{"id":43560,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/rights-offering-agreement-telefonica-sa-terra-networks-sa-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"rights-offering-agreement-telefonica-sa-terra-networks-sa-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/rights-offering-agreement-telefonica-sa-terra-networks-sa-and.html","title":{"rendered":"Rights Offering Agreement &#8211; Telefonica SA, Terra Networks SA and Lycos Inc."},"content":{"rendered":"<pre>\n                           RIGHTS OFFERING AGREEMENT\n\nRIGHTS OFFERING AGREEMENT, dated as of May 16, 2000 (this 'Agreement'), by and\namong Telefonica, S.A., a company organized under the laws of the Kingdom of\nSpain ('Telefonica'), Terra Networks, S.A., a company organized under the laws\nof the Kingdom of Spain ('Terra'), and Lycos, Inc., a Delaware corporation\n('Lycos').\n\n                             W I T N E S S E T H :\n\n          WHEREAS, Terra and Lycos have entered into an Agreement and Plan of\nReorganization dated as of the date hereof, pursuant to which Lycos will\nbecome a wholly owned subsidiary of Terra (the 'Reorganization Agreement';\ncapitalized terms used herein but not defined herein shall have the meanings\nascribed thereto in the Reorganization Agreement);\n\n          WHEREAS, in connection with the Reorganization Agreement, Terra (the\n'Terra Board') has agreed to consummate a rights offering (the 'Rights\nOffering') of shares of common stock ('Subscription Stock') equal to an\naggregate value, including a par value plus premium to be paid in by the\nsubscribers, of 2.2 billion Euros (the 'Subscription Amount');\n\n          WHEREAS, Telefonica wishes to support Terra's business prospects and\njoin other Terra shareholders in a common vision for Terra's success.\n\n          NOW THEREFORE, in consideration of the above-referenced recitals,\nand other good and valuable consideration, the receipt and adequacy of which\nis hereby conclusively acknowledged, the parties hereto intending to be\nlegally bound, agree as follows:\n\n1.   Rights Offering.\n\n     (a)   As soon as reasonably practicable after the date of this Agreement,\nthe Board of Directors of Terra will call a meeting of the Terra shareholders\n('Terra Shareholders') as soon as practicable to seek their approval to\ndelegate to the Board of Directors the power to effectuate the Rights Offering\nin an amount equal to the Subscription Amount, in accordance with the Spanish\nCorporation Law of 1989 (Texto Refundido de la Ley de Sociedades Anonimas).\nThe Terra Shareholders shall agree that necessary terms and conditions,\nincluding in order to permit Telefonica to subscribe to the shares of the\nSubscription Stock in accordance with Section 2 below, shall be determined by\nthe Board of Directors or the Delegated Committee of the Board of Directors\n(the 'Committee') at a meeting of such Board or Committee to be held in order\nto carry out the Rights Offering. The per share subscription price shall be\nthe closing price per share of the Terra Capital Stock on the Spanish\nContinuous Market Exchange (Systema de Interconexion Bursatil- Mercado\nContinuo) ('SCME') on May 16, 2000. The Rights Offering shall be effective,\navailable for subscription, completed and the proceeds therefrom received by\nTerra at least ten full SCME trading days prior to the period during which the\nTerra Average Price is to be calculated pursuant to the terms of the \nReorganization Agreement.\n\n\n \n\n\n     (b)  As soon as practicable following the date of this Agreement, Terra\nshall (i) prepare and file with the CNMV a relevant fact disclosure (hecho\nrelevante), (ii) prepare and arrange to have a prior notice to the CMNV\noutlining the proposed transaction (comunicacion previa) and have registered\nwith and verified by the CMNV a prospectus (folleto), and (iii) prepare and\nfile with the U.S. Securities and Exchange Commission a registration statement\non Form F-1 (the 'Registration Statement'), if necessary, relating to the\nRights Offering. Terra shall use its reasonable best efforts to have such\nprospectus registered, and the Registration Statement, if required, filed with\nand declared effective, by the relevant securities authorities as promptly as\npracticable after such filings. Terra shall also use its reasonable best\nefforts to (i) obtain all necessary state securities law or 'Blue Sky' permits\nand approvals required to carry out the Rights Offering, (ii) make the filings\nwith and obtain the authorization of the listing of Terra Shares on the\nSpanish Stock Exchange and the verification by the NSEC and the Managing\nCompanies of the Spanish Stock Exchanges and (iii) make the filing with and\nobtain the approval of the Nasdaq National Market to authorize the quotation\nof the ADSs.