EXHIBIT 10.2
Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company's application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act.
EXECUTION COPY
SECOND AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
by and among
AMERICA ONLINE LATIN AMERICA, INC.,
a Delaware corporation,
AMERICA ONLINE, INC.,
a Delaware corporation,
ASPEN INVESTMENTS LLC,
a Delaware limited liability company,
ATLANTIS INVESTMENTS LLC,
a Delaware limited liability company,
and
(for purposes of Articles I, III, V (but not
Section 5.7 thereof), VI, VIII, IX and
XI and Section 10.2 only)
AOL TIME WARNER INC.,
a Delaware Corporation,
DATED AS OF MARCH 8, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS.............................................................................................2
SECTION 1.1 DEFINITIONS........................................................................................2
SECTION 1.2 USAGE GENERALLY; INTERPRETATION...................................................................11
ARTICLE II PURPOSE..............................................................................................11
SECTION 2.1 PURPOSE..........................................................................................11
SECTION 2.2 NO PARTNERSHIP...................................................................................12
SECTION 2.3 VOTING...........................................................................................12
ARTICLE III VOTING PROVISIONS....................................................................................12
SECTION 3.1 VOTING AGREEMENTS................................................................................12
ARTICLE IV NON-COMPETITION......................................................................................13
SECTION 4.1 NON-COMPETITION WITH THE COMPANY.................................................................13
SECTION 4.2 REPURCHASE UPON BREACH...........................................................................15
ARTICLE V RESTRICTIONS ON TRANSFERS.............................................................................19
SECTION 5.1 PROHIBITED TRANSFERS.............................................................................19
SECTION 5.2 PERMITTED TRANSFERS..............................................................................20
SECTION 5.3 RIGHTS OF FIRST REFUSAL..........................................................................21
SECTION 5.4 CLOSING DELIVERIES...............................................................................23
SECTION 5.5 DIRECT COMPREHENSIVE COMPETITOR..................................................................23
SECTION 5.6 PURCHASE OF THE ODC HOLDINGS; INSTALLMENT PAYMENTS...............................................24
SECTION 5.7 THIRD-PARTY EQUITY PARTICIPANTS..................................................................24
ARTICLE VI REGISTRATION RIGHTS..................................................................................26
SECTION 6.1 REGISTRATION RIGHTS..............................................................................26
ARTICLE VII ODC NON-MONETARY OBLIGATIONS........................................................................27
SECTION 7.1 ODC NON-MONETARY CONTRIBUTIONS...................................................................27
ARTICLE VIII OTHER AGREEMENTS; LEGENDS..........................................................................27
SECTION 8.1 LEGENDS..........................................................................................27
SECTION 8.2 LIMITATION OF LIABILITY..........................................................................28
ARTICLE IX TERM AND TERMINATION.................................................................................29
SECTION 9.1 TERM.............................................................................................29
SECTION 9.2 TERMINATION......................................................................................29
ARTICLE X STANDSTILL PROVISIONS; INDEMNIFICATION................................................................29
SECTION 10.1 LIMITATIONS ON STOCKHOLDERS' OWNERSHIP..........................................................29
SECTION 10.2 INDEMNIFICATION.................................................................................30
ARTICLE XI MISCELLANEOUS........................................................................................31
SECTION 11.1 CONFIDENTIAL INFORMATION........................................................................31
SECTION 11.2 GOVERNING LAW...................................................................................33
SECTION 11.3 ENTIRE AGREEMENT................................................................................33
SECTION 11.4 ASSIGNMENT......................................................................................33
SECTION 11.5 SURVIVAL........................................................................................34
SECTION 11.6 NOTICES.........................................................................................34
SECTION 11.7 COUNTERPARTS; FACSIMILES........................................................................36
SECTION 11.8 EXPENSES........................................................................................36
SECTION 11.9 FURTHER ASSURANCES..............................................................................36
SECTION 11.10 CONSTRUCTION....................................................................................36
SECTION 11.11 SEVERABILITY....................................................................................36
SECTION 11.12 JOINT AND SEVERAL LIABILITY ....................................................................36
ASPEN INVESTMENTS LLC.........................................................................................37
ATLANTIS INVESTMENTS LLC......................................................................................37
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SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
This SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this
"AGREEMENT") is made as of this 8th day of March, 2002 (the "EFFECTIVE DATE"),
by and among America Online Latin America, Inc., a Delaware corporation having
its principal place of business at 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx
Xxxxxxxxxx, Xxxxxxx 00000 (the "COMPANY"), America Online, Inc., a Delaware
corporation having its principal place of business at 00000 XXX Xxx, Xxxxxx,
Xxxxxxxx 00000 ("AOL"), Aspen Investments LLC, a Delaware limited liability
company having its principal place of business at 000 Xxxxxxxx Xxx, Xxxxx 000,
Xxxxx Xxxxxx, Xxxxxxx 00000 ("ASPEN"), Atlantis Investments LLC, a Delaware
limited liability company having its principal place of business at 000 Xxxxxxxx
Xxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxx 00000 ("ATLANTIS", and together with
Aspen, "ODC") and, for purposes of Articles I, III, V (but not Section 5.7
thereof), VI, VIII, IX and XI and Section 10.2 only, AOL Time Warner Inc., a
Delaware corporation having its principal place of business at 00 Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, XX 00000 ("AOLTW"), and each of the AOLTW Permitted Assignees
(as each term is defined below) listed on the attached Schedule of AOLTW
Permitted Assignees who becomes a party to this Agreement from time to time.
AOL, Aspen and Atlantis are sometimes hereinafter referred to, collectively, as
the "STOCKHOLDERS" and, individually, as a "STOCKHOLDER" and for the purposes of
Articles I, III, V (but not Section 5.7 thereof), VI, VIII, IX and XI and
Section 10.2 only, each of AOLTW and any AOLTW Permitted Assignee shall be
considered a single "Stockholder".
WHEREAS, the Company, AOL and Riverview Media Corp., a British Virgin
Islands corporation ("Riverview"), previously entered into a Stockholders'
Agreement, dated as of August 7, 2000 (the "ORIGINAL AGREEMENT");
WHEREAS, pursuant to the AOL-LA Share Transfer and Assignment
Agreement, dated as of December 28, 2000, by and between Riverview, Aspen and
Atlantis (the "ASSIGNMENT AGREEMENT"), Riverview assigned to each of Aspen and
Atlantis all of its right, title and interest in and to 48,649,203 shares of the
Company's Series C Redeemable Convertible Preferred Stock, par value $.01 per
share (the "SERIES C PREFERRED STOCK"), and 2,000,000 shares of the Company's
Class A Common Stock, par value $.01 per share (the "CLASS A COMMON STOCK");
WHEREAS, on March 30, 2001, the Company, AOL, Aspen and Atlantis
entered into an Amended and Restated Stockholders' Agreement (the "FIRST AMENDED
AND RESTATED STOCKHOLDERS' AGREEMENT"), which agreement amended and restated the
Original Agreement in its entirety;
WHEREAS, the Company and AOLTW are parties to a certain Note Purchase
Agreement dated as of March 8, 2002 (as amended, supplemented or otherwise
modified from time to time, the "NOTE PURCHASE AGREEMENT"), pursuant to which
the Company has agreed to issue and sell to AOLTW and AOLTW has agreed to
purchase from the Company an aggregate principal amount of up to $160 million of
the Company's 11% Senior Convertible Notes due 2007;
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WHEREAS, pursuant to Section 7.1 of the Note Purchase Agreement, AOLTW
may assign its right to purchase Notes thereunder to any Person who is not a
Competitor (as defined therein) and, after the purchase of any such Notes,
pursuant to Section 10 of the Notes, AOLTW (or in the event of an assignment by
AOLTW, such assignee) may transfer any such Notes to any Person who is not a
Competitor (as defined therein);
WHEREAS, if AOLTW makes any such assignment to any AOLTW Permitted
Assignee, in connection with such assignment or transfer and pursuant to Section
4.5(b) of the Note Purchase Agreement or Section 10 of the Note, AOLTW and any
such AOLTW Permitted Assignees agree to be bound by the certain restrictions and
obligations herein with respect to any shares of the Company Securities that may
be issued or issuable in connection with the Notes including, directly or
indirectly, upon conversion of, or as interest, dividends or redemptions, on the
Notes (the "NOTE CONVERSION SHARES");
WHEREAS, the Company and the Stockholders have agreed on certain
restrictions with respect to the transfer of shares of Series B Preferred Stock,
Series C Preferred Stock, Series F Preferred Stock, Class B Common Stock and
Class C Common Stock held by them from time to time, including any Note
Conversion Shares; and
WHEREAS, the Stockholders wish to promote their mutual interests by
imposing certain restrictions and obligations on each other and on the shares of
Preferred Stock and Common Stock now or hereafter owned by each, and, further,
to provide for certain matters pertaining to the management and governance of
the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the parties hereto hereby agree to
amend and restate the First Amended and Restated Stockholders' Agreement, in its
entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. The following terms shall, for the purposes of
this Agreement and the Schedules and Exhibits hereto, have the following
meanings (terms defined in the singular or the plural include the plural or the
singular, as the case may be):
"ACCESS SERVICES" shall mean, collectively, PC Access Services, TV
Access Services and Wireless Access Services.
"ACQUIRING PARTY" has the meaning given in Section 4.2(b).
"ACTION" has the meaning given in the Certificate of Incorporation.
"AFFILIATE" of any Person shall mean any other Person that, directly or
indirectly, controls, is under common control with or is controlled by that
Person. For purposes of this definition, "control" (including, with its
correlative meanings, the terms "controlled by" and "under common control
2
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
"AGGREGATED SIGNIFICANT COMPETITORS" with respect to Access Services
shall mean Persons (a) that in the aggregate have Access Service Permanent
Subscribers in those countries within the Territory in which the Company
provides Access Services equal to or greater than thirty-five percent (35%) of
the Access Service Permanent Subscribers of the Company in the Territory,
provided that such Persons in the aggregate have at least 315,000 PC Access
Service Permanent Subscribers in the Territory, or (b) that in the aggregate
have Access Service Permanent Subscribers in Brazil equal to or greater than
thirty-five (35%) of the Access Service Permanent Subscribers of the Company in
Brazil, provided that such Persons have at least 105,000 PC Access Service
Permanent Subscribers in Brazil. For avoidance of doubt, IP (i.e., Internet
protocol) telephony and related subscribers and customers shall not be
considered in determining whether a Person is a Significant Competitor or
Persons together are Aggregated Significant Competitors.
"AOL" has the meaning set forth in the preamble.
"AOL-BRANDED" has the meaning given in the Certificate of
Incorporation.
"AOL DIRECTORS" shall mean, collectively, the Class B Directors of the
Company (as such term is defined in the Certificate of Incorporation).
"AOL LATIN AMERICA" shall mean AOL Latin America, S.L. (f/k/a
Tesjuates, S.L.) a limited liability company organized under the laws of the
Kingdom of Spain and a wholly owned Subsidiary of the Company.
"AOL LICENSE" shall mean the AOL License Agreement, dated as of August
7, 2000, by and between AOL and AOL Latin America.
"AOL MARKS" has the meaning set forth in the AOL License.
"AOL OLS AGREEMENT" shall mean the AOL Online Services Agreement, dated
as of August 7, 2000, by and between AOL and AOL Latin America.
"AOLTW PERMITTED ASSIGNEE" means any Subsidiary of AOLTW which holds
Notes or Note Conversion Shares.
"AOL SERVICE(S)" shall mean the Interactive Services that are PC Access
Services provided worldwide, including the AOL-US Service and any other
international AOL Services, under the brand name America Online(TM) and/or
AOL(TM) existing as of the date hereof or in the future as modified from time to
time.
"AOLTW" has the meaning set forth in the preamble.
3
"AOLTW STOCK" has the meaning given in Section 4.2(a).
"AOL-US SERVICE" shall mean the principal AOL Services provided by AOL
to United States residents on the date hereof, as such service shall be modified
from time to time.
"ASPEN" has the meaning set forth in the preamble.
"ATLANTIS" has the meaning set forth in the preamble.
"BOARD" or "BOARD OF DIRECTORS" shall mean the Board of Directors of
the Company.
"BUSINESS" has the meaning given in Section 2.1(a).
"BUSINESS DAY" shall mean any day, other than a Saturday or Sunday, on
which federally chartered banks in the United States are open for business.
"BY-LAWS" shall mean the By-laws of the Company as in effect as of the
date of this Agreement, as the same may be amended, modified or restated from
time to time in accordance with the terms thereof.
"CALL OPTION" has the meaning given in Section 5.7(b).
"CALL OPTION CLOSING" has the meaning given in Section 5.7(b).
"CERTIFICATE OF DESIGNATION" shall mean the Certificate of Designation
of the Company that authorizes the issuance of the Series F Preferred Stock.
"CERTIFICATE OF INCORPORATION" shall mean the Restated Certificate of
Incorporation of the Company as in effect as of the date of this Agreement, as
the same may be amended or restated from time to time in accordance with the
terms thereof.
"CHARTER AMENDMENTS" shall have the meaning assigned to such term in
the Note Purchase Agreement.
"CIS LICENSE" shall mean the CIS License Agreement, dated as of August
7, 2000, by and between AOL and AOL Latin America.
"CIS MARKS" has the meaning given in the CIS OLS Agreement.
"CIS OLS AGREEMENT" shall mean the CIS Online Services Agreement, dated
as of August 7, 2000, by and between CompuServe and AOL Latin America.
"XXXXXXXX FAMILY MEMBERS" shall mean Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxxx
and/or their lineal descendants, individually or collectively and/or any trusts
for the exclusive benefit of any one or more of such persons.
