing Date as though made on and as of the Closing Date, provided,\nhowever, that for purposes of this Section 8.3(a), Lycos's representations and\nwarranties shall be deemed to be true and correct unless the failure or\nfailures of such representations and warranties to be so true and correct,\neither individually or in the aggregate, and without giving effect to any\nqualification as to materiality set forth in such representations or\nwarranties, has had or would reasonably be expected to have a Material Adverse\nEffect on Lycos. Terra shall have received a certificate signed on behalf of\nLycos by the Chief Executive Officer and the Chief Financial Officer of Lycos\nto the foregoing effect.\n\n          (b)       Performance of Obligations of Lycos. Lycos shall have\nperformed in all material respects all obligations required to be performed by\nit under this Agreement at or prior to the Closing Date, and Terra shall have\nreceived a certificate signed on behalf of Lycos by the Chief Executive\nOfficer and the Chief Financial Officer of Lycos to such effect.\n\n\n                                     -40-\n\n\n\n\n\n                                  ARTICLE IX\n\n                           TERMINATION AND AMENDMENT\n\n          9.1       Termination. This Agreement may be terminated at any time\nprior to the Reorganization Effective Time, whether before or after (unless\notherwise provided below) approval of the matters presented in connection with\nthe Reincorporation Merger or the Share Exchange by the shareholders of Lycos\nor Terra:\n\n          (a)       by mutual consent of Lycos and Terra in a written\ninstrument, if the Board of Directors of each so determines by a vote of a\nmajority of the members of its entire Board;\n\n          (b)       by either the Board of Directors of Lycos or the Board of\nDirectors of Terra if any Restraint having any of the effects set forth in\nSection 8.1(e) shall be in effect and shall have become final and\nnonappealable, provided that such terminating party shall have used its\nreasonable best efforts to prevent the entry of and to remove such Restraint;\n\n          (c)       any shareholder approval required by Section 8.1(a) is not\nobtained at shareholder meetings duly convened pursuant to Section 7.3 or at\nany postponement or adjournment thereof;\n\n          (d)       by either the Board of Directors of Lycos or the Board of\nDirectors of Terra if the Reorganization shall not have been consummated on or\nbefore January 31, 2001, unless the failure of the Closing to occur by such\ndate shall be due to the failure of the party seeking to terminate this\nAgreement to perform or observe the covenants and agreements of such party set\nforth herein;\n\n          (e)       by either the Board of Directors of Lycos or the Board of\nDirectors of Terra (provided that the terminating party is not then in breach\nof any representation, warranty, covenant or other agreement contained herein)\nif there shall have been a breach of any of the covenants or agreements or any\nof the representations or warranties set forth in this Agreement on the part\nof Terra, in the case of a termination by Lycos, or Lycos, in the case of a\ntermination by Terra, which breach, either individually or in the aggregate,\nwould constitute, if occurring or continuing on the Closing Date, the failure\nof the conditions set forth in Section 8.2 or 8.3, as the case may be, and\nthat is not cured within 30 days following written notice to the party\ncommitting such breach or by its nature or timing cannot be cured prior to the\nClosing Date;\n\n          (f)       by Terra, (i) if the Board of Directors of Lycos withdraws,\nmodifies or changes its recommendation of this Agreement in a manner adverse\nto Terra or shall have resolved to do so, (ii) if, after a bona fide\nAcquisition Proposal shall have been made public, the Board of Directors of\nLycos shall have refused to affirm its recommendation of this Agreement as\npromptly as practicable (but in any case within 10 business days) after\nreceipt of any written request from Terra (provided that Terra may only make\none such request in respect of each Acquisition Proposal), (iii) if the Board\nof Directors of Lycos shall have recommended to the stockholders of Lycos an\nAcquisition Proposal or shall have resolved to do so, or (iv) if a tender\noffer or exchange offer for 15% or more of the outstanding shares of capital\nstock of Lycos is commenced, and the Board of Directors of Lycos fails to\nrecommend against acceptance of such tender offer or exchange offer by its\nstockholders (including by taking no \n\n\n                                     -41-\n\n\n\n\n\nposition with respect to the acceptance of such tender offer or exchange offer\nby its stockholders);\n\n          (g)       by Lycos prior to the vote of the stockholders of Lycos on\nthe Agreement and the Reorganization, if, after receiving a bona fide\nAcquisition Proposal, the Board of Directors of Lycos determines, in good\nfaith after consulting with outside legal counsel, that such action is\nnecessary to comply with the fiduciary duties of the Lycos Board under\napplicable law; provided, however, that Lycos may not terminate this Agreement\npursuant to this subsection (g) until three business days have elapsed\nfollowing delivery to Terra of written notice of such determination of Lycos\n(which written notice will inform Terra of the material terms and conditions\nof the Acquisition Proposal); provided, further, however, that such\ntermination under this Section 9.1(g) shall not be effective until Lycos has\nmade payment to Terra of the amounts required to be paid pursuant to Section\n9.2(b).\n\n          9.2       Effect of Termination. (a) In the event of termination of\nthis Agreement by either Lycos or Terra as provided in Section 9.1, this\nAgreement shall forthwith become void and have no effect, and none of Lycos,\nTerra, any of their respective Subsidiaries or any of the officers or\ndirectors of any of them shall have any liability of any nature whatsoever\nhereunder, or in connection with the transactions contemplated hereby, except\nthat (i) Sections 9.2(b), 9.2, 10.3, and 10.12 through and including 10.15\nshall survive any termination of this Agreement, and (ii) notwithstanding\nanything to the contrary contained in this Agreement, neither Lycos nor Terra\nshall be relieved or released from any liabilities or damages arising out of\nits willful breach of any provision of this Agreement.