\n\n2.   Telefonica Commitment.\n\n     Subject to the terms and conditions of this Agreement, Telefonica agrees\nthat it shall subscribe for all of the shares of the Subscription Stock not\nsubscribed for by other shareholders of Terra in the Rights Offering;\nprovided, however, that in no event shall Telefonica be required to subscribe\nfor in excess of the entire Subscription Amount in connection with the Rights\nOffering.\n\n3.    Voting of Terra Shares. Telefonica agrees that it shall vote all of its\nTerra Shares, which Telefonica represents to constitute approximately 66.6% of\nthe outstanding Terra Shares (all such shares, as they may be adjusted as a\nresult of any stock split, stock dividend, reclassification, merger,\nreorganization, recapitalization or other change in the capital structure of\nTerra, as well as any Terra Shares acquired after the date hereof and prior to\nthe meeting at which a vote of the Terra Shareholders is held in respect of\nthe matters contemplated hereby or by the Reorganization Agreement, the\n'Subject Shares'), in favor of the matters to be voted upon by the holders of\nTerra Shares pursuant to the transaction contemplated hereby and by the\nReorganization Agreement. Telefonica agrees that it shall vote all such Terra\nShares against any matter upon which the Terra Shareholders are asked to vote\ninvolving any amendment of the Terra Articles or the Terra By-Laws or any\nproposals or transactions involving Terra or its Subsidiaries that, in any\nsuch case, would prevent or materially delay consummation of the transactions\ncontemplated hereby or by the Reorganization Agreement or change in any manner\nthe voting rights of any class of capital stock of Terra.\n\n4.    Purchase and Sale of Subject Shares. Telefonica and Terra each hereby\nagrees that it will not, and that it shall use its reasonable best efforts to\ncause its 'affiliates' and 'associates' (as such terms are defined under Rule\n12b-2 promulgated under the Exchange Act ) not to, purchase or agree to\npurchase any additional Terra Shares, any securities convertible into or\nexchangeable for Terra Shares or any options, warrants or other rights to\nacquire Terra Shares during the period during which the Terra Average Price is\nto be calculated pursuant to the terms of the Reorganization Agreement and\nthat it will not, during such period, publicly announce any intention to\npurchase any Terra Shares (other than pursuant to the Rights Offering).\nTelefonica further agrees that it shall not sell, transfer, pledge, assign or\notherwise dispose of (collectively, 'Transfer') or enter into any\n\n\n                                      2\n\n\n\n\ncontract, option or other arrangement with respect to the Transfer of, or\nthe creation or offer of any derivative security in respect of, the Subject\nShares to any person or commit or agree, or announce an intention to, take any\nof the foregoing actions.\n\n5.   Representations and Warranties. Telefonica represents and warrants (with\nrespect to the representations and warranties regarding Telefonica only) to\nLycos, Terra represents and warrants (with respect to the representations and\nwarranties regarding Terra only) to Lycos and Lycos represents and warrants\n(with respect to the representations and warranties regarding Lycos only) to\nTelefonica and Terra:\n\n     (a)   It has full corporate power and authority to execute and deliver\nthis Agreement and the Reorganization Agreement (if it is a party thereto) and\nhas full corporate power and authority to consummate the transactions\ncontemplated hereby and thereby (if it is a party thereto); the execution and\ndelivery of this Agreement and the Reorganization Agreement (if it is a party\nthereto) and the consummation of the transactions contemplated hereby and\nthereby (if it is a party thereto) have been duly and validly approved by its\nBoard of Directors (or, in the case of Telefonica, the Chairman of the Board\nof Telefonica under the authorization granted by the Executive Committee of\nthe Board of Telefonica); this Agreement and the Reorganization Agreement (if\nit is a party thereto) has been duly and validly executed and delivered by it\nand (assuming due authorization, execution and delivery by the other party or\nparties thereto) constitutes valid and binding obligation(s) of it,\nenforceable against it in accordance with its (or their) terms; neither the\nexecution and delivery of this Agreement or the Reorganization Agreement (if\nit is a party thereto) by it nor the consummation