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EXHIBIT 1
S&C Draft of November 10, 1999
TERRA NETWORKS, S.A.
ORDINARY SHARES
IN THE FORM OF SHARES OR AMERICAN DEPOSITARY SHARES
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INTERNATIONAL UNDERWRITING AGREEMENT
November -, 1999
Banco de Negocios Argentaria S.A.
BBV Interactivos, S.A., S.V.B.
Xxxxxxx Xxxxx International,
InverCaixa Valores, S.V.B., S.A.,
As representatives of the several International Underwriters
named in Schedule I hereto (the "Representatives"),
c/o Goldman Sachs International,
Xxxxxxxxxxxx Xxxxx,
000 Xxxxx Xxxxxx,
Xxxxxx XX0X 0XX.
Ladies and Gentlemen:
Terra Networks, S.A., a corporation (sociedad anonima)
organized under the laws of Spain (the "Company"), proposes, subject to the
terms and conditions stated herein, to issue and sell to the underwriters named
in Schedule I hereto (the "International Underwriters") an aggregate of -
ordinary shares, nominal value of [euro]2 each (the "Firm International
Shares"), directly or in the form of American Depositary Shares (the "ADSs"),
each ADS representing the right to receive one ordinary share. The ADSs will
represent International Shares (as defined herein) to be deposited by the
Company pursuant to the Deposit Agreement (as defined herein). In addition, the
Company proposes to sell to the International Underwriters up to an aggregate of
- additional ordinary shares (the "Optional International Shares"), if and to
the extent that you shall have determined to exercise on behalf of the
International Underwriters the right to subscribe for Optional International
Shares granted in Section 2 hereof (together with the offering of the Firm
International Shares, the "International Offering"). The ordinary shares
(including the ordinary shares in respect of the ADSs) delivered to the
International Underwriters pursuant to this Agreement are hereinafter called the
"International Shares", and the ordinary shares to be delivered to the Spanish
Underwriters pursuant to the Spanish Underwriting Agreements (as defined herein)
are hereinafter called the "Spanish Shares". The Spanish Shares
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and the International Shares are hereinafter collectively called the "Shares".
The International Shares in respect of the ADSs to be delivered at each Time of
Delivery of ADSs (as defined in Section 4(d) hereof) are to be deposited by the
Company with the Depositary (as defined herein) or a custodian thereof pursuant
to the Deposit Agreement prior to such Time of Delivery against issuance of ADRs
(as defined herein) evidencing such ADSs.
The ADSs will be issued in accordance with the Deposit
Agreement, dated as of -, 1999 (the "Deposit Agreement"), among the Company,
Citibank N.A., as depositary (the "Depositary"), and the holders from time to
time of American Depositary Receipts (the "ADRs") issued thereunder and
evidencing ADSs, which ADRs shall be substantially in the form filed as an
exhibit to the ADS Registration Statement (as defined herein).
The Company is a 91.2%-owned subsidiary of Telefonica, S.A.
("Telefonica"), a corporation with limited liability (sociedad anonima)
organized under the laws of Spain.
Prior to the consummation of the transactions contemplated by
this Agreement, the Company (a) recapitalized [euro]266.8 million of short-term
liabilities in exchange for 133.4 million ordinary shares issued to Telefonica,
(b) entered into agreements to acquire: (i) 100% of Ordenamientos de Links
Especializados S.L. ("Ole"), a corporation organized under the laws of Spain,
Nutec Informatica S.A. ("Nutec"), a corporation organized under the laws of
Brazil and Informacion Selectiva, S.A. de C.V. ("Infosel"), a corporation
organized under the laws of Mexico and Netgocios S.A. and Donde Latinoamerica
S.A., corporations organized under the laws of Argentina; (ii) 100% of the
assets of Telefonica Services Internet S.A.C., a subsidiary of Telefonica del
Peru S.A., (iii) a 95% equity interest in the Internet subsidiary of Compania de
Telecomunicaciones de Chile S.A., and (iv) a 51% stake in a joint venture with
International Discount Telecommunications Corp. ("IDT"); and (c) engaged in
other related transactions, including the incorporation of Terra Networks Brazil
S.A. ("Terra Networks Brazil"), a corporation organized under the laws of
Brazil, Telefonica Chile Ltda ("Terra Networks Chile"), a corporation organized
under the laws of Chile, Terra Networks (Peru) S.A. ("Terra Networks Peru"), a
corporation organized under the laws of Peru, Terra Networks (Argentina) S.A.
("Terra Networks Argentina"), a corporation organized under the laws of
Argentina and Telefonica Interactiva USA, Inc. ("Telefonica Interactiva USA"), a
corporation organized under the laws of the State of Florida, to hold the assets
acquired in Chile, Peru, Argentina and the United States, respectively. Nutec,
Terra Networks Brazil, Infosel, Terra Networks Chile, Terra Networks Peru, Terra
Networks Argentina and Telefonica Interactiva USA are hereinafter collectively
referred to as the "Foreign Subsidiaries". The acquisitions and other
transactions described above will have been completed prior to the execution of
this Agreement. The transactions referred to above, as more fully described
under "The Company" in the Prospectus, and any other transactions necessary or
incidental to the consummation of such transactions, are hereinafter
collectively referred to as the "Transactions", and the contracts, agreements
and deeds executed and delivered or to be executed and delivered by the Company
and its subsidiaries in connection with the Transactions are hereinafter
collectively referred to as the "Transaction Documents", an indicative list of
which is set forth in Annex A hereto.
It is understood and agreed by all parties hereto that the
Company has entered or is concurrently entering into a Spanish retail
underwriting agreement and a Spanish institutional underwriting agreement
(together, the "Spanish Underwriting Agreements") with certain Spanish
underwriters (the "Spanish
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Underwriters") providing for the sale by the Company of a total of - Spanish
Shares to Spanish institutional investors (the "Spanish Institutional Offering")
and a total of - Spanish Shares to retail investors in Spain and in the European
Economic Area and Andorra who have current and custody accounts in Spain (the
"Spanish Retail Offering" and together with the Spanish Institutional Offering,
the "Spanish Offering", and the Spanish Offering together with the International
Offering, the "Global Offering").
All sales in the United States by the International
Underwriters will be made through their U.S. broker-dealer affiliates (the
"Selling Agents") listed in Schedule I hereto, which Selling Agents shall be
registered as broker-dealers under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act").
Four forms of prospectus are to be used in connection with the
offering and sale of Shares as part of the Global Offering: the U.S. Prospectus
(as defined herein) relating to the offering and sale of International Shares
and ADSs by the Selling Agents in the United States; one relating to the
offering and sale of International Shares and ADSs by the International
Underwriters outside the United States, Canada and Spain (the "International
Prospectus"); one relating to the offering and sale of International Shares and
ADSs by the International Underwriters in Canada (the "Canadian Prospectus");
and one in the form of a Folleto Informativo Completo in the Spanish language
relating to the Spanish Shares to be offered and sold to institutional and
retail purchasers in Spain. The International Prospectus contains substantially
identical information to the U.S. Prospectus except for certain or additional
substitute pages. Unless the context otherwise requires, references herein to
any prospectus (the "Prospectus") whether in preliminary or final form and
whether as amended or supplemented, shall include the U.S. and International
versions thereof.
The International Underwriters and the Spanish Underwriters
are hereinafter collectively called the "Underwriters", and this Agreement and
the Spanish Underwriting Agreements are hereinafter collectively called the
"Underwriting Agreements".
You have advised us that the Underwriters are concurrently
entering into an Agreement among the Spanish and International underwriting
syndicates (the "Agreement among Syndicates"), which provides, among other
things, that Xxxxxxx Xxxxx International, Banco de Negocios Argentaria, S.A.,
BBV Interactivos, S.A., S.V.B. and InverCaixa Valores, S.V.B., S.A. shall act as
the joint global coordinators for the Global Offering. Anything herein or
therein to the contrary notwithstanding, the respective closings under this
Agreement and the Spanish Underwriting Agreements are hereby made expressly
conditional on one another.
1. (a) The Company represents and warrants to, and agrees with, each of
the International Underwriters that:
(i) A registration statement on Form F-1 (File No. 333-89997), and
as part thereof of a preliminary prospectus and Amendment No.
1 to such registration statement, and as part of such
Amendment, a preliminary prospectus (collectively, the
"Initial Registration Statement"), in respect of the
International Shares being offered in the United States, has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-
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effective amendment thereto, each in the form heretofore
delivered to you, and excluding exhibits thereto, to you for
each of the other International Underwriters, have been
declared effective by the Commission in such form; other than
a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and
no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto
or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated
or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter
called a "Preliminary U.S. Prospectus"); the various parts of
the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto
and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and
deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part
of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively
called the "Registration Statement", and such final
prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the "U.S. Prospectus";
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each
Preliminary U.S. Prospectus, at the time of filing thereof
with the Commission, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder; each Preliminary Prospectus did not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by an International Underwriter through Xxxxxxx Sachs
International expressly for use in any Preliminary Prospectus;
(iii) The Registration Statement conforms, and the U.S. Prospectus
and any further amendments or supplements to the Registration
Statement or the U.S. Prospectus will conform, in all material
respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the
Registration Statement and any amendment
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thereto and as of the applicable filing date as to the U.S.
Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; the U.S.
Prospectus and the International Prospectus and any further
amendments or supplements thereto do not and will not, as of
their respective dates, contain an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by an International Underwriter through Xxxxxxx Xxxxx
International expressly for use in the U.S. Prospectus or the
International Prospectus, as the case may be, or any amendment
or supplement to either of them;
(iv) The Spanish "Folleto Informativo Completo" filed with the
Spanish Comision Nacional del Xxxxxxx de Valores (the "CNMV")
on October 29, 1999 (the "Spanish Folleto"), conforms, and any
further amendments or supplements thereto will conform, in all
material respects to the requirements of Spanish law and the
rules and regulations of the CNMV, and does not and will not,
as of its applicable effective or filing date, contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading;
(v) A registration statement on Form F-6 (File No. 333-11078) in
respect of the ADSs has been filed with the Commission; such
registration statement in the form heretofore delivered to you
and, excluding exhibits, to you for each of the other
International Underwriters, has been declared effective by the
Commission in such form; no other document with respect to
such registration statement has heretofore been filed with the
Commission; no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for
that purpose has been initiated or threatened by the
Commission (the various parts of such registration statement,
including all exhibits thereto, each as amended at the time
such part of the registration statement became effective,
being hereinafter called the "ADS Registration Statement");
and the ADS Registration Statement when it became effective
conformed, and any further amendments thereto will conform, in
all material respects to the requirements of the Act and the
rules and regulations of the Commission thereunder, and did
not, as of the applicable effective date, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading;
(vi) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements of
the Company included in the Prospectus any loss or
interference with its business from fire, explosion, flood or
other calamity,
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whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree that
otherwise in any such case is material to the Company and its
subsidiaries taken as a whole, than as set forth or
contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in
the capital stock (other than pursuant to the grant or
exercise of options described in the Prospectus), short-term
or long-term debt of the Company or any of its subsidiaries,
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders'
equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(vii) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and
marketable title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such
as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and any
real property and buildings held under lease by the Company
and its subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed
to be made of such property and buildings by the Company and
its subsidiaries;
(viii) The Company has been duly incorporated and is validly existing
as a corporation with limited liability (sociedad anonima) in
good standing under the laws of Spain, with full power and
authority (corporate and other) to own or lease and operate
its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, or is subject to no material
liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the
Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its
jurisdiction of incorporation;
(ix) The Company has an authorized capitalization as set forth in
the Prospectus, and all the issued shares of capital stock of
the Company have been duly and validly authorized and issued,
and are fully paid and non-assessable and conform to the
description of the capital stock of the Company contained in
the Prospectus; and all of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares and except as set
forth in the Prospectus) are
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owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims; the holders of
outstanding shares of capital stock of the Company or any
other person, including parties to any of the Transaction
Documents, are not entitled to preemptive or other rights to
acquire the Shares or the ADSs which have not been complied
with; except as described in the Prospectus, there are no
outstanding securities convertible or exchangeable for, or
warrants, rights or options to purchase from the Company or
obligations of the Company to issue, ordinary shares or any
other class of capital stock of the Company; the International
Shares may be freely deposited by the Company with the
Depositary against issuance of ADRs evidencing the ADSs; the
Shares and ADSs are freely transferable by the Company to or
for the account of the several Underwriters in the manner
contemplated in the Underwriting Agreements; and there are no
restrictions on subsequent transfers of the Shares or the ADSs
except as described in the Prospectus under "Description of
Ordinary Shares - Foreign Investment and Exchange Control
Regulations";
(x) The unissued Shares to be issued and sold by the Company to
the Underwriters hereunder and under the Spanish Underwriting
Agreements have been duly and validly authorized and, when
issued and delivered against payment therefor as provided
herein, and therein, will be duly and validly issued and fully
paid and non-assessable and will conform to the description of
the capital stock contained in the Prospectus;
(xi) The Deposit Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization,
execution and delivery by the Depositary, constitutes a valid
and legally binding agreement of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, fraudulent transfer,
suspension of payments or other laws of general applicability
relating to or affecting the enforcement of creditors' rights
generally and to general equity principles and provided that
detailed information relating to any payment by the Company
pursuant to Section 5.08 thereof will be required to be given
to the Spanish Registry Entity (as defined under Spanish
Exchange Control legislation (the "Spanish Registry Entity"))
through which such payment is made; upon due issuance by the
Depositary of ADRs evidencing ADSs against the deposit of
International Shares in respect thereof in accordance with the
provisions of the Deposit Agreement, such ADRs will be duly
and validly issued and the persons in whose names the ADRs are
registered will be entitled to the rights specified therein
and in the Deposit Agreement; and the Deposit Agreement and
the ADRs conform in all material respects to the descriptions
thereof contained in the Prospectus;
(xii) All consents, approvals, authorizations, orders,