\n\n          (b)       In the event that (i) this Agreement is terminated by Terra\npursuant to clause (ii), (iii) or (iv) of Section 9.1(f) or (ii) this\nAgreement is terminated by Lycos pursuant to Section 9.1(g) or (iii) (A) this\nAgreement is terminated pursuant to (x) Section 9.1(c) due to the failure of\nLycos's stockholders to approve and adopt this Agreement, (y) Section 9.1(d)\nwithout the Lycos Stockholder Meeting having occurred or (z) clause (i) of\nSection 9.1(f) and (B) at the time of such failure to so approve and adopt\nthis Agreement (in the case of clause (x)) or at the time of such termination,\n(in the case of clause (y)) or at the time of the withdrawal, modification or\nchange in recommendation (in the case of clause (z)) any person (other than\nTerra) has made to Lycos or any of its Subsidiaries a bona fide Acquisition\nProposal which shall have been made known to the Lycos stockholders generally\nor shall have publicly announced an intention (whether or not conditional) to\nmake an Acquisition Proposal and, within 12 months of the termination of this\nAgreement, Lycos enters into a definitive agreement with any third party to\nconsummate, or consummates, an Acquisition Proposal (as defined in Section\n7.12 except that the references to \"15%\" therein shall be deemed to be\nreferences to \"40%\"), then in each of (i) - (iii), Lycos shall pay to Terra an\namount equal to 3% of the product of (A) the closing price of Terra Shares on\nthe SCME on May 16, 2000 expressed in U.S. dollars using the noon buying rate\nof Euros for U.S. dollars as of such date as reported by the U.S. Federal\nReserve, (B) 1.72 and (C) 120,000,000 (the \"Termination Fee\").\n\n          (c)       The Termination Fee required to be paid pursuant to Section\n9.2(b)(i) shall be paid to Terra by wire transfer of immediately available\nfunds no later than two days after this Agreement has been terminated. The\nTermination Fee required to be paid pursuant to Section 9.2(b)(ii) shall be\npaid to Terra prior to, and shall be a pre-condition to effectiveness of,\ntermination of this Agreement pursuant to Section 9.1(g). The Termination Fee\nrequired to be paid pursuant to Sections 9.2(b)(iii) shall be paid to Terra no\nlater than two days \n\n\n                                     -42-\n\n\n\n\n\nafter the earlier to occur of the date of entrance by\nLycos or any of its Subsidiaries into the definitive agreement referenced in\nSection 9.2(b)(iii) and the date of consummation of such Acquisition Proposal\nreferenced in Section 9.2(b)(iii).\n\n          (d)       Each of Lycos and Terra agrees that the payments provided\nfor in Sections 9.2(b) shall be the sole and exclusive remedies of the parties\nupon a termination of this Agreement pursuant to Section 9.1(c), (d), (f), or\n(g), as the case may be, and such remedies shall be limited to the payments\nstipulated in Section 9.2(b); provided, however, that nothing herein shall\nrelieve any party from liability for the willful breach of any of its\nrepresentations and warranties or the breach of any of its covenants or\nagreements set forth in this Agreement.\n\n          (e)       Any payment required to be made pursuant to Section 9.2(b)\nshall be made by wire transfer of immediately available funds to an account\ndesignated by the party entitled to receive payment.\n\n          9.3       Amendment. Subject to compliance with applicable law, this\nAgreement may be amended by the parties hereto, by action taken or authorized\nby their respective Boards of Directors, at any time before or after approval\nof the matters presented in connection with Reorganization by the shareholders\nof Lycos and Terra; provided, however, that after any approval of the\ntransactions contemplated by this Agreement by the respective shareholders of\nLycos or Terra, there may not be, without further approval of such\nshareholders, any amendment of this Agreement that changes the amount or the\nform of the consideration to be delivered hereunder to the holders of Lycos\nCommon Stock, other than as contemplated by this Agreement, or that under\napplicable law otherwise requires the further approval of such shareholders.\nThis Agreement may not be amended except by an instrument in writing signed on\nbehalf of each of the parties hereto.\n\n          9.4       Extension; Waiver. At any time prior to the Exchange\nEffective Time, the parties hereto, by action taken or authorized by their\nrespective Board of Directors, may, to the extent legally allowed, (a) extend\nthe time for the performance of any of the obligations or other acts of the\nother parties hereto, (b) waive any inaccuracies in the representations and\nwarranties contained herein or in any document delivered pursuant hereto and\n(c) waive compliance with any of the agreements or conditions contained\nherein; provided, however, that after any approval of the transactions\ncontemplated by this Agreement by the respective shareholders of Lycos or\nTerra, there may not be, without further approval of such shareholders, any\nextension or waiver of this Agreement or any portion thereof that reduces the\namount or changes the form of the consideration to be delivered to the holders\nof Lycos Common Stock hereunder, other than as contemplated by this Agreement,\nor that under applicable law otherwise requires the further approval of such\nshareholders. Any agreement on the part of a party hereto to any such\nextension or waiver shall be valid only if set forth in a written instrument\nsigned on behalf of such party, but such extension or waiver or failure to\ninsist on strict compliance with an obligation, covenant, agreement or\ncondition shall not operate as a waiver of, or estoppel with respect to, any\nsubsequent or other failure.