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"CLASS A COMMON STOCK" means the Class A Common Stock, par value $.01
per share, of the Company.
"CLASS B COMMON STOCK" means the Class B Common Stock, par value $.01
per share, of the Company.
"CLASS C COMMON STOCK" means the Class C Common Stock, par value $.01
per share, of the Company.
"COMMISSION" shall mean the Securities and Exchange Commission, or any
successor agency performing the functions currently performed by the Securities
and Exchange Commission.
"COMMON STOCK" shall mean the shares of the Company's common stock,
including the shares Class A Common Stock, Class B Common Stock and Class C
Common Stock, collectively.
"COMMUNICATION SERVICES" has the meaning given in the Certificate of
Incorporation.
"COMPANY" has the meaning set forth in the first paragraph hereof.
"COMPANY SECURITIES" shall mean any shares of Common Stock or other
Voting Stock.
"COMPUSERVE" shall mean CompuServe Interactive Services, Inc.
"COMPUSERVE-BRANDED" shall mean, with respect to any internet or online
service that such service includes the word "CompuServe" as an integral part of
the name of such internet or online service. For the avoidance of doubt, a
reference to an internet or online service being a "CompuServe" internet or
online service shall not make such service "CompuServe-branded".
"CONFIDENTIAL INFORMATION" has the meaning given in Section 11.1.
"CONTENT" has the meaning given in the Certificate of Incorporation.
"DAMAGES" has the meaning given in the Certificate of Incorporation.
"DEFAULT RATE" shall mean a per annum rate of interest equal to the
Prime Rate plus two hundred (200) basis points.
"DIRECT COMPREHENSIVE COMPETITOR" has the meaning given in Section 5.5.
"DIRECTLY COMPETITIVE SERVICE" has the meaning given in Section 6.2(a).
"DISPROPORTIONATE DILUTION" has the meaning given in Section 5.7(b).
"EFFECTIVE DATE" has the meaning set forth in the preamble.
5
"EMPLOYEE" has the meaning given in the Certificate of Incorporation.
"ENCUMBRANCE" shall mean any mortgage, pledge, security interest, lien,
restriction on use or transfer, other than those imposed by law, voting
agreement, adverse claim or encumbrance or charge of any kind (including any
agreement to give any of the foregoing), any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of, or any
agreement to give, any financing statement under the Uniform Commercial Code or
similar law of any jurisdiction.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder,
as amended.
"EXERCISE NOTICE" has the meaning given in Section 7.1(b).
"FAIR MARKET VALUE" shall mean (i) with respect to a share of any
Common Stock of the Company as of any date, the average closing price for a
share of Class A Common Stock as quoted on any national securities exchange or
on the NASDAQ National Market System for the fifteen trading days ending on the
second trading day prior to such date as reported in the Eastern Edition of THE
WALL STREET JOURNAL and (ii) as of any date with respect to a share of any
Voting Stock of the Company convertible into Common Stock, the aggregate Fair
Market Value of the shares of Common Stock into which such share of Voting Stock
is then convertible. If the Class A Common Stock shall not be listed on any such
exchange or traded on any such automated quotation system on all such trading
days during such 15-trading day period, the closing or latest reported price for
Class A Common Stock in the over-the-counter market on each trading day on which
such shares are not so listed or traded as reported by NASDAQ or, if not so
reported, then the last sale price for each such day, as reported by the
National Quotation Bureau Incorporated, or if such organization is not in
existence, by an organization providing similar services (as determined by the
Board), shall be deemed to be the closing price on such trading day. If, at a
time when the Class A Common Stock is trading other than on such an exchange,
there shall not have been a sale on any such trading day, the mean of the last
reported bid and asked quotations as reported in the Eastern Edition of THE WALL
STREET JOURNAL for Class A Common Stock on such day shall be deemed to be the
closing price. If the shares of Class A Common Stock shall not be so reported on
any of such trading days, then the Fair Market Value per share of such Class A
Common Stock shall be the fair market value thereof as determined in the
reasonable judgment of the Board of Directors. For the purpose hereof, "trading
day" shall mean a day on which the securities exchange or automated quotation
system specified herein shall be open for business or, if the shares of Class A
Common Stock shall not be listed on such exchange or automated quotation system
for such period, a day with respect to which quotations of the character
referred to in the next preceding sentence shall be reported.
"GCL" shall mean the General Corporation Law of the State of Delaware.
"GLA" shall mean Galaxy Latin America, LLC, a limited liability company
organized under the laws of the State of Delaware, and its successors.
6
"GOVERNMENTAL AUTHORITY" shall mean any domestic or foreign national,
state or municipal or other local government or multi-national body, any
subdivision, agency, commission or authority thereof, or any quasi-governmental
or private body exercising any regulatory authority thereunder and any
corporation, partnership or other entity directly or indirectly owned by or
subject to the control of any of the foregoing.
"INTERACTIVE SERVICES" has the meaning given in the Certificate of
Incorporation.
"INTERNET PORTAL SERVICES" has the meaning given in the Certificate of
Incorporation.
"LAUNCH" shall mean the first commercial availability of an Interactive
Service to potential Subscribers in the Territory or a country in the Territory,
as applicable.
"LOCALIZED" or "LOCALIZATION" shall mean (a) the translation of an
Interactive Service into the language(s) primarily used in a particular country;
and (b) the localization of Content and/or Communication Services, as the case
may be, available through such Interactive Service that is specific to such
country.
"MAXIMUM DISPROPORTIONATE DILUTION" has the meaning given in section
5.7(b).
"NON-ACCESS SERVICE" has the meaning given in Section 6.2(a).
"NOTE CONVERSION SHARES" has the meaning given in the preamble.
"NOTES" shall mean any of the 11% Senior Convertible Notes of the
Company issued under the Note Purchase Agreement (the "Initial Notes") and any
11% Senior Convertible Notes of the Company issued as interest on the Initial
Notes or other 11% Senior Convertible Notes.
"NOTE PURCHASE AGREEMENT" has the meaning given in the preamble.
"ODC" has the meaning given in the preamble.
"ODC BUSINESS UNIT" has the meaning given in Section 5.2.
"ODC DIRECTORS" shall mean, collectively, the Class C Directors of the
Company (as such term is defined in the Certificate of Incorporation).
"OPERATING ENTITY" has the meaning given in the Certificate of
Incorporation.
"ORIGINAL AGREEMENT" has the meaning set forth in the recitals above.
"PARENT ENTITY" shall mean each of AOLTW, AOL and, individually and
collectively, Riverview Media Corp., a British Virgin Islands corporation, and
Aspen and Atlantis, for so long as each of Aspen and Atlantis is directly or
indirectly wholly owned by the Xxxxxxxx Family Members, and any Permitted
7
Transferee(s) for so long as such Permitted Transferee(s) are directly or
indirectly wholly owned by, or is a or are, Xxxxxxxx Family Members.
"PARTY" shall mean each of AOL, ODC and the Company, and each other
Person who becomes a party to this Agreement in accordance with the provisions
hereof, and, for purposes of Articles I, III, V (but not Section 5.7 thereof),
VI, VIII, IX and XI and Section 10.2 hereof, AOLTW and any AOLTW Permitted
Assignee who becomes a party hereto.
"PERMITTED TRANSFEREE" shall mean AOL, ODC, each of their Wholly Owned
Affiliates, Employees of AOL and ODC, and the Xxxxxxxx Family Members.
"PC ACCESS SERVICES" has the meaning given in the Certificate of
Incorporation.
"PERMANENT SUBSCRIBER" shall mean, as of any date and with respect to
any Access Service, a Subscriber that has used the applicable Access Service
during the longer of (i) the ninety (90)-day period preceding such date and (ii)
the period preceding such date consisting of sixty (60) days plus the duration
of any free trial period involving such service to which such person is
entitled. Notwithstanding the foregoing, if one or more Access Services is
bundled with one or more other Access Services, a Subscriber shall be deemed to
be a Permanent Subscriber if the foregoing test has been met with respect to at
least one of such bundled Access Services.
"PERSON" shall mean an individual, sole proprietorship, corporation,
partnership, limited liability company, joint venture, trust, unincorporated
organization, mutual company, joint stock company, estate, union, employee
organization, bank, trust company, land trust, business trust or other
organization, whether or not a legal entity, or a Governmental Authority.
"PREFERRED STOCK" means any of the Company's preferred stock, including
(i) preferred stock designated by the Company from time to time under its
certificate of incorporation and (ii) the Series B Preferred Stock, Series C
Preferred Stock and Series F Redeemable Preferred Stock, par value $.01 per
share, of the Company.
"PRIME RATE" shall mean, for any date, the rate of interest per annum
publicly announced from time to time as the prime rate in effect as of such date
as reported in the "Money Rates" column of the Eastern Edition of THE WALL
STREET JOURNAL or other comparable source as agreed to by the Parties if THE
WALL STREET JOURNAL is not then publishing such figures. Each change in the
Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.
"PUBLIC SALE" shall mean a sale of securities pursuant to an offering
registered under the Securities Act or in a transaction pursuant to Rule 144 of
the Securities Act.
"PURCHASE NOTICE" has the meaning given in Section 5.7(b).
"REGISTRATION RIGHTS AGREEMENT" has the meaning given in Section 6.1.
8
"RESTRICTED ACTIVITIES" has the meaning given in Section 4.1(a).
"RESTRICTED TRANSFEREE" shall mean any Person that would cause a
Stockholder to be in violation of the non-competition provisions of Article IV
hereof (assuming, for the purpose of this definition only, that AOLTW and any
AOLTW Permitted Assignee were subject to Article IV) if such person became and
remained a Special Affiliate of such Stockholder and shall include, without
limitation, each of Terra Networks, Star Media, Universo Online, XX.xxx, El
Sitio/O Site, Telmex/Prodigy, Ciudad Internet/Clarin, Microsoft or any of their
respective Affiliates.
"RSL-LA" shall mean RSL Communications, Latin America, Ltd., an
international business company organized under the laws of the British Virgin
Islands, and its successors in interest.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder, as amended.
"SERIES B PREFERRED STOCK" means the Series B Redeemable Convertible
Preferred Stock, par value $.01 per share, of the Company.
"SERIES C PREFERRED STOCK" means the Series C Redeemable Convertible
Preferred Stock, par value $.01 per share, of the Company.
"SERIES F PREFERRED STOCK" means the Series F Redeemable Convertible
Preferred Stock, par value $.01 per share, of the Company.
"SIGNIFICANT COMPETITOR" with respect to Access Services shall mean any
Person (a) having Access Service Permanent Subscribers in those countries within
the Territory in which the Company provides Access Services equal to or greater
than twenty-five percent (25%) of the Access Service Permanent Subscribers of
the Company in the Territory, provided that such Person has at least 225,000 PC
Access Service Permanent Subscribers in the Territory, or (b) having Access
Service Permanent Subscribers in Brazil equal to or greater than twenty-five
percent (25%) of the Access Service Permanent Subscribers of the Company in
Brazil, provided that such Person has at least 75,000 PC Access Service
Permanent Subscribers in Brazil.
"SPECIAL AFFILIATE" has the meaning given in Section 4.1(a).
"SPECIAL COMMITTEE" has the meaning given in the Certificate of
Incorporation.
"STOCK PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement,
dated as of March 30, 2001, by and among the Company and the other parties named
therein.
"STOCKHOLDER" has the meaning set forth in the preamble.
"STRATEGIC PARTNER" shall mean any Person who acquires 25% or more of
the equity of the Company and who provides a strategic benefit to the Company in
the form of a contractual relationship or contribution of material, in-kind
9
assets but shall not include AOLTW or any other holder of the Notes or Note
Conversion Shares obtained upon conversion of the Notes by virtue of its
acquisition of such Notes or Note Conversion Shares.
"SUBSCRIBER" shall mean, as of any date of determination and with
respect to any Interactive Service, any Person who has opened an account with or
otherwise registered as a user of such Interactive Service.
"SUBSIDIARY" of any Person means any corporation, association,
partnership, joint venture, limited liability company or other business entity
of which more than 50% of the total voting power of shares of capital stock or
other interests (including partnership and joint venture interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by, or the managing member, general partner or other
solely controlling affiliate of such corporation, association, partnership,
joint venture, limited liability company or other business entity is, (i) such
Person, (ii) such Person and one or more Subsidiaries of such Person or (iii)
one or more Subsidiaries of such Person.
"TERM" has the meaning given in Section 9.1.
"TERRITORY" has the meaning given in the Certificate of Incorporation.
"TRADITIONAL MEDIA SERVICES" shall mean the delivery of movies,
television shows, sporting events and other forms of traditional entertainment
products intended to be viewed or experienced in uninterrupted fashion (i.e.,
non-interactive) from beginning to end over ISDN, cable, satellite, fiber optics
or other form of broadcast media.
"TRANSFER" shall mean, whether directly or indirectly by merger,
operation of law or otherwise, any sale, assignment, conveyance, transfer,
donation or any other means to dispose of, or pledge, hypothecate or otherwise
encumber in any manner whatsoever, or permit or suffer any Encumbrance.
"TV ACCESS SERVICES" has the meaning given in the Certificate of
Incorporation.
"VOTING STOCK" shall mean securities having the right to vote generally
in any election of Directors of the Company (other than solely by reason of the
occurrence of an event); provided that none of the Note Conversion Shares
including any shares of Series B Preferred Stock or Series F Preferred Stock,
Class B Common Stock or Class A Common Stock received by AOLTW or any AOLTW
Permitted Assignee shall be considered "Voting Stock" for the purposes of
Section 5.7.
"WARRANT" shall mean that certain warrant, dated August 7, 2000, issued
by the Company to AOL.