registrations, clearances and qualifications of or with any
court or governmental agency or body or any stock
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exchange authorities (hereinafter referred to as a
"Governmental Agency") having jurisdiction over the Company or
any of its subsidiaries or any of their properties or any
stock exchange authorities (hereinafter referred to as
"Governmental Authorizations") required for the deposit of
Shares, the issuance of ADSs in respect thereof and for the
execution and delivery by the Company of this Agreement, the
Spanish Underwriting Agreements, the Agency Agreement (the
"Agency Agreement"), dated as of October 28, 1999 between the
Company, on the one hand, and Argentaria, Caja Postal y Banco
Hipotecario, S.A. and Banco Bilbao Vizcaya as agents, on the
other hand, and the Deposit Agreement to be duly and validly
authorized have been obtained or made and are in full force
and effect;
(xiii) All dividends and other distributions declared and payable on
the shares of capital stock of the Company may under the
current laws and regulations of Spain be paid to the
Depositary in euro and may be converted into foreign currency
that may be freely transferred out of Spain, and all such
dividends and other distributions will not be subject to
withholding or other taxes under the laws and regulations of
Spain and are otherwise free and clear of any other tax,
withholding or deduction in Spain and without the necessity of
obtaining any Governmental Authorization in Spain, except that
the remittance to foreign investors of dividends with respect
to the Shares will require registration thereof with the
Spanish Registry of Foreign Investments;
(xiv) The issue and sale of the Shares to be sold by the Company
hereunder and under the Spanish Underwriting Agreements, the
deposit of the International Shares with the Depositary
against issuance of ADRs evidencing the ADSs, the compliance
by the Company with all of the provisions of this Agreement,
each of the Spanish Underwriting Agreements, the Agency
Agreement and the Deposit Agreement and the consummation of
the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
Transaction Document, indenture, mortgage, deed of trust,
acquisition, merger or joint venture agreement, lease, loan
agreement or other agreement or instrument to which the
Company or any of its subsidiaries is subject or by which the
Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the Estatutos of the Company or
any statute or any order, rule or regulation of any
Governmental Agency having jurisdiction over the Company or
any of its subsidiaries or any of their properties; no holders
of securities of the Company or any other person, including
parties to any of the Transaction Documents, have or will have
rights, pursuant to any agreement with the Company,
Telefonica, or any subsidiary of either, to the registration
of such securities under the Registration Statement or the ADS
Registration Statement; and no consent, approval,
authorization, order, registration, qualification or clearance
of or with any such Governmental Agency is required for the
issue and sale of the
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International Shares or the ADSs, for the deposit of the
International Shares being deposited with the Depositary
against issuance of ADRs evidencing ADSs to be delivered or
for the consummation by the Company of the transactions
contemplated by this Agreement, the Spanish Underwriting
Agreements, the Agency Agreement and the Deposit Agreement,
except (A) (i) the registration under the Act of the
International Shares and the ADSs and the qualification of the
ADSs for quotation on the Nasdaq National Market, (ii) such
consents, approvals, authorizations, orders, registrations,
qualifications or clearances as have been duly obtained, are
in full force and effect and copies of which have been
furnished to you and (iii) such Governmental Authorizations as
may be required under securities laws in connection with the
subscription and distribution of the International Shares and
the ADSs by or for the account of the International
Underwriters, (B) that the Spanish Offering will be required
to be registered with the CNMV, (C) that the capital increase
relating to the Shares will be required to be registered with
the Registro Mercantil de Madrid (the "Mercantile Registry"),
(D) that the listing of the Shares will need to be approved by
the CNMV and the relevant managing entities ("sociedades
rectoras") of each of the Madrid, Barcelona, Bilbao and
Valencia Stock Exchanges (collectively, the "Spanish Stock
Exchanges"), (E) that detailed information relating to any
payment for the Shares or ADSs will be required to be given to
the Spanish Registry Entity through which payment is made by
the Company and similar information will be required to be
given in respect of any payment made by the Company pursuant
to Section 9 hereof or by the Company pursuant to Section 5.08
of the Deposit Agreement and (F) that remittance to foreign
investors of dividends, other benefits, or sale proceeds with
respect to shares of capital stock (including the Shares) will
require registration thereof with the Spanish Registry of
Foreign Investments;
(xv) (A) the Company is not in violation of its Estatutos and (B)
no subsidiary of the Company is in violation of its
constitutive documents, and neither the Company nor any of its
subsidiaries is in default in the performance or observance of
any obligation, agreement, covenant or condition contained in
any Transaction Document, indenture, mortgage, deed of trust,
loan agreement, acquisition, merger or joint venture
agreement, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be
bound, except in each case described in clause (B), as
described in the Prospectus, and except in each case as would
not have a material adverse effect on the business, results of
operations or financial condition of the Company and its
subsidiaries considered as a whole (a "Material Adverse
Effect");
(xvi) No stamp or other issuance or transfer taxes or duties, and no
capital gains, income, withholding or other taxes, are payable
to Spain or any political subdivision or taxing authority
thereof or therein by or on behalf of the International
Underwriters (other than any tax which the Company has agreed
to pay pursuant to Section 6(viii) hereof) in connection with
(A) the sale and delivery of the Shares and ADSs to or for
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the respective accounts of the International Underwriters, (B)
the sale and delivery by the International Underwriters of the
International Shares or ADSs to the initial subscribers and
purchasers, respectively, thereof in the manner contemplated
herein or (C) the deposit of International Shares with the
Depositary against the issuance of ADRs evidencing ADSs;
(xvii) Neither the Company nor any of its subsidiaries has taken
directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or
resale of the Shares or ADSs;
(xviii) The statements set forth in the Prospectus under the captions
"Description of Ordinary Shares" and "Description of American
Depositary Receipts", insofar as they purport to constitute a
summary of the terms of the Shares and the ADSs, respectively,
are accurate, complete and fair in all material respects;
(xix) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries, considered as a whole; and, to
the best of the Company's knowledge, no such proceedings are
threatened or contemplated by any Governmental Agency or
threatened by others;
(xx) Other than as set forth in the Prospectus, the Company and its
subsidiaries own or have the right to use pursuant to license,
sublicense, agreement or permission all patents, patent
applications, trademarks, service marks, trade names,
copyrights, trade secrets, confidential information,
proprietary rights and processes ("Intellectual Property")
necessary for the operation of the business of the Company and
its subsidiaries as described in the Prospectus and have taken
all steps reasonably necessary to secure assignments of such
Intellectual Property from their employees and contractors; to
the Company's knowledge, none of the technology employed by
the Company or any of its subsidiaries has been obtained or is
being used by the Company or any of its subsidiaries in
violation of any contractual or fiduciary obligation binding
upon the Company, any of its subsidiaries or any of their
respective directors or executive officers or any of their
respective employees or consultants, except in each case as
would not have a Material Adverse Effect; and the Company and
its subsidiaries have taken and will maintain reasonable
measures to prevent the unauthorized dissemination or
publication of its confidential information. To the Company's
knowledge, neither the Company nor any of its subsidiaries
have interfered with, infringed upon, misappropriated or
otherwise come
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into conflict with any Intellectual Property rights of third
parties, and except as described in the Prospectus, the
Company and its subsidiaries have not received any charge,
complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation or violation
(including any claim that the Company or any of its
subsidiaries must license or refrain from using any
intellectual property rights of any third party) which, if the
subject of any unfavorable decision, ruling or finding would,
individually or in the aggregate, have a material adverse
effect on the business, financial condition, shareholders'
equity or results of operations of the Company and its
subsidiaries;
(xxi) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company",
as such term is defined in the U.S. Investment Company Act of
1940, as amended (the "Investment Company Act");
(xxii) Xxxxxx Xxxxxxxx y Cia, S. Com., who have certified certain
financial statements of the Company and its subsidiaries and
of Ole, Xxxxxx Xxxxxxxx S/C and Xxxx, Xxxxxxx y Cia., S.C.
(Xxxxxx Xxxxxxxx) who have certified certain financial
statements of Nutec and Infosel, respectively, Price
Waterhouse Auditores, S.A. and BDO Audiberia, who have
certified certain financial statements of Servicios y
Contenidos por la Red S.A.U., are each independent public
accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(xxiii) The unaudited pro forma condensed balance sheet as of June 30,
1999 (the "pro forma balance sheet"), and the pro forma
condensed statements of operations for the year ended December
31, 1998 and the six months ended June 30, 1999 (together, the
"pro forma statements of operation" and, together with the pro
forma balance sheet, the "pro forma financial statements")
comply as to form in all material respects with the applicable
rules and regulations of the Commission; the pro forma
financial statements accurately, completely and fairly present
the significant effects attributable to the transactions
described under the caption "Pro Forma Financial Data" in the
Prospectus; and the pro forma adjustments have been properly
applied to the historical amounts in the compilation of the
pro forma financial statements;
(xxiv) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or
any of its subsidiaries has a material relationship to
evaluate the extent to which the business or operations of the
Company or any of its subsidiaries will be affected by the
Year 2000 Problem. As a result of such review, the Company has
no reason to believe, and does not believe, that the Year 2000
Problem will have a material adverse effect on the general
affairs, management, the current or future consolidated
financial position, business prospects, shareholders' equity
or results of operations of the Company and its subsidiaries
or result in any material loss or interference with the
Company's business or operations. The "Year 2000 Problem" as
used herein means any
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significant risk that computer hardware or software used in
the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in
the operation of mechanical or electrical systems of any kind
will not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to that date;
(xxv) The Transaction Documents to which the Company or any of its
subsidiaries is a party have been duly authorized, executed
and delivered by the Company and its subsidiaries, as
applicable; each Transaction Document to which the Company or
any of its subsidiaries is a party constitutes a valid and
legally binding agreement of the Company or such subsidiary,
enforceable in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent
transfer, suspension of payments or other laws of general
applicability relating to or affecting the enforcement of
creditors' rights generally and to general equity principles;
by the date of this Agreement all required corporate actions
and Governmental Authorizations by the Company and its
subsidiaries, as applicable, will have been taken or obtained
to effect and complete the Transactions, including all
issuances, transfers, exchanges or acquisitions of capital
stock; and the Transactions will have closed prior to the date
of this Agreement and will not result and have not resulted in
the Company or its subsidiaries, as applicable, assuming or
becoming subject to any material obligation or liability not
disclosed in the Prospectus; and
(xxvi) This Agreement has been duly authorized, executed and
delivered by the Company.
2. (a) Subject to the terms and conditions herein set forth, (i) the
Company agrees to offer for subscription to each of the International
Underwriters, and each of the International Underwriters agrees,
severally and not jointly, to subscribe from the Company on the date of
the Time of Payment (as defined in Section 4(d) hereof), at the initial
public offering price per International Share set forth in the
Prospectus the number of Firm International Shares set forth opposite
the name of such International Underwriter in Schedule I hereto, and
(ii) in the event and to the extent that the International Underwriters
shall exercise the election to subscribe for Optional International
Shares as provided below, the Company agrees to offer for subscription
to each of the International Underwriters, and each of the
International Underwriters agrees, severally and not jointly, to
subscribe from the Company, at the price per International Share set
forth in clause (a)(i) of this Section 2, that portion of the number of
Optional International Shares as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional
International Shares) determined by multiplying such number of Optional
International Shares by a fraction the numerator of which is the
maximum number of Optional International Shares for which each
International Underwriter is entitled to subscribe as set forth
opposite the name of such International Underwriter in Schedule I
hereto and the denominator of which is the maximum number of Optional
International Shares for which all of the International Underwriters
are entitled to subscribe hereunder.
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(b) The Company hereby grants to the International
Underwriters the right to subscribe at their election for up to - Optional
International Shares at the price per Share set forth in clause (a)(i) of this
Section 2, for the sole purpose of covering overallotments in the sale of Firm
International Shares. Any such election to subscribe for Optional International
Shares may be exercised once only by written notice from you to the Company,
given within a period of 30 calendar days after the date on which the
International Shares subscribed for by you are admitted to trading on the Madrid
Stock Exchange (the "Trade Date"), which is expected to occur on November -,
1999, and setting forth the aggregate number of Optional International Shares to
be subscribed for and the date on which such Optional International Shares are
to be delivered, as determined by you, but in no event earlier than the First
Time of Delivery of International Shares (as defined in Section 4(d) hereof) or,
unless you and the Company otherwise agree in writing, earlier than two or later
than ten Business Days (as defined in Section 15 below) after the date of such
notice.
(c) As compensation to the International Underwriters for
their commitments hereunder, the Company will pay at each Time of Delivery to
Xxxxxxx Xxxxx International, for the accounts of the several International
Underwriters, an underwriting commission of [euro]- per Share or Optional
International Share (including Shares and Optional Shares in the form of ADSs),
as the case may be. Any reference herein to underwriting discount shall be
deemed to include such underwriting commission. In addition, the Company may in
its sole discretion pay to the International Underwriters and Selling Agents an
additional discretionary performance-based fee of up to [euro]- per Share, which
fee shall be paid to the several International Underwriters in proportion to
their respective underwriting obligations.
3. Upon the authorization by you of the release of the Firm
International Shares, the several International Underwriters propose to offer
the Firm International Shares to be severally subscribed by them for sale upon
such terms and conditions as shall be set forth in the Prospectus.
4. (a) With respect to all or any portion of the International
Shares to be subscribed for and sold hereunder at each Time of Payment, Xxxxxxx
Sachs International, on behalf of the several International Underwriters
pursuant to the Agreement among Syndicates, may elect to have ADSs delivered and
paid for hereunder in lieu of, and in satisfaction of, the Company's obligation
to sell to the several International Underwriters and the several International
Underwriters' obligations to subscribe for, such International Shares. Not later
than the Notification Time (as defined below) with respect to each Time of
Delivery, Xxxxxxx Xxxxx International, on behalf of the International
Underwriters, will notify the Company of the portion of the International Shares
to be delivered in the form of ADSs.