\n\n                                  ARTICLE X\n                                       \n\n                              GENERAL PROVISIONS\n\n          10.1      Closing. Subject to the terms and conditions of this\nAgreement, \n\n\n                                     -43-\n\n\n\n\n\nthe closing of the Reincorporation Merger and the Share Exchange (the\n\"Closing\") will take place at 10:00 a.m. on a date and at a place to be\nspecified by the parties, which shall be no later than five business days\nafter the satisfaction (or, to the extent permitted by law or regulation,\nwaiver by all parties) of the conditions set forth in Section 8.01, or, if on\nsuch day any condition set forth in Section 8.02 or 8.03 has not been\nsatisfied (or, to the extent permitted by law or regulation, waived by the\nparty or parties entitled to the benefits thereof), as soon as practicable\nafter all the conditions set forth in Article VIII have been satisfied (or, to\nthe extent permitted by law or regulation, waived by the parties entitled to\nthe benefits thereof), or at such other place, time and date as shall be\nagreed in writing between Terra and Lycos. The date on which the Closing\noccurs is referred to in this Agreement as the \"Closing Date\".\n\n          10.2      Nonsurvival of Representations, Warranties and Agreements.\nNone of the representations, warranties, covenants and agreements in this\nAgreement or in any instrument delivered pursuant to this Agreement (other\nthan the Confidentiality Agreement, which shall terminate in accordance with\nthe terms thereof) shall survive the Closing, except for Section 7.7 and for\nthose other covenants and agreements contained herein and therein that by\ntheir terms apply in whole or in part after the Closing.\n\n          10.3      Expenses. All costs and expenses incurred in connection\nwith this Agreement and the transactions contemplated hereby shall be paid by\nthe party incurring such expense, provided, however, that the costs and\nexpenses of printing and mailing the Proxy Statement, and all filing and other\nfees paid to the SEC in connection with the Reincorporation Merger, shall be\nshared equally by Lycos and Terra.\n\n          10.4      Notices. All notices and other communications hereunder\nshall be in writing and shall be deemed given if delivered personally,\ntelecopied (with confirmation), mailed by registered or certified mail (return\nreceipt requested) or delivered by an express courier (with confirmation) to\nthe parties at the following addresses (or at such other address for a party\nas shall be specified by like notice):\n\n          (a)       if to Lycos, to:\n\n                Lycos, Inc.\n                400-2 Totten Pond Road\n                Waltham, MA  02451-2000\n                Facsimile No.:  781-370-2600\n                Attn.:  Edward M. Philip\n\n          With a copy to:\n\n                Cravath, Swaine &amp; Moore\n                Worldwide Plaza\n                825 Eighth Avenue\n                New York, NY  10019\n                Facsimile No.:  212-474-3700\n                Attn:  Robert A. Kindler, Esq.\n                Faiza J. Saeed, Esq.\n\n          and\n\n\n                                     -44-\n\n\n\n\n\n         (b)        if to Terra, to:\n\n                Terra, S.A.\n                Via de las Dos Castillas\n                33, Complejo Atica, Edeficial\n                Pozuelo de Alarcon\n                28223 Madrid\n                Spain\n                Facsimile No.:  011-34-91-452-3305\n                Attention:  Antonio de Esteban\n\n         With a copy to:\n\n                Wachtell, Lipton, Rosen &amp; Katz\n                51 West 52nd St.\n\n                New York, NY\n                Facsimile:  212-403-2000\n                Attention:  Craig M. Wasserman, Esq.\n\n         and a copy to:\n\n                Greenberg Traurig, LLP\n                The MetLife Building\n                200 Park Avenue\n                New York, NY 10166\n                Facsimile No.: (212) 801-6400\n                Attn: Clifford E. Neimeth, Esq.\n\n          10.5      Interpretation. When a reference is made in this Agreement\nto Sections, Exhibits or Schedules, such reference shall be to a Section of or\nExhibit or Schedule to this Agreement unless otherwise indicated. The table of\ncontents and headings contained in this Agreement are for reference purposes\nonly and shall not affect in any way the meaning or interpretation of this\nAgreement. Whenever the words \"include\", \"includes\" or \"including\" are used in\nthis Agreement, they shall be deemed to be followed by the words \"without\nlimitation\".\n\n          10.6      Counterparts. This Agreement may be executed in\ncounterparts, all of which shall be considered one and the same agreement and\nshall become effective when counterparts have been signed by each of the\nparties and delivered to the other parties, it being understood that all\nparties need not sign the same counterpart.\n\n          10.7      Entire Agreement. This Agreement (including the documents\nand the instruments referred to herein) and the Confidentiality Agreement, the\nRights Offering Agreement, dated as of May 16, 2000, by and among Lycos, Terra\nand Telefonica, and the [Bobcat] Agreement constitute the entire agreement and\nsupersede all prior agreements and understandings, both written and oral,\namong the parties with respect to the subject matter hereof.\n\n          10.8      Governing Law. This Agreement shall be governed and\nconstrued in accordance with the laws of the State of New York, without regard\nto any applicable conflicts of law principles.\n\n\n                                     -45-\n\n\n\n\n\n          10.9      Publicity. Except as otherwise required by applicable law\nor the rules of the Nasdaq or the CNMV, neither Lycos or Terra shall, or shall\npermit any of its Subsidiaries to, issue or cause the publication of any press\nrelease or other public announcement with respect to, or otherwise make any\npublic statement concerning, the transactions contemplated by this Agreement\nwithout the consent of Terra, in the case of a proposed announcement or\nstatement by Lycos, or Lycos, in the case of a proposed announcement or\nstatement by Terra, which consent shall not be unreasonably withheld.