EXHIBIT 99.2
NOTE PURCHASE AGREEMENT
BY AND BETWEEN
AMERICA ONLINE LATIN AMERICA, INC.
AND
AOL TIME WARNER INC.
DATED AS OF MARCH 8, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE 1 Agreement To Sell And Purchase; Closings................................................................1
Section 1.1 Sale and Purchase.............................................................1
Table 1 SUBSEQUENT TRANCHES......................................................................................2
Section 1.2 Closings, Delivery and Payment................................................3
ARTICLE 2 Representations And Warranties Of The Company...........................................................4
Section 2.1 Organization; Authorization; Enforceability...................................4
Section 2.2 Valid Issuance of the Securities..............................................5
Section 2.3 SEC Documents; Financial Statements...........................................5
Section 2.4 Securities Law Compliance.....................................................6
Section 2.5 Compliance with Laws, Other Instruments; Governmental Authorizations,
etc...........................................................................6
Section 2.6 No Prohibitions...............................................................7
Section 2.7 Litigation....................................................................7
Section 2.8 Taxes.........................................................................7
Section 2.9 ERISA; Foreign Pension Plans..................................................7
Section 2.10 Accuracy of Information.......................................................8
Section 2.11 Regulations U and X...........................................................8
Section 2.12 Absence of Undisclosed Liabilities............................................8
Section 2.13 Capitalization and Voting Rights..............................................9
Section 2.14 Intellectual Property........................................................10
Section 2.15 Broker Fees..................................................................10
ARTICLE 3 Representations And Warranties Of The Purchaser........................................................10
Section 3.1 Investment Representations...................................................10
Section 3.2 Organization; Authorization; No Conflict.....................................11
Section 3.3 Consents.....................................................................12
Section 3.4 Brokers Fees.................................................................12
Section 3.5 Disclosure of Information....................................................12
Section 3.6 Legends......................................................................12
ARTICLE 4 Covenants..............................................................................................12
Section 4.1 Notification Requirements....................................................12
Section 4.2 Actions to Issue the Securities..............................................12
Section 4.3 Reimbursement of Legal Fees..................................................15
Section 4.4 Assignee Registration Rights.................................................15
Section 4.5 Resale Restriction on Applicable Shares......................................16
Section 4.6 Further Assurances...........................................................16
ARTICLE 5 Conditions To Closings.................................................................................16
Section 5.1 Conditions to the Purchaser's Obligations to Purchase the Initial
Notes........................................................................16
Section 5.2 Conditions to the Company's Obligations to Issue Initial Notes...............18
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PAGE
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ARTICLE 6 Indemnification........................................................................................19
Section 6.1 Indemnification by the Company...............................................19
Section 6.2 Non-Exclusive Remedy.........................................................19
ARTICLE 7 Miscellaneous..........................................................................................20
Section 7.1 Successors and Assigns; Assignment...........................................20
Section 7.2 Amendments and Waivers.......................................................20
Section 7.3 Notices......................................................................20
Section 7.4 Entire Agreement; Supersedes Prior Agreements................................21
Section 7.5 Delays or Omissions..........................................................22
Section 7.6 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.................22
Section 7.7 Severability.................................................................22
Section 7.8 Titles and Subtitles.........................................................22
Section 7.9 Counterparts; Facsimile Signatures...........................................22
Section 7.10 Survival of Warranties.......................................................23
Section 7.11 Other Definitions............................................................23
TABLES
Table 1 Subsequent Tranches
EXHIBITS
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Exhibit A-1 Form of Initial Note
Exhibit A-2 Form of PIK Note
Exhibit B Disclosure Schedule
Exhibit C Form of Charter Amendments
Exhibit D Form of Certificate of Designation for Series F Preferred Stock
Exhibit E Form of Assignee Registration Rights Agreement
Exhibit F Second Amended and Restated Registration Rights Agreement
Exhibit G Second Amended and Restated Stockholders Agreement
Exhibit H Itau Letter
Exhibit I Legal Opinion
Exhibit J Cross-Receipt
Exhibit K Form of Counterpart Signature Page
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NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "AGREEMENT") is entered into as of March 8,
2002 between America Online Latin America, Inc., a Delaware corporation (the
"COMPANY") and AOL Time Warner Inc., a Delaware corporation ("AOLTW" and/or its
permitted assigns, the "PURCHASER").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an
aggregate principal amount of up to $160 million of its 11% Senior Convertible
Notes due 2007, in the form attached hereto as EXHIBIT A-1 (the "INITIAL
NOTES"); and
WHEREAS, the Purchaser desires to purchase the Initial Notes from time
to time on the terms and conditions set forth herein and therein, and the
Company desires to issue and sell the Initial Notes to the Purchaser from time
to time on the terms and conditions set forth herein and therein;
WHEREAS, interest due and payable on the Initial Notes shall be payable
by the Company in cash, in additional convertible notes of the Company, in the
form attached hereto as EXHIBIT A-2 and on the terms set forth in the Initial
Notes (the "PIK NOTES" and, together with the Initial Notes, the "NOTES") or in
Applicable Shares (as defined in Section 7.11) on the terms set forth in the
Initial Notes; and
WHEREAS, the Notes will be convertible into Applicable Shares;
NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
AGREEMENT TO SELL AND PURCHASE; CLOSINGS
SECTION 1.1 SALE AND PURCHASE.