(b) The Company agrees that with respect to each Time of
Payment, owing to operational reasons relating to the need to have the Shares
admitted to trading on the Madrid Stock Exchange as soon as possible: (i) Banco
de Negocios Argentaria S.A., BBV Interactivos, S.A., S.V.B., Xxxxxxx Sachs
International and InverCaixa Valores S.V.B., S.A., as prefunding banks (the
"Prefunding Banks"), acting on behalf of the International Underwriters for the
benefit of investors, or the International Underwriters acting in their own name
but for the benefit of investors, as the case may be, will subscribe and pay for
the Shares to be subscribed for at such Time of Payment at the time specified in
Section 4(c) below; (ii) immediately after receiving payment from the Prefunding
Banks or the International Underwriters, as the case may be, expected
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to be no later than 10:30 a.m., Madrid time, on the date of each Time of
Payment, the Company will take all steps necessary to register the capital
increase with respect to such Shares with the Mercantile Registry in accordance
with the terms described in the Folleto Informativo Completo registered with the
CNMV on October 29, 1999; and (iii) the Prefunding Banks or the International
Underwriters, as the case may be, will effect a special transaction on the
Madrid Stock Exchange transferring such Shares to the accounts designated by
investors, expected to be no later than 6:30 p.m., Madrid time, on the date of
each Time of Payment. It is further agreed that the prefunding to the Company by
the Prefunding Banks acting on behalf of the International Underwriters for the
benefit of investors, or the International Underwriters acting in their own name
but for the benefit of investors, as the case may be, with respect to the Shares
to be subscribed for at such Time of Payment will remain in the account of the
Company at insert bank for Company designated by the Company pursuant to Section
4(c) below until the amount paid by the Prefunding Banks to the Company pursuant
to this Section has been reimbursed to the Prefunding Banks or the International
Underwriters, as the case may be, by or on behalf of investors at the applicable
Time of Delivery of International Shares, which in the case of the First Time of
Delivery, is expected to occur on November -, 1999; provided that this sentence
shall not affect the obligation of the International Underwriters to subscribe
for the International Shares and ADSs and to pay the Company therefor as
otherwise provided in this Agreement. It is understood and agreed by the parties
hereto, that no delivery or transfer of International Shares to be subscribed
for and purchased hereunder shall be effective unless and until payment therefor
has been made pursuant to this paragraph (b) and Section 4(c) below and the
capital increase with respect to such International Shares has been registered
with the Mercantile Registry.
(c) The time and date of the payment for the International
Shares by the Prefunding Banks to the Company shall be, with respect to the Firm
International Shares, prior to 10:00 a.m., Madrid time, on the date of the First
Time of Payment (as defined herein), or at such other time and date as you and
the Company may agree upon in writing, and, with respect to the Optional
International Shares, prior to 10:00 a.m., Madrid time, on the date specified by
you in the written notice given by you of the International Underwriters'
election to subscribe for such Optional International Shares in accordance with
the second paragraph of Section 2, or at such other time and date as you and the
Company may agree upon in writing. Payment for International Shares will be made
by transfer of immediately available funds in euro to the account of the Company
at -, as the Company shall have designated upon notice to Xxxxxxx Xxxxx
International given not less than 24 hours prior to the each Time of Payment.
(d) The time and date for delivery of the Firm International
Shares to the Prefunding Banks or the International Underwriters, as the case
may be, in each case for the benefit of investors, shall be the time at which
such Shares are registered with the Mercantile Registry, which is expected to
occur on November -, 1999 (the "First Time of Payment"), or at such other time
and date as you and the Company may agree upon in writing, and with respect to
the Optional International Shares, the time at which such Shares are registered
with the Mercantile Registry, Madrid time, on the date specified by you (the
"Second Time of Payment") in the written notice given by you of the
International Underwriters' election to subscribe for such Optional
International Shares in accordance with Section 2(b), or at such other time and
date as you and the Company may agree upon in writing. Each such time and date
for delivery are herein called a "Time of Payment".
The time and date of delivery of the International Shares to
investors against payment therefor shall be, with respect to the Firm
International Shares, prior to 10:00a.m., Madrid time, on November
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15
-, 1999 (the "First Time of Delivery of International Shares"), or at such other
time and date as you and the Company may agree upon in writing, and with respect
to the Optional International Shares, prior to 10:00 a.m., Madrid time, on the
date specified by you in the written notice given by you of the International
Underwriters' election to subscribe for such Optional International Shares (the
"Second Time of Delivery of International Shares"), or at such other time and
date as you and the Company may agree upon in writing. Each such time and date
for delivery to investors is herein called a "Time of Delivery of International
Shares". Payment to the Prefunding Banks through the Agent Bank or to the
International Underwriters, as the case may be, for the International Shares
will be made by transfer in immediately available funds in euro, through the
liquidation system of the Servicio de Compensacion y Liquidacion de Valores,
S.A. ("SCLV"). The term "Notification Time", with respect to any Time of
Delivery of International Shares or any Time of Delivery of ADSs (as defined
below), shall mean 4:00 p.m., Madrid time, on the second Business Day prior to
such Time of Delivery of International Shares or Time of Delivery of ADSs, as
the case may be.
(e) The time and date for delivery of the ADSs relating to the
Firm International Shares to the International Underwriters against payment
therefor shall be prior to 9:00 a.m., New York time, on November -, 1999 (the
"First Time of Delivery of ADSs"), or at such other time and date as you and the
Company may agree upon in writing, and with respect to the ADSs relating to the
Optional International Shares, prior to 9:00 a.m., New York time, on the date
specified by you in the written notice given by you of the International
Underwriters' election to subscribe for such Optional International Shares (the
"Second Time of Delivery of ADSs"), or at such other time and date as you and
the Company may agree upon in writing. Each such time and date for delivery of
ADSs is herein called a "Time of Delivery of ADSs". Payment to the Prefunding
Banks or the International Underwriters, as the case may be, for the ADSs will
be made by transfer in immediately available funds in euro to accounts of the
Prefunding Banks at -, as the Prefunding Banks shall have designated upon notice
to the Agent given not less than 24 hours prior to the First Time of Payment.
(f) Any International Shares to be delivered at each Time of
Delivery of International Shares shall be delivered by book-entry transfer
(transferencia contable de las anotaciones en cuenta) to the accounts specified
by the Prefunding Banks at accredited Spanish financial institutions (entidades
adheridas), in such respective portions as the Prefunding Banks may designate by
notice given at or prior to the Notification Time with respect to such Time of
Delivery of International Shares. If an election has been made to acquire ADSs,
the ADRs evidencing the ADSs to be acquired by each International Underwriter
hereunder at each Time of Delivery of ADSs, in such denominations and registered
in such names as Xxxxxxx Sachs International may request not later than the
Notification Time with respect to such Time of Delivery of ADSs, by notice to
the Depositary and the Company, shall be delivered to you for the account of
such International Underwriter through the book entry facilities of DTC.
(g) ADR certificates evidencing ADSs to be delivered at each
Time of Delivery of ADSs will be made available for checking and packaging at
least 24 hours prior to each Time of Delivery of ADSs at the office of the
Depositary in New York. Such ADR certificates will be available for release at
each Time of Delivery of ADSs at said office of the Depositary.
(h) The documents to be delivered at each Time of Payment or
Time of Delivery, as the case may be, by or on behalf of the parties hereto
pursuant to Section 7 or Section 8 hereof, and any
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additional documents requested by the International Underwriters pursuant to
Section 7(m) or Section 8(g) hereof, will be delivered at the offices of
Xxxxxxxx & Xxxxxxxx, St. Xxxxx'x House, 0x Xxxxxxxxxx Xxxx, Xxxxxx XX0X 0XX (the
"Closing Location"), at such Time of Payment or Time of Delivery, as the case
may be, and the International Shares will be delivered as specified above at
such Time of Payment and the ADSs will be delivered as specified above at such
Time of Delivery of ADSs. A meeting will be held at Xxxxxxxx & Xxxxxxxx at 4:00
p.m., London time, on the Business Day prior to date of each Time of Payment or
Time of Delivery of ADSs, as the case may be, at which meeting the final drafts
of the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties thereto.
5. (a) The Company agrees with each of the International Underwriters:
(i) To prepare the Prospectus in a form approved by you and to
file the U.S. Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission's close of business on the
second Business Day after the date hereof or, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under
the Act; to make no further amendment or supplement to the
Registration Statement, the Prospectus or the ADS Registration
Statement prior to the last Time of Delivery of International
Shares or ADSs, whichever is later, which shall be disapproved
by you promptly after reasonable notice thereof; to advise
you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement or the ADS
Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has
been filed and to furnish you copies thereof; to advise you,
promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or
Prospectus, of the suspension of the qualification of the
International Shares or ADSs for offering or sale in any
jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement, the Prospectus or the ADS Registration
Statement or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus
or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the International Shares and the
ADSs for offering and sale under the state securities or Blue
Sky laws of such jurisdictions in the United States as you may
request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the International Shares and the ADSs,
provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
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(iii) To furnish the International Underwriters with copies of the
Prospectus in such quantities as you may from time to time
reasonably request and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with
the offering or sale of the International Shares or the ADSs
and if at such time any events shall have occurred as a result
of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus
in order to comply with the Act, to notify you and upon your
request to prepare and furnish without charge to each
International Underwriter, to each Selling Agent and to any
dealer in securities as many copies as you may from time to
time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement
or omission or effect such compliance; and in case any
International Underwriter is required to deliver a prospectus
in connection with sales of any International Shares or ADSs
at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such
International Underwriter, to prepare and deliver to such
International Underwriter as many copies as you may request of
an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(iv) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earning statement of
the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(v) During the period beginning at the Trade Date and continuing
to and including the date which is 180 days thereafter, not to
issue, offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder and under the Spanish
Underwriting Agreements and except in connection with the
Transactions contemplated in the Transactions Documents or
pursuant to the Company's employee benefit plan described in
the Prospectus, any securities of the Company that are
substantially similar to the Shares or ADSs, including but not
limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive
capital stock or any such substantially similar securities
(other than pursuant to employee stock option plans existing
on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this
Agreement), without your prior written consent. The foregoing
restriction is expressly agreed to preclude the Company from
engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result
in a sale or
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disposition of the Company's Shares, even if such Shares would
be disposed of by someone other than the Company. Such
prohibited hedging or other transaction would include without
limitation any short sale or any purchase, sale or grant of
any right (including without limitation any put or call
option) with respect to any of the Company's Shares or with
respect to any security that includes, relates to, or derives
any significant part of its value from such Shares;
(vi) To furnish to its shareholders as soon as practicable after
the end of each fiscal year an annual report (in English)
(including a consolidated balance sheet and consolidated
statements of operations and shareholders' equity of the
Company and its consolidated subsidiaries certified by
independent public accountants and prepared in conformity with
generally accepted accounting principles in Spain ("Spanish
GAAP") together with a reconciliation of net income and total
shareholders' equity to generally accepted accounting
principles in the U.S. ("U.S. GAAP")) and, as soon as
practicable after the end of each of the first three quarters
of each fiscal year prepared in accordance with Spanish GAAP
(beginning with the fiscal quarter ending after the effective
date of the Registration Statement), to make available to its
shareholders consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable
detail;
(vii) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all
reports or other communications (financial or other) furnished
to shareholders, and to deliver to you (A) as soon as they are
available, copies of any reports and financial statements
furnished to or filed with the Commission or any securities
exchange on which any class of securities of the Company is
listed; and (B) during a period of three years from the
effective date of the Registration Statement, to deliver such
additional information concerning the business and financial
condition of the Company as you may from time to time
reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company
and its subsidiaries are consolidated in reports furnished to
its shareholders generally or to the Commission);
(viii) For so long as the Shares or ADSs are outstanding, to file
with the CNMV or the Spanish Stock Exchanges or any other
Governmental Agency such reports, documents, agreements and
other information which may from time to time be required to
be so filed by the Company, including filings with respect to
the ownership of Shares or ADSs and the implementation and
payment of dividends or other distributions on the Shares or
ADSs;
(ix) To comply with the Deposit Agreement so that ADRs evidencing
ADSs to be delivered to the International Underwriters at each
Time of Delivery of ADSs are executed (and, if applicable,
countersigned);
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(x) To use the net proceeds received by it from the sale of the
Shares and ADSs pursuant to this Agreement and the Spanish
Underwriting Agreements in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(xi) Not to (and to cause its subsidiaries not to) take, directly
or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company or facilitate the sale or resale of
the Shares and the ADSs;
(xii) To use its best efforts to effect the listing of the Shares on
the Spanish Stock Exchanges and to list for quotation the ADSs
on the National Association of Securities Dealers Automated
Quotations National Market System ("NASDAQ"); and
(xiii) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m.,
Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several International
Underwriters that it will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the International
Shares under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, the ADS
Registration Statement, any Preliminary Prospectus, the Prospectus and
amendments and supplements thereto and any amendments to the ADS
Registration Statement and the mailing and delivering of copies thereof
to the International Underwriters, the Selling Agents and dealers; (ii)
the cost of printing or producing this Agreement, the Spanish
Underwriting Agreements, the Deposit Agreement, the Blue Sky
Memorandum, and any other documents in connection with the offering,
subscription, purchase, sale and delivery of the International Shares
and the ADSs; (iii) all expenses in connection with any qualification
of the ADSs and the International Shares for offering and sale under
state securities or Blue Sky laws as provided in Section 5(a)(ii)
hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection
with the Blue Sky surveys; (iv) all fees and expenses in connection
with listing the Shares on the Spanish Stock Exchanges and the
quotation of the ADSs on NASDAQ; (v) the filing fees incident to, and
the fees and disbursements of counsel for the International
Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the
sale of the International Shares and the ADSs; (vi) the cost of
preparing ADR certificates evidencing the ADSs; (vii) to Xxxxxxx Xxxxx
International, for the account of the several International
Underwriters, up to U.S.$- in respect of reasonable out-of-pocket
expenses (including fees, disbursements and expenses of counsel to the
International Underwriters) incurred by the International Underwriters
in connection with the transactions contemplated hereby, other than the
fees, disbursements and expenses included in Clause (a)(iii) above;
(viii) all expenses and taxes arising as
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a result of the deposit by the Company of the International Shares with
the Depositary and the issuance and delivery of ADRs evidencing ADSs in
exchange therefor by the Depositary, of the sale and delivery of the
ADSs and the International Shares by the Company to or for the account
of the International Underwriters, of the sale and delivery of the ADSs
and the International Shares by the International Underwriters to each
other and to the Selling Agents and to the sale and delivery outside
Spain of the ADSs and the International Shares by or on behalf of the
International Underwriters or the Selling Agents to the initial
subscribers and purchasers thereof in the manner contemplated in the