\n\n          10.10          Assignment; Third Party Beneficiaries. Neither this\nAgreement nor any of the rights, interests or obligations shall be assigned by\nany of the parties hereto (whether by operation of law or otherwise) without\nthe prior written consent of the other parties. Subject to the preceding\nsentence, this Agreement will be binding upon, inure to the benefit of and be\nenforceable by the parties and their respective successors and assigns. Except\nas otherwise specifically provided in Section 7.7, this Agreement (including\nthe documents and instruments referred to herein) is not intended to confer\nupon any person other than the parties hereto any rights or remedies\nhereunder.\n\n          10.11          Submission to Jurisdiction; Waivers; Consent to\nService of Process. (a) Each of Terra and Lycos irrevocably agree that any\nlegal action or proceeding with respect to this Agreement or for recognition\nand enforcement of any judgment in respect hereof brought by another party\nhereto or its successors or assigns may be brought and determined in any\nDelaware state court or Federal court sitting in the State of New York or the\nState of Delaware, and each of Terra and Lycos hereby (x) irrevocably submits\nwith regard to any such action or proceeding for itself and in respect to its\nproperty, generally and unconditionally, to the exclusive personal\njurisdiction of the aforesaid courts in the event any dispute arises out of\nthis Agreement or any transaction contemplated hereby, (y) agrees that it will\nnot attempt to deny or defeat such personal jurisdiction by motion or other\nrequest for leave from any such court and (z) agrees that it will not bring\nany action relating to this Agreement or any transaction contemplated hereby\nin any court other than any Delaware state or Federal court sitting in the\nState of New York or the State of Delaware. Any service of process to be made\nin such action or proceeding may be made by delivery of process in accordance\nwith the notice provisions contained in Section 10.11(b). Each of Terra and\nLycos hereby irrevocably waives, and agrees not to assert, by way of motion,\nas a defense, counterclaim or otherwise, in any action or proceeding with\nrespect to this Agreement, (a) the defense of sovereign immunity, (b) any\nclaim that it is not personally subject to the jurisdiction of the above-named\ncourts for any reason other than the failure to serve process in accordance\nwith this Section 10.11, (c) that it or its property is exempt or immune from\njurisdiction of any such court or from any legal process commenced in such\ncourts (whether through service of notice, attachment prior to judgment,\nattachment in aid of execution of judgment, execution of judgment or\notherwise), and (d) to the fullest extent permitted by applicable law that (i)\nthe suit, action or proceeding in any such court is brought in an inconvenient\nforum, (ii) the venue of such suit, action or proceeding is improper and (iii)\nthis Agreement, or the subject matter hereof, may not be enforced in or by\nsuch courts.\n\n          (c)       Terra hereby appoints National Registered Agents, Inc., with\noffices on the date hereof at 9 East Loockerman Street in the City of Dover,\nCounty of Kent, State of Delaware, and with offices on the date hereof at 440\nNinth Avenue, Fifth Floor, in the City of New York, County of New York, State\nof New York, as its authorized agent (the \"Authorized Agent\"), upon whom\nprocess may be served in any suit, action or proceeding arising out of or\nrelating to this Agreement or any transaction contemplated by this Agreement\nthat may be instituted in any \n\n\n                                     -46-\n\n\n\n\n\ncourt described in Section 10.11(a). Telefonica agrees to take any and all\nreasonable action, including the filing of any and all documents, that may be\nnecessary to establish and continue such appointment in full force and effect\nas aforesaid. Telefonica agrees that service of process upon the Authorized\nAgent shall be, in every respect, effective service of process upon\nTelefonica.\n\n          10.12          Enforcement of Agreement. The parties hereto agree\nthat irreparable damage would occur in the event that any of the provisions of\nthis Agreement was not performed in accordance with its specified terms or was\notherwise breached. It is accordingly agreed that the parties shall be\nentitled to an injunction or injunctions to prevent breaches of this Agreement\nand to enforce specifically the terms and provisions hereof in any court of\ncompetent jurisdiction, this being in addition to any other remedy to which\nthey are entitled at law or in equity.\n\n          10.13          WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,\nTO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A\nTRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR\nRELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER\nBASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES\nTHAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,\nEXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF\nLITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT\nAND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT\nBY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.\n\n\n                                     -47-\n\n\n\n\n\n          IN WITNESS WHEREOF, Lycos and Terra have caused this Agreement to be\nexecuted by their respective officers thereunto duly authorized as of the date\nfirst above written.\n\n\n                                             TERRA NETWORKS, S.A.\n\n                                             By: \/s\/ Abel Linares\n                                                 -------------------------\n                                                 Name:  Abel Linares\n                                                 Title: Chief Executive Officer\n\n\n                                             LYCOS, INC.