"WHOLLY OWNED AFFILIATE" shall mean with respect to any Person any
other Person which is directly or indirectly wholly owned by such Person,
directly or indirectly wholly owns such Person or is directly or indirectly
10
wholly owned by the same Person as such Person, with such ownership to mean
possession of both 100% of the equity interest and 100% of the voting interest,
except for directors' qualifying shares, if any. Any Person that is directly or
indirectly wholly-owned by the Xxxxxxxx Family Members shall be deemed a Wholly
Owned Affiliate of ODC, and any Person that is directly or indirectly wholly
owned by AOLTW shall be deemed a Wholly Owned Affiliate of AOL.
"WIRELESS ACCESS SERVICES" has the meaning given in the Certificate of
Incorporation.
"WORSE OFFER" has the meaning given in Section 5.5.
Section 1.2 USAGE GENERALLY; INTERPRETATION. Whenever the context may
require, any pronoun includes the corresponding masculine, feminine and neuter
forms. All references herein to Articles and Sections shall be deemed to be
references to Articles and Sections of this Agreement unless the context
otherwise requires. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise expressly provided herein, any agreement, instrument
or statute defined or referred to herein or in any agreement or instrument that
is referred to herein means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. All references to Dollars or use of the "$"
symbol shall mean United States Dollars.
ARTICLE II
PURPOSE
Section 2.1 PURPOSE. The Stockholders have entered into this Agreement
to provide for the manner of dealing in their capacities as stockholders with
certain matters involving the management, conduct and operation of the Company,
including without limitation:
(a) To ensure that the Company's sole line of business shall
be to provide Interactive Services within the Territory (the
"BUSINESS"); provided, however, that unless and until AOL and ODC shall
otherwise agree in accordance with the provisions hereof and the
Certificate of Incorporation, the Business of the Company shall be
limited to providing (i) PC Access Services, AOL-branded TV Access
Services, AOL-branded Wireless Access Services, and Internet Portal
Services in the Territory; and (ii) Content, management and related
activities on the AOL online service or any other AOL-branded property,
including creating, maintaining and managing for AOL, English and
Spanish-language versions of a mini channel directed at the Hispanic
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audience in the United States, and taking all actions necessary or
desirable to carry out and perform such activities and any other
activities contemplated, either explicitly or implicitly, thereby,
including executing, delivering and performing any agreements,
documents and instruments entered into in connection therewith;
provided, further, however, that the Company shall not Launch any TV
Access Services, Wireless Access Services or Internet Portal Services
in any country within the Territory unless and until such Launch shall
have been approved by the Special Committee in accordance with the
provisions of the Certificate of Incorporation.
(b) To ensure that the Company conducts the Business under the
brand names "AOL" and/or "America Online" pursuant to the terms and
conditions of the AOL License and CompuServe pursuant to the terms and
conditions of the CIS License.
Section 2.2 NO PARTNERSHIP.
(a) Nothing in this Agreement shall be construed as creating
between or among any of the Parties a partnership or joint venture.
(b) Except as expressly provided herein or as approved in
writing by the represented Party, no Party shall have the right to
represent the other Party in negotiations with third parties. No Party
shall have the right to enter into an agreement with a third party for
the account of the other Party or for their joint account, except as
expressly provided herein or as may be hereafter approved, or agreed
to, by the Parties in writing.
Section 2.3 VOTING. To effectuate the intent of Section 2.1 and subject
to any agreement reached by the Stockholders in connection with the admission of
a third-party equity participant in the Company as provided in Section 5.7, the
Stockholders shall vote their shares of Voting Stock in accordance with the
provisions of Article III hereof.
ARTICLE III
VOTING PROVISIONS
Section 3.1 VOTING AGREEMENTS. The Stockholders agree to vote all
shares of Voting Stock held by them or their respective Affiliates so as to
cause the following:
(a) The election of each Class A Director (as defined in the
Certificate of Incorporation) proposed for election by the Special
Committee; and
(b) The approval of any expansion of the Business in which the
Company shall be permitted to engage as and when (i) the Company
obtains the right to engage in any such expanded Business in accordance
with the provisions of Section 2.9 of the AOL License and (ii) the
Company shall elect to pursue such expanded business in accordance with
the provisions of the AOL License and the Certificate of Incorporation,
including, without limitation, voting to approve any amendment of the
Certificate of Incorporation as and to the extent required to effect
any such expansion of the Business.
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ARTICLE IV
NON-COMPETITION
Section 4.1 NON-COMPETITION WITH THE COMPANY
(a)(i) Subject to the cure provisions of Section 4.2, from
August 7, 2000 until December 15, 2003 and thereafter for so long as
each of AOL and ODC, together with their respective Subsidiaries and,
with respect to ODC only, Xxxxxxxx Family Members, holds shares of
Voting Stock equal to at least twenty percent (20%) of the issued and
outstanding shares of Voting Stock (as adjusted for each of AOL and ODC
to negate the effect of any of the following that occur after August 7,
2000: (1) the admission of third parties admitted as equity
participants as contemplated in Section 5.7 hereof, (2) the issuance of
any Company Securities by the Company, including pursuant to the Stock
Purchase Agreement, the Note Purchase Agreement or the Notes, or (3)
the issuance of any Company Securities upon exercise of the Warrant) no
Stockholder (nor any third party admitted as a Stockholder of the
Company in accordance with this Agreement) nor any Special Affiliate
thereof shall, directly or indirectly, independently of the Company or
the other Stockholders, through a Special Affiliate or otherwise,
provide, acquire or hold any interest in:
(A) a Person providing, or otherwise participating in
the provision within the Territory of, a PC Access Service
that is a Significant Competitor or Persons providing, or
otherwise participating in the provision within the Territory
of, PC Access Services that taken together are Aggregated
Significant Competitors; or,
(B) in the case of AOL and its Special Affiliates, a
Spanish or Portuguese language AOL-branded or
CompuServe-branded Internet Portal Service targeted at end
users residing in the Territory (except that AOL shall have
the right to offer such service in one or more countries
within the Territory directly or together with a third party
pursuant to and in compliance with the provisions of Section
2.9 of the AOL License).
(ii) Subject to the cure provisions of Section 4.2, from
August 7, 2000 until August 7, 2005 and thereafter for so long as each
of AOL and ODC, together with their respective Subsidiaries and, with
respect to ODC only, Xxxxxxxx Family Members, holds shares of Voting
Stock equal to at least twenty percent (20%) of the issued and
outstanding shares of Voting Stock (as adjusted to negate the effect of
(1) the admission of third parties admitted as equity participants, the
result of which is that ODC suffers a disproportionate dilution as
contemplated in Section 5.7(b) hereof or (2) the issuance of any
Company Securities by the Company upon the exercise of the Warrant and
assuming that each of ODC and AOL each hold one-half of all the Note
Conversion Shares that are actually held by any of AOL, ODC and any of
their Affiliates, regardless of the actual ownership by them of such
Note Conversion Shares), neither AOL nor any Special Affiliate thereof
shall, directly or indirectly, independently of the Company or the
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other Stockholders, through a Special Affiliate or otherwise, provide,
acquire or hold any interest in a Person providing in the Territory, or
otherwise participating in the provision within the Territory of, an
AOL-branded TV Access Service or an AOL-branded Wireless Access
Service.
(iii) Subject to the cure provisions of Section 4.2, from
August 7, 2000 until August 7, 2005 neither ODC nor any Special
Affiliate thereof shall, directly or indirectly, independently of the
Company or the other Stockholders, through a Special Affiliate or
otherwise, provide, acquire or hold any interest in a Person providing
in the Territory, or otherwise participating in the provision within
the Territory of, TV Access Services or Wireless Access Services that
is a Significant Competitor or Persons providing or otherwise
participating in the provision within the Territory of TV Access
Services or Wireless Access Services that taken together are Aggregated
Significant Competitors.
For purposes of this Section 4.1(a), "SPECIAL AFFILIATE" shall
mean any entity in which AOL, ODC or the Xxxxxxxx Family Members hold a
direct and/or indirect ownership interest of at least thirty-five
percent (35%), or, in the case of RSL-LA or GLA, in which ODC or the
Xxxxxxxx Family Members hold a direct and/or indirect ownership
interest of greater than fifty percent (50%), excluding, for the
avoidance of doubt, AOLTW and any entity in which AOLTW has an
ownership interest but AOL does not have an ownership interest of at
least thirty-five percent (35%). For the purposes of this Section
4.1(a), "ACCESS SERVICES", as it relates to the definition of PC Access
Services, TV Access Services and Wireless Access Services, shall
include what would otherwise be a non-Access Service if any such
services are bundled with a third-party Access Service in a joint
venture, profit sharing, joint marketing or like arrangement, whereby:
(x) the non-Access Service serves as the default homepage for the
Access Service, (y) the non-Access Service and Access Service are
promoted or marketed as the same service or under the same brand, or
(z) consumers otherwise may reasonably conclude that such bundled
services are one and the same. For the avoidance of doubt, a link on
the homepage of a third-party Access Service to a non-Access Service
and/or the promotion of the non-Access Service as one of the services
available to the end users of the Access Service shall not render the
non-Access Service(s) an "Access Service" for purposes of this Section
4.1(a). (All prohibited activities under this Section 4.1(a) shall be
collectively referred to as "RESTRICTED ACTIVITIES".) For the avoidance
of doubt, (i) with respect to PC Access Services, TV Access Services
and Wireless Access Services, a Stockholder shall not be deemed to be
engaging in a Restricted Activity, regardless of whether the applicable
Person is a Significant Competitor or together with other Persons is an
Aggregated Significant Competitor, unless the Stockholder has a direct
and/or indirect ownership interest in the applicable Person or Persons
of at least thirty five percent (35%) and (ii) ODC shall not be deemed
to be engaging in a Restricted Activity with respect to GLA and/or
RSL-LA, regardless of whether GLA or RSL-LA is a Significant Competitor
or taken together are Aggregated Significant Competitors, unless ODC or
the Xxxxxxxx Family Members have a direct and/or indirect ownership
interest in GLA and/or RSL-LA, as applicable, of greater than fifty
percent (50%).
(b) Notwithstanding paragraph (a), Restricted Activities shall
exclude:
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(i) Traditional Media Services;
(ii) IP (i.e., Internet protocol) telephony services;
and
(iii) AOL's GlobalNet(TM)international roaming
communications network services.
(c) For the avoidance of doubt and subject to the definition
of Access Services in Section 4.1(a) above as it relates to PC Access
Services, TV Access Services and Wireless Access Services, AOL,
directly or together with a third party, shall have the right to offer
in the Territory:
(i) Spanish or Portuguese language AOL-branded and
CompuServe-branded online or Internet services that are not
Access Services to the extent provided in Section 2.9 of the
AOL License; and
(ii) Non-AOL-branded and non-CompuServe-branded
Access Services or other services that are not PC Access
Services.
(d) For the avoidance of doubt, notwithstanding the
termination or non-applicability of the non-competition provisions of
Section 4.1(a), AOL shall have no right to engage in PC Access
Services, TV Access Services or Wireless Access Services or Restricted
Activities in the Territory using the AOL Marks or CIS Marks:
(i) except to the extent expressly provided in this
Section 4, the AOL License or the CIS License, or
(ii) unless the AOL License or CIS License terminates
or is amended to allow such use of the AOL Marks or CIS Marks
in accordance with the express terms of the AOL License or CIS
License.
Section 4.2 REPURCHASE UPON BREACH.
(a) Subject to the other provisions of this Section 4.2, if a
Stockholder and/or a Special Affiliate thereof violates the
prohibitions of Section 4.1(a)(i) or (iii) and, if applicable, does not
remedy such violation as provided in Sections 4.2(c) and (d), and such
Stockholder and/or Special Affiliate fails to cure such violation and,
if applicable, fails to remedy within thirty (30) Business days of
receiving written notice from AOL, if Aspen and/or Atlantis is the
violating party, or Aspen or Atlantis, if AOL is the violating party,
then, in addition to other remedies available herein or under law or
equity, if Aspen and/or Atlantis or one of its or their Special
Affiliates is the breaching Person, the Company shall have the right to
purchase all, but not less than all, of ODC's shares of Voting Stock in
the Company (collectively, "ODC'S HOLDINGS") at their Fair Market
15
Value, less, to the extent such damages are not reflected in the Fair
Market Value, all damages arising as a result of the breach, such
purchase to be effected in accordance with the procedures set forth
herein and in Sections 5.3(d) and 5.4 below. If the Company elects not
to purchase ODC's Holdings upon any breach by ODC or one of its Special
Affiliates hereunder, then AOL shall have the right to purchase all,
but not less than all, of ODC's Holdings on the same terms. If AOL or
one of its Special Affiliates is the breaching Person, then ODC shall
have the right to require AOL to purchase all, but not less than all,
of ODC's Holdings at their Fair Market Value plus, to the extent such
damages are reflected in the Fair Market Value, all damages arising as
a result of the breach, such purchase to be effected in accordance with
the procedures set forth herein and in Sections 5.3(d) and 5.4 below.
The Company or AOL, as applicable, shall purchase such ODC Holdings in
cash, provided that, (i) if the Company has elected to purchase ODC's
Holdings, the Company may effect such purchase by delivery of its
promissory note, in the full amount of the purchase price therefor,
payable over three years with interest at the Default Rate, compounded
annually, and (ii) if AOL is the purchasing party, then at the option
of the non-breaching party, AOL shall purchase ODC's Holdings in cash
or in freely tradable shares of AOLTW common stock (the "AOLTW STOCK")
in installments over a three (3)-year period, with interest at the
Default Rate compounded annually (the "INSTALLMENT PAYMENTS"), subject
to the Liquidity Requirements as set forth in paragraph (f) below. If
Installment Payments are chosen, or if the Company elects to effect its
purchase of ODC's Holdings by delivery of its promissory note, then the
purchase price shall be paid in equal quarterly installments of
principal and interest over the applicable period, and evidenced by a
promissory note in form and substance reasonably satisfactory to ODC.