Underwriting Agreements and the Agreement among Syndicates, including,
in any such case, any Spanish income, capital gains, withholding,
transfer or other tax or any brokerage fee or any fee payable to the
securities brokerage companies or agencies in Spain in connection
therewith asserted against an International Underwriter by reason of
the subscription and sale of a Share or purchase and sale of an ADS
contemplated in the Underwriting Agreements, in the Agreement among
Syndicates and any selling agreements entered into with the
International Underwriters; (ix) the fees and expenses (including fees
and disbursements of counsel), if any, of the Depositary and any
custodian appointed under the Deposit Agreement, other than the fees
and expenses to be paid by holders of ADRs (other than the
International Underwriters in connection with the initial purchases of
ADSs and the International Shares); (x) the fees and expenses of the
Authorized Agent (as defined in Section 16 hereof); (xi) the cost and
charges of any transfer agent or registrar; (xii) all fees and expenses
in connection with quoting the ADSs on NASDAQ; (xiii) such costs and
expenses relating to the U.S. and International "roadshows" as may be
separately agreed; and (xiv) all other costs and expenses incident to
the performance of the obligations of the Company hereunder which are
not otherwise specifically provided for in this Section. It is
understood, however, that except as provided in this Section, Section 9
and Section 12 hereof, the International Underwriters will pay all
their own costs and expenses, including the fees of their counsel,
stock transfer taxes (other than any imposed by Spain or any political
subdivision or taxing authority thereof or therein) on the sale of any
of the International Shares or ADSs by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the International Underwriters hereunder as to the
International Shares to be delivered at each Time of Payment shall be
subject, in their discretion, to the condition that all representations
and warranties and other statements of the Company herein are, at and
as of such Time of Payment, true and correct, the condition that the
Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Registration Statement shall have become effective, not
later than 5:30 p.m., New York City time, on the date hereof;
the U.S. Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under
the Act and in accordance with Section 5 (a) hereof; if the
Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00
p.m., Washington, D.C. time, on the date of this Agreement; no
stop order suspending the effectiveness of the Registration
Statement or the ADS Registration Statement or any part
thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the
Commission; and all requests
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21
for additional information on the part of the Commission shall
have been complied with to your satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, United States counsel for the
International Underwriters, shall have furnished to you such
opinion or opinions, dated such Time of Payment, with respect
to the validity of the ADSs to be sold at each Time of
Delivery of ADSs, the Registration Statement, the Prospectus,
the ADS Registration Statement and other related matters as
you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably
request to enable them to pass upon such matters; in giving
such opinion or opinions, such counsel may state that they
have assumed that any documents referred to in such opinion or
opinions as executed by the Company have been duly authorized,
executed and delivered pursuant to Spanish law, and such
counsel may rely, without independent investigation, as to all
matters of Spanish law, upon the opinion of Spanish counsel
described in paragraph (d)(X) of this Section 7;
(c) Xxxxx Xxxx & Xxxxxxxx, special United States counsel for the
Company, shall have furnished to you their written opinion
dated such Time of Payment, in form and substance satisfactory
to you, to the effect that:
(i) This Agreement has been duly executed and delivered
by the Company;
(ii) The Deposit Agreement has been duly executed and
delivered by the Company and, assuming the due
authorization, execution and delivery of the Deposit
Agreement by the Depositary and that each of the
Depositary and (under Spanish law) the Company has
full power, authority and legal right to enter into
and perform its obligations thereunder, constitutes a
valid and legally binding agreement of the Company,
enforceable in accordance with its terms, subject, as
to enforcement, to the effects of applicable
bankruptcy, insolvency, and similar laws affecting
creditors' rights generally and to equitable
principles of general applicability; and the
statements relating to legal matters or documents
included in the Prospectus under the caption
"Description of American Depositary Receipts", fairly
summarize, in all material respects, such matters or
documents;
(iii) Upon due issuance by the Depositary of ADRs
evidencing ADSs being delivered at each Time of
Delivery of ADSs against the deposit of International
Shares in respect thereof in accordance with the
provisions of the Deposit Agreement, such ADRs will
be duly and validly issued and the persons in whose
names the ADRs are registered will be entitled to the
rights specified therein and in the Deposit
Agreement;
(iv) Assuming the validity of such action under Spanish
Law, under the laws of the State of New York relating
to submission to jurisdiction, the Company has,
pursuant to Section 16 of this Agreement, validly and
irrevocably submitted to the
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jurisdiction of any state or federal court located in
the Borough of Manhattan, the City of New York, New
York, in any action arising out of or with respect to
this Agreement, has validly and irrevocably waived
any objection to the venue of a proceeding in any
such court; and has validly and irrevocably appointed
CT Corporation as its authorized agent (the
"Authorized Agent") for the purpose described in
Section 16 hereof; and service of process effected in
the manner set forth in Section 16 hereof will be
effective to confer personal jurisdiction over the
Company in any such action;
(v) Assuming the validity of such action under Spanish
Law, under the laws of the State of New York relating
to submission to jurisdiction, the Company has,
pursuant to Section 16 of this Agreement, validly and
irrevocably submitted to the jurisdiction of any
state or federal court located in the Borough of
Manhattan, the City of New York, New York, in any
action arising out of or with respect to this
Agreement, has validly and irrevocably waived any
objection to the venue of a proceeding in any such
court; and has validly and irrevocably appointed CT
Corporation as its authorized agent (the "Authorized
Agent") for the purpose described in Section 16
hereof; and service of process effected in the manner
set forth in the Section 16 hereof will be effective
to confer personal jurisdiction over the Company in
any such action;
(vi) The statements set forth in the Prospectus under the
caption "Taxation United States Taxation", to the
extent that they constitute matters of U.S. federal
income tax laws or conclusions pertaining thereto,
fairly present the information therein in all
material respects;
(vii) The Company is not and, after giving effect to the
offering and sale of the International Shares and
ADSs and the application of the proceeds thereof, as
described in the Prospectus, will not be required to
register as an "investment company", as such term is
defined in the Investment Company Act;
(viii) Nothing has come to such counsel's attention that
causes such counsel to believe that (A) the ADS
Registration Statement, the Registration Statement or
the prospectus included therein (except for the
financial statements and related schedules therein,
as to which such counsel need express no belief) do
not comply as to form in all material respects with
the requirements of the Act and the applicable rules
and regulations of the Commission thereunder, or
(B)(1) either the Registration Statement and the
prospectus included therein (except for the financial
statements and related schedules included therein, as
to which such counsel need express no belief) or the
ADS Registration Statement, at the time the
Registration Statement or the ADS Registration
Statement, as the case may be, became effective,
contained an untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading or (2) the Prospectus (except
as stated) as of its date and as of the date of such
opinion
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contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; and such counsel do
not know of any amendments to the Registration Statement or the
ADS Registration Statement required to be filed or any
contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or the ADS
Registration Statement or required to be described in the
Registration Statement or the ADS Registration Statement or the
U.S. Prospectus which are not filed or incorporated by
reference or described as required; and
(ix) Such counsel has been informed by the Commission
that the Registration Statement and the ADS Registration
Statement have become effective under the Act, and, to the best
of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or the ADS
Registration Statement has been issued and no proceedings for
that purpose have been instituted or threatened.
In giving such opinion, such counsel may state that (w) they have assumed that
any documents referred to in their opinion and executed by the Company have been
duly authorized, executed and delivered pursuant to Spanish law; (x) to the
extent that the laws of Spain are relevant to such opinion, such counsel has
assumed the effect of the laws of Spain as stated therein and may rely with
respect thereto, without independent investigation, upon the opinions of Spanish
counsel described in paragraph (d)(Y) of this Section 7; and (y) they have not
themselves checked the accuracy or completeness of, or otherwise verified, the
information furnished with respect to matters in the Registration Statement, the
ADS Registration Statement or the Prospectus other than as specified above, but
have generally reviewed and discussed with representatives of the International
Underwriters and with certain officers and employees of, and counsel and
independent accountants for, the Company the information furnished, whether or
not subject to their check and verification, and that their opinion is rendered
on the basis of such consideration, review and discussion, but without
independent check or verification, except as so specified.
(d) (X) Garrigues & Xxxxxxxx, Spanish counsel for the
Underwriters, and (Y) Xxxx x Xxxxxxxx, Spanish counsel for the Company shall
have furnished to you their written opinions, dated such Time of Payment, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation with limited liability
(sociedad anonima) in good standing under the laws of Spain,
with full power and authority (corporate and other) to own or
lease and operate its properties and conduct its business as
described in the Prospectus;
(ii) Such counsel has no reason to believe that the
Spanish "Folleto Informativo Completo" filed with the CNMV on
October 29, 1999, and any further amendments or supplements
thereto, did not conform in all material respects to the
requirements of Spanish law and the rules and regulations of
the CNMV or, as of its applicable
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effective or filing date, contained or contains an untrue
statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made not misleading;
(iii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, and are fully paid and non-assessable
and conform in all material respects to the description of the
capital stock of the Company contained in the Prospectus; the
holders of outstanding shares of capital stock of the Company
or any other person, including parties to any of the
Transaction Documents, are not entitled to preemptive or other
rights to acquire the Shares or the ADSs which have not been
complied with; there are no outstanding securities convertible
or exchangeable for, or warrants, rights or options to purchase
from the Company or obligations of the Company to issue,
ordinary shares or any other class of capital stock of the
Company; the International Shares may be freely deposited by
the Company with the Depositary against issuance of ADRs
evidencing ADSs; the Shares and the ADSs are freely
transferable by the Company to or for the account of the
several International Underwriters and the initial purchasers
in the manner contemplated in the Underwriting Agreements; and
there are no restrictions on subsequent transfers of the ADSs
or the Shares except as described in the Prospectus under
"Description of Capital Stock --Restrictions on foreign
investment";
(iv) The Deposit Agreement has been duly authorized,
executed and delivered by the Company and, assuming the Deposit
Agreement constitutes a valid and legally binding agreement
under New York law, constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its
terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, fraudulent transfer, suspension of payments or
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; detailed
information relating to any payment by the Company pursuant to
Section 5.08 thereof will be required to be given to the
Spanish Registry Entity through which such payment is made;
(v) The Agency Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid
and legally binding agreement of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, fraudulent transfer,
suspension of payments or other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles;
(vi) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other
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jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject
to no material liability or disability by reason of failure to
be so qualified in any such jurisdiction (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and
certificates);
(vii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation;
and all of the issued shares of capital stock of each such
subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable, and (except for directors'
qualifying shares and except as otherwise set forth in the
Prospectus) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying
upon such opinions and certificates);
(viii) The Company and its subsidiaries have good and
marketable title in fee simple to all real property owned by
them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and
do not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries
(in giving the opinion in this clause, such counsel may state
that no examination of record titles for the purpose of such
opinion has been made, and that they are relying upon a general
review of the titles of the Company and its subsidiaries, upon
opinions of local counsel and abstracts, reports and policies
of title companies rendered or issued at or subsequent to the
time of acquisition of such property by the Company or its
subsidiaries, upon opinions of counsel to the lessors of such
property and, in respect of matters of fact, upon certificates
of officers of the Company or its subsidiaries, provided that
such counsel shall state that they believe that both you and
they are justified in relying upon such opinions, abstracts,
reports, policies and certificates);
(ix) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the
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Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or threatened by
others;
(x) This Agreement has been duly authorized, executed
and delivered by the Company and, assuming that this Agreement
constitutes a valid and legally binding agreement of the
Company under New York law, this Agreement constitutes a valid
and legally binding agreement, enforceable in accordance with
its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, fraudulent transfer, suspension of
payments or other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(xi) The issue and sale of the Shares to be sold by the
Company hereunder and under the Spanish Underwriting
Agreements, the deposit of the International Shares with the
Depositary against issuance of ADRs evidencing the ADSs to be
delivered at each Time of Delivery, the sale and delivery of
the ADSs and the International Shares to be delivered at each
Time of Payment by the Company, the performance by the Company
of this Agreement, each of the Spanish Underwriting Agreements,
the Agency Agreement and the Deposit Agreement and the
consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of
the terms or provisions of, or constitute a default under any
Transaction Document, indenture, mortgage, deed of trust, loan
agreement, acquisition, merger or joint venture agreement,
lease or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries, is a party or by
which the Company or any of its subsidiaries, is bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such action result in any
violation of the provisions of the charter or Estatutos of the
Company or any of its subsidiaries, or any statute or any
order, rule or regulation known to such counsel of any court or
Governmental Agency in Spain having jurisdiction over the
Company or any of its subsidiaries or any of its properties;
and no holders of securities of the Company or any other
person, including the parties to any of the Transaction
Documents, have or will have rights pursuant to any agreement
with the Company or any of its subsidiary;
(xii) No Governmental Authorization of or with any
Governmental Agency in Spain having jurisdiction over the
Company or any of its properties or of any stock exchange
authorities in Spain is required for the issue of the Shares
and the ADSs, to be sold by the Company hereunder or under the
Spanish Underwriting Agreements, the deposit of the
International Shares being deposited with the Depositary
against issuance of ADRs evidencing the ADSs to be delivered at
each
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Time of Delivery, the sale and delivery of the International
Shares to be delivered at such Time of Payment by the Company
or the consummation by the Company of the other transactions
contemplated by this Agreement, each of the Spanish
Underwriting Agreements, the Agency Agreement and the Deposit
Agreement, as the case may be, except such consents, approvals,
authorizations, orders, registrations, qualifications or
clearances as have been duly obtained, are in full force and
effect and copies of which are delivered with such opinion,
including the registration of the public offering of the
Spanish Shares with the CNMV, and except that (A) detailed
information relating to any payment for the ADSs or
International Shares will be required to be given by the
Company to the Spanish Registry Entity through which payment is
made and similar information relating to any payment by the
Company pursuant to Section 9 hereof or by the Company pursuant
to Section 5.08 of the Deposit Agreement will be required to be
given to the Spanish Registry Entity through which such payment
is made; (B) remittance to foreign investors of dividends,
other benefits, or sale proceeds with respect to shares of
capital stock (including the Shares) will require registration
thereof with the Spanish Registry of Foreign Investments; and
(C) the capital increase relating to the International Shares
to be offered in the Global Offering will be required to be
registered with the Mercantile Registry;
(xiii) Insofar as matters of Spanish law are concerned,
the Registration Statement and the ADS Registration Statement
and the filing of such documents with the Commission have been