\n\n                                             By: \/s\/ Robert J. Davis\n                                                 -------------------------\n                                                 Name:  Robert J. Davis\n                                                 Title: Chief Executive Officer\n\n\n\n                                     -48-\n\n\n\n\n                                                                       ANNEX A\n\n\n                            PLAN OF SHARE EXCHANGE\n                                    BETWEEN\n                              LION VIRGINIA, INC.\n                                      AND\n                             TERRA NETWORKS, S.A.\n\n\n          Pursuant to this Plan of Share Exchange (\"Plan of Share Exchange\"),\nLion Virginia, Inc. (\"Lion Virginia\"), shall become a wholly-owned subsidiary\nof Terra Networks, S.A., a company organized under the laws of the Kingdom of\nSpain (\"Terra\"), pursuant to a statutory share exchange under Section 13.1-722\nof the Virginia Stock Corporation Act.\n\n                                   ARTICLE I\n                          TERMS OF THE SHARE EXCHANGE\n\n1.1       THE SHARE EXCHANGE\n\n          Subject to the terms and conditions of the Agreement and Plan of\nReorganization between Lycos, Inc. and Terra (the \"Agreement\") at the Exchange\nEffective Time (as defined Section 2.1 of this Plan of Share Exchange), Lion\nVirginia shall become a wholly-owned subsidiary of Terra through the exchange\nof each outstanding share of common stock of Lion Virginia for ordinary shares\nof Terra (such shares to be issued in the form of American Depositary Shares,\nexcept as otherwise provided in Section 2.1(a) of this Plan of Share Exchange)\nin accordance with Section 2.1 of this Plan of Share Exchange and pursuant to\na statutory share exchange under Sections 13.1-717 and 13.1- 722 of the\nVirginia Stock Corporation Act (the \"Share Exchange\"). At the Exchange\nEffective Time, the Share Exchange shall have the effect as provided in\nSection 13.1-721 of the Virginia Stock Corporation Act.\n\n                                  ARTICLE II\n                          MANNER OF EXCHANGING SHARES\n\n2.1       CONVERSION OF SHARES\n\n          Upon and by reason of the Share Exchange becoming effective pursuant\nto the issuance of a Certificate of Share Exchange by the Virginia State\nCorporation Commission (the \"Exchange Effective Time\"):\n\n          each share of Lion Virginia Common Stock issued and outstanding\n          immediately prior to the Exchange Effective Time shall be exchanged\n          for that number of shares of Terra Capital Stock (as defined in the\n          Agreement) determined by dividing (i) $97.55 by (ii) the average\n          closing price (rounded to the nearest thousandth, or if there shall\n          not be a nearest thousandth of a U.S. dollar, the next higher\n          thousandth) of Terra Shares (the \"Terra Average Price\") on the\n          Spanish Continuous Market Exchange (Systema de Interconexion\n          Bursatil-Mercado Continuo) (the \"SCME\") for the ten full SCME\n          trading days ending on the tenth SCME trading day prior to the\n          Closing Date (excluding the Closing Date), each closing price\n          expressed in U.S. dollars using the noon buying rate of Euros for\n          U.S. dollars as of each day on which such average closing price is\n          measured (such quotient, as it may be adjusted as provided herein,\n          the \"Exchange Ratio\"); provided, however, that if the Terra Average\n          Price is equal to or greater than \n\n\n\n\n\n          $68.06, the Exchange Ratio shall be 1.433, and if the Terra Average\n          Price is equal to or less than $45.37, the Exchange Ratio as shall\n          be 2.150. The Terra Shares to be issued in exchange for the shares\n          of Lion Virginia Common Stock exchanged hereunder shall be\n          registered in the name of the Depositary by the Settlement and\n          Clearing System and then delivered (x) in the form of American\n          Depositary Shares representing Terra Shares (\"Terra ADSs\"), and such\n          Terra ADSs shall be issued in accordance with the Depositary\n          Agreement dated as of November 15, 1999, by and between Terra,\n          Citibank, N.A., as depositary, and the holders of Terra ADSs (as\n          such agreement may be amended to deposit the Terra Shares being\n          issued pursuant hereto and to deliver the Terra ADSs being delivered\n          hereto) or a depositary agreement to be entered into after the date\n          of this Agreement in form and substance not reasonably objected to\n          by Lycos (the \"Depositary Agreement\") or (y) if and to the extent\n          elected by any holder in the manner provided in Section 3.2(b) of\n          the Agreement, in the form of Terra Shares, in account entry form,\n          rather than Terra ADSs. Following the Exchange Effective Time, each\n          certificate previously representing any shares of Lion Virginia\n          Common Stock (\"Lion Virginia Common Certificate\") exchanged for\n          Terra Shares pursuant to this Section 2.1 shall cease to represent\n          shares of Lion Virginia Common Stock and shall thereafter represent\n          only the right to receive (i) a receipt issued in accordance with\n          the Depositary Agreement representing the number of whole Terra ADSs\n          or such number of Terra Shares in account entry form and (ii) cash\n          in lieu of fractional shares, in each case, into which the shares of\n          Lion Virginia Common Stock represented by such Lion Virginia Common\n          Certificate have been converted pursuant to this Section 2.1 and\n          Section 2.3, respectively. Certificates previously representing\n          shares of Lion Virginia Common Stock shall be exchanged for receipts\n          representing whole Terra ADSs or Terra Shares in account entry form\n          and cash in lieu of fractional shares issued in consideration\n          therefor upon the surrender of such Lion Virginia Common\n          Certificates in accordance with Section 2.3, without any interest\n          thereon. If, prior to the Exchange Effective Time, the outstanding\n          shares of Terra Capital Stock, Lycos Common Stock or Lion Virginia\n          Common Stock shall have been changed into or exchanged for a\n          different number or kind of shares or securities as a result of a\n          merger, consolidation or other business combination, reorganization,\n          recapitalization, reclassification, stock dividend, stock split,\n          reverse stock split, or other similar change in capitalization, an\n          appropriate and proportionate adjustment shall be made to the\n          Exchange Ratio to provide to the stockholders of Lycos the same\n          economic effect, including any premiums, as contemplated by the\n          Agreement prior to such event.