EXHIBIT 10.3
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (this "AGREEMENT") dated as of ___________,
2000, is by and between AMERICA ONLINE, INC., a Delaware corporation ("AOL"),
RIVERVIEW MEDIA CORP., a British Virgin Islands corporation ("ODC"), XXXXXXX
XXXXXX ("XXXXXX"), XXXXXXXX XXXXXXXX ("XXXXXXXX"), XXXXXX XXXXXX ("XXXXXX") and
AMERICA ONLINE LATIN AMERICA, INC., a Delaware corporation (the "COMPANY").
R E C I T A L S
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A. AOL is the owner of (i) all of the outstanding capital stock of AOL
Latin America Holdings, Inc., a Delaware corporation ("HOLDINGS"), which in turn
owns 50% of the limited liability company interests in AOL Latin America, S.L.
(f/k/a Tesjuates, S.L.), a limited liability company organized under the laws of
the Kingdom of Spain ("AOL LATIN AMERICA") and (ii) 50% of the limited liability
company interests in AOL Latin America Management LLC, a Delaware limited
liability company ("MANAGEMENT") (collectively, the "AOL CONTRIBUTED
INTERESTS").
X. Xxxxxx is the owner of 1% of the outstanding capital stock of Federal
Communications Corp., a corporation organized under the laws of the Oriental
Republic of Uruguay ("FEDCOMM"), which in turn owns 50% of the limited liability
company interests in AOL Latin America (the "XXXXXX CONTRIBUTED INTEREST").
Xxxxxxxx is the owner of 0.39% of the outstanding capital stock of FedComm (the
"XXXXXXXX CONTRIBUTED INTEREST"). Xxxxxx is the owner of 0.57% of the
outstanding capital stock of FedComm (the "XXXXXX CONTRIBUTED INTEREST" and,
collectively with the Xxxxxx Contributed Interest and the Xxxxxxxx Contributed
Interest, the "INDIVIDUALS' CONTRIBUTED INTERESTS").
C. B. ODC (i) is the owner of 98.04% of the outstanding capital stock
of FedCom and (ii) has control of all of the equity interests in Latin American
Interactive Services, Inc., a Delaware corporation ("LAIS"), which in turn owns
50% of the limited liability company interests in Management (collectively, the
"ODC CONTRIBUTED INTERESTS," and together with the AOL Contributed Interests and
the Individuals' Contributed Interests, the "CONTRIBUTED INTERESTS").
D. AOL and ODC have formed the Company to act as a holding company that
indirectly will hold the outstanding equity interests of AOL Latin America and,
indirectly, the equity interests of the Operating Entities that will be formed
to conduct the Business in the Territory, and has filed a Registration Statement
on Form S-1, Registration No. 333-95051, with the United States Securities and
Exchange Commission (the "SEC") relative to shares of Class A Common Stock, par
value $0.01 per share (the "CLASS A COMMON STOCK"), of the Company and offering
such Class A Common Stock to the public upon the effectiveness of the
Registration Statement (the "IPO").
E. In connection with the IPO, AOL, Hauser, Pieretti, Xxxxxx and ODC
have agreed to contribute to the Company, or cause to be contributed to the
Company, all of the Contributed Interests, AOL has agreed to execute, and cause
its subsidiary CompuServe Interactive Services, Inc. ("COMPUSERVE") to execute,
license agreements with the Company, and the Company has agreed to issue in
exchange therefore shares of its High Vote Preferred Stock and, with respect to
AOL, a warrant to acquire additional shares of the Company's capital stock, all
in accordance with the terms of this Agreement and as contemplated in the
Restated Certificate of Incorporation of the Company executed by the Company on
the date hereof (the "CERTIFICATE OF INCORPORATION").