duly authorized by and on behalf of the Company; and the
Registration Statement and the ADS Registration Statement have
been duly executed pursuant to such authorization by and on
behalf of the Company;
(xiv) The statements in the Prospectus under
"Dividends", "Description of Ordinary Shares",
"Taxation-Spanish Taxation" "Business-Spanish Regulation" and
"Market Information", and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws,
regulations and documents referred to therein, are accurate,
complete and fair;
(xv) In the opinion of Xxxx x Xxxxxxxx, their opinions
set forth in the Prospectus under "Risk Factors-Risks Related
to this Offering-It may be difficult to enforce judgments
against us in U.S. courts" are confirmed as of such Time of
Payment;
(xvi) No stamp or other issuance or transfer taxes or
duties, and no capital gains, income, withholding or other
taxes, are payable to Spain or any political subdivision or
taxing authority thereof or therein by or on behalf of the
International Underwriters (other than any tax which the
Company has agreed to pay pursuant to Section 6(viii) hereof)
in connection with (A) the sale and delivery of the Shares and
ADSs to or for the respective accounts of the International
Underwriters in the manner contemplated herein, (B) the sale
and delivery by the International Underwriters of the
International
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Shares or ADSs to the initial subscribers or purchasers,
respectively, thereof in the manner contemplated herein, or (C)
the deposit of International Shares with the Depositary against
the issuance of ADRs evidencing ADSs;
(xvii) The choice of law provisions set forth in
Section 18 hereof will be recognized by the Spanish courts; the
Company can xxx and be sued in its own name; insofar as a New
York Court declares itself competent pursuant to the
irrevocable submission of the Company to the non-exclusive
jurisdiction of a New York Court, the Company may be sued in
such New York Court; the waiver by the Company of any objection
to the venue of a proceeding in a New York Court and the
agreement of the Company that this Agreement shall be governed
by and construed in accordance with the laws of New York are
legal, valid and binding; service of process effected in the
manner set forth in Section 16 hereof, assuming its validity
under New York law, will be effective; any judgment obtained in
a New York Court arising out of or in relation to the
obligations of the Company herein will be recognized in Spain
in accordance with and subject to the Ley de Enjuiciamiento
Civil (Law of Civil Procedure), the substantive provisions of
which are found in Articles 951 to 958, inclusive; the
aforementioned Articles provide, inter alia, that any judgment
rendered outside Spain may be enforced in Spain (A) if the
appropriate order (exequatur) would be obtainable according to
the provisions of any applicable treaty, (B) in the absence of
any such treaty, if it could be shown that the jurisdiction
where the foreign judgment was given would recognize Spanish
judgments on a reciprocal basis, provided that pursuant to the
case law of the jurisdiction in question such reciprocity has
not been denied, and (C) if the existence or non-existence of
reciprocity could not be proved, subject to the satisfaction of
certain conditions such as the defendant having entered a
personal appearance in the proceedings before the foreign
court; and since there is no treaty between Spain and the
United States, unless the conditions referred to in (C) above
were satisfied, in order to enforce in Spain a judgment of a
New York Court it would be necessary to prove that the New York
Courts would enforce judgments issued by Spanish courts;
(xviii) The Transaction Documents to which the Company
or any of its subsidiaries, as applicable, is a party have been
duly authorized, executed and delivered by the Company or its
subsidiaries, as applicable; each Transaction Document to which
the Company or any of its subsidiaries, is a party constitutes
a valid and binding agreement of the Company, or such
subsidiary, enforceable in accordance with its terms, subject,
as to enforcement, to applicable bankruptcy, insolvency,
fraudulent transfer, suspension of payments or other laws of
general applicability relating to or affecting the enforcement
of creditors' rights generally and to general equity
principles; by the date of this Agreement all required
corporate actions and Governmental Authorizations by the
Company or any of its subsidiaries, will have been taken or
obtained to effect and complete the Transactions including all
issuances, transfers, exchanges or acquisitions of capital
stock; and the Transactions
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will have closed prior to the date of this Agreement and will
not result and have not resulted in the Company or any of its
subsidiaries, assuming or becoming subject to any material
obligation or liability not disclosed in the Prospectus;
(xix) The indemnification and contribution provisions
set forth in Section 9 hereof and the right of contribution
pursuant to Section 9(d) of the Act have been duly authorized
by the Company and constitute valid and binding obligations of
the Company enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, suspension of payments or other laws of
general applicability relating to or affecting creditors'
rights and to general equity principles;
(xx) All dividends and other distributions declared and
payable on the shares of capital stock may under current
Spanish laws and regulations be paid to the Depositary in euro
that may be converted into foreign currency that may be freely
transferred out of Spain, subject only to a withholding tax of
25% on the amount of any such payment in euro, but otherwise
free and clear of any other tax, duty, withholding or deduction
in Spain and without the necessity of obtaining any
Governmental Authorization of any nature whatsoever in Spain;
(xxi) Neither the Company nor any of its subsidiaries
is in violation of its Estatutos or in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any Transaction
Document, indenture, mortgage, deed of trust, loan agreement,
acquisition, merger or joint venture agreement, lease or other
agreement or instrument to which it is a party or by which it
or any of its properties may be bound; and
(xxii) Although they do not assume any responsibility
for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection
(xiii) of this Section 7(d), such counsel have no reason to
believe that, as of the effective date of the Registration
Statement, either the Registration Statement or the Prospectus
(or, as of its date, any further amendment or supplement
thereto made by the Company prior to such Time of Payment)
(other than the financial statements and related schedules
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
that, as of such Time of Payment, either the Registration
Statement or the Prospectus (or any such further amendment or
supplement thereto) (other than the financial statements and
related schedules therein, as to which such counsel need
express no opinion) contains an untrue statement of a material
fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading.
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In giving the opinions specified in (X) and (Y) above, (I) Garrigues & Xxxxxxxx
may rely without independent examination as to matters of United States federal
and New York law on the opinion of Xxxxxxxx & Xxxxxxxx, United States counsel
for the International Underwriters, described in paragraph (b) of this Section
7, and (II) Xxxx x Xxxxxxxx may rely without independent investigation on the
opinion of Xxxxx Xxxx & Xxxxxxxx, United States counsel for the Company
described in paragraph (c) of this Section 7, and as to matters of Argentine,
Brazilian, Chilean, Florida, Mexican and Peruvian law on the opinions of Xxxxx &
XxXxxxxx (Argentina), Xxxxxxx Xxxxx, Sendacz & Opice (Brazil), Xxxxxxxx,
Yrarrazaval, Xxxxxx & Xxxxxxx (Chile), Xxxxxxxxx Traurig (Florida), Xxxxx &
XxXxxxxx (Mexico) and Estudio Xxxx Echecopar Xxxxxx (Peru) (the "foreign
counsel"), respectively; (III) Garrigues & Xxxxxxxx and Xxxx x Xxxxxxxx may: (A)
rely as to factual matters on certificates of directors and executive officers
of the Company and certificates of public officials and (B) state (1) that they
have not themselves checked the accuracy or completeness of, or otherwise
verified, the information furnished with respect to matters in the Registration
Statement or the Prospectus other than as specified above, but have generally
reviewed and discussed with representatives of the International Underwriters
and with certain officers and employees of, and United States and foreign
counsel and independent accountants for, the Company the relevant information
furnished, whether or not subject to their check and verification, and that
their opinion is rendered on the basis of such consideration, review and
discussion, but without independent check or verification, except as so
specified, and (2) that: (w) their opinion is subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors' rights generally and to public policy considerations; (x)
the term "enforceable" means that the obligations assumed by the relevant party
under the relevant documents are of a type that the Spanish courts would enforce
and it does not mean that those obligations will be necessarily enforced in all
circumstances in accordance with their terms; and (z) there is doubt as to the
enforceability in Spain of original actions or in actions for enforcement of
judgments of United States courts of liabilities predicated solely upon the Act,
provided that such counsel further states that, as of the date of such opinion,
they are not aware of any public policy considerations that would affect the
obligations of the relevant parties under the relevant documents or of any
circumstances under which such obligations would not be enforced in accordance
with their terms other than the fact that there is doubt as to the
enforceability in Spain of punitive damages and of original actions or actions
for enforcement of judgments of United States courts of liabilities predicated
solely upon the Act;
(e) Xxxxxxxx Xxxxxx, General Director of Legal Affairs of the
Company, shall have furnished to you her written opinion, dated such
Time of Payment, in form and substance satisfactory to you, to the
effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation with limited liability
(sociedad anonima) in good standing under the laws of Spain,
with full power and authority (corporate and other) to own or
lease and operate its properties and conduct its business as
described in the Prospectus;
(ii) The Company and each of its subsidiaries have all
licenses, franchises, permits, authorizations, approvals and
orders of and from all governmental regulatory officials and
bodies that are necessary to own or lease and operate their
properties
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and conduct their businesses as described in the Prospectus and
are material in relation to the business of the Company and its
subsidiaries taken as a whole;
(iii) To the best of her knowledge there are no legal
or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the consolidated financial position, shareholders'
equity or results of operations of the Company and its
subsidiaries; and, to the best of her knowledge, no such
proceedings are threatened or contemplated by any Governmental
Agency or threatened by others, except as disclosed in the
Prospectus;
(iv) The issue and sale of the International Shares and
ADSs, the deposit of the International Shares being deposited
with the Depositary against issuance of ADRs evidencing the
ADSs to be delivered at each Time of Delivery of ADSs, the sale
and delivery of the International Shares to be delivered at
such Time of Payment and of the ADSs to be delivered at each
Time of Delivery of ADSs by the Company, the performance of
this Agreement, each of the Spanish Underwriting Agreements,
the Agency Agreement and the Deposit Agreement and the
consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of
the terms or provisions of, or constitute a default under any
Transaction Document, indenture, mortgage, deed of trust, loan
agreement, acquisition, merger or joint venture agreement,
lease or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such action result in any
violation of the provisions of the charter or Estatutos of the
Company or any of its subsidiaries or any statute or any order,
rule or regulation known to such counsel of any court or
Governmental Agency or body in Spain having jurisdiction over
the Company or any of its subsidiaries or any of its
properties;
(v) Each of Ole, Telefonica Servicios y Contenidos por
la Red S.A., Telefonica Interactiva de Contenidos, S.A., Nutec,
Infosel, Terra Networks Chile, Terra Networks Peru, Terra
Networks Argentina and Telefonica Interactiva USA
(collectively, the "Principal Subsidiaries") has been duly
incorporated and is validly existing as a corporation (sociedad
anonima) in good standing under the laws of Spain or: in the
case of Nutec, Brazil; in the case of Infosel, Mexico; in the
case of Terra Networks Chile, Chile; in the case of Terra
Networks Peru, Peru; in the case of Terra Networks Argentina,
Argentina; and in the case of Telefonica Interactiva USA, the
State of Florida; with full power and authority (corporate and
other) to own or lease and operate its properties and conduct
its business as described in the Prospectus; all of the issued
shares of capital stock of each of the Principal Subsidiaries
have been
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duly and validly authorized and issued and are fully paid and
nonassessable; and the Company owns the shares of capital stock
representing its participation in each of the respective
Principal Subsidiaries as set forth in the Prospectus, in each
case free and clear of all liens, encumbrances, equities and
claims;
(vi) The Transaction Documents to which the Company or
any of its subsidiaries is a party have been duly authorized,
executed and delivered by the Company and its subsidiaries;
each Transaction Document to which the Company or any of its
subsidiaries is a party constitutes a valid and legally binding
agreement of the Company or such subsidiary, enforceable in
accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, fraudulent transfer,
suspension of payments or other laws of general applicability
relating to or affecting the enforcement of creditors' rights
generally and to general equity principles; by the date of this
Agreement all required corporate actions and Governmental
Authorizations by the Company and its subsidiaries will have
been taken or obtained to effect and complete the Transactions,
including all issuances, transfers, exchanges or acquisitions
of capital stock; and the Transactions will have closed prior
to the date of this Agreement and will not result and have not
resulted in the Company or its subsidiaries assuming or
becoming subject to any material obligation or liability not
disclosed in the Prospectus;
(vii) Such counsel has no reason to believe that either
of the Spanish Folletos, and all amendments and supplements
thereto, did not conform in all material respects to the
requirements of Spanish law and the rules and regulations of
the CNMV or, as of their applicable effective or filing dates,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and
(viii) Nothing has come to such counsel's attention
that causes such counsel to believe that (A) either the
Registration Statement or the prospectus included therein
(except for the financial statements and related schedules
included therein, as to which such counsel need express no
belief), at the time the Registration Statement became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
(B) the Prospectus (except as stated) as of its date and as of
the date of such opinion contained or contains an untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
In giving such opinion, such counsel may rely without independent examination as
to matters of Argentine, Brazilian, Chilean, Florida, Mexican and Peruvian law
on the opinions of foreign counsel for the Company
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described in paragraph (f) of this Section 7 and as to factual matters on
certificates of directors and executive officers of the Company and certificates
of public officials;
(f) Each of Xxxxx & XxXxxxxx (Argentina), Xxxxxxx Xxxxx,
Sendacz e Opice (Brazil), Xxxxxxxx, Yrarrazaval, Xxxxxx & Xxxxxxx
(Chile), Xxxxxxxxx Traurig (Florida), Xxxxx & XxXxxxxx (Mexico) and
Estudio Xxxx Echecopar Xxxxxx (Peru), Argentine, Brazilian, Chilean,
Florida, Mexican and Peruvian special foreign counsel to the Company,
respectively, shall have furnished to you their written opinion, dated
such Time of Payment, in form and substance satisfactory to you, to the
effect that:
(i) Terra Networks Brazil (formerly Nutec), Infosel,
Terra Networks Chile, Terra Networks Peru, Terra Networks
Argentina or Telefonica Interactiva USA, as applicable, (each a
"Foreign Subsidiary") has been duly incorporated or organized
and is validly existing as a corporation or other form of legal
entity in good standing under the laws of the jurisdiction of
its incorporation, and has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, or is subject to no material
liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(ii) The shares of capital stock acquired by the
Company or any of its subsidiaries in connection with the
relevant Transaction have been duly and validly authorized, are
fully paid and non-assessable; the shares of capital stock or
assets acquired by the Company in connection with the relevant
Transaction are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
and the Company's interest in the relevant Foreign Subsidiary
is as stated in the Prospectus;
(iii) The statements in the Prospectus under "Business
- Regulation", to the extent such statements relate to matters
of law in the jurisdiction of practice of such foreign counsel,
are accurate, complete and fair;
(iv) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there is no contract,
document, arrangement or understanding to which the Company or
any of its subsidiaries is a party that relates to the relevant
Foreign Subsidiary, its subsidiaries or its business that is
material to the conduct of the business of the relevant Foreign
Subsidiary and its subsidiaries;
(v) All consents, approvals, authorizations, orders,
registrations, clearances and qualifications of or with any
Governmental Agency having jurisdiction over the relevant
Foreign Subsidiary required for the consummation of the
relevant Transaction by the Company have been obtained; and
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(vi) The relevant Transaction Documents have been duly
authorized, executed and delivered by the parties thereto and
constitute valid and legally binding agreements of the parties
thereto, enforceable in accordance with their terms, subject as
to enforcement to applicable bankruptcy, insolvency, fraudulent
transfer, suspension of payments or other laws of general
applicability relating to or affecting the enforcement of
creditors' rights generally and to general equity principles;
all required corporate actions and Governmental Authorizations
have been taken or obtained by the parties to the Transaction
Documents to effect and complete the Transactions including all
issuances, transfers and exchanges of share capital prior to
the date of this Agreement; and the relevant Transaction will
have closed prior to the date of this Agreement and will not
result and have not resulted in the Company or any of its
subsidiaries, or the relevant Foreign Subsidiary assuming or
becoming subject to any material obligation or liability not
disclosed in the Prospectus.