by it of the transactions\ncontemplated hereby or thereby (if it is a party thereto), nor compliance by\nit with any of the terms or provisions hereof, will violate any provision of\nits certificate of incorporation, articles of incorporation, by-laws or other\nsimilar documents or violate any statute, code, ordinance, rule, regulation,\njudgment, order, writ, decree or injunction applicable to it or any of its\nproperties or assets; and no consents or approvals of or filings or\nregistrations with any court, administrative agency or commission or other\ngovernmental or regulatory authority or instrumentality ('Governmental\nAuthority'), or of or with any third party, are necessary in connection with\nthe execution and delivery by it of this Agreement or the Reorganization\nAgreement (if it is a party thereto) and the consummation by it of the\ntransactions contemplated hereby or thereby (if it is a party thereto) and\ncompliance by it with any of the provisions hereof or thereof (if it is a\nparty thereto), other than those the failure of which to obtain or make would\nnot reasonably be expected to prevent or materially delay the transactions\ncontemplated hereby and other than the approvals, filings, notices and\nregistrations referred to in Section 1 and in the Reorganization Agreement.\n\n    (b)   Telefonica represents and warrants to Lycos that Telefonica owns,\ndirectly or indirectly, all of the Subject Shares, free and clear of any\nliens, pledges, charges, encumbrances and security interests whatsoever.\nTelefonica represents and warrants to Lycos that Telefonica does not own (of\nrecord or beneficially) any options, warrants, rights or other similar\ninstruments to acquire any capital stock or other voting securities of Terra.\nTelefonica has the sole right to vote and Transfer the Subject Shares, and\nnone of the Subject Shares is subject to any voting trust or other agreement,\narrangement or restrictions with respect to the voting or Transfer of the\nSubject Shares, except pursuant to this Agreement. Telefonica hereby agrees\nthat at all times prior to and including the date of Terra Shareholder\nMeeting, it shall continue to own and have the right to vote no less than the\nnumber and kind of Terra Shares held as of the date hereof. To the extent\ninconsistent\n\n                                      3\n\n\n\n\n\nwith the provisions of this Agreement, Telefonica hereby represents that\nany proxies heretofore given in respect of the Subject Shares are not\nirrevocable and that it hereby revokes any and all previous proxies given by\nit with respect to the Subject Shares or any other voting securities of Terra.\nTelefonica hereby agrees that it shall not, directly or indirectly, grant any\nproxies or powers of attorney with respect to the Subject Shares or any other\nvoting securities of Terra with respect to any matter that would prevent or\nmaterially delay Telefonica from complying with its obligations set forth in\nthis Agreement. The parties understand and agree that the representations and\nwarranties contained in this Section 5(b) regarding the Subject Shares do not\nrelate to any Subject Shares acquired after the date hereof.\n\n6.   General Provisions.\n     \n     (a)   This Agreement may be executed in counterparts, all of which\nshall be considered one and the same agreement and shall become effective when\ncounterparts have been signed by each of the parties and delivered to the\nother parties, it being understood that all parties need not sign the same\ncounterpart.\n\n     (b)   This Agreement, together with the Reorganization Agreement (if a\nparty thereto) (including the documents and the instruments referred to\nherein) constitutes the entire agreement and supersedes all prior agreements\nand understandings, both written and oral, among the parties with respect to\nthe subject matter hereof.\n\n     (c)   This Agreement shall be governed and construed in accordance with\nthe laws of the Kingdom of Spain, without regard to any applicable conflicts\nof law principles.\n\n     (d)   Except as otherwise required by applicable law or the rules of\nthe NASDAQ and Spanish Stock Exchange authorities (in which cases the party\nproposing to make any disclosure shall provide reasonable notice to the other\nparty prior to making the proposed disclosure), none of the parties shall, or\nshall permit any of its subsidiaries to, issue or cause the publication of any\npress release or other public announcement with respect to, or otherwise make\nany public statement concerning, the transactions contemplated by this\nAgreement without the consent of Terra and Telefonica, in the case of a\nproposed announcement or statement by Lycos, or Lycos, in the case of a\nproposed announcement or statement by Terra or Telefonica, which consent shall\nnot be unreasonably withheld.