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants, agreements and conditions set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows (terms with initial capital
letters used herein without definition shall have the meanings given in the
Certificate of Incorporation):
1. Contributions and Other Events.
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On (or prior to) the Closing Date (defined below), the following actions
will take place in the following order:
(a) AOL's Agreement to Contribute. In consideration of AOL being
issued (i) 101,858,334 shares of Series B Preferred Stock and (ii) a Warrant to
purchase an aggregate of 16,642,500 shares of Series B Preferred Stock (plus a
number of shares equal to six percent 6% of the number of shares, if any,
purchased by the underwriters pursuant to their over-allotment option plus such
additional number of shares, if any, as may be issuable pursuant to the
provisions thereof) and/or such number of shares of Class B Common Stock and/or
Class A Common Stock into which such shares of Series B Preferred Stock are
convertible at the time of exercise, in each case at an exercise price per share
equal to the price per share at which the Class A Common Stock is sold to the
public in the IPO, AOL hereby agrees to contribute, convey and assign to the
Company, upon the terms and conditions hereinafter set forth, all of its right,
title and interest in and to the AOL Contributed Interests. In addition, AOL
agrees to execute and
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deliver to the Company and AOL Latin America, and to cause CompuServe to execute
and deliver to the Company and AOL Latin America, the license agreements.
(b) Individuals' Agreement to Contribute. Simultaneously with the
contribution of the AOL Contributed Interests, and in consideration of Xxxxxx,
Xxxxxxxx and Xxxxxx being issued 1,018,583, 397,248 and 580,593 shares of Series
C Preferred Stock, respectively, Xxxxxx, Xxxxxxxx and Xxxxxx severally hereby
agree to contribute, convey and assign to the Company, upon the terms and
conditions hereinafter set forth, all of their right, title and interest in and
to the Xxxxxx Contributed Interest, Xxxxxxxx Contributed Interest and Xxxxxx
Contributed Interest, respectively.
(c) ODC's Agreement to Contribute. In consideration of ODC being
issued 99,861,910 shares of Series C Preferred Stock, ODC hereby agrees to
contribute, convey and assign to the Company, upon the terms and conditions
hereinafter set forth, all of its right, title and interest in and to the ODC
Contributed Interests.
2. Closing Date.
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The date upon which title to the Contributed Interests are so transferred
to the Company shall be referred to herein as the "CLOSING DATE," which date
shall be the date on which the registration statement filed by the Company in
connection with the IPO has been declared effective by the SEC.
3. Contingencies.
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The obligation of AOL, Hauser, Pieretti, Xxxxxx and ODC to so convey the
Contributed Interests to the Company and the obligation of AOL to execute and
deliver the license and cause CompuServe to execute and deliver the CompuServe
license to the Company shall be subject to the effectiveness of the registration
statement filed by the Company in connection with the IPO.
4. Representations and Warranties.
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(a) To induce the other parties hereto to enter into this Agreement,
AOL represents and warrants to each of the other parties hereto that:
(i) AOL is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power,
authority and legal right to enter into this Agreement and to perform its
obligations hereunder.
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(ii) This Agreement has been duly authorized, executed and delivered
by AOL and constitutes the legal, valid and binding obligation of AOL,
enforceable against it in accordance with its terms.
(iii) AOL owns all right, title and interest in and to the AOL
Contributed Interests free and clear of all liens, claims and encumbrances
whatsoever.
(b) To induce the other parties hereto to enter into this Agreement,
Xxxxxx represents and warrants to each of the other parties hereto that:
(i) This Agreement constitutes the legal, valid and binding obligation
of Xxxxxx, enforceable against him in accordance with its terms.
(ii) Xxxxxx owns all right, title and interest in and to the Xxxxxx
Contributed Interest free and clear of all liens, claims and encumbrances
whatsoever.
(c) To induce the other parties hereto to enter into this Agreement,
Xxxxxxxx represents and warrants to each of the other parties hereto that:
(i) This Agreement constitutes the legal, valid and binding obligation
of Xxxxxxxx, enforceable against her in accordance with its terms.
(ii) Xxxxxxxx owns all right, title and interest in and to the
Xxxxxxxx Contributed Interest free and clear of all liens, claims and
encumbrances whatsoever.
(d) To induce the other parties hereto to enter into this Agreement,
Xxxxxx represents and warrants to each of the other parties hereto that:
(i) This Agreement constitutes the legal, valid and binding obligation
of Xxxxxx, enforceable against him in accordance with its terms.
(ii) Xxxxxx owns all right, title and interest in and to the Xxxxxx
Contributed Interest free and clear of all liens, claims and encumbrances
whatsoever.