(g) Xxxxxxxxx Traurig (New York), counsel for the Depositary,
shall have furnished to you their written opinion, dated such Time of Payment,
in form and substance satisfactory to you, to the effect that:
(i) the Deposit Agreement has been duly authorized,
executed and delivered by the Depositary and constitutes a
valid and legally binding obligation of the Depositary,
enforceable in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization and other laws of general
applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles; and
(ii) the ADRs issued under and in accordance with the
provisions of the Deposit Agreement to evidence ADSs will
entitle the holders thereof to the rights specified therein and
in the Deposit Agreement, assuming that (A) the International
Shares represented by the ADSs which are in turn evidenced by
the ADRs have been duly authorized and validly issued and are
fully paid and nonassessable and (B) such International Shares
have been duly deposited with |X| as Custodian;
(h) At 4:00 p.m., Madrid time, on the date hereof and at each
Time of Payment, each of Xxxxxx Xxxxxxxx y Cia, S. Com., Xxxxxx Xxxxxxxx S/C and
Xxxx, Xxxxxxx y Cia, S.C. (Xxxxxx Xxxxxxxx) shall have furnished to you, acting
on behalf of the International Underwriters, letters, dated the date of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Schedules II(A) to (D) hereto;
(i) Each of Telefonica, InfoSearch Holdings, S.A. in connection
with the acquisition of Ole in Spain; MLSP-Comercio e Participacoes Ltda and Xx.
Xxxxxx Xxxx Xxxxx de Xxxxx in connection with the acquisition of Nutec in
Brazil; Bidasoa B.V. in connection with the acquisition of Infosel in Mexico,
Compania de Telefonos de Chile Transmisiones Regionales S.A. ("CTC Mundo") in
connection with the acquisitions of the Internet assets of CTC Mundo in Chile;
Telefonica del Peru, S.A.A. in connection with the acquisition of the Internet
assets of Telefonica Servicios Internet S.A.C. in Peru; and IDT Corporation in
connection with the formation of a joint venture with IDT shall have furnished
to you prior to the First Time of
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Payment the "lock-up" agreement, substantially in the form of Schedule III(A) or
(B) hereto, between you and each of Telefonica, InfoSearch Holdings S.A,
MLSP-Comercio e Participacoes Ltda, Xx. Xxxxxx Xxxx Xxxxx xx Xxxxx, Xxxxxxx
X.X., XXX Xxxxx, Xxxxxxxxxx xxx Xxxx S.A.A. and IDT Corporation relating to
sales and certain other dispositions of Shares or certain other securities of
the Company; and each such "lock-up" agreement shall be in full force and effect
at each Time of Payment;
(j) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock or short-term or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is in the
sole judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the ADSs and International Shares being delivered hereunder at such Time of
Payment on the terms and in the manner contemplated in the Prospectus;
(k) On or after the date hereof and prior to 3:00 p.m. Madrid
time on the day on which the public deed in connection with the subscription and
sale of the Shares is granted, there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange, NASDAQ, the London Stock Exchange or
the Madrid Stock Exchange; (ii) a suspension or material limitation in trading
in the Company's on NASDAQ, the London Stock Exchange, the New York Stock
Exchange or the Spanish Stock Exchanges; (iii) a general moratorium on
commercial banking activities in New York, London or Spain declared by the
relevant authorities; (iv) a change or development involving a prospective
change in Spanish taxation affecting the Company, the Shares or the ADSs or the
transfer thereof or the imposition of exchange controls by the United States or
Spain; or (v) the outbreak or escalation of hostilities involving the United
States, the United Kingdom or Spain or the declaration by the United States, the
United Kingdom or Spain of a national emergency or war, if the effect of any
such event specified in this clause (v) in the judgment of at least three of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of Payment
on the terms and in the manner contemplated in the Prospectus or (vi) the
occurrence of any change in the financial, political or economic conditions in
the United States, the United Kingdom, Spain or elsewhere which, in the judgment
of at least three of the Representatives would materially and adversely affect
the financial markets or the market for the Shares or ADSs and other equity
securities. This Agreement can be terminated by mutual agreement of the Company
and at least three of the Representatives if any of the events in (i) through
(vi) above occurs after 3:00p.m. on the day on which the Public Deed is granted
and prior to 2:00 a.m. on the day following the granting of the Public Deed;
(l) All steps necessary for the International Shares to be sold
at such Time of Payment to be duly listed and admitted for trading on the
Spanish Stock Exchanges, quoted on the AQS and settled
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through the automatic book entry system (sistema de las anotaciones en cuenta)
at the close of business (Madrid time) on the date of such Time of Payment shall
have been taken; and all steps necessary for the ADSs to be duly quoted for
trading on NASDAQ at the open of business (New York time) on the date of such
Time of Payment shall have been taken;
(m) The Deposit Agreement and the Agency Agreement shall be in
full force and effect;
(n) The Company shall have furnished or caused to be furnished
to you at such Time of Payment, certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Payment, as to the performance by
the Company of all of its obligations hereunder and under the Spanish
Underwriting Agreements to be performed at or prior to such Time of Payment, and
as to such other matters as you may reasonably request, and the Company shall
have furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (i) of this Section and as to such other matters as
you may reasonably request; and
(o) At such Time of Payment, the subscription and sale of the
Spanish Shares to be delivered by the Company pursuant to each of the Spanish
Underwriting Agreements at the corresponding Time of Payment thereunder shall
have occurred or shall be occurring simultaneously therewith.
8. The obligations of the International Underwriters hereunder as to
ADSs to be delivered at each Time of Delivery of ADSs shall be subject, in their
discretion, to the condition that the representations and warranties and other
statements of the Company in Section 1(a) are, at and as of such Time of
Delivery of ADSs, true and correct, the condition that each of the Company shall
have performed all of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement or the ADS Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your
satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, United States counsel for the
International Underwriters, shall have furnished to you such opinion or
opinions, dated such Time of Delivery of ADSs, with respect to the validity of
the ADSs and the ADS Registration Statement and other related matters as you may
reasonably request, in form and substance based on Section 7(b) and otherwise
reasonably satisfactory to you;
(c) Xxxxx Xxxx & Xxxxxxxx, United States counsel for the
Company, shall have furnished to you such opinion dated such Time of Delivery of
ADSs, with respect to the validity of the ADSs and the ADS Registration
Statement and other related matters as you may reasonably request, in form and
substance based on Section 7(c) and otherwise reasonably satisfactory to you;
(d) Xxxxxxxxx Traurig, counsel for the Depositary, shall have
furnished to you their written opinion, dated such Time of Delivery of ADSs, in
form and substance satisfactory to you, to the effect
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37
that (i) the Deposit Agreement has been duly authorized, executed and delivered
by the Depositary and constitutes a valid and legally binding obligation of the
Depositary, enforceable in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
suspension of payments or other laws of general applicability relating to or
affecting the enforcement of creditors' rights and to general equity principles
and (ii) the ADRs issued under and in accordance with the provisions of the
Deposit Agreement to evidence ADSs will entitle the holders thereof to the
rights specified therein and in the Deposit Agreement;
(e) All of the issued shares of capital stock of the Company
(including the International Shares) shall be duly listed and admitted for
trading on the Spanish Stock Exchanges, quoted on the AQS and settled through
the automatic book entry system (sistema de las anotaciones en cuenta); and the
ADSs shall be duly listed for quotation on NASDAQ;
(f) The Deposit Agreement shall be in full force and effect,
and the Depositary shall have furnished or caused to be furnished to you at each
Time of Delivery of ADSs, certificates, satisfactory to you evidencing the
deposit with it of the International Shares being so deposited against issuance
of the ADRs evidencing the ADSs to be delivered at such Time of Delivery of
ADSs, the execution in favor of the corresponding book-entry transfer
(transferencia contable de las anotaciones en cuenta) and the delivery to it of
other documents of transfer, and the execution, issuance, countersignature (if
applicable) and delivery of ADRs evidencing such ADSs pursuant to the Deposit
Agreement; and
(g) The Company shall have furnished or caused to be furnished
to you at such Time of Delivery of ADSs, certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties of
the Company at and as of such Time of Delivery of ADSs, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery of ADSs, and as to such other matters as you may
reasonably request, and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in subsection (a) of this
Section and as to such other matters as you may reasonably request.
9. (a) The Company will indemnify and hold harmless each
International Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such International Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the Spanish
Folletos or the ADS Registration Statement, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
International Underwriter for any legal or other expenses reasonably incurred by
such International Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement, the Prospectus or the ADS
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Registration Statement, or any such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company by any
International Underwriter through Xxxxxxx Xxxxx International expressly for use
therein.
(b) Each International Underwriter will indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus or the ADS Registration Statement, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus or the ADS Registration
Statement, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such
International Underwriter through Xxxxxxx Sachs International expressly for use
therein, and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company as such expenses are incurred in connection
with investigating or defending any such action or claim.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim, and (ii) does not include a
statement
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39
as to or an admission of fault, culpability, or a failure to act by or on behalf
of any indemnified party.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the International
Underwriters on the other from the offering of the International Shares and
ADSs. If, however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the International
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the International
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering of International Shares and ADSs under this
Agreement (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the International
Underwriters with respect to the International Shares subscribed for and ADSs
purchased under this Agreement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand, or the
International Underwriters, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the International Underwriters agree that
it would not be just and equitable if contribution pursuant to this subsection
(d) were determined by pro rata allocation (even if the International
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no
International Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the International Shares and
ADSs underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such International Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to
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contribution from any person who was not guilty of such fraudulent
misrepresentation. The International Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 9 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any International Underwriter within the meaning of the Act; and the obligations
of the International Underwriters under this Section 9 shall be in addition to
any liability which the respective International Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company, to the Company's authorized representative in the
United States signing the Registration Statement and the ADS Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
10. (a) If any International Underwriter shall default in its
obligation to subscribe for the International Shares which it has agreed to
subscribe for hereunder at a Time of Payment, you may in your discretion arrange
for you or another party or other parties to subscribe for such International
Shares on the terms contained herein. If within 36 hours after such default by
any International Underwriter you do not arrange for the subscription for such
International Shares, then the Company shall be entitled to a further period of
36 hours within which to procure another party or other parties satisfactory to
you to subscribe for such International Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the subscription for such International Shares, or the Company
notifies you that it has so arranged for the subscription for such International
Shares, you or the Company shall have the right to postpone such Time of Payment
for a period of not more than seven days in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "International Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such International Shares.
(b) If, after giving effect to any arrangements for the
subscription for the International Shares of a defaulting International
Underwriter or International Underwriters by you and the Company as provided in
subsection (a) above, the aggregate number of such International Shares which
remain unsubscribed does not exceed one-fifth of the aggregate number of all the
International Shares to be subscribed for at such Time of Payment, then the
Company shall have the right to require each non-defaulting International
Underwriter to subscribe for the number of International Shares which such
International Underwriter agreed to subscribe for hereunder at such Time of
Payment and, in addition, to require each non-defaulting International
Underwriter to subscribe for its pro rata share (based on the number of Firm
International Shares which such International Underwriter agreed to subscribe
for hereunder) of the International Shares of such defaulting International
Underwriter or International
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41
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting International Underwriter from liability for its
default.
(c) If after giving effect to any arrangements for the
subscription for International Shares of a defaulting International Underwriter
or International Underwriters by you and the Company as provided in subsection
(a) above, the aggregate number of such International Shares which remains
unsubscribed exceeds one-fifth of the aggregate number of all the International
Shares to be subscribed at such Time of Payment or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
International Underwriters to purchase International Shares of a defaulting
International Underwriter or International Underwriters, then this Agreement
(or, with respect to the Second Time of Payment, the obligations of the
International Underwriters to subscribe for and of the Company to sell the
Optional International Shares) shall thereupon terminate without liability on
the part of any non-defaulting International Underwriter or the Company, except
for the expenses to be borne by the Company and the International Underwriters,
as provided in Section 6 hereof, and the indemnity and contribution agreements
in Section 9 hereof; but nothing herein shall relieve a defaulting International
Underwriter from liability for its default.
11. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several International
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any International Underwriter or any controlling person
of any International Underwriter, or the Company, any officer or director or
controlling person of the Company, and shall survive delivery of and payment for
the International Shares and the ADSs hereunder.