(a) Subject to the terms and conditions hereof, the Company hereby
agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase
from the Company a maximum of $160,000,000 aggregate principal amount of the
Initial Notes for a maximum purchase price of $160,000,000 (the "PURCHASE
PRICE") in accordance with the terms hereof. The Initial Notes will be issued in
a series of tranches from time to time in an aggregate amount not to exceed
$160,000,000 and as further specified herein, and upon the delivery by the
Company to the Purchaser of a Funding Notice (as defined below) for each
applicable tranche. Subject to the satisfaction or waiver of the conditions
specified in Article V, the first tranche, consisting of $17,300,000 principal
amount of Initial Notes, shall be issued at the First Closing (as defined
below). Subject to the delivery of a Funding Notice (as defined below) by the
Company, Section 1.1(d), and the satisfaction or waiver of the applicable
conditions specified in Article V, each subsequent tranche of Initial Notes
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shall be issued at the Subsequent Closing (as defined below) specified in the
applicable Funding Notice in accordance with the terms set forth herein;
PROVIDED, that (i) no Initial Notes shall be issued and AOLTW shall have no
obligation to purchase or cause the Purchaser to purchase any Initial Notes
after December 31, 2002, (ii) there shall be no more than one subsequent tranche
of Initial Notes in any one calendar month, (iii) each subsequent tranche of
Initial Notes shall consist of no less than $10,000,000 principal amount of
Initial Notes, and (iv) at no time shall the aggregate principal amount of
Initial Notes issued as of the First Closing and thereafter exceed the maximum
aggregate principal amount specified in the following table for the applicable
funding period (each, a "FUNDING PERIOD"), as adjusted pursuant to Section
1.1(d) hereof:
TABLE 1
SUBSEQUENT TRANCHES
------------------------------------------------------------------------------------ -----------------------------
MAXIMUM AGGREGATE PRINCIPAL
AMOUNT
OF INITIAL NOTES TO BE
FUNDING PERIOD ISSUED
------------------------------------------------------------------------------------ -----------------------------
First Closing to and including March 31, 2002 $17,300,000
------------------------------------------------------------------------------------ -----------------------------
On and after April 1, 2002 to and including June 30, 2002 $86,800,000
------------------------------------------------------------------------------------ -----------------------------
On and after July 1, 2002 to and including September 30, 2002 $124,900,000
------------------------------------------------------------------------------------ -----------------------------
On and after October 1, 2002 to and including December 31, 2002 $160,000,000
------------------------------------------------------------------------------------ -----------------------------
(b) In the event the Company decides to issue Initial Notes in any
subsequent tranche, not less than five (5) business days prior to the proposed
date of funding thereof, the Company shall deliver (such date of delivery, the
"FUNDING NOTICE DATE") a written notice to the Purchaser (each, a "FUNDING
NOTICE") which Funding Notice shall set forth the aggregate principal amount of
Initial Notes to be purchased by the Purchaser at the Subsequent Closing (as
defined below) for such tranche and shall specify the date and time of such
Subsequent Closing (which shall be no more than 20 days later than the Funding
Notice Date for such tranche).
(c) At each Closing, the Company will issue and deliver the Initial
Notes to be sold and purchased at such Closing free and clear of any Liens and
in such denominations as the Purchaser may request and registered in the
Purchaser's name. At each Closing, the Purchaser shall pay the purchase price
for the Initial Notes to be sold and purchased by wire transfer of immediately
available U.S. dollars to an account designated by the Company by prior written
notice to the Purchaser.