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(e) To induce the other parties hereto to enter into this Agreement, ODC
represents and warrants to each of the other parties hereto that:
(i) ODC is a corporation duly organized, validly existing and in good
standing under the laws of the British Virgin Islands and has all requisite
power, authority to enter into this Agreement and to perform its obligations
hereunder.
(ii) This Agreement has been duly authorized, executed and delivered
by ODC and constitutes the legal, valid and binding obligation of ODC,
enforceable against it in accordance with its terms.
(iii) ODC owns all right, title and interest in and to the ODC
Contributed Interests free and clear of all liens, claims and encumbrances
whatsoever.
(iv) LAIS owns all right, title and interest in and to 50% of the
limited liability company interests in Management free and clear of all liens,
claims and encumbrances whatsoever.
5. Closing.
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The Closing Date shall occur promptly upon satisfaction of the contingency
set forth in Section 3. On or prior to the Closing Date, as described in
Section 1 above, each of AOL, Hauser, Pieretti, Xxxxxx and ODC shall deliver to
the Company the following:
(a) AOL shall deliver certificates representing all of the outstanding
shares of Holdings, duly endorsed and completed or with separate stock powers or
other instruments duly signed and completed to effect the transfer of all of
such shares to the Company, an Assignment of Limited Liability Company Interests
transferring to the Company its limited liability company interests in
Management, and such other instruments as reasonably shall be necessary to
assign to the Company all of its right, title and interest in and to the AOL
Contributed Interests;
(b) Xxxxxx shall deliver certificates representing 1% of the
outstanding shares of FedComm, duly endorsed and completed or with separate
stock powers or other instruments duly signed and completed to effect the
transfer of all of such shares to the Company, and such other instruments as
reasonably shall be necessary to assign to the Company all of his right, title
and interest in and to the Xxxxxx Contributed Interest;
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(c) Xxxxxxxx shall deliver certificates representing 0.39% of the
outstanding shares of FedComm, duly endorsed and completed or with separate
stock powers or other instruments duly signed and completed to effect the
transfer of all of such shares to the Company, and such other instruments as
reasonably shall be necessary to assign to the Company all of her right, title
and interest in and to the Xxxxxxxx Contributed Interest;
(d) Xxxxxx shall deliver certificates representing 0.57% of the
outstanding shares of FedComm, duly endorsed and completed or with separate
stock powers or other instruments duly signed and completed to effect the
transfer of all of such shares to the Company, and such other instruments as
reasonably shall be necessary to assign to the Company all of his right, title
and interest in and to the Xxxxxx Contributed Interest;
(e) ODC shall deliver certificates representing 98.04% of the
outstanding shares of FedComm and 100% of the outstanding shares of LAIS, in
each case duly endorsed and completed or with separate stock powers or other
instruments duly signed and completed to effect the transfer of all of such
shares to the Company, and such other instruments as reasonably shall be
necessary to assign to the Company all of its right, title and interest in and
to the ODC Contributed Interests; and
(f) AOL, Hauser, Pieretti, Xxxxxx and ODC shall deliver or cause the
delivery of any other documents reasonably required by AOL, ODC or the Company
to consummate the transactions contemplated hereby.
6. Conditions to Closing.
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The following shall be conditions precedent to such transfer of the
Contributed Interests to the Company and the issuance by the Company of the
shares of High Vote Preferred Stock:
(a) The contingency set forth in Section 3 shall be satisfied; and
(b) Each and every warranty and representation of the respective
parties set forth in Section 4 shall be true and correct in all material
respects as of the Closing Date.
7. Assignment.
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None of the parties hereto may assign this Agreement or any of their rights
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hereunder for any purpose whatsoever without the prior written consent of the
other parties hereto, which consent may be granted or withheld in the other
parties' sole discretion, and any purported assignment or assignments of this
Agreement shall be absolutely void and of no force or effect.
8. Notices.
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All notices, demands, requests, consents or other communications required
or permitted to be given or made under this Agreement shall be in writing and
signed by the party giving the same and shall be deemed given or made when given
by personal service or three (3) days after mailing by certified or registered
mail, postage prepaid, to the intended recipient at the address set forth below
or any other address of which prior written notice has been given:
If to AOL: America Online, Inc.
00000 XXX Xxx
Xxxxxx, XX 00000-0000, XXX
Attn: President, AOL International
Fax No.: (000) 000-0000
If to the Company: America Online Latin America, Inc.