At ODC's election the note or Installment Payments shall be secured by
ODC's Holdings being purchased. If any third party admitted as a
stockholder of the Company as contemplated in Section 5.7 violates the
prohibitions contained in Section 4.1(a) and does not remedy such
violation as provided in Sections 4.2(c) or (d), then, in addition to
other remedies available herein or under law or equity, the Company
shall have the right to purchase all, but not less than all, of such
third party's shares of Voting Stock in the Company at their Fair
Market Value, less, to the extent such damages are not reflected in the
Fair Market Value, all damages arising as a result of the breach, such
purchase to be effected in accordance with the procedures set forth
herein and in Sections 5.3(d) and 5.4 below. If the Company fails to
exercise such right, then AOL and ODC shall have the right to purchase
all or any part of such third party's shares of Voting Stock in the
Company at their Fair Market Value, less to the extent such damages are
not reflected in the Fair Market Value, all damages arising as a result
of the breach. AOL and ODC shall each be entitled to purchase a portion
of such third party's shares in proportion to the shares of Voting
Stock originally sold by AOL and/or ODC to such third party equity
participant, if any, or if no such shares were originally sold by AOL
or ODC, in proportion to their then respective percentage ownership
interests in the Voting Stock. If either AOL or ODC chooses not to so
purchase any part of a third party's shares that it is permitted to buy
under this Section 4.2, then the other may, at its option, purchase all
of the remainder of such third party's shares.
(b) If, after the Effective Date, a Stockholder and/or any of
its Special Affiliates (the "ACQUIRING PARTY") intends to acquire an
interest in a Person or Persons (which as a result of such acquisition
would be a Special Affiliate(s)) that, directly or indirectly, as part
of its or their activities would cause a Stockholder and/or any of its
Special Affiliates to be engaged in Restricted Activities, then the
16
Acquiring Party shall use its commercially reasonable efforts (subject
to any applicable confidentiality obligations) to notify the other
Stockholders and the Company of such intent to acquire such interest.
If a Stockholder is precluded from providing the complete notice
required hereunder due to a conflicting confidentiality obligation, the
Stockholder must, at a minimum, notify the other Stockholders and the
Company that a conflicting confidentiality obligation is preventing it
from full compliance with this Section 4.2(b).
(c) If, after the Effective Date, the Acquiring Party acquires
an interest in a Person or Persons (which as a result of such
acquisition becomes a Special Affiliate(s) of the Acquiring Party)
that, directly or indirectly, engages in Restricted Activities, then
the Acquiring Party shall have the option, in its sole discretion, of
either: (y) divesting the Restricted Activities to the extent necessary
to be in compliance with Section 4.1 within one (1) year from the date
on which the Acquiring Party has acquired such an interest in
Restricted Activities, or (z) offering first to the Company and, if not
accepted by the Company, then to AOL, if either Aspen or Atlantis is
the Acquiring Party, and to ODC, if AOL is the Acquiring Party, an
opportunity to participate in the Restricted Activities or offering to
contribute that part of the Person conducting Restricted Activities to
the Company in exchange for payment by the Company of the fair market
value thereof. If the Acquiring Party makes an offer pursuant to clause
(z) above, and neither the Company nor AOL, if either Aspen or Atlantis
is the Acquiring Party, or ODC, if AOL is the Acquiring Party, agrees
to acquire such interest for any reason or the Company does not agree
to pay for the Restricted Activities, then the Acquiring Party shall
divest the Restricted Activities to the extent necessary to be in
compliance with Section 4.1 within the later of: (A) one (1) year from
the date on which the Acquiring Party has acquired such an interest in
the applicable Person(s), or (B) six (6) months after receiving written
notice rejecting the Acquiring Party's offer from both AOL, if either
Aspen or Atlantis is the Acquiring Party, and ODC, if AOL is the
Acquiring Party, and the Company, but, in any case, no later than
eighteen (18) months after the date on which the Acquiring Party has
acquired such an interest in the Person.
(d) Notwithstanding any other provision of this Agreement,
during the period that the non-competition provisions of Section 4.1(a)
are in force, if:
(i) the activities of any Stockholder or any of its
Special Affiliates result in such Stockholder and/or its
Special Affiliate(s) becoming a Significant Competitor
providing PC Access Services (or, in the case of ODC and/or
its Special Affiliates, TV Access Services or Wireless Access
Services) in the Territory, or
(ii) the activities of the Stockholder and its
Special Affiliates result in such Stockholder or Special
Affiliate together becoming an Aggregated Significant
17
Competitor providing PC Access Services (or, in the case of
ODC and/or its Special Affiliates, TV Access Services or
Wireless Access Services) in the Territory,
then the Stockholder and/or the Special Affiliate(s), as the case may
be, shall have the option, in its or their sole discretion, of either:
(y) divesting the Restricted Activity to the extent necessary to be in
compliance with Section 4.1 within one (1) year from the date on which
it becomes a Significant Competitor or an Aggregated Significant
Competitor, as the case may be, or (z) offering first to the Company
and, if not accepted by the Company, then to AOL, if either Aspen or
Atlantis is engaged in the Restricted Activity, and to ODC, if AOL is
engaged in the Restricted Activity, an opportunity to participate in
the Restricted Activities or offering to contribute that part of the
Person conducting Restricted Activities to the Company in exchange for
payment by the Company of the fair market value thereof. If the
Acquiring Party makes an offer pursuant to clause (z) above, and the
Company does not agree to pay for the Restricted Activity for any
reason or the Company or AOL or ODC, as applicable, does not agree to
acquire such interest for any reason, then the Acquiring Party shall
divest the Restricted Activity to the extent necessary to be in
compliance with Section 4.1 within one (1) year from the date on which
the applicable Person(s) became a Significant Competitor or Aggregate
Significant Competitor, as the case may be.
(e) Notwithstanding any other provision of this Agreement,
during the period that the non-competition provisions of Section
4.1(a)(i) and (iii), as applicable, are in force, any Stockholder,
either directly or through a Special Affiliate, may acquire or hold an
interest in a Person providing, or otherwise participating in the
provision of, PC Access Services, TV Access Services (except
AOL-branded TV Access Services) and Wireless Access Services (except
AOL-branded Wireless Access Services) within the Territory so long as
such Person is not a Significant Competitor and such Person, together
with the applicable Stockholder and its Special Affiliates, is not an
Aggregated Significant Competitor.
(f) The "LIQUIDITY REQUIREMENTS" shall be deemed satisfied
only if AOL provides unconditional guarantees to ODC, in form and
substance reasonably satisfactory to ODC, that provide reasonable
assurances that ODC can sell an amount of the AOLTW Stock received at a
price sufficient to provide the same amount of money to ODC on
approximately the same time schedule that ODC would have received if
AOL had chosen to make Installment Payments in cash and guarantee that
if ODC cannot do so, AOL will pay the difference to ODC. ODC
recognizes, however, that it may not "dump" or otherwise sell such
AOLTW Stock in a manner that would disrupt the market for such stock,
and accordingly, the parties shall mutually agree to a procedure and
timetable for the most rapid liquidation of such AOLTW Stock that does
not disrupt the market therefor. Notwithstanding the foregoing, if for
any reason ODC does not sell its AOLTW Stock or any portion thereof
within forty-five (45) days of receipt of such AOLTW Stock or, if
later, within the timetable agreed upon, AOL cannot and does not
guarantee that the AOLTW Stock given to ODC will be equivalent in value
to the cash Installment Payments.
18
(g) If the Company and an Acquiring Party are unable to agree
on the fair market value of the part of any Person conducting
Restricted Activities which such Acquiring Party is required to offer
to the Company pursuant to Section 4.1(c) or 4.1(d), then either party
may request an appraisal of such fair market value by delivery of such
a request in writing to the other. Such appraisal shall be conducted by
an investment banking firm of international standing with experience in
valuations of the type of business in question reasonably acceptable to
each of the Company and the Acquiring Party. If the Acquiring Party
acquired the Person that is conducting the Restricted Activities
pursuant to arm's length negotiations with an un-Affiliated party, then
the appraisal of such investment banking firm shall be limited to
determining the percentage of purchase price paid by the Acquiring
Party for such Person attributable to the Restricted Activities.
Otherwise, the investment banking firm may make such appraisal on
whatever basis it reasonably may determine. Any such appraisal shall,
absent manifest error, be binding on the Company, the Acquiring Person
and the other Stockholders for all purposes under this Section 4.1.
ARTICLE V
RESTRICTIONS ON TRANSFERS
Section 5.1 PROHIBITED TRANSFERS. Except as expressly permitted in this
Agreement, no Stockholder nor any of their respective Affiliates, including any
direct or indirect beneficial owner or ultimate parent of any such entity
(including AOLTW, AOL and ODC), shall, directly or indirectly, Transfer any of
the right, title or interest in (i) any shares of Preferred Stock or Common
Stock or (ii) any of their Affiliates which beneficially own, either directly or
indirectly, any shares of Preferred Stock or Common Stock; provided that, for
the avoidance of doubt, neither this restriction nor any other provision of this
Article V shall apply to any Transfer of Notes. Without limiting the foregoing
or any right or remedy any Party may have hereunder, each Stockholder agrees
that, in the event that at any time any Parent Entity or any Wholly Owned
Affiliate of a Parent Entity ceases to be a Parent Entity or a Wholly Owned
Affiliate of a Parent Entity (including if AOL ceases to be a Wholly Owned
Affiliate of AOLTW or if Aspen or Atlantis ceases to be a Wholly Owned Affiliate
of the Xxxxxxxx Family), then all shares of Voting Stock Transferred to or held
by such Person shall automatically be deemed to, and such Person and the
Stockholder Affiliated with such Person shall cause such shares to, immediately
convert at such time from High Vote Preferred Stock, if applicable, into that
number of shares of High Vote Common Stock into which such shares are then
convertible at the applicable conversion ratio under the Certificate of
Incorporation, and immediately convert at such time from High Vote Common Stock,
if applicable, into that number of shares of Class A Common Stock into which
such shares are then convertible at then applicable conversion ratio under the
Certificate of Incorporation; PROVIDED that no such conversion shall occur if
such Person ceases to be a Parent Entity or a Wholly Owned Affiliate of a Parent
Entity solely as a result of the bona fide pledge, hypothecation or similar
financing transaction of the equity interests of such Person so long as the
Transferring Parent Entity or Wholly Owned Affiliate of a Parent Entity
continues to have the sole and exclusive authority and right to vote the shares
subject to such pledge, hypothecation, or other financing transaction. Except
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for Transfers duly made in accordance with this Article V, no Transfer of
Preferred Stock or Common Stock by a Stockholder shall be valid as against the
Company and its stockholders and any purported transfer not so made in
accordance with Article V shall be null and void and of no force or effect as
against the Company and the other Stockholders.
Section 5.2 PERMITTED TRANSFERS.
(a) Notwithstanding anything in this Agreement to the
contrary, each Stockholder (or any permitted transferee under clauses
(i) through (iv) below) may Transfer shares of Voting Stock owned by it
and its rights under this Agreement as they relate to such transferred
Voting Stock as follows:
(i) All or part of the shares of Voting Stock owned
by it and its rights under this Agreement to any transferee
that is a Parent Entity or a Wholly Owned Affiliate of a
Parent Entity, provided that no Restricted Transferee owns or
thereafter shall own an interest in such Parent Entity, which
interest, with respect to a Parent Entity, is acquired
directly from such Parent Entity or from one of its
Affiliates;
(ii) All or part of the shares of Voting Stock owned
by it and its rights under this Agreement to any transferee
admitted to the Company as a third party equity holder
pursuant to the provisions of Section 5.7 hereof;
(iii) Up to twenty percent (20%) of the shares of
Voting Stock of such Stockholder (with Aspen and Atlantis, on
one hand, and AOLTW, any AOLTW Permitted Assignee and AOL, on
the other hand, each constituting a single Stockholder for
purposes of this subsection) to transferees that comprise of
Xxxxxxxx Family Members and/or Employees of the Stockholders
or of any Wholly Owned Affiliate of such Stockholder, provided
that (x) prior to the effective date of any such transfer, the
prospective transferees shall enter into a voting agreement,
in form and substance satisfactory to the Company and the
non-transferring Stockholder, pursuant to which the
transferring Stockholder shall retain all voting rights
attributable to the transferred shares or (y) such transfers
are of Class A Common Stock;
(iv) All of the shares of Voting Stock owned by it
and its rights and obligations as a Stockholder under this
Agreement if such Transfer is part of the Transfer to any
party acquiring all (or substantially all) of (A) the business
of AOL or (B) the ODC Business Unit. For purposes hereof, "ODC
BUSINESS UNIT" means any Person or Persons that individually
or collectively owns all of the equity interests of ODC and
its Affiliates and the Xxxxxxxx Family Members in the Company
and RSL-LA; and
(v) All or part of the shares of Voting Stock owned
by it as a result of the pledge, hypothecation or other
similar financing transaction so long as (x) the transferring
stockholder continues to have the sole and exclusive authority
and right to vote the shares subject to such pledge,
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hypothecation or other financing transaction and (y) the
financial institution or other Person that is a party to any
such pledge, hypothecation or other financing transaction (the
"FINANCING PARTY") agrees to be bound and obligated by all of
the provisions of this Agreement upon the commencement by such
Financing Party of any proceedings to sell or otherwise
foreclose on any shares of Voting Stock subject to any pledge,
hypothecation or other financing transaction permitted hereby.