(d) Notwithstanding anything to the contrary herein, if after the date
hereof but on or before December 31, 2002, the Company or any of its
Subsidiaries, directly or indirectly,
(i) issues or sells any shares of Capital Stock or other
Securities (including pursuant to the exercise, exchange or conversion
of any convertible securities, options, warrants or other rights) to
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any Person for cash or Cash Equivalents or incurs any Indebtedness
(other than Indebtedness permitted under clauses (a), (b), (c), (e),
(f), (g), (h), (i) and (j) of Section 6.2 of the Notes) (each such
issuance, sale or incurrence, a "FINANCING"), other than (x) a
Financing consummated since the date hereof to the extent that such
Financing, when taken together with all other Financings consummated
since the date hereof, does not in the aggregate exceed $10,000,000 and
(y) Financings which are Exempted Financings, or
(ii) engages in an Asset Sale, other than an Asset Sale
consummated since the date hereof to the extent that such Asset Sale,
when taken together with all other Asset Sales consummated since the
date hereof, does not in the aggregate exceed $10,000,000,
then the maximum aggregate principal amount of the Initial Notes that AOLTW
shall be obligated to purchase or cause the Purchaser to purchase under this
Agreement for the Funding Period in which such Financing or Asset Sale occurs
and future Funding Periods shall be reduced on a dollar-for-dollar basis by the
amount of all Net Cash Proceeds received by the Company or any of its
Subsidiaries from such Financing or such Asset Sale.
SECTION 1.2 CLOSINGS, DELIVERY AND PAYMENT.
(a) The purchase and sale of each tranche of the Initial Notes will be
consummated at a closing (each a "CLOSING" and collectively, the "CLOSINGS").
(b) At the first closing (the "FIRST CLOSING"), subject to the
satisfaction or waiver of the conditions specified in Article V hereof, the
Company shall issue and sell to the Purchaser and the Purchaser shall purchase
from the Company, $17,300,000 aggregate principal amount of the Initial Notes
for a purchase price of $17,300,000. The First Closing shall take place at the
offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and shall occur at 10 a.m. Eastern Standard time, on March 11, 2002 or on
such other date and time as may be mutually agreed upon by the Company and the
Purchaser. The date on which the First Closing occurs is referred to herein as
the "FIRST CLOSING DATE".
(c) At each Closing after the First Closing (each, a "SUBSEQUENT
CLOSING"), subject to Section 1.1(d) and the satisfaction or waiver of the
applicable conditions specified in Article V hereof, the Company shall issue and
sell to the Purchaser and the Purchaser shall purchase from the Company, an
aggregate principal amount of Initial Notes as determined in accordance with
Section 1.1 for a purchase price equal to the aggregate principal amount of such
Initial Notes to be sold and purchased. There shall occur no more than one
Subsequent Closing under this Agreement in any one calendar month. Each
Subsequent Closing shall be held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and shall occur at 10 a.m.
Eastern Standard time and on the date determined in accordance with Section 1.1
above or on such other date and time as may be mutually agreed upon by the
Company and the Purchaser. The date on which a Subsequent Closing occurs is
referred to herein as a "SUBSEQUENT CLOSING DATE".
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule attached hereto as
EXHIBIT B (the "DISCLOSURE SCHEDULE"), which Disclosure Schedule shall identify
those sections of this Article 2 that each item included therein is intended to
qualify, the Company hereby represents and warrants to the Purchaser as of the
date hereof and as of the date of each Closing (unless another date is
specifically referenced) as follows:
SECTION 2.1 ORGANIZATION; AUTHORIZATION; ENFORCEABILITY.