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000, XXX
Attn: President
Fax No.: (000) 000-0000
with a copy to: Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000, XXX
Attn: Xxxxx X. Xxxxxxxx, Esquire
Fax No.: (000) 000-0000
If to ODC, Xxxxxx, Riverview Media Corp.
Xxxxxx or Xxxxxxxx: 000 Xxxxxxxxxx Xxxxx
Xxxxxxx'x Xxx
Road Town, Tortola
British Virgin Islands
Attn: Legal Department
Fax No.: (000) 000-0000
with a copy to: Finser Corporation
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000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000, XXX
Attn: Legal Department
Fax No.: (000) 000-0000
9. Incorporation of Prior Agreements.
---------------------------------
This Agreement contains the entire understanding of the parties hereto with
respect to the subject matter hereof, and no prior written or oral agreement or
understanding pertaining to any such matter shall be effective for any purpose.
No provision of this Agreement may be amended or added to except by an agreement
in writing signed by the parties to this Agreement or their respective
successors in interest.
10. Section Headings.
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Headings at the beginning of Sections and Paragraphs of this Agreement are
solely for convenience and are not a part of this Agreement.
11. Time is of the Essence.
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Time is of the essence of this Agreement.
12. Governing Law; Forum and Venue; Construction.
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This Agreement and the transaction herein contemplated shall be construed
in accordance with and governed by the laws of the State of Delaware without
reference to its conflicts of laws provisions. The parties hereto agree that,
to the extent permissible under applicable laws and rules of court procedure,
any action or proceeding between or among any of the parties with respect to
this Agreement shall be commenced only in a court of competent jurisdiction in
the State of Delaware, and in no other jurisdiction. The parties hereto have
participated fully in the negotiation and preparation of this Agreement and,
accordingly, this Agreement shall not be more strictly construed against any one
of the parties.
13. Indemnification.
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(a) AOL shall indemnify, defend and hold harmless the Company and its
Affiliates (other than AOL or ODC) and their respective officers, directors,
employees, and agents from and against any and all losses, costs, expenses,
obligations, liabilities, damages, recoveries, deficiencies, financing costs,
taxes, penalties and interest, in each such case whether arising by contract,
statute, or
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otherwise, and whether by action, suit, proceeding, assessment, levy,
investigation, examination, audit or otherwise, including reasonable third party
legal, accounting and other professional fees and expenses (at any trial or
appellate level), and costs of investigations, audits, examinations, appraisals
or similar proceedings (collectively, "LOSSES") (i) arising out of, related to
or in connection with Holdings and relating to periods on or before the Closing
Date or (ii) from the inclusion of any of the entities, the stock or other
equity interests of which comprise the AOL Contributed Interests, in a
consolidated, combined or unitary tax return relating to periods on or before
the Closing Date. The foregoing indemnity shall survive the termination of this
Contribution Agreement.
(b) ODC shall indemnify, defend and hold harmless the Company and its
Affiliates (other than AOL or ODC) and their respective officers, directors,
employees, and agents from and against any and all Losses (i) arising out of,
related to or in connection with FedComm or LAIS and relating to periods on or
before the Closing Date or (ii) from the inclusion of any of the entities, the
stock or other equity interests of which comprise the ODC Contributed Interests
or Individuals' Contributed Interests, or Management, in a consolidated,
combined or unitary tax return relating to periods on or before the Closing
Date. The foregoing indemnity shall survive the termination of this
Contribution Agreement.
(c) For purposes hereof, an "AFFILIATE" of any particular person or
entity shall mean any other person or entity which is or has ever been, directly
or indirectly, controlling, controlled by or under common control with such
particular person or entity. The amount of any payment under this section shall
be increased to take account of any net tax cost incurred by the recipient
thereof as a result of the receipt or accrual of payments hereunder ("grossed-
up" for such increase).
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AMERICA ONLINE, INC.
By: ________________________
Name:
Title:
___________________________
Xxxxxxx Xxxxxx
___________________________
Xxxxxx Xxxxxx
___________________________
Xxxxxxxx Xxxxxxxx
RIVERVIEW MEDIA CORP.
By: _______________________
Name:
Title:
AMERICA ONLINE LATIN AMERICA, INC.
By: _______________________
Name:
Title:
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