12. If this Agreement shall be terminated pursuant to Section
10, the Company shall not then be under any liability to any International
Underwriter except as provided in Sections 6 and 9 hereof; but, if for any other
reason any Shares or ADSs are not delivered by or on behalf of the Company as
provided herein and in the Spanish Underwriting Agreements, the Company will
reimburse the International Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the International Underwriters in making
preparations for the subscription, purchase, sale and delivery of the
International Shares and/or ADSs not so delivered, but the Company shall then be
under no further liability to any International Underwriter except as provided
in Sections 6 and 9 hereof.
13. In all dealings hereunder, you shall act on behalf of each
of the International Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
International Underwriter made or given by you jointly or by Xxxxxxx Xxxxx
International.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the International Underwriters shall be
sufficient in all respects if delivered or sent by registered mail, telex or
-41-
42
facsimile transmission promptly confirmed by a writing delivered or sent by
registered mail, to Xxxxxxx Sachs International, Xxxxxxxxxxxx Xxxxx, 000 Xxxxx
Xxxxxx, Xxxxxx XX0X 0XX, Attention: Equity Capital Markets; and if to the
Company, shall be sufficient in all respects if delivered or sent by registered
mail, telex or facsimile transmission promptly confirmed by a writing delivered
or sent by registered mail, to the Company at Xxx xx xxx Xxx Xxxxxxxxx, 00,
Complejo Atica, Xxxxxxxx 0, 00000 Xxxxxxx xx Xxxxxxx, Xxxxx, Attention: |X|
(Facsimile No. (34-91-452-|X|); provided, however, that any notice to an
International Underwriter pursuant to Section 9(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such International Underwriter
at its address to be supplied by you to the Company upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. This Agreement shall be binding upon, and inure solely to
the benefit of, the International Underwriters and the Company and, to the
extent provided in Sections 9 and 11 hereof, the officers and the directors of
the Company, the Company's authorized representative in the United States and
each person who controls the Company, or any International Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No party subscribing for or purchasing any of the International
Shares or ADSs from any International Underwriter shall be deemed a successor or
assign by reason merely of such subscription or purchase.
15. Time shall be of the essence of this Agreement. The term
"Business Day", as used herein, shall mean any day on which banks in Madrid and
New York City, the AQS of the Spanish Stock Exchanges and NASDAQ are open for
business and when the Commission's office in Washington, D.C. is normally open
for business.
16. Each of the parties hereto irrevocably agrees that any
legal suit, action or proceeding against the Company brought by any
International Underwriter or by any person who controls any International
Underwriter arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in any New York Court, irrevocably waives,
to the fullest extend it may effectively do so, any objection which it may now
or hereafter have to the laying of venue of any such proceeding, and irrevocably
submits to the nonexclusive jurisdiction of such New York Courts in any such
suit, action or proceeding. The Company has appointed CT Corporation System, New
York, New York, as its authorized agent (the "Authorized Agent") upon which
process may be served in any such action arising out of or based on this
Agreement or the transactions contemplated hereby which may be instituted in any
New York Court by any International Underwriter or by any person who controls
any International Underwriter, expressly consents to the jurisdiction of any
such court in respect of any such action, and waives any other requirements of
or objections to personal jurisdiction with respect thereto. Such appointment
shall be irrevocable. The Company represents and warrants that the Authorized
Agent has agreed to act as said agent for service of process, and the Company
agree to take any and all action, including the filing of any and all documents
and instruments, that may be necessary to continue such appointment in full
force and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every respect,
effective service of process upon the Company.
-42-
43
Notwithstanding the foregoing, any action based on this Agreement may be
instituted by any International Underwriter in any competent court in Spain.
17. In respect of any judgment or order given or made for any
amount due hereunder that is expressed and paid in a currency (the "judgment
currency") other than United States dollars, the Company, will indemnify each
International Underwriter against any loss incurred by such International
Underwriter as a result of any variation as between (i) the rate of exchange at
which the United States dollar amount is converted into the judgment currency
for the purpose of such judgment or order and (ii) the rate of exchange at which
an International Underwriter is able to purchase United States dollars with the
amount of the judgment currency actually received by such International
Underwriter on the Business Day immediately following receipt of the judgment
currency. The foregoing indemnity shall constitute a separate and independent
obligation of the Company and shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of or conversion into United States dollars.
18. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
19. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
-43-
44
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by you
on behalf of each of the International Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
International Underwriters and the Company. It is understood that your
acceptance of this letter on behalf of each of the International Underwriters is
pursuant to the authority set forth in an Agreement among International
Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
TERRA NETWORKS, S.A.
By:
Name:
Title:
Accepted as of the date hereof:
Banco de Negocios Argentaria S.A. BBV Interactivos, S.A., S.V.B.
By: __________________________ By: _________________________
Xxxxxxx Xxxxx International InverCaixa Valores, S.V.B., S.A.
By: __________________________ By: _________________________
On behalf of each of the International Underwriters
-44-
45
SCHEDULE I
Number of Optional
Number of International Shares
Firm International to be Subscribed If
Shares to be Subscribed Maximum Option Total Number of
International Underwriter for Exercised International Shares
------------------------- --- --------- --------------------
Xxxxxxx Sachs International
Credit Suisse First Boston (Europe) Limited
X.X. Xxxxxx Securities Ltd.
Xxxxxx Brothers International (Europe)
Banco de Negocios Argentaria S.A.
BBV Interactivos, S.A., S.V.B.
InverCaixa Valores, S.V.B., S.A.
Bear, Xxxxxxx International Limited
Salomon Brothers International Limited
I-1
46
SELLING AGENTS IN THE U.S.
Xxxxxxx, Xxxxx & Co.
I-2
47
SCHEDULE II(A)
FORM OF COMFORT LETTER TO BE DELIVERED BY
XXXXXX XXXXXXXX Y CIA, S. COM. REGARDING THE COMPANY
Pursuant to Section 7(h) of the Underwriting Agreement, Xxxxxx
Xxxxxxxx y Cia, S. Com. shall furnish letters to the Underwriters to the effect
that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements
and financial statement schedules audited by them and included in the
Prospectus and the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position and balance sheets of the Company for the three most recent
fiscal years and the six month period ended June 30, 1999 included in
the Prospectus and the Registration Statement agrees with the
corresponding amounts in the audited consolidated financial statements
for such three fiscal years and the six month period;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with Spanish generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the
latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its
subsidiaries and Telefonica, S.A. since June 30, 1999, inquiries of
officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) (i) the unaudited consolidated statements of
operations, consolidated balance sheets and changes in
financial position and shareholders' equity for the six month
period ended June 30, 1998 included in the Prospectus and the
Registration Statement and for the nine month period ended
September 30, 1999 attached to such letter do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited consolidated statements of operations,
consolidated balance sheets and changes in financial position
and shareholders' equity included in the Prospectus and the
Registration Statement or attached to such letter for them to
be in conformity with generally accepted accounting principles
in Spain;
(B) as of September 30, 1999 and as of a specified
date not more than five days prior to the date of such letter,
there have been any changes in the consolidated capital stock
(other than issuances of ordinary shares upon exercise of
options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible
securities,
II(A)-1
48
in each case since June 30, 1999) or any increase in the
consolidated long-term or short-term liabilities of the
Company and its subsidiaries, or any decrease in consolidated
net current assets or shareholders' equity since June 30,
1999, except in each case for changes, increases or decreases
which the Prospectus and the Registration Statement disclose
have occurred or may occur or which are described in such
letter; and
(C) for the period from June 30, 1999 to September
30, 1999 and to a date not more than 5 days prior to the date
of such letter there were any increases in consolidated net
loss or operating loss or the total or per share amounts of
consolidated net loss, in each case as compared with the
comparable period of the preceding year and in the case of the
period from June 30, 1999 to a date not more than 5 days prior
to the date of such letter, the comparable period in the
preceding six months, except in each case for decreases or
increases which the Prospectus and the Registration Statement
disclose have occurred or may occur or which are described in
such letter; and
(D) the unaudited pro forma financial statements
included in the Registration Statement and Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(v) In addition to the examination referred to in their report
included in the Prospectus and the Registration Statement and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraph (iv) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards in Spain, with
respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
II(A)-2
49
SCHEDULE II(B)
FORM OF COMFORT LETTER TO BE DELIVERED BY XXXXXX XXXXXXXX Y
CIA., S. COM. REGARDING ORDENAMIENTO DE LINKS
ESPECIALIZADOS, S.L.
Pursuant to Section 7(h) of the Underwriting Agreement, Xxxxxx
Xxxxxxxx y Cia, S. Com. shall furnish letters to the Underwriters to the effect
that:
(i) They are independent certified public accountants with
respect to Ordenamiento de Links Especializados, S.L. (OLE) within the
meaning of the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements and financial
statement schedules audited by them and included in the Prospectus and
the Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published rules and regulations thereunder;
(iii) On the basis of limited procedures, not constituting an
examination in accordance with Spanish generally accepted auditing
standards, consisting of a reading of the unaudited consolidated
financial statements and other information referred to below, a reading
of the latest available interim financial statements of OLE and its
subsidiaries, inspection of the minute books of OLE and its
subsidiaries since June 30, 1999, inquiries of officials of OLE and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of
operations, consolidated balance sheets and changes in
financial position and shareholders' equity for the nine month
period ended September 30, 1999 attached to such letter do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations, or (ii) any material modifications
should be made to the unaudited consolidated statements of
operations, consolidated balance sheets and changes in
financial position and shareholders' equity attached to such
letter for them to be in conformity with generally accepted
accounting principles in Spain;
(B) as of September 30, 1999 and a specified date not
more than five days prior to the date of such letter, there
have been any changes in the consolidated capital stock (other
than issuances of ordinary shares upon exercise of options and
stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities in each
case since June 30, 1999) or any increase in the long-term or
short-term debt of OLE and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity
since June 30, 1999, except in each case for
II(B)-1
50
changes, increases or decreases which the Prospectus and the
Registration Statement disclose have occurred or may occur or
which are described in such letter; and
(B) for the period from June 30, 1999 to September
30, 1999 and to a date not more than 5 days prior to the date
of such letter there were any increases in net loss or
operating loss or the total or per share amounts of net loss,
in each case as compared with the comparable period of the
preceding year and, in the case of the period from June 30,
1999 to a date not more than 5 days prior to the date of such
letter, the comparable period in the preceding six months,
except in each case for decreases or increases which the
Prospectus and the Registration Statement disclose have
occurred or may occur or which are described in such letter;
and
(iv) In addition to the examination referred to in their
report included in the Prospectus and the Registration Statement and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraph(iii) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards in Spain, with
respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the general
accounting records of OLE and its subsidiaries, which appear in the
Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of OLE and its subsidiaries and have found
them to be in agreement.
II(B)-2
51
SCHEDULE II(C)
FORM OF COMFORT LETTER TO BE DELIVERED BY
XXXX, XXXXXXX Y CIA., S.C. REGARDING INFORMACION
SELECTIVA, S.A. DE C.V.
Pursuant to Section 7(h) of the Underwriting Agreement, Xxxxxx
Xxxxxxxx Mexico shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to Informacion Selectiva, S.A. de C.V. ("Infosel") within the
meaning of the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements and financial
statement schedules audited by them and included in the Prospectus and
the Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published rules and regulations thereunder;
(iii) On the basis of limited procedures, not constituting an
examination in accordance with Mexican generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the
latest available interim financial statements of Infosel and its
subsidiaries, inspection of the minute books of Infosel and its
subsidiaries since June 30, 1999, inquiries of officials of Infosel and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited balance sheets, statements of
income (loss), changes in shareholders' equity and in
financial position for the six month period ended June 30,
1998 included in the Prospectus and the Registration Statement
and the nine month period ended September 30, 1999 attached to
such letter do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited consolidated
statements of operations, consolidated balance sheets and
changes in financial position and shareholders' equity
included in the Prospectus and the Registration Statement or
attached to such letter for them to be in conformity with
generally accepted accounting principles in Mexico;
(B) as of September 30, 1999 and as of a specified
date not more than five days prior to the date of such letter,
there have been any changes in the consolidated capital stock
(other than issuances of ordinary shares upon exercise of
options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible
securities in each case since June 30, 1999) or any increase
in the long-term or short-term debt of Infosel and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity since June 30, 1999, except in
each case for
II(C)-1
52
changes, increases or decreases which the Prospectus and the
Registration Statement disclose have occurred or may occur or
which are described in such letter; and
(C) for the period from June 30, 1999 to September
30, 1999 and to a date not more than 5 days prior to the date
of such letter there were any increases in net loss or
operating loss or the total or per share amounts of net loss,
in each case as compared with the comparable period of the
preceding year and, in the case of the of the period from June
30, 1999 to a date not more than 5 days prior to the date of
such letter, the comparable period in the preceding six
months, except in each case for decreases or increases which
the Prospectus and the Registration Statement disclose have
occurred or may occur or which are described in such letter;
and
(iv) In addition to the examination referred to in their
report included in the Prospectus and the Registration Statement and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraph(iii) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards in Mexico, with
respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the general
accounting records of Infosel and its subsidiaries, which appear in the
Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of Infosel and its subsidiaries and have
found them to be in agreement.
II(C)-2
53
SCHEDULE II(D)
FORM OF COMFORT LETTER TO BE DELIVERED BY
XXXXXX XXXXXXXX S/C REGARDING NUTEC INFORMATICA S.A.