\n\n          Shares of Lion Virginia Common Stock issued and outstanding shall,\n          by virtue of the Share Exchange, continue to be issued and\n          outstanding shares held by Terra.\n\n          At the Exchange Effective Time, each option granted by Lion Virginia\n          to purchase shares of Lion Virginia Common Stock that is outstanding\n          and unexercised immediately prior thereto shall cease to represent a\n          right to acquire shares of Lion Virginia Common Stock and shall be\n          converted automatically into an option to purchase Terra ADSs in an\n          amount and at an exercise price determined as provided below (and\n          otherwise subject to the terms of the Lycos Stock Plans and the\n          agreements evidencing grants thereunder):\n\n          The number of Terra ADSs to be subject to the new option shall be\n          equal to the product of the number of shares of Lion Virginia Common\n          Stock subject to the \n\n\n                                     -2-\n\n\n\n\n\n          original option and the Exchange Ratio, provided that any fractional\n          shares of Terra Common Stock resulting from such multiplication\n          shall be rounded to the nearest whole share; and\n\n          The exercise price per Terra Share under the new option shall be\n          equal to the exercise price per share of Lion Virginia Common Stock\n          under the original option divided by the Exchange Ratio, provided\n          that such exercise price shall be rounded to the nearest whole cent.\n\n          The adjustment provided herein with respect to any options that are\n          \"incentive stock options\" (as defined in Section 422 of the Internal\n          Revenue Code) shall be and is intended to be effected in a manner\n          that is consistent with Section 424(a) of the Internal Revenue Code.\n          The duration and other terms of the new option shall be the same as\n          the original option, except that all references to Lycos (or Lion\n          Virginia) shall be deemed to be references to Terra.\n\n2.2       MANNER OF EXCHANGE\n\n          As promptly as practicable after the Exchange Effective Time, Terra\nshall cause the Exchange Agent (as defined in the Agreement) to send to each\nformer stockholder of record of Lion Virginia immediately prior to the\nExchange Effective Time transmittal materials for use in exchanging such\nstockholder's certificates of Lion Virginia Common Stock for the consideration\nset forth in Section 2.1 above and Section 2.3 below. Any fractional share\nchecks which a Lion Virginia shareholder shall be entitled to receive in\nexchange for such stockholder's shares of Lion Virginia Common Stock, and any\ndividends paid on any shares of Terra Common Stock, that such stockholder\nshall be entitled to receive prior to the delivery to the Exchange Agent of\nsuch stockholder's certificates representing all of such stockholder's shares\nof Lion Virginia Common Stock will be delivered to such stockholder only upon\ndelivery to the Exchange Agent of the certificates representing all of such\nshares (or indemnity satisfactory to Terra and the Exchange Agent, in their\njudgment, if any of such certificates are lost, stolen or destroyed). No\ninterest will be paid on any such fractional share checks or dividends to\nwhich the holder of such shares shall be entitled to receive upon such\ndelivery.\n\n2.3       NO FRACTIONAL SHARES\n\n          No certificates or scrip for fractional Terra ADSs or Terra Shares\nwill be issued. In lieu thereof, Terra will pay the value of such fractional\nshares an amount of cash determined by multiplying (i) the Terra Average Price\nby (ii) the fraction of a Terra Share (rounded to the nearest thousandth when\nexpressed in decimal form) to which such holder would otherwise be entitled to\nreceive pursuant to Section 2.1 of this Plan of Share Exchange.\n\n2.4       DIVIDENDS\n\n          No dividend or other distribution payable to the holders of record\nof Terra Common Stock at or as of any time after the Exchange Effective Time\nshall be paid to the holder of any certificate representing shares of Lion\nVirginia Common Stock issued and outstanding at the Exchange Effective Time\nuntil such holder physically surrenders such certificate for exchange as\nprovided in Section 2.2 of this Plan of Share Exchange, promptly after which\ntime all such dividends or distributions shall be paid (without interest).\n\n\n                                     -3-\n\n\n\n\n\n                                  ARTICLE III\n                         MODIFICATIONS -- TERMINATION\n\n          Subject to the limitations of Section 13.1-718 of the of the\nVirginia Stock Corporation Act, this Plan of Share Exchange may be amended,\nmodified or abandoned at any time prior to the Exchange Effective Time by\naction of the Board of Directors of each of the parties hereto.\n\n          IN WITNESS WHEREOF, Lion Virginia and Terra have caused this\nAgreement to be executed by their respective officers thereunto duly\nauthorized as of the date first above written.\n\n                                        TERRA NETWORKS, S.A.