In the event of any Transfer of any Company Securities other than Class
A Common Stock pursuant to Sections 5.2(a)(i) through (iv), the
transferee thereof (or subsequent transferee) shall be entitled to the
rights and privileges set forth in this Agreement and shall be bound
and obligated by the provisions of this Agreement. As a condition to
any such Transfer permitted pursuant to Sections 5.2(a)(i) through
(iv), each transferee that will own shares of Voting Stock (other than
shares of Class A Common Stock) shall, prior to such Transfer, agree in
writing to be bound by all of the provisions of this Agreement and no
such transferee shall be permitted to make any Transfer which the
original transferor was not permitted to make. In connection with any
such Transfer of any Company Securities other than Class A Common Stock
pursuant to Sections 5.2(a)(i) through (iv), the transferee shall
execute and deliver to the non-transferring Stockholder (with Aspen and
Atlantis constituting a single Stockholder for purposes of this
provision) and the Company such documents as may reasonably be
requested by the non-transferring Stockholder and/or the Company to
evidence the same.
(b) Any Stockholder may Transfer some or all of the shares of
Voting Stock owned by it to another Stockholder other than an AOLTW
Permitted Assignee (it being understood that for purposes hereof,
Atlantis may Transfer some or all of the shares of Voting Stock owned
by it to Aspen and Aspen may Transfer some or all of the shares of
Voting Stock owned by it to Atlantis; and AOLTW may Transfer some or
all of the shares of Voting Stock owned by it to AOL and AOL may
Transfer some or all of the shares of Voting Stock owned by it to
AOLTW).
(c) Any Stockholder may Transfer some or all of the Class A
Common Stock owned by it in a Public Sale.
Section 5.3 RIGHTS OF FIRST REFUSAL.
(a) Each Stockholder agrees with the other Stockholders that,
except with respect to Transfers permitted pursuant to Section 5.2, if
a Stockholder or any of its Wholly-Owned Affiliates or Parent Entities
wants to Transfer any shares of Voting Stock to any other Person (other
than (x) Transfers of Voting Stock to a Restricted Transferee or (y)
Transfers of Voting Stock (except Class A Common Stock) to an Affiliate
of such Stockholder which is not a Parent Entity or a Wholly Owned
Affiliate of a Parent Entity, both of which Transfers are prohibited
hereby, and other than pursuant to a pledge, hypothecation or other
similar financing transaction in which the transferring Stockholder
continues to have the sole and exclusive authority and right to vote
the shares subject to such pledge, hypothecation or other financing
transaction) in a bona fide transaction, such Stockholder, Wholly Owned
Affiliate or Parent Entity (the "OFFEROR") shall be entitled to do so
provided that such Offeror first offers to sell such shares of Voting
Stock to the other Stockholder (with Aspen and Atlantis together with
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their Wholly Owned Affiliates and Parent Entities being such other
Stockholder if AOL, AOLTW or any AOLTW Permitted Assignee or any of
their Wholly Owned Affiliates or Parent Entities is the Offeror; and
with AOL and AOLTW together with their Wholly Owned Affiliates and
Parent Entities constituting such other Stockholder if Aspen or
Atlantis or any of their Wholly Owned Affiliates or Parent Entities is
the Offeror; such other Stockholder, the "OFFEREE") at the same price
and the same terms and conditions as the Offeror would receive from
such other Person. The Offeror shall submit to the Company and the
Offeree a written notice (the "OFFER NOTICE") stating in reasonable
detail such price or other consideration and such terms and conditions
and identifying the Person and all Persons who beneficially own more
than five percent (5%) of such Person, proposing to purchase the shares
of Voting Stock. The Offeree shall have a period of thirty (30) days
after the receipt of the Offer Notice in which to accept or reject such
offer. If the Offeree elects to accept such offer, which acceptance
must be for all and not part of the Voting Stock offered for sale, it
shall so indicate within such thirty (30) day period by notice to the
Offeror. The notice required to be given by the Offeree shall specify a
date for the closing of the purchase which, subject to the expiration
or early termination of any waiting period required by any Governmental
Authority and the receipt of any required approvals of any Governmental
Authority, shall not be more than thirty (30) days after the date of
the giving of such notice.
(b) If the Offeree does not exercise its right to purchase all
of the shares of Voting Stock offered for sale pursuant to the
provisions of this Section 5.3, the Offeror of such shares of Voting
Stock shall have the right to sell to the Person identified in the
Offer Notice, subject to the provisions of this Agreement, all (but not
less than all) of such shares of Voting Stock on the same terms and
conditions including the price or other consideration specified in the
Offer Notice, free from the restrictions of Section 5.1 of this
Agreement (for purposes of such specific transaction and purchasing
Person, but not for purposes of any subsequent transaction or other
purchasing Person) in a bona fide transaction, for a period of ninety
(90) days from the date that the Offer expires hereunder, provided that
any such purchaser shall prior to such transfer, if such purchaser
shall be receiving shares of Voting Stock, other than shares of Class A
Common Stock, agree in writing to be bound by all of the provisions of
this Agreement. At the end of such ninety (90) day period, the Offeror
shall notify the Company and the Offeree in writing whether its shares
of Voting Stock have been sold in a bona fide transaction during such
period. To the extent not sold during such ninety (90) day period, all
of such shares of Voting Stock shall again become subject to all of the
restrictions and provisions of this Section 5.3.
(c) If the Offeree accepts the offer set forth in the Offer
Notice, the purchase price or other consideration per share of the
shares of Voting Stock purchased by the Offeree shall be the price or
other consideration per share offered to be paid by the prospective
transferee described in the Offer Notice, which price shall be paid in
cash and/or such other consideration, at the election of the Offeree.
22
(d) If the Offeree accepts the offer set forth in the Offer
Notice, the closing of the purchase shall take place at the principal
office of the Company or such other location as shall be mutually
agreeable to the Offeror and Offeree, and the purchase price shall be
paid at the closing by wire transfer of immediately available funds or
in such other appropriate form if for consideration other than cash. At
the closing, the Offeror shall deliver to the Offeree the certificates
evidencing the shares of Voting Stock to be transferred, duly endorsed
and in negotiable form as well as the items listed in Section 5.4.
Section 5.4 CLOSING DELIVERIES. The Offeror at a closing under this
Article V shall deliver to the Offeree the following:
(a) A duly executed stock power, "Deed of Transfer" or other
appropriate instrument conveying to the Offeree the shares of Voting
Stock being purchased by the Offeree, free and clear of any
Encumbrances, except those in this Agreement which are expressly
assumed. If less than all of the shares of Voting Stock evidenced by a
stock certificate are being purchased, the Company shall, upon receipt
of such duly endorsed stock certificate, issue to the Offeree a stock
certificate evidencing the shares being purchased and issue to the
Offeror a stock certificate evidencing the number of shares not being
purchased.
(b) A statement from the Offeror that: (i) except as set forth
therein, the Offeror has no claim against the Company in respect of the
shares of Voting Stock being transferred, including for any unpaid
dividends; and (ii) the Offeror shall perform any of its obligations
under this Agreement that shall continue to be applicable to the
Offeror after such transfer of shares or shall guarantee any such
obligations as may be assumed by the Offeree, unless such guarantee is
not then required by the other parties to this Agreement.
Section 5.5 DIRECT COMPREHENSIVE COMPETITOR. Before ODC or any of its
Affiliates may Transfer any shares of Voting Stock offered by ODC or any of such
Affiliates pursuant to this Article V to a "Direct Comprehensive Competitor" (as
defined below) of AOL, ODC shall provide AOL with commercially reasonable notice
of its intentions and the terms of the contemplated transaction. Before ODC or
any of its Affiliates may consummate any transaction with such Direct
Comprehensive Competitor, AOL shall have a right, exercisable within thirty (30)
days after written notice from ODC, to purchase such shares on the same terms as
those offered by ODC and/or its Affiliates to the Direct Comprehensive
Competitor. If AOL does not accept this opportunity to purchase ODC's and/or its
Affiliates' shares and ODC and/or its Affiliates wishes to sell such shares to
the Direct Comprehensive Competitor at a price lower than the price offered to
AOL, or on material terms which, when taken as a whole, are less favorable to
ODC and/or its Affiliates than those offered to AOL (a "WORSE OFFER"), ODC shall
23
notify AOL of its intentions and the terms of the Worse Offer. Before ODC and/or
its Affiliates may consummate any Worse Offer transaction with such Direct
Comprehensive Competitor, AOL shall have a right to purchase ODC's and its
Affiliates' shares on the same terms as such Worse Offer, exercisable within
thirty (30) days of written notice from ODC. For purposes of this Section 5.5, a
"DIRECT COMPREHENSIVE COMPETITOR" shall mean a Person or entity which owns or
controls, directly or indirectly, a multinational business that includes the
provision of comprehensive horizontal (i.e., across multiple, diverse subject
areas) Interactive Services containing Content of general interest as may be
organized under such subject areas as news, sports, and finance, including, by
way of example, [**], [**], [**], and [**].
Section 5.6 PURCHASE OF THE ODC HOLDINGS; INSTALLMENT PAYMENTS. ODC
hereby agrees that AOL and/or the Company, as applicable, may designate a
Subsidiary or a third party as the acquirer of all or any of ODC's shares of
Voting Stock it may be entitled to purchase hereunder, provided that AOL and/or
the Company, as applicable, unconditionally guarantees the required purchase
payments to ODC.
Section 5.7 THIRD-PARTY EQUITY PARTICIPANTS. AOL, ODC and the Company
shall evaluate the benefits of admitting one or more significant third-party
equity stockholders to the Company, and (except as expressly set forth in this
Agreement) any such admission of a significant third-party equity participant
shall be mutually agreed upon by AOL and ODC in accordance with this Section 5.7
and, if such admission is to be effected in whole or in part by sale of any
Company Securities by the Company, submitted for approval of the Special
Committee and the Board in accordance with the provisions of the Certificate of
Incorporation:
(a) Either AOL or ODC may identify one or more Strategic
Partners, and may enter into discussions with one or more such
Strategic Partners with a view to offering to such Strategic Partners
an opportunity to participate in the equity ownership of the Company.
Before AOL or ODC commences negotiations (e.g., making a formal
proposal regarding a significant deal point) it shall provide notice to
the other and the Company which shall have the right to participate in
any and all such negotiations. Either AOL or ODC may, however, direct
that such negotiations not commence and such third party not be
considered for an interest.
(b) DISPROPORTIONATE DILUTION; CALL OPTION.
(i) Any such admission of a Strategic Partner to the
Company shall be accomplished in such a manner that the
respective Voting Stock holdings of ODC and AOL in the Company
are diluted on a two to one (2 to 1) basis until the aggregate
number of shares of Voting Stock owned by ODC is reduced to
twenty-five percent (25%) of the aggregate number of shares of
Voting Stock then outstanding as adjusted to reflect any stock
splits, reverse stock splits, stock dividends, stock issuances
and similar capital transactions, and, thereafter the
respective Voting Stock holdings of ODC and AOL, respectively,
shall be diluted on a one and one-half to one (1.5 to 1) basis
(collectively, the "DISPROPORTIONATE DILUTION"). Strategic
Partners may be admitted at any entity level or levels (e.g.,
to the Company or any other Subsidiary) and in any manner
(e.g., by the issuance of shares by the Company and/or the
24
sale of shares by AOL and/or ODC), provided, however, that the
net effect of all transactions admitting Strategic Partners
does not dilute ODC's overall (direct or indirect, whether
through the Company or otherwise) percentage ownership of the
Voting Stock of the Company relative to AOL's percentage
ownership more than on a 2 to 1 or 1.5 to 1 basis, as
applicable ("MAXIMUM DISPROPORTIONATE DILUTION").
(ii) ODC hereby grants the Company and AOL an option
(the "CALL OPTION") to purchase from ODC, and ODC shall be
obligated to sell to the Company and AOL, as applicable, such
number of shares of Voting Stock then owned by ODC as may be
required to effect the Disproportionate Dilution. The Company
and/or AOL, as applicable, may exercise the Call Option by
written notice (the "PURCHASE NOTICE") to ODC, which Purchase
Notice must be delivered to ODC within thirty (30) days after
the admission of a Strategic Partner to the Company. The price
at which the Call Option shall be exercised shall be
determined pursuant to subsection (A) below, and the date and
place of transfer shall be determined pursuant to subsection
(B) below.
(A) PRICE DETERMINATION. The purchase price
per share at which the Call Option shall be exercised
shall be equal to the Fair Market Value thereof as of
the date of delivery of the Purchase Notice.
(B) DATE AND PLACE OF TRANSFER. The purchase
and sale of the shares owned by ODC to the Company
and/or AOL, as applicable, pursuant to subsection
(b)(ii) above shall take place at the principal place
of business of the Company (unless otherwise agreed
by AOL and ODC), on a date specified by the Company
and/or AOL, as applicable, but no later than thirty
(30) days after the Purchase Notice has been sent
pursuant to subsection (b)(ii), unless otherwise
agreed by AOL and ODC (the "CALL OPTION CLOSING"). At
the Call Option Closing, the Company and/or AOL, as
applicable, shall tender and ODC shall accept payment
of the purchase price by certified or bank check or
wire transfer, and ODC shall deliver to the Company
and/or AOL, as applicable, in exchange therefor the
certificate(s) for the shares of Voting Stock being
acquired pursuant to the Purchase Notice, accompanied
by duly executed instruments of transfer and the
other documents required to be delivered pursuant to
Section 5.4 hereof.