Pursuant to Section 7(h) of the Underwriting Agreement, Xxxxxx
Xxxxxxxx Brazil shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to Nutec Informatica S.A. ("Nutec")within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements
and financial statement schedules audited by them and included in the
Prospectus and the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder;
(iii) On the basis of limited procedures, not constituting an
examination in accordance with Brazilian generally accepted auditing
standards, consisting of a reading of the unaudited consolidated
financial statements and other information referred to below, a reading
of the latest available interim financial statements of Nutec and its
subsidiaries, inspection of the minute books of Nutec and its
subsidiaries since June 30, 1999, inquiries of officials of Nutec and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited balance sheets, statements of
income (loss), changes in shareholders' equity and in
financial position for the six month period ended June 30,
1998 included in the Prospectus and the Registration Statement
and the nine month period ended September 30, 1999 attached to
such letter do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited consolidated
statements of operations, consolidated balance sheets and
changes in financial position and shareholders' equity
included in the Prospectus and the Registration Statement or
attached to such letter for them to be in conformity with
generally accepted accounting principles in Mexico;
(B) as of September 30, 1999 and as of a specified
date not more than five days prior to the date of such letter,
there have been any changes in the consolidated capital stock
(other than issuances of ordinary shares upon exercise of
options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible
securities in each case since June 30, 1999)or any increase in
the long-term or short-term debt of Nutec and its subsidiaries
or any decreases in consolidated net current assets or
stockholders' equity since June 30, 1999, except in each case
for changes,
II(D)-1
54
increases or decreases which the Prospectus and the
Registration Statement disclose have occurred or may occur or
which are described in such letter; and
(C) for the period from June 30, 1999 to September
30, 1999 and to a date not more than 5 days prior to the date
of such letter there were any increases in net loss or
operating loss or the total or per share amounts of net loss,
in each case as compared with the comparable period of the
preceding year and, in the case of the period from June 30,
1999 to a date not more than 5 days prior to the date of such
letter, the comparable period in the preceding six months,
except in each case for decreases or increases which the
Prospectus and the Registration Statement disclose have
occurred or may occur or which are described in such letter;
and
(iv) In addition to the examination referred to in their
report included in the Prospectus and the Registration Statement and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraph(iii) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards in Brazil, with
respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the general
accounting records of Nutec and its subsidiaries, which appear in the
Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of Nutec and its subsidiaries and have
found them to be in agreement.
III(A)-1
55
SCHEDULE III (A)
LOCK-UP AGREEMENT
_________________, 199_
Banco de Negocios Argentaria S.A.
BBV Interactivos, S.A., S.V.B.
Xxxxxxx Xxxxx International,
InverCaixa Valores, S.V.B., S.A.,
As representatives of the several International Underwriters
named in Schedule I to the International Underwriting Agreement,
c/o Goldman Sachs International,
Xxxxxxxxxxxx Xxxxx,
000 Xxxxx Xxxxxx,
Xxxxxx XX0X 0XX.
Ladies and Gentlemen:
The undersigned understands that you, as representatives of the several
International Underwriters (the "International Underwriters"), have entered into
an International Underwriting Agreement (the "International Underwriting
Agreement") with Terra Networks, S.A., a corporation with limited liability
(sociedad anonima) organized under the laws of Spain (the "Company"), providing
for the international offering (the "International Offering") by the several
International Underwriters named in Schedule I to the International Underwriting
Agreement, of ordinary shares, nominal value euro 2 each (the "Shares"),
directly or in the form of American depositary shares ("ADSs") evidenced by
American depositary receipts ("ADRs"), of the Company, pursuant to the
Registration Statement and the Prospectus. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the International
Underwriting Agreement. In addition, the undersigned understands that the
Company is concurrently entering into a Spanish retail underwriting agreement
and a Spanish institutional underwriting agreement with certain Spanish
underwriters providing for the sale by the Company of shares to institutional
investors in Spain and to retail investors in Spain, the European Economic Area
and Andorra.
In consideration of the International Underwriters' agreement to
purchase and make the International Offering of the Shares and ADSs, and for
other good and valuable consideration receipt of which is hereby acknowledged,
the undersigned hereby agrees that, without the prior written consent of the
Representatives on
III(A)-1
56
behalf of the International Underwriters, the undersigned will not, during the
period 180 days after the date the Shares are admitted to trading on the Madrid
Stock Exchange, issue, offer, sell, contract to sell or otherwise dispose of any
securities of the Company that are substantially similar to the Shares or ADSs,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive capital stock or any
such substantially similar securities, without the prior written consent of the
Representatives.
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the undersigned's Shares, even if such Shares would be disposed
of by someone other than the undersigned. Such prohibited hedging or other
transaction would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the undersigned's Shares or with respect to any security
that includes, relates to, or derives any significant part of its value from
such Shares.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the International Underwriting
Agreement does not become effective, or if the International Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Shares to be
sold thereunder, the undersigned shall be released from all obligations under
this Letter Agreement.
The undersigned understands that the International Underwriters are
entering into the International Underwriting Agreement and proceeding with the
International Offering in reliance upon this Letter Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
By: ______________________________
Name:
Title:
Accepted as of the date hereof:
III(A)-2
57
Banco de Negocios Argentaria S.A. BBV Interactivos, S.A., S.V.B.
By: _________________________ By: ________________________
Xxxxxxx Xxxxx International InverCaixa Valores, S.V.B., S.A.
By: _________________________ By: ________________________
On behalf of each of the International Underwriters
III(A)-3
58
SCHEDULE III (B)
LOCK-UP AGREEMENT FOR BIDASOA, B.V. (INFOSEL)
November -, 1999
Banco de Negocios Argentaria S.A.
BBV Interactivos, S.A., S.V.B.
Xxxxxxx Sachs International
InverCaixa Valores, S.V.B., S.A.
As representatives of the several International Underwriters
named in Schedule I to the International Underwriting Agreement,
c/o Goldman Xxxxx International,
Xxxxxxxxxxxx Xxxxx,
000 Xxxxx Xxxxxx,
Xxxxxx XX0X 0XX.
Ladies and Gentlemen:
The undersigned understands that you, as representatives of the several
International Underwriters (the "International Underwriters"), have entered into
an International Underwriting Agreement (the "International Underwriting
Agreement") with Terra Networks, S.A., a corporation with limited liability
(sociedad anonima) organized under the laws of Spain (the "Company") providing
for the international offering (the "International Offering") by the several
International Underwriters named in Schedule I to the International Underwriting
Agreement, of ordinary shares, nominal value (U)2.00 each (the "Shares"),
directly or in the form of American depositary shares ("ADSs") evidenced by
American depositary receipts ("ADRs"), of the Company, pursuant to the
Registration Statement and the Prospectus. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the International
Underwriting Agreement. In addition, the undersigned understands that the
Company is concurrently entering into a Spanish retail underwriting agreement
and a Spanish institutional underwriting agreement with certain Spanish
underwriters providing for the sale by the Company of shares to institutional
investors in Spain and to retail investors in Spain, the European Economic Area
and Andorra.
In consideration of the International Underwriters' agreement to
purchase and make the International Offering of the Shares and ADSs, and for
other good and valuable consideration receipt of which is hereby acknowledged,
the undersigned hereby agrees that, without the prior written consent of the
Representatives on behalf of the International Underwriters, the undersigned
will not, during the period ending 180 days after the date the Shares are
admitted to trading on the Madrid Stock Exchange, issue, offer, sell, contract
to sell or otherwise
III(B)-1
59
dispose of any securities of the Company that are substantially similar to the
Shares or ADSs, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive capital stock
or any such substantially similar securities, without the prior written consent
of the Representatives. The undersigned further agrees that during the period
between 180 days and one year after the date the Shares are admitted to trading
on the Madrid Stock Exchange, it will not issue, offer, sell, contract to sell
or otherwise dispose of more than 25% of the shares of the Company that it
acquires under the Share Option Agreement dated October 5, 1999 between the
undersigned and Telefonica, S.A. without the prior written consent of the
Representatives.
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the undersigned's Shares, even if such Shares would be disposed
of by someone other than the undersigned. Such prohibited hedging or other
transaction would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the undersigned's Shares or with respect to any security
that includes, relates to, or derives any significant part of its value from
such Shares.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the International Underwriting
Agreement does not become effective, or if the International Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Shares to be
sold thereunder, the undersigned shall be released from all obligations under
this Letter Agreement.
The undersigned understands that the International Underwriters are
entering into the International Underwriting Agreement and proceeding with the
International Offering in reliance upon this Letter Agreement.
III(B)-2
60
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
By: _____________________
Name:
Title:
Accepted as of the date hereof:
Banco de Negocios Argentaria S.A. BBV Interactivos, S.A., S.V.B.
By: _________________________ By: ________________________
Xxxxxxx Xxxxx International Invercaixa Valores, S.V.B., S.A.
By: _________________________ By: ________________________
On behalf of each of the International Underwriters
III(B)-3
61
ANNEX A
TRANSACTION DOCUMENTS
1. Argentina
1.1. Purchase and Sale Agreement for the Stock of Netgocios S.A., dated
September 9, 1999 among Xx. Xxxxxxx Xxxxxxx Xxxxxxx, Xx. Xxxxxxxx Xxxxxx
Xxxxxxx and Telefonica Interactiva Argentina S.A.
1.2. Purchase and Sale Agreement for the Stock of Donde Latinoamerica S.A.,
dated September 21, 1999 among Mr. Grancisco Xxxxx Xxxxxxxx, Xx. Xxxxx
Xxxxxxx Xxxxxx and Telefonica Interativa Argentina S.A.
2. Brazil
2.1. Nutec Informatica S.A. Share Subscription Agreement, dated June 15, 1999
among RBS Administracao e Cobranca Ltda., MLSP - Comercio e Participacoes
Ltda., Xx. Xxxxxx Xxxxxxx xx Xxxxx, Xx. Xxxx Xxxxxxx Xxxxxxxxxx,
Xxx.Xxxxxx Xxxx Xxxxx de Xxxxx and Telefonica Interactiva Brasil Ltda.
2.2. Nutec Informatica S.A.'s Shareholders Agreement, dated June 15, 1999 among
RBS Administracao e Cobranca Ltda., Xx. Xxxxxxx Xxxxxxx xx Xxxxx, Xx. Xxxx
Xxxxxxx Xxxxxxxxxx, MLSP - Comercio e Participacoes Ltda., Xxx. Xxxxxx
Xxxx Xxxxx de Xxxxx and Telefonica Interactiva Brasil Ltda., as partially
rescinded by the Rescission Agreement dated August 5, 1999
2.3. Nutec Informatica S.A. Shareholders' Agreement, dated June 15, 1999 among
MLSP - Comercio e Participacoes Ltda., Xxx. Xxxxxx Xxxx Xxxxx de Xxxxx and
Telefonica Interactiva Brasil Ltda, as supplemented.
2.4. Purchase and Sale Agreement for the Stock of Nutec Informatica S.A., dated
August 5, 1999 between MLSP - Comercio e Participacoes Ltda. and
Telefonica Interactiva Brasil Ltda.
2.5. Agreement for the Purchase and Sale of Stock of Nutec Informatica S.A.,
dated August 5, 1999 between Telefonica Interactiva Brasil Ltda. and Xxx.
Xxxxxx Xxxxx de Xxxxx
2.6. Memorandum of Understanding, dated October 22, 1999 between Taetel S.L.,
MLSP - Comercio e Participacoes Ltda. and Xxx. Xxxxxx Xxxx Xxxxx xx Xxxxx
0. Xxxxx
3.1. Purchase and Sale Agreement for the Stock of Proveedora de Servicios de
Conectividad S.A., dated October 4, 1999 between Compania de Telefonos de
Chile-Transmisiones Regionales S.A. and Telefonica Interactiva Chile
Limitada
3.2. Option Agreement for the Subscription for Shares, dated October 4, 1999
between Compania de Telefonos de Chile - Transmisiones Regionales S.A. and
Terra Networks, S.A.
X-0
00
0. Xxxxxx
4.1. Purchase and Sale Agreement for the Stock of Informacion Selectiva, S.A.
de C.V., dated October 5, 1999 among Inversiones Grupo Reforma, S.A. de
C.V., Consorcio Interamericano de Comunicacion, S.A. de C.V., Terra
Networks Mexico, S.A. de C.V.and Editora El Sol, S.A. de C.V.
4.2. Non-compete and Cooperation Agreement, dated October 5, 1999 among Xx.
Xxxxxxxxx Xxxxx de la Xxxx, Editora El Sol, S.A. de C.V., Ediciones del
Norte, S.A. de C.V., Servicios Motociclistas, S.A. de C.V., Inmobialiaria
Macro, S.A. de C.V., Consorcio Interamericano de Comunicacion, S.A. de
C.V., Apoyo Aereo, S.A. de C.V., Comunicacion Integrada de Occidente, S.A.
de C.V., Inversiones Grupo Reforma, S.A. de C.V. and Terra Networks
Mexico, S.A. de C.V.
4.3. Purchase and Sale Agreement for a 25% interest in Terra Networks Mexico,
S.A. de C.V., dated October 5, 1999 among Bidasoa, B.V., Telefonica
Servicios y Contenidos por la Red, S.A. and Terra Networks, S.A.
4.4. Share Option Agreement, dated October 5, 1999 between Bidasoa, B.V. and
Telefonica, S.A., together with the letter for the exercise of the share
option, dated October 11, 1999 between Bidasoa, B.V. and Telefonica, S.A.
5. Peru
5.1 Option Agreement for the subscription for shares, dated October 20, 1999
between Telefonica del Peru S.A.A. and Terra Networks, S.A.
5.2 Asset Purchase Agreement, dated October 20, 1999 between Telefonica
Servicios Internet S.A.C. and Terra Networks Peru S.A.
5.3 Services Agreement, dated Xxxxxxx 00, 0000 xxxxx Xxxxxxxxxx xxx Xxxx
S.A.A., Terra Networks Peru S.A., Telefonica Servicios de Internet S.A.C.
and Terra Networks, S.A.
6. Spain
6.1. Purchase and Sale Agreement for Stock of Ordenamientos de Links
Especializados, S.L. (Ole), dated March 10, 1999 between Telefonica
Interactiva, S.A. and InfoSearch Holdings
6.2. Master Agreement, dated September 13, 1999 among Telefonica Interactiva,
S.A., InfoSearch Holdings and Telefonica, S.A., in connection with the
acquisition of Ordanamientos de Links Especializados, S.L. (Ole)
7. United States
7.1. Limited Liability Company Agreement of Terra Networks Access Services USA,
LLC, dated October 5, 1999 between Telefonica Interactiva USA, Inc. and
IDT Corporation.
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63
7.2 Internet Colocation Services Agreement, dated October 5, 1999 between
Terra Networks Interactive Services USA, LLC and IDT Corporation.
7.3 Limited Liability Company Agreement of Terra Networks Interactives
Services USA, LLC, dated October 5, 1999 between Telefonica Interactiva
USA, Inc. and IDT Corporation.
7.4 Internet Service Provisioning and Marketing Agreement, dated October 5,
1999 between Terra Networks Access Services USA, LLC and IDT Corporation.
7.5 Joint Venture Agreement, dated October 5, 1999 between Terra Networks S.A.
and IDT Corporation.
A-3