\n\n    (e)   This Agreement may not be amended, changed, supplemented, waived\nor otherwise modified or terminated except by an instrument in writing signed\nby Lycos and Telefonica. The failure of any party hereto to exercise any\nright, power or remedy provided under this Agreement or otherwise available in\nrespect hereof at law or in equity, or to insist upon compliance by any other\nparty hereto with its obligations hereunder, and any custom or practice of the\nparties at variance with the terms hereof, shall not constitute a waiver by\nsuch party of its right to exercise any such or other right, power or remedy\nor to demand such compliance.\n\n   (f)   This Agreement shall be binding upon and shall inure to the\nbenefit of and be enforceable by the parties and their respective successors\nand assigns, including without limitation in the case of any corporate party\nhereto any corporate successor by merger or otherwise, and in the case of any\nindividual party hereto any trustee, executor, heir, legatee or personal\nrepresentative succeeding to the ownership of the Subject Shares or other\n\n                                      4\n\n\n\n\nsecurities subject to this Agreement. Notwithstanding any transfer of Subject\nShares, the transferor shall remain liable for the performance of all\nobligations under this Agreement of the transferor.\n\n     (g)   If any term of this Agreement or the application thereof to any party\nor circumstance shall be held invalid or unenforceable to any extent, the\nremainder of this Agreement and the application of such term to the other\nparties or circumstances shall not be affected thereby and shall be enforced\nto the greatest extent permitted by applicable law, provided that in such\nevent the parties shall negotiate in good faith in an attempt to agree to\nanother provision (in lieu of the term or application held to be invalid or\nunenforceable) that will be valid and enforceable and will carry out the\nparties' intentions hereunder.\n\n     (h)   The parties acknowledge that money damages are not an adequate remedy\nfor violations of this Agreement and that any party may, in its sole\ndiscretion, apply to a court of competent jurisdiction for specific\nperformance or injunctive or such other relief as such court may deem just and\nproper in order to enforce this Agreement or prevent any violation hereof and,\nto the extent permitted by applicable law, each party waives any objection to\nthe imposition of such relief. All rights, powers and remedies provided under\nthis Agreement or otherwise available in respect hereof at law or in equity\nshall be cumulative and not alternative, and the exercise or beginning of the\nexercise of any thereof by any party shall not preclude the simultaneous or\nlater exercise of any other such right, power or remedy by such party.\n\n     (i)   This Agreement is not intended to be for the benefit of and shall not\nbe enforceable by any person or entity who or which is not a party hereto.\n\n     (j)   Each party hereto hereby waives any right to a trial by jury in\nconnection with any such action, suit or proceeding.\n\n     (k)   Each of Telefonica, Terra and Lycos irrevocably agree that any legal\naction or proceeding with respect to this Agreement or for recognition and\nenforcement of any judgment in respect hereof brought by another party hereto\nor its successors or assigns may be brought and determined in any Delaware\nstate court or Federal court sitting in the State of Delaware, and each of\nTelefonica and Lycos hereby (x) irrevocably submits with regard to any such\naction or proceeding for itself and in respect to its property, generally and\nunconditionally, to the exclusive personal jurisdiction of the aforesaid\ncourts in the event any dispute arises out of this Agreement or any\ntransaction contemplated hereby, (y) agrees that it will not attempt to deny\nor defeat such personal jurisdiction by motion or other request for leave from\nany such court and (z) agrees that it will not bring any action relating to\nthis Agreement or any transaction contemplated hereby in any court other than\nany Delaware state or Federal court sitting in the State of Delaware. Any\nservice of process to be made in such action or proceeding may be made by\ndelivery of process in accordance with the notice provisions contained in\nSection 6(k). Each of Telefonica, Terra and Lycos hereby irrevocably waives,\nand agrees not to assert, by way of motion, as a defense, counterclaim