\n\n                                        By:_________________________\n                                        Name:\n                                        Title:\n\n\n                                        LION VIRGINIA, INC.\n\n                                        By:_________________________\n                                        Name:\n                                        Title:\n\n\n                                      -4-\n\n\n\n\n                                                                       ANNEX B\n\n                                    PLAN OF\n                                MERGER BETWEEN\n\n                                   LYCOS AND\n                              LION VIRGINIA, INC.\n\n                                   ARTICLE I\n                              TERMS OF THE MERGER\n\n1.1       THE REINCORPORATION MERGER\n\n          Subject to the terms and conditions of the Agreement and Plan of\nReorganization (the \"Agreement\"), dated as of May 16, 2000, between Terra\nNetworks, S.A. (\"Terra\") and Lycos, Inc. (\"Lycos\"), Lycos shall merge (the\n\"Reincorporation Merger\") with and into Lion Virginia, Inc. (\"Lion Virginia\").\nLion Virginia shall be the Surviving Corporation (the \"Surviving Corporation\")\nin the Reincorporation Merger and shall continue its corporate existence under\nthe laws of the Commonwealth of Virginia. Upon consummation of the\nReincorporation Merger, the separate corporate existence of Lycos shall cease.\n\n1.2       ARTICLES OF INCORPORATION\n\n          The Articles of Incorporation of Lion Virginia immediately prior to\nthe Reincorporation Merger shall be the Articles of Incorporation of the\nSurviving Corporation until thereafter amended in accordance with applicable\nlaw.\n\n1.3       BYLAWS\n\n          The Bylaws of Lion Virginia immediately prior to the Reincorporation\nMerger shall be the Bylaws of the Surviving Corporation until thereafter\namended in accordance with applicable law.\n\n                                  ARTICLE II\n                          MANNER OF CONVERTING SHARES\n\n2.2       CONVERSION OF SHARES\n\n          Upon the Reincorporation Merger becoming effective pursuant to the\nissuance of a certificate of merger by the Virginia State Corporation\nCommission (the \"Reincoporation Effective Time\"), by virtue of the\nReincorporation Merger and without any action on the part of Lycos, Lion\nVirginia or any holder of common stock, par value $0.01 per share, of Lycos\n(\"Lycos Common Stock\"), (i) each share of Lycos Common Stock issued and\noutstanding immediately prior to the Reincorporation Effective Time shall be\nconverted into one share of common stock, par value $0.01 per share, of Lion\nVirginia (\"Lion Virginia Common Stock\") and (ii) each shares of Lion Virginia\nCommon Stock issued and outstanding immediately prior to the Reincorporation\nMerger Effective Time shall be cancelled.\n\n          All shares of Lycos Common Stock converted into shares of Lion\nVirginia Common Stock pursuant to Section 2.2(a) shall no longer be\noutstanding and shall automatically be canceled and shall cease to exist as of\nthe Reincorporation Effective Time, and each certificate previously\nrepresenting any such shares (\"Lycos Common Certificate\") shall thereafter\nrepresent, without the requirement of any exchange thereof, \n\n\n\n\n\nthat number of shares of Lion Virginia Common Stock into which such shares of\nLycos Common Stock represented by such Lycos Common Certificate have been\nconverted pursuant to Section 2.2(a) (such certificates following the\nReincorporation Merger, the \"Lion Virginia Common Certificates\").\n\n          Lycos and Lion Virginia shall take all requisite action such that,\nat the Reincorporation Effective Time, each option granted by Lycos to\npurchase shares of Lycos Common Stock that is outstanding and unexercised\nimmediately prior thereto shall cease to represent a right to acquire shares\nof Lycos Common Stock and shall be converted automatically into an option to\npurchase a number of shares of Lion Virginia Common Stock equal to the number\nof shares of Lycos Common Stock subject to such option immediately prior to\nthe Reincorporation Effective Time at an exercise price per share of Lion\nVirginia Common Stock equal to the exercise price per share of Lycos Common\nStock in effect immediately prior to the Reincorporation Effective Time and\notherwise subject to the terms of the Lycos Stock Plans (as defined in Section\n4.2 of the Agreement) under which such options were issued and the agreements\nevidencing grants thereunder (including accelerated vesting provisions under\nsuch agreements evidencing grants thereunder or under any employment\nagreements between employees of Lycos and Lycos). The adjustment provided\nherein with respect to any options that are \"incentive stock options\" (as\ndefined in Section 422 of the Internal Revenue Code) shall be and is intended\nto be effected in a manner which is consistent with Section 424(a) of the\nInternal Revenue Code. The duration and other terms of the new option shall be\nthe same as the original option except that all references to Lycos shall be\ndeemed to be references to Lion Virginia. Notwithstanding anything to the\ncontrary herein, each option granted by Lycos to a non-employee director prior\nto the Reincorporation Effective Time shall be fully vested, to the extent not\nalready vested, as of the Reincorporation Effective Time.\n\n                                  ARTICLE III\n                          MODIFICATIONS - TERMINATION\n\n          Subject to the limitations of Section 13.1-718 of the Virginia State\nCorporation Act, this Plan of Merger may be amended, modified or abandoned at\nany time prior to the Reincorporation Effective Time by action of the Board of\nDirectors of each of the parties hereto.\n\n          IN WITNESS WHEREOF, Lion Virginia and Lycos have caused this\nAgreement to be executed by their respective officers thereunto duly\nauthorized as of the date first above written.\n\n                                        LION VIRGINIA, INC.