The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. The Company has full
corporate power and authority to enter into this Agreement and the Notes, to
perform its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The Company has taken all
corporate and shareholder action necessary to execute and deliver this Agreement
and the Notes, to perform its obligations under this Agreement, the Notes and
the other documents and instruments delivered by it pursuant to this Agreement,
and the consummation of the transactions contemplated hereby and thereby,
including, without limitation, obtaining the recommendation of the Finance
Committee of the Company's Board of Directors (the "BOARD"), the approval of the
Board and the approval of the Special Committee of the Board in each case, of
this Agreement, the Notes, the amendments to the Company's Restated Certificate
of Incorporation (the "CERTIFICATE") in the form of EXHIBIT C here to (the
"CHARTER AMENDMENTS") and the Certificate of Designation and each of the
transactions contemplated thereby, other than (i) the filing with the Secretary
of State of the State of Delaware of a certificate of designation for the Series
F Preferred Stock in substantially the form of EXHIBIT D hereto (the
"CERTIFICATE OF DESIGNATION"), (ii) the approval of the Charter Amendments by
(x) the requisite vote of the Series B Preferred Stock and Series C Preferred
Stock, (y) the affirmative vote of the holders of at least 75% of the
outstanding voting power of Class A Common Stock, Series B Preferred Stock and
Series C Preferred Stock voting together as a single class, and (z) the
affirmative vote of the holders of at least a majority of the outstanding Class
A Common Stock (the "CHARTER AMENDMENTS SHAREHOLDER APPROVAL"), (iii) the
approval of the transactions contemplated hereby and by the Notes for purposes
of Rule 4350 of the Marketplace Rules of the Nasdaq Stock Market by the
affirmative vote of a majority of the votes cast on the matter by the holders of
issued and outstanding shares of Class A Common Stock, Series B Preferred Stock
and Series C Preferred Stock, voting together as a single class (the "NASDAQ
SHAREHOLDER APPROVAL") and, together with the Charter Amendments Shareholder
Approval, the "SHAREHOLDER APPROVALS") and (iv) upon receipt of the Charter
Amendments Shareholder Approval, the filing with the Secretary of State of the
State of Delaware of the Charter Amendments. Except as described in the
preceding sentence, no corporate or shareholder action is required for the
execution, delivery and performance of this Agreement and the Notes, the filing
and effectiveness of the Certificate of Designation, the filing and
effectiveness of the Charter Amendments, the issuance of the Notes, the
conversion of the Notes into Series F Preferred Stock or Series B Preferred
Stock, as the case may be, in accordance with their terms, the continued payment
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of dividends on, and the redemption of, the Series B Preferred Stock in
accordance with its terms, and the consummation of all the other transactions
contemplated hereby and thereby. This Agreement has been, and the Notes when
executed will be, duly executed and delivered by the Company and this Agreement
is, and the Notes when executed will be, legal, valid and binding obligations of
the Company, enforceable against it in accordance with their respective terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and the availability or lack of availability of specific
performance and other equitable remedies.
SECTION 2.2 VALID ISSUANCE OF THE SECURITIES.
The Initial Notes, when issued, sold, and delivered in accordance with
the terms of this Agreement for the consideration expressed herein, and the PIK
Notes, when issued and delivered in accordance with the terms of the Initial
Notes, will be duly authorized and issued and will be free and clear of any
Liens and preemptive and other similar rights other than rights under the
Stockholders Agreements. Upon the filing of the Certificate of Designation, the
Series F Preferred Stock will be validly authorized and will be issuable without
restriction upon the conversion of any Notes in accordance with the terms
thereof. Upon filing of the Charter Amendments with the Secretary of State of
the State of Delaware, the Series B Preferred Stock will be validly authorized
and will be issuable without restriction upon the conversion of any Notes in
accordance with the terms thereof. The Applicable Shares have been duly reserved
for issuance and, upon issuance in accordance with the terms of the Certificate,
the Notes and this Agreement (and the Certificate of Designation, in the case of
Series F Preferred Stock, and the Charter Amendments, in the case of Series B
Preferred Stock), will be duly authorized and validly issued, fully paid, and
nonassessable and will be free and clear of any Liens and preemptive and other
similar rights, other than rights under the Stockholders Agreements.
SECTION 2.3 SEC DOCUMENTS; FINANCIAL STATEMENTS.