or\notherwise, in any action or proceeding with respect to this Agreement, (a) the\ndefense of sovereign immunity, (b) any claim that it is not personally subject\nto the jurisdiction of the above-named courts for any reason other than the\nfailure to serve process in accordance with this Section 6(k), (c) that it or\nits property is exempt or immune from jurisdiction of any such court or from\nany legal process commenced in such\n\n\n                                      5\n\n\n\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     (l)   Telefonica 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 court described in Section 6(k). Telefonica\nagrees to take any and all reasonable action, including the filing of any and\nall documents, that may be necessary to establish and continue such\nappointment in full force and effect as aforesaid. Telefonica agrees that\nservice of process upon the Authorized Agent shall be, in every respect,\neffective service of process upon Telefonica.\n\n     (m)   Subject to the terms and conditions of this Agreement, the parties\nhereto each agree to use its reasonable best efforts in good faith to take, or\ncause to be taken, all actions, and to do, or cause to be done, all things\nnecessary, proper or desirable, or advisable under applicable laws, so as to\npermit consummation of transactions contemplated hereby and by the\nReorganization Agreement (if a party thereto) including, without limitation,\nusing its reasonable best efforts to obtain (and cooperating with the other\nparty hereto to obtain) any consent, authorization, order or approval of, or\nany exemption by, any Governmental Authority (as defined in Section 5(a)) and\nany other third party that is required to be obtained by any of the parties\nhereto in connection with the transactions contemplated by this Agreement and\nby the Reorganization Agreement (if a party thereto).\n\n     (n)   All notices and other communications hereunder shall be in writing\nand shall be deemed given if delivered personally, telecopied (with\nconfirmation), mailed by registered or certified mail (return receipt\nrequested) or delivered by an express courier (with confirmation) to the\nparties at the following addresses (or at such other address for a party as\nshall be specified by like notice):\n\n         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\n\n                                     6\n\n\n\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         if to Tiger, to:\n\n                         Tiger, 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.:  011-34-91-452-3144\n                         Attention:  Antonio de Esteban\n\n                  With a copy to:\n\n                         Wachtell, Lipton, Rosen &amp; Katz\n                         51 West 52nd St.\n                         New York, NY\n                         Facsimile:  212-403-2000\n                         Attention:  Craig M. Wasserman, Esq.\n\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     (o)   It is a condition precedent to the effectiveness of this Agreement\nthat the Reorganization Agreement shall have been executed and delivered by\neach of the parties thereto and be in full force and effect. In the event the\nReorganization Agreement is terminated in accordance with its terms, this\nAgreement shall automatically terminate and be of no further force or effect.\nUpon such termination, except for any rights any party may have in respect of\nany breach by any other party of its or his obligations hereunder, none of the\nparties hereto shall have any further obligation or liability hereunder.\n\n     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be\nexecuted by their respective officers thereunto duly authorized as of the date\nfirst above written.\n\n\n                                      7\n\n\n\n\n                                             TELEFONICA, S.A.\n\n                                             By: \/s\/ Juan Villalonga\n                                                 --------------------------\n                                                 Name:  Juan Villalonga\n                                                 Title: Chief Executive Officer\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\n                                      8\n\n\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-43560","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\/43560","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=43560"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43560"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43560"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}