\n\n                                        By:_________________________\n                                        Name:\n                                        Title:\n\n\n                                        LYCOS, INC.\n\n\n                                      -2-\n\n\n\n\n\n                                        By:_________________________\n                                        Name:\n                                        Title:\n\n\n                                      -3-\n\n\n\n\n                                                                   EXHIBIT 6.4\n\nLadies and Gentlemen:\n\n          I have been advised that as of the date hereof I may be deemed to be\nan \"affiliate\" of Lycos, a Delaware corporation (\"Lycos\"), and I may in the\nfuture be deemed to be an \"affili ate\" of Lion Virginia, Inc., a Virginia\ncorporation (\"Lion Virginia\"), as the term \"affiliate\" is de fined for\npurposes of paragraphs (c) and (d) of Rule 145 of the Rules and Regulations\n(the \"Rules and Regulations\") of the Securities and Exchange Commission (the\n\"Commission\") under the Securities Act of 1933, as amended (the \"Act\"). I have\nbeen further advised that pursuant to the terms of the Agreement and Plan of\nReorganization dated as of May 16, 2000 (the \"Agreement\"), between Terra\nNetworks, S.A., a company organized under the laws of the Kingdom of Spain\n(\"Terra\"), and Lycos, Inc. (\"Lycos\"), Lycos will merge with and into Lion\nVirginia, with Lion Virginia surviving the merger, and thereafter, pursuant to\na statutory share exchange under the Virginia Stock Corporation Act, Lion\nVirginia will become a wholly owned subsidiary of Terra. I have been further\nadvised that as a result of the Agreement, I will receive shares of common\nstock of Lion Virginia (\"Lion Virginia Common Stock\") in the merger in\nexchange for shares of common stock of Lycos (\"Lycos Common Stock\") owned by\nme, and I will receive ordinary shares of Terra (or American Depositary\nReceipts representing such shares, \"Terra Stock\") in the statutory share\nexchange in exchange for shares of Lion Virginia Common Stock owned by me. All\nterms used in this letter but not defined herein shall have the meanings\nascribed thereto in the Agreement.\n\n          I represent, warrant and covenant to Terra that in the event that I\nreceive any Terra Stock:\n\n          a.   I shall not make any sale, transfer or other disposition of the\nTerra Stock in violation of the Act or the Rules and Regulations.\n\n\n\n\n\n          b.   I have carefully read this letter and the Agreement and\ndiscussed its requirements and other applicable limitations upon my ability to\nsell, transfer or otherwise dispose of Terra Stock to the extent I believed\nnecessary with my counsel or counsel for Lycos\n\n          c.   I have been advised that the issuance of Terra Stock to me\npursuant to the Agreement will be registered with the Commission under the Act\non a Registration Statement on Form F-4. However, I have also been advised\nthat, since at the time the Agreement will be submitted for a vote of the\nstockholders of Lycos I may be deemed to have been an affiliate of Lycos and\nthe distribution by me of the Terra Stock has not been registered under the\nAct, I may not sell, transfer or otherwise dispose of Terra Stock issued to me\nin the Agreement unless (i) such sale, transfer or other disposition has been\nregistered under the Act, (ii) such sale, transfer or other disposition is\nmade in conformity with the volume and other limitations of Rule 145\npromulgated by the Commission under the Act, or (iii) in the opinion of\ncounsel reasonably acceptable to Terra, such sale, transfer or other\ndisposition is otherwise exempt from registration under the Act.\n\n          d.   I understand that Terra is under no obligation to register the\nsale, transfer or other disposition of the Terra Stock by me or on my behalf\nunder the Act or to take any other action necessary in order to make\ncompliance with an exemption from such registration available.\n\n          I recognize and agree that the foregoing provisions also apply to\n(i) my spouse, (ii) any relative of mine or my spouse occupying my home, (iii)\nany trust or estate in which I, my spouse or any such relative owns at least\n10% beneficial interest or of which any of us serves as trustee, executor or\nin any similar capacity and (iv) any corporate or other organization in which\nI, my spouse or any such relative owns at least 10% of any class of equity\nsecurities or of \n\n\n\n\n\nthe equity interest.\n\n          It is understood and agreed that this Letter Agreement shall\nterminate and be of no further force and effect if the Agreement is terminated\nin accordance with its terms. It is also understood and agreed that this\nLetter Agreement shall terminate and be of no further force and effect upon\nthe later of delivery by the undersigned to Terra of a copy of a letter from\nthe staff of the SEC, an opinion of counsel in form and substance reasonably\nsatisfactory to Terra, or other evidence reasonably satisfactory to Terra, to\nthe effect that a transfer of my shares of Terra Stock will not violate the\nAct or any of the rules and regulations of the SEC thereunder.\n\n          Execution of this letter should not be construed as an admission on\nmy part that I am an \"affiliate\" of Lycos as described in the first paragraph\nof this letter or as a waiver of any rights I may have to object to any claim\nthat I am such an affiliate on or after the date of this letter.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8096,9035],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9622,9626],"class_list":["post-43211","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-lycos-inc","corporate_contracts_companies-terra-networks-sa","corporate_contracts_industries-technology__programming","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43211","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43211"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43211"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43211"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43211"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}