(c) If for any reason the admission of a Strategic Partner
results in an aggregate dilution of ODC's relative percentage ownership
in the Company greater than the Maximum Disproportionate Dilution, the
Stockholders and the Company shall take all actions necessary to ensure
that such excessive dilution is eliminated by an adjustment in the form
of: (i) the sale or transfer from AOL and/or the Company to ODC of
shares of Voting Stock in the Company, and/or (ii) any other measure
reasonably agreed upon by the Stockholders, such that after such
adjustment the resulting dilution of ODC's ownership interest does not
exceed the Maximum Disproportionate Dilution.
(d) If a Strategic Partner is admitted to the Company, and the
manner of effecting the disproportionate dilution is other than
25
pursuant to the Call Option, ODC shall be compensated for any sale or
other dilution of ODC's Voting Stock ownership directly or indirectly
in an amount equal to the Fair Market Value thereof.
(e) Any admission of a Non-Strategic Partner to the Company
shall dilute AOL and ODC pro rata.
(f) The method of admitting Strategic Partners and
Non-Strategic Partners (e.g., whether to effect such admission by the
issuance of shares to such new stockholder and/or the sale of shares by
AOL and/or ODC), shall be determined by the Stockholders and, if such
method involves the issuance of any Company Securities or other equity
securities of the Company, submitted to the Special Committee and the
Board for their approval in accordance with the Certificate of
Incorporation.
(g) If the shares of Voting Stock held by AOL and/or ODC shall
have been reduced by reason of a sale of a portion of its or their
shares of Voting Stock to a Strategic Partner or Non-Strategic Partner
as contemplated in this Section 5.7, and such Strategic Partner or
Non-Strategic Partner thereafter wants to, or is required to, sell all
or a portion of such shares of Voting Stock, AOL and ODC shall
cooperate with each other and such Strategic Partner or Non-Strategic
Partner, as applicable, so that each of AOL and ODC shall have the
right and opportunity to repurchase any such shares of Voting Stock in
proportion to the shares of Voting Stock originally sold by AOL and/or
ODC to such Strategic Partner or Non-Strategic Partner. If AOL or ODC
chooses not to purchase any part of a third-party's shares of Voting
Stock which it is permitted to buy under this Section 5.7(g), then the
other or, if it elects not to purchase all of such shares, the Company,
may purchase at its option all of the remainder of such third-party's
shares of Voting Stock.
(h) For the avoidance of doubt, AOLTW or any other holder of
the Notes shall not be deemed to be a third party equity stockholder or
Strategic Partner under this Section 5.7 by virtue of its acquisition
of Notes or Note Conversion Shares upon conversion of the Notes.
ARTICLE VI
REGISTRATION RIGHTS
Section 6.1 REGISTRATION RIGHTS. The shares of Class A Common Stock
that are issued to the Stockholders by the Company upon conversion of Class B
Common Stock or Class C Common Stock or otherwise (including, without
limitation, upon conversion of any Series B Preferred Stock received by AOL upon
exercise by AOL of the Warrant in whole or in part or received by AOLTW or any
AOLTW Permitted Assignee upon conversion of any Note Conversion Shares or Notes)
shall have the registration rights set forth in the Second Amended and Restated
Registration Rights Agreement, dated as of March 8, 2002, by and among AOL,
AOLTW, and ODC (the "REGISTRATION RIGHTS AGREEMENT"). The parties agree that,
subject to the advance notice requirements set forth in the Certificate of
Incorporation and the Certificate of Designation any such conversion, exercise
26
or exchange shall, except as otherwise expressly set forth herein or in the
Certificate of Incorporation, or Certificate of Designation occur, at the option
of the exchanging or converting Stockholder, contemporaneously with the
registration of the Class A Common Stock to be received, or the consummation of
the sale of such Class A Common Stock pursuant to such registration, or at such
other time as such Stockholder shall request in writing.
ARTICLE VII
ODC NON-MONETARY OBLIGATIONS
Section 7.1 ODC NON-MONETARY CONTRIBUTIONS. As an integral part of
ODC's contribution to the Company, ODC or its Affiliates shall provide to the
Company, for the benefit of the Company and its Subsidiaries, the non-monetary
contributions and services set forth on Schedule 7.1 hereof relating to such
Non-Monetary Contributions as may be in effect from time to time. Upon the
termination of this Agreement, the rights and obligations arising under any and
all such side agreements in effect at the time of termination shall continue in
full force and effect until the expiration or termination of such side
agreements in accordance with their terms and neither the Company, nor AOL, nor
AOLTW nor ODC shall be obligated to enter into any additional side agreements
following the date of termination of this Agreement.
ARTICLE VIII
OTHER AGREEMENTS; LEGENDS
Section 8.1 LEGENDS. As long as this Agreement shall remain in full
force and effect, there shall be inscribed upon each certificate of Voting Stock
held by a Stockholder the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, ASSIGNED, HYPOTHECATED OR IN ANY WAY DISPOSED
OF OR ENCUMBERED EXCEPT PURSUANT TO THE TERMS AND CONDITIONS OF A
CERTAIN STOCKHOLDERS' AGREEMENT, DATED AS OF AUGUST 7, 2000, AND ANY
AMENDMENTS THERETO, BETWEEN AMERICA ONLINE LATIN AMERICA, INC.,
AMERICA ONLINE, INC. AND RIVERVIEW MEDIA CORP., A COPY OF WHICH IS ON
FILE AT THE OFFICE OF THE COMPANY. THE HOLDER AND THE OWNER HEREOF IS
SUBJECT TO THE OBLIGATIONS THEREIN SET FORTH AND CONTAINED AND ANY
SUCH DISPOSITION OR ENCUMBRANCE IN VIOLATION OF SAID STOCKHOLDERS'
AGREEMENT SHALL BE NULL AND VOID.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY SECURITIES REGULATORY AUTHORITY OF ANY
27
STATE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, ENCUMBERED,
TRANSFERRED, GRANTED AN OPTION WITH RESPECT TO OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR DELIVERY TO THE COMPANY OF
AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT.
Notwithstanding the foregoing, for so long as this Agreement shall
remain in full force and effect, there shall be inscribed on each certificate of
Voting Stock issued to a Stockholder after March 8, 2002 the following legend in
lieu of the first legend required pursuant to the foregoing:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, ASSIGNED, HYPOTHECATED OR IN ANY WAY DISPOSED
OF OR ENCUMBERED EXCEPT PURSUANT TO THE TERMS AND CONDITIONS OF A
CERTAIN SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT, DATED AS
OF MARCH 8, 2002, AND ANY AMENDMENTS THERETO, BETWEEN AMERICA ONLINE
LATIN AMERICA, INC., AMERICA ONLINE, INC., AOL TIME WARNER INC.,
ASPEN INVESTMENTS LLC, AND ATLANTIS INVESTMENTS LLC, A COPY OF WHICH
IS ON FILE AT THE OFFICE OF THE COMPANY. THE HOLDER AND THE OWNER
HEREOF IS SUBJECT TO THE OBLIGATIONS THEREIN SET FORTH AND CONTAINED
AND ANY SUCH DISPOSITION OR ENCUMBRANCE IN VIOLATION OF SAID
STOCKHOLDERS' AGREEMENT SHALL BE NULL AND VOID.
Section 8.2 LIMITATION OF LIABILITY. IN NO EVENT SHALL ANY PARTY BE
LIABLE TO ANOTHER (OR TO ANY AFFILIATE OF ANOTHER) FOR ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY KIND OR NATURE WHATSOEVER (INCLUDING
WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS, PROFITS OR OTHER PECUNIARY
LOSS) ARISING OUT OF THIS AGREEMENT, WHETHER SOUNDING IN TORT, CONTRACT OR ANY
OTHER FORM OF ACTION, EVEN IF THE PARTY AGAINST WHOM SUCH DAMAGES ARE SOUGHT HAS
BEEN ADVISED, HAD REASON TO KNOW, OR IN FACT KNEW OF THE POSSIBILITY OF SUCH
DAMAGES.
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ARTICLE IX
TERM AND TERMINATION
Section 9.1 TERM. The term of this Agreement (the "TERM") shall
commence on the Effective Date and shall terminate (i) by mutual agreement of
the Parties in writing, (ii) when the Stockholders have ceased to hold any
shares of Voting Stock in the Company, (iii) by termination pursuant to the
provisions of Section 9.2, or (iv) on June 30, 2048, whichever occurs first.
Section 9.2 TERMINATION. AOL and AOLTW, on the one hand, and ODC, on
the other hand, at their sole discretion, may terminate this Agreement by
delivering notice of termination and the basis therefor to the other and the
Company, at such time as the other ceases to hold a direct or indirect ownership
interest in Voting Stock greater than 10% percent of the number of shares of
Voting Stock at any time outstanding (or such lower percentage resulting solely
from admission of third-party equity participants pursuant to Section 5.7).
ARTICLE X
STANDSTILL PROVISIONS; INDEMNIFICATION
Section 10.1 LIMITATIONS ON STOCKHOLDERS' OWNERSHIP. Except for
purchases of Company Securities made in accordance with this Article X, each
Stockholder agrees that until December 15, 2003 it will not, nor will it permit
any of its Affiliates other than the Company to directly or indirectly, acquire,
offer or propose to any of the Company's stockholders or any third party to
acquire, solicit an offer to sell or agree to acquire, by purchase, by gift, by
joining a partnership, limited partnership, syndicate or other "group" (as such
term is used in Section 13(d)(3) of the Exchange Act), any Company Securities,
except as follows:
(a) a Stockholder may acquire Company Securities as
consideration for such Stockholder's sale of an asset, property or
right to the Company;
(b) a Stockholder may acquire Company Securities in connection
with such Stockholder's making of a tender offer or exchange offer for
not less than 100% of the shares of Company Securities then outstanding
at a price approved by the disinterested members of the Board of
Directors of the Company and based upon a fairness opinion delivered to
the Board of Directors of the Company by a nationally recognized
investment banking firm;
(c) the Stockholders shall have the right to acquire in the
aggregate shares of Class A Common Stock up to an amount equal to five
percent (5%) of the aggregate number of shares of Class A Common Stock
outstanding on the Effective Date, it being understood that for
purposes of this subsection (c) only, Aspen and Atlantis shall be
treated as one Stockholder and shall collectively be limited to acquire
in the aggregate no more than up to an amount equal to five percent
29
(5%) of the aggregate number of shares of Class A Common Stock
outstanding on the Effective Date, and any acquisition of shares of
Class A Common Stock by AOLTW shall be treated for purposes of this
subsection (c) only as if they were acquired by AOL;
(d) AOL may exercise the Warrant and AOL and the AOLTW
Permitted Assignees may acquire Notes and Note Conversion Shares;
(e) pursuant to the rights of first refusal granted pursuant
to the provisions of Section 10.1 of the Amended and Restated
Registration Rights and Stockholders Agreement, dated as of March 30,
2001, by and between the Company, Banco Itau, S.A. and the other
parties named therein; and
(f) as specifically approved by the Board.
Notwithstanding the foregoing, nothing in this Section 10.1 shall
prohibit any Stockholder or Affiliate of such Stockholder from acquiring any
Company Securities as a result of any stock dividend, stock split, combination,
reorganization, reclassification or similar event affecting the Company's
capital structure.
SECTION 10.2 INDEMNIFICATION.
(a) If, and to the extent that, the Company, any stockholder
of the Company or any other Person brings any Action against AOL,
AOLTW, any AOLTW Permitted Assignees, or ODC or any of their Affiliates
or Subsidiaries (or any of their officers, directors, agents,
shareholders, members, partners, Affiliates or Subsidiaries) seeking
any Damages or injunctive or other equitable relief based on, arising
out of or relating to any breach or alleged breach of any fiduciary or
other duty based on any action or inaction which is permitted by the
provisions of Article THIRD of the Certificate of Incorporation, or
which is otherwise taken in reliance upon the provisions of said
Article THIRD, the Company shall, to the fullest extent permitted by
law, indemnify and hold such Persons harmless from and against all
Damages arising out of or in connection with any such Action. The right
to indemnification conferred herein shall include the right to be paid
by the Company the expenses (including attorneys', accountants',
experts' and other professionals' fees, costs and expenses) incurred in
defending any such Action in advance of its final disposition
(hereinafter, an "ADVANCEMENT OF EXPENSES"); provided, however, that
if, but only if and then only to the extent, the GCL requires, an
advancement of expenses incurred by an indemnitee hereunder shall be
made only upon delivery to the Company of an undertaking (hereinafter,
an "UNDERTAKING"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal
(hereinafter, a "FINAL ADJUDICATION") that such indemnitee is not
entitled to be indemnified for such expenses under this Article THIRD
or otherwise. The rights to indemnification and to the advancement of
expenses conferred herein shall be contract rights and, as such, shall
inure to the benefit of the indemnitee's successors, assigns, heirs,
executors and administrators.
30
(b) If a claim for indemnification under this Section 10.2 is
not paid in full by the Company within sixty (60) days after a written
claim has been received by the Company, except in the case of a claim
for an advancement of expenses, in which case the applicable period
shall be twenty (20) days, the indemnitee may at any time thereafter
bring suit against the Company to recover the unpaid amount of the
claim. If successful in whole or in part in any such suit, or in a suit
brought by the Company to recover an advancement of expenses pursuant
to the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. In (i) any
suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a
right to an advancement of expenses) it shall be a defense that, and
(ii) any suit brought by the Company to recover an advancement of
expenses pursuant to the terms of an undertaking, the Company shall be
entitled to recover such expenses only upon a final adjudication that,
the indemnitee has not met the applicable standard for indemnification,
if any, set forth in the GCL. Neither the failure of the Company
(including the Board, independent legal counsel, or its stockholders)
to have made a determination prior to the commencement of such suit
that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set
forth herein or in the GCL, nor an actual determination by the Company
(including its directors, or a committee thereof, independent legal
counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the
case of such a suit brought by the indemnitee, be a defense to such
suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or brought
by the Company to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is
not entitled to be indemnified, or to such advancement of expenses,
under this Section 10.2 or otherwise, shall be on the Company.