(a) The Company has furnished or made available to the Purchaser each
report, schedule, statement, form and definitive proxy statement, if any, filed
by the Company with the United States Securities and Exchange Commission ("SEC")
since December 31, 2000 up to and including the First Closing Date and, with
respect to each Subsequent Closing, such Subsequent Closing Date, which are all
the documents that the Company will have been required to file (or otherwise did
file) with the SEC in accordance with Sections 13, 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") prior to the
date of such applicable Closing Date (collectively, the "COMPANY SEC
DOCUMENTS"). Set forth in Section 2.3 of the Disclosure Schedule is a complete
listing of the Company SEC Documents as of the date of this Agreement. As of
their respective filing dates, none of the Company SEC Documents (including all
exhibits and schedules thereto and documents incorporated by reference therein)
contained or will have contained any untrue statement of a material fact or
omitted or will have omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the Company SEC
Documents complied or will have complied when filed, or in the case of
registration statements, as of their respective effective times, in all material
respects with the then applicable requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), or the Exchange Act, as the case may be, and the
rules and regulations promulgated by the SEC thereunder. To the actual knowledge
of senior management of the Company, none of the statements made in any such
Company SEC Documents is, or has been, required to be amended or updated under
applicable law (except for such statements as have been amended or updated in
subsequent filings prior to the date hereof).
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(b) The financial statements (including the notes thereto) of the
Company included in the Company SEC Documents, complied or will have complied as
to form in all material respects with the then applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were or will have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods involved (except
as may have been indicated in the notes thereto and, with respect to any interim
financial statements, except for the absence of footnotes and subject to normal
year-end adjustments) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations, shareholders' equity and cash flows for the period then ended.
SECTION 2.4 SECURITIES LAW COMPLIANCE.
Assuming that the representations and warranties of the Purchaser set
forth in Section 3.1 hereof are true and correct in all material respects, the
offer and sale of the Notes made pursuant to this Agreement will be exempt from
the registration requirements of the Securities Act. Neither the Company nor any
Person acting on its behalf has taken or will take any action (including,
without limitation, any offering of any securities of the Company under
circumstances which would require, under the Securities Act, the integration of
such offering with the offering and sale of the Notes) which would subject the
offering or sale of the Notes to the registration requirements of the Securities
Act.
SECTION 2.5 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS; GOVERNMENTAL
AUTHORIZATIONS, ETC.
(a) None of the execution, delivery and performance by the Company of
this Agreement and the Notes, the issuance and sale of the Initial Notes, the
issuance of PIK Notes, the issuance of the Applicable Shares, or the
consummation of any other transaction contemplated by this Agreement or the
Notes will (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, the Certificate or the Bylaws of the Company or
the similar organizational documents of any Subsidiary, in each case as in
effect from time to time, any material provision of any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, or any other agreement
or instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any arbitrator or
Governmental Authority applicable to the Company or any Subsidiary or (iii)
violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary or any of
transactions contemplated hereby or by the Notes.
(b) No consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required to be obtained or
made by the Company in connection with the execution, delivery or performance by
the Company of this Agreement or the Notes, other than (i) any required filing
of notification and report forms and the expiration or termination of the
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (the "HSR ACT") in respect of the receipt of Applicable Shares
pursuant to the terms of the Notes, (ii) the filing of the Certificate of
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Designation and the Charter Amendments with the Secretary of State of the State
of Delaware, (iii) the filing of a Notice of Sale of Securities pursuant to
Regulation D under the Securities Act and (iv) the filing with the SEC of
preliminary proxy materials (such proxy materials, and any amendments or
supplements thereto, and the definitive form of such proxy materials,
collectively, the "PROXY STATEMENT").
SECTION 2.6 NO PROHIBITIONS.
No temporary restraining order, preliminary or permanent injunctions or
other order issued against the Company or any Subsidiary of the Company or, to
the knowledge of the Company, any other Person by any court of competent
jurisdiction or other legal or regulatory restraint or provision challenging the
transactions contemplated hereby or by the Notes are in effect, nor is any
proceeding brought by an administrative agency or commission or other
Governmental Authority or instrumentality seeking any of the foregoing pending
against the Company or any Subsidiary of the Company or, to the knowledge of the
Company, any other Person. In addition, no Federal, state, local or foreign
statute, rule or regulation has been enacted which prohibits, restricts or
delays the consummation of the transactions contemplated by this Agreement or
the Notes or any of the conditions to the consummation of such transactions.
SECTION 2.7 LITIGATION.
There are no actions, suits, investigations or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of
the Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective assets or properties (i) which would
reasonably be expected to be adversely determined and that, if adversely
determined, would, individually or in the aggregate, reasonably be expected to
result in a material adverse effect on the business, assets (including
intangible assets), operations or condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"), or
(ii) with respect to the transactions contemplated by this Agreement and the
Notes.
SECTION 2.8 TAXES.
Each of the Company and its Subsidiaries has timely filed or caused to
be filed all