(c) The rights to indemnification and to the advancement of
expenses conferred in this Section 10.2 shall not be exclusive of any
other right which any person may have or hereafter acquire by any
statute, the Certificate of Incorporation, the Company's By-laws, or
any agreement, vote of stockholders or disinterested directors or
otherwise.
ARTICLE XI
MISCELLANEOUS
Section 11.1 CONFIDENTIAL INFORMATION. At all times following the date
hereof, each Party shall keep strictly confidential and not disclose, use,
divulge, publish or otherwise reveal, directly or through another Person:
(a) information that a Party indicates to another Party is, or
that such other Party reasonably should know is, confidential,
non-public information of a Party or an Affiliate of a Party which was
disclosed pursuant to the AOL License and AOL OLS Agreement, or
31
(b) any information that a Party indicates to another Party
is, or that such other Party reasonably should know is, confidential,
non-public information:
(i) relating to the business of any other Party and
obtained as a result of the preparation and negotiation of
this Agreement, the performance by the Parties of their
obligations hereunder, or the joint conduct by the Parties of
activities pursuant to this Agreement, or
(ii) relating to the business of any Subsidiary of
the Company;
in each case including, but not limited to, documents and/or
information regarding customers, costs, profits, markets, sales,
products, product development, key personnel, pricing policies,
operational methods, technology, know-how, technical processes,
formulae, or plans for future development of or concerning such other
Party or Subsidiary (collectively, "CONFIDENTIAL INFORMATION"), except
as may be necessary for the directors, employees, agents or consultants
of it and its Affiliates to perform their respective obligations under
this Agreement or conduct of the Business, in connection with filings
with Governmental Bodies as required under applicable law, including,
in particular, the filing of this Agreement and the Registration Rights
Agreement with the Commission in connection with the initial public
offering of the Class A Common Stock; provided that, except for the
filing of this Agreement and the Registration Rights Agreement with the
Commission, no Party shall make any disclosure required under
applicable law before providing the applicable Party with a reasonable
opportunity to seek a protective order. Each Party shall cause any
Persons receiving Confidential Information in accordance with the terms
hereof to retain such Confidential Information in strict confidence.
Upon termination or expiration of this Agreement, each Party shall
return to the other Parties or destroy, as the other Parties may direct
in their sole discretion, all memoranda, notes, records, reports and
other documents (including all copies thereof) relating to the
Confidential Information of the other Parties and their Subsidiaries
which such Party may then possess or have under its control. Each Party
shall certify in writing to another Party within ten (10) Business Days
of receiving instructions from such other Party regarding the return or
destruction of such materials of such other Parties that all such
materials have been returned or destroyed as such other Party has
directed. If no instruction with respect to the return or destruction
of such materials is provided to a Party within ten (10) Business Days
of termination or expiration, such Party shall promptly destroy such
material. Notwithstanding the foregoing, the following shall not
constitute Confidential Information: (x) information which was already
otherwise known to the recipient at the time of its receipt in
connection with this Agreement, (y) information which is or becomes
freely and generally available to the public through no wrongful act of
the recipient or (z) information which is rightfully received by the
recipient from a third party legally entitled to disclose such
32
information without breach by the recipient of this Agreement. In the
event of any breach of this Section 11.1, a non-breaching Party shall
have the right, in addition to any other remedy available at law or in
equity, to (a) pursue its claim either individually or through the
Company, as such non-breaching Party shall in its sole discretion
determine, and (b) demand the immediate dismissal of all personnel
actively or passively participating in such breach.
Section 11.2 GOVERNING LAW. This Agreement, and the rights and
liabilities of the Parties hereunder, shall be governed by the substantive laws
of the State of Delaware, USA without giving effect to its rules relating to
conflict of laws. To the extent otherwise applicable, the United Nations
Convention on Contracts for the International Sale of Goods shall not apply to
the construction or interpretation of this Agreement. Each Party irrevocably
consents to the exclusive jurisdiction of the state and federal courts located
in the State of Delaware for all disputes arising under or related to this
Agreement, which are subject to litigation hereunder, and to service of process
in any jurisdiction in any such action by means of notice delivered pursuant to
Section 11.6 hereof; provided, however to permit a Party either to enforce a
judgment or to seek injunctive relief, each Party also irrevocably consents to
the jurisdiction of the courts in the place where such judgment enforcement or
injunctive relief is sought. Each Party waives any objection it otherwise may
have to the personal jurisdiction and venue of the courts designated in this
Section 11.2. Notwithstanding the foregoing, for so long as a party is an entity
organized under the laws of the State of Delaware, injunctive relief may be
sought against that party only in the State of Delaware.
Section 11.3 ENTIRE AGREEMENT. Except for the agreements specifically
referred to in this Agreement, this Agreement constitutes the entire agreement
among the Parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements (including, in particular, the First
Amended and Restated Stockholders' Agreement and the Joint Venture Agreement,
dated as of December 15, 1998, by and among Federal Communications, S.A., AOL,
Pan Latin Interactive Ventures C.V., a limited partnership organized under the
laws of the Netherlands, and AOL Latin America), understandings, negotiations
and discussions, whether oral or written, of the Parties with respect to the
subject matter hereof. All exhibits referenced herein and attached to this
Agreement are incorporated hereby and shall be treated as if set forth herein.
No amendment, supplement, modification, waiver or termination of this Agreement
shall be implied or be binding unless executed in writing by the Party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall waiver constitute a continuing waiver unless otherwise
expressly therein provided.
Section 11.4 ASSIGNMENT. All of the terms and provisions of this
Agreement by or for the benefit of the Parties shall be binding upon and inure
to the benefit their successors and permitted assigns. The rights and
obligations provided under this Agreement may not be assigned, except in
accordance with the provisions of Section 5.2. Except as expressly provided
herein, nothing herein is intended to confer upon any Person, other than the
33
Parties and their permitted successors, and permitted assigns as provided
herein, any rights or remedies under or by reason of this Agreement. In
connection with any assignment, sale or transfer of (i) any of the rights to
purchase Initial Notes under the Note Purchase Agreement in accordance with the
terms thereof, (ii) the Notes in accordance with the terms of the Notes or (iii)
the Note Conversion Shares in accordance with this Agreement, in each case to
any AOLTW Permitted Assignee, the Company shall execute and deliver to, and such
assignee shall agree in writing to become a party to (in the event that such
assignee is not yet a party), by executing a counterpart signature page attached
hereto to this Agreement and the Company shall update the Schedule of AOLTW
Permitted Assignees attached hereto to include such assignee.
Section 11.5 SURVIVAL. Sections 7.1, 8.2, 10.2 and 11.1 shall survive
expiration or termination of this Agreement for any reason, to the extent set
forth in or as necessary to give effect to the applicable provision.
Section 11.6 NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing in English and shall be deemed to
have been duly given (except as may otherwise be specifically provided herein to
the contrary): (i) if delivered by hand to the Party to whom said notice or
other communication shall have been directed, upon such receipt, (ii) if mailed
by certified or registered mail with postage prepaid, return receipt requested,
on the seventh Business Day after mailing, (iii) if transmitted by telefax, on
the date of transmission, with such transmittal followed by delivery of a
confirmation copy via one of the other methods set out herein, or (iv) if
delivered by electronic mail, on the delivery date, with such transmittal
followed by delivery of a confirmation copy via one of the other methods set out
herein. All notices shall be addressed as set forth below or to any other
address such Party shall notify to the other Party in accordance with this
Section:
If to AOL: America Online, Inc.
00000 XXX Xxx
Xxxxxx, XX 00000-0000, XXX
Attn: President, AOL International
Fax No.: (000) 000-0000
with a copy to: America Online, Inc.
00000 XXX Xxx
Xxxxxx, XX 00000-0000, XXX
Attn: General Counsel
Fax No.: (000) 000-0000
If to AOLTW: AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Treasurer
Fax: (000) 000-0000
34
with copies to:
AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
If to the Company: America Online Latin America, Inc.
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000, XXX
Attn: Chief Executive Officer
Fax No.: (000) 000-0000
with a copy to: America Online Latin America, Inc.
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000, XXX
Attn: General Counsel
Fax No.: (000) 000-0000
If to Aspen: Aspen Investments LLC
c/o Finser Corporation
000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000, XXX
Attn: President
Fax No.: (000) 000-0000
with a copy to: Finser Corporation
000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000, XXX
Attn: General Counsel
Fax No.: (000) 000-0000
If to Atlantis: Atlantis Investments LLC
c/o Finser Corporation
000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000, XXX
Attn: President
Fax No.: (000) 000-0000
with a copy to: Finser Corporation
000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000, XXX
Attn: General Counsel
Fax No.: (000) 000-0000
35
If to any other Stockholder: at such address and facsimile number as such
Stockholder shall have furnished the Company
in writing, with a copy to AOL, AOLTW and
ODC.
Section 11.7 COUNTERPARTS; FACSIMILES. This Agreement and each of the
exhibits attached hereto may be executed and delivered in one or more
counterparts, each of which shall be deemed to be an original, and all of which
when taken together shall constitute one and the same instrument and shall
become effective when copies hereof, bearing the signatures of each of the
Parties, shall have been received by the Company, ODC, AOL and AOLTW. Facsimile
signatures to this Agreement and each of the exhibits attached hereto shall be
effective if promptly followed by the original signed Agreement or exhibit, as
the case may be.
Section 11.8 EXPENSES. Except as otherwise expressly provided in the
Stock Purchase Agreement, Note Purchase Agreement each of the Parties shall pay
all of its own legal and other fees and expenses incurred in connection with
this Agreement, the transactions contemplated hereby, and the negotiations
leading to the same.
Section 11.9 FURTHER ASSURANCES. Each Party shall perform all other
acts and execute and deliver all other documents as may be necessary or
appropriate to carry out the purposes and intent of this Agreement, as
reasonably requested by the other Parties.
Section 11.10 CONSTRUCTION. The terms and provisions of this Agreement
and the wording used herein shall in all cases be interpreted and construed
simply in accordance with their fair meanings and not strictly for or against
any Party hereto. The captions at the headings of each Section of this Agreement
are for convenience of reference only, and are not intended or to be used or
applied to describe, interpret, construe, define or limit the scope, extent,
intent or operation of this Agreement or of any term or provision hereof.
Section 11.11 SEVERABILITY. If any provision of this Agreement shall be
held to be incomplete, illegal, invalid or unenforceable, or if it becomes
necessary to amend the Agreement in order to comply with an administrative or
governmental order, the remaining provisions of the Agreement shall stay in
force and the unenforceable, void or incomplete provision shall be replaced by a
valid provision or amendment reflecting the economic and business objectives of
the original Agreement as best as possible.
Section 11.12 JOINT AND SEVERAL LIABILITY. Notwithstanding anything
contained herein to the contrary, Aspen and Atlantis shall be jointly and
severally liable for each other's obligations and liabilities hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
36
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
AMERICA ONLINE LATIN AMERICA, INC.
By:/s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AMERICA ONLINE, INC.
By:/s/ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Financial Officer
ASPEN INVESTMENTS LLC
By:/s/ Xxxx Xxxxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx Xxxxxx
Title:
ATLANTIS INVESTMENTS LLC
By:/s/ Xxxx Xxxxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx Xxxxxx
Title:
For purposes of Articles I, III, V (but not
Section 5.7 thereof), VI, VIII, IX and XI
and Section 10.2 only
AOL TIME WARNER INC.
By:/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
37
AOLTW PERMITTED ASSIGNEES COUNTERPART SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
By execution and delivery of this signature page, the undersigned
hereby agrees to become a Stockholder as defined in that certain SECOND AMENDED
AND RESTATED STOCKHOLDERS' AGREEMENT (the "AGREEMENT") dated as of March 8, 2002
by and among America Online Latin America, Inc., a Delaware corporation (the
"COMPANY"), America Online, Inc., a Delaware corporation ("AOL"), AOL Time
Warner Inc., a Delaware corporation ("AOLTW"), Aspen Investments LLC, a Delaware
limited liability company ("ASPEN"), Atlantis Investments LLC, a Delaware
limited liability company ("ATLANTIS", and together with Aspen, "ODC") and each
of the AOLTW Permitted Assignees listed on the SCHEDULE OF AOLTW PERMITTED
ASSIGNEES thereto for the purposes of Articles I, III, V (but not Section 5.7
thereof), VI, VIII, IX and XI and Section 10.2 only (and only such Articles (or
parts thereof) and such Section 10.2 of the Agreement) and hereby agrees to all
of the provisions of Articles I, III, V (but not Section 5.7 thereof), VI, VIII,
IX and XI and Section 10.2 only of the Agreement and to join in and be bound by
the terms and conditions of Articles I, III, V (but not Section 5.7 thereof),
VI, VIII, IX and XI and Section 10.2 only of the Agreement and shall be deemed
an "Stockholder" under Articles I, III, V (but not Section 5.7 thereof), VI,
VIII, IX and XI and Section 10.2 only thereunder entitled to the benefits and
rights, and subject to the duties and obligations, of Stockholders under
Articles I, III, V (but not Section 5.7 thereof), VI, VIII, IX and XI and
Section 10.2 only thereunder. The undersigned authorizes this signature page to
be attached to the Agreement or counterpart thereof executed by the Company and
the other Stockholders and further agrees to be identified as AOLTW Permitted
Assignee on the SCHEDULE OF AOLTW PERMITTED ASSIGNEES to the Agreement.
Capitalized terms not defined herein shall have the meanings set forth in the
Agreement.
This signature page may be executed in two counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
AOLTW PERMITTED ASSIGNEE
Date:
--------------------------------------
[AOLTW PERMITTED ASSIGNEE]
By:
--------------------------------------------------
Name:
-----------------------------------------------
Title:
-----------------------------------------------
Mailing Address:
-----------------------------------------------
-----------------------------------------------
Business Telephone:
----------------------------------
Telecopier:
--------------------------------------------
Title:
1
SCHEDULE OF AOLTW PERMITTED ASSIGNEES
AOLTW PERMITTED ASSIGNEE ADDRESS
2
SCHEDULE 7.1
NON-MONETARY CONTRIBUTIONS AND SERVICES OF ODC
ODC further agrees that, upon the request of the Company, ODC and its
Affiliates will provide the services set forth in Section II of this Schedule
7.1 at ODC's or its Affiliates' cost.
ODC further agrees that, upon the request of the Company, with respect
to services set forth in Section III of this Schedule 7.1 that are provided by
ODC or its Affiliates, ODC shall provide such services at ODC MFN Rates. "ODC
MFN RATES" shall mean rates at least as favorable as rates charged by ODC or its
Affiliates at such time to any Person other than ODC Seventy-Five Percent
Affiliates, if any, for substantially similar services, or if ODC or its
Affiliates do not provide substantially similar services to such other Persons,
favorable rates consistent with the intent of this Schedule 7.1. "ODC
SEVENTY-FIVE PERCENT AFFILIATE" means any Person in which Xxxxxxx Xxxxxxxx
and/or Xxxxxxx Xxxxxxxx and/or their lineal descendants own, directly or
indirectly, individually or collectively, through any other Person or Persons,
at least seventy-five percent (75%) of the equity interests.
Upon the request of the Company, with respect to services set forth in
Section III of this Schedule 7.1 that are provided by entities in which the
Xxxxxxxx Family Members have an equity interest that are not Affiliates of ODC,
ODC shall use its best commercially reasonable efforts to obtain for the benefit
of the Company such services at rates as favorable as those provided to ODC and
its Affiliates other than ODC Seventy-Five Percent Affiliates, or, if such
services are not provided to ODC and such Affiliates, at favorable rates
consistent with the intent of this Schedule 7.1.
Upon the request of the Company, ODC will use best commercially
reasonable efforts to obtain for the benefit of the Company services provided to
ODC and its Affiliates by third parties in which the Xxxxxxxx Family Members do
not have any equity interest on terms as favorable as the terms extended by such
third parties to ODC and its Affiliates other than ODC Seventy-Five Percent
Affiliates, and if such third parties do not provide such services to ODC and
such Affiliates, at favorable rates consistent with the intent of this letter
agreement and Section 7.1 of the Stockholders Agreement.
With respect to any services obtained from entities in which the
Xxxxxxxx Family Members have an equity interest that are not Affiliates of ODC
and third parties in which the Xxxxxxxx Family Members do not have any equity
interest, in addition to the rates set forth above payable to such other
entities, the Company shall pay to ODC all reasonable out-of-pocket costs
incurred by ODC and its Affiliates in obtaining such services for the benefit of
the Company.
In addition to the services set forth in Sections I, II and III of this
Schedule 7.1 ODC will use best commercially reasonable efforts to obtain from
Univision for the benefit of the AOL-US Service, unoccupied advertising air time
3
at Univision's most favored rates for comparable volumes of air time, until the
Company has purchased $2,000,000 worth of such advertising. For purposes hereof,
"AOL-US SERVICE" shall mean the principal AOL Service provided by AOL to United
States residents on the date hereof, as such service shall be modified from time
to time, and "AOL SERVICES" shall mean the Interactive Services that are PC
Access Services provided worldwide, including the AOL-US Service and any other
international AOL Services, under the brand names America Online(TM) and/or
AOL(TM) existing as of the date hereof or in the future and modified from time
to time.
With respect to any service provided by ODC or its Affiliates to the
Company or obtained for the benefit of the Company from other entities, a ten
percent (10%) management fee will be charged to the Company where there is
dedicated management involved in providing or obtaining such services for the
Company.
Notwithstanding anything contained herein, (i) nothing in this Schedule
7.1 shall obligate the Company to purchase services from ODC and/or its
Affiliates, and (ii) any agreements for services provided hereunder where the
Company is to pay ODC and/or its Affiliates, as the case may be, shall be
subject to the Company's and AOL's approval as provided in Article FIFTH, Clause
(c) of the Certificate of Incorporation.
SECTION I. CONTRIBUTIONS PROVIDED AT NO CHARGE:
o Local market intelligence
o Leverage existing relationships and contacts (see Attachment 1)
o Facilitate appropriate high level in-country contacts with governmental
and regulatory officials to further the Company business in the
Territory
SECTION II. SERVICES PROVIDED AT COST*:
o Legal and regulatory advice
o Tax services
o In-market research
o Financial and administrative services
o Marketing and advertising services
o Public relations
* Plus a nominal management fee of 10% where there is dedicated management.
SECTION III. SERVICES PROVIDED OR OBTAINED AT MOST FAVORED OR FAVORABLE RATES*:
(* Plus ODC reasonable, out-of-pocket costs in obtaining services and management
fee where there is dedicated management.)
4
o ADVERTISING & PROMOTION: Advertising and promotion at most favored rates
applicable to comparable volumes of air time on ODC affiliated television
networks, including unoccupied air time on Venevision, Chilevision,
Caracol, Rock & Pop and Caribbean Communications Network. Use of available
vehicles for cross-promotion of services between media properties and the
Company, including cross-promotion via references to the Company
Interactive Services on television programs. For example:
>> ODC will make best commercially reasonable efforts to obtain from Galaxy
Latin America, unoccupied advertising space to promote the Company in its
programming line up. In addition, ODC will make best commercially
reasonable efforts to obtain rights from GLA to promote the Company service
in DIRECTV's electronic programming grid.
>> ODC will also make best commercially reasonable efforts to obtain product
placement in country specific programming through its affiliated
programming properties in Latin America, including the channels of the
Xxxxxxxx Television group, Clase, I-Sat, Space, Infinito, Uniseries, and
Jupiter.
>> ODC will provide the Company with cross promotion and advertising in
Xxxxxxxxxx.xxx, the web site of Venevision.
>> ODC will make best commercially reasonable efforts to obtain from Imagen
Satelital, promotion through its affiliated channels, with the Company as
its exclusive online service.
>> ODC will make its best commercially reasonable efforts to obtain from
Panamco marketing, promotion and distribution in connection with Coca-Cola
products in the Territory.
o ELECTRONIC PROGRAMMING: Rights to develop online content based on
traditional content developed by ODC's controlled programming properties.
To the extent the rights are available from companies other than ODC's
controlled properties, ODC shall use best commercially reasonable efforts
to obtain such rights for the Company. FOR EXAMPLE:
>> Create virtual electronic environments using the characters and themes of
Venevision's children and teenager programs;
>> Reasonable commercial efforts to obtain rights to develop virtual
electronic environments based on the characters developed by
non-controlled affiliates of ODC (i.e. Locomotion, Space, I-Sat, Space,
Infinito, Uniseries, Chilevision.)
>> Venevision will make best commercially reasonable efforts to arrange for
its exclusive celebrities to take part periodically in the service's chat
rooms, provided that these stars participate from their home base in these
chat rooms.
o ACCESS TO CUSTOMER DATABASES: Subject to applicable laws, access to
customer databases of affiliate companies. FOR EXAMPLE:
5
>> ODC will make best commercially reasonable efforts to obtain from RSLCOM
Latin America and GLA access to their subscriber databases for the purpose
of mailing the AOL client software to the subscribers of such services.
o DISTRIBUTION OUTLETS: Access to ODC's distribution outlets for the
distribution of the Company software. FOR EXAMPLE:
>> GLA has distribution agreements with numerous outlets throughout Latin
America. ODC will use its best commercially reasonable efforts to secure
distribution of software through such outlets.
IV. BUNDLING/MARKETING AGREEMENTS; COMMERCE AGREEMENTS
o ODC may negotiate to obtain bundling and other marketing and subscriber
acquisition agreements for the benefit of the Company ("BUNDLING/MARKETING
AGREEMENTS"). the Company shall pay ODC a royalty for each Subscriber
registration that results from such Bundling/Marketing Agreements
("BOUNTY"). The amount of each Bounty under each Bundling/Marketing
Agreement shall be mutually agreed upon by ODC and the Company, and subject
to the approval of the Company and AOL as set forth in Article FIFTH,
Clause (c) of the Certificate of Incorporation.
o ODC may negotiate to obtain advertising and/or electronic commerce
agreements with respect to the Company Interactive Services for the benefit
of the Company if and as approved by the Company. ("COMMERCE AGREEMENTS").
the Company shall pay ODC a royalty for each Commerce Extension
("COMMISSION"). The amount of the Commission under each Commerce Agreement
shall be no less than fifteen percent (15%).
6
ATTACHMENT 1 TO SCHEDULE 7.1
EXISTING RELATIONSHIPS AS OF AUGUST 7, 2000
------------------------ -------------------------------------------- ---------------------------- -------------------------
NAME OF COMPANY NATURE OF BUSINESS AREA OF INFLUENCE % OWN
------------------------ -------------------------------------------- ---------------------------- -------------------------
1. Venevision Open TV network Venezuela [ ** ]%
Producer of Spanish Language programming
in South America
------------------------ -------------------------------------------- ---------------------------- -------------------------
2. Pueblo Xtra Chain of supermarkets in the Caribbean Puerto Rico [ ** ]%
International Chain of Blockbuster video stores in the US Virgin Islands
Caribbean (approx. 30)
------------------------ -------------------------------------------- ---------------------------- -------------------------
3. Vtel Distributors of wireless communications Venezuela [ ** ]%
devices from Motorola and other
manufacturers
------------------------ -------------------------------------------- ---------------------------- -------------------------
4. AmericaTel Provider of nationwide trunking services Venezuela [ ** ]%
------------------------ -------------------------------------------- ---------------------------- -------------------------
5. Ibero American Broadcasting private equity fund in Latin Currently in: [ ** ]%
Media Partners America Argentina, Chile,
Colombia, Portugal
Plans for continued
expansion in Latin America
------------------------ -------------------------------------------- ---------------------------- -------------------------
5(a) Xxxxxxxx TV Group Distributor of original and third-party Regional [ ** ]%
programming for subscription-based TV
services (CATV and DTH).
------------------------ -------------------------------------------- ---------------------------- -------------------------
5(b) Chilevision Open TV network Chile [ ** ]%
------------------------ -------------------------------------------- ---------------------------- -------------------------
5(c) Imagen Satelital Distributor of original and third-party Regional [ ** ]%
programming for subscription-based TV Strongest in Latin
services (CATV and DTH) America's Southern Cone
(Argentina, Chile and
Brazil)
------------------------ -------------------------------------------- ---------------------------- -------------------------
5(d) Rock & Pop All music cable network Chile [ ** ]%
Owner and operator of three radios stations
------------------------ -------------------------------------------- ---------------------------- -------------------------
5(e) Caribbean Open TV Network Trinidad & Tobago [ ** ]%
Communications Newspaper Publisher Barbados
Network Jamaica
St. Kitts
------------------------ -------------------------------------------- ---------------------------- -------------------------
5(f) Caracol TV Broadcast TV Colombia [ ** ]%
------------------------ -------------------------------------------- ---------------------------- -------------------------
6. Galaxy Latin Satellite delivered direct-to-home Regional [ ** ]%
America television
(Holding Company)
------------------------ -------------------------------------------- ---------------------------- -------------------------
7
------------------------ -------------------------------------------- ---------------------------- -------------------------
NAME OF COMPANY NATURE OF BUSINESS AREA OF INFLUENCE % OWN
------------------------ -------------------------------------------- ---------------------------- -------------------------
7. RSL Provider of long distance telephone Regional Venezuela [ ** ]%
Communications services Mexico [ ** ]%
Brazil [ ** ]%
------------------------ -------------------------------------------- ---------------------------- -------------------------
8. Univision Open TV Network United States [ ** ]%
------------------------ -------------------------------------------- ---------------------------- -------------------------
9. Galaxy Latin Galaxy has a network of affiliated Venezuela [ ** ]%
America companies in all Latin America. These Colombia [ ** ]%
10. (Local companies are generally the strongest Brazil [ ** ]%
operating (broadcast or print) media company in its Argentina [ ** ]%
companies country. All local partners were selected Pto Rico. [ ** ]%
by ODC and ODC has retained (jointly with Via Dig (Sp) [ ** ]%
Xxxxxx) the option to purchase up to 40% Others up to [ ** ]%
of each LOC.
------------------------ -------------------------------------------- ---------------------------- -------------------------
11. Editora Abril Publisher of print media Brazil [ ** ]%
Operator of CATV (Partner in GLA)
Provider of DTH
------------------------ -------------------------------------------- ---------------------------- -------------------------
12. Corporacion Remote interactive educational services Regional [ ** ]%
Latinoamericana Provided through DIRECTV
de Servicios
Educativos
13. (Clase)
------------------------ -------------------------------------------- ---------------------------- -------------------------
14. Coca-Cola/ Bottler of Coca-Cola products Regional [ ** ]%
Panamco
------------------------ -------------------------------------------- ---------------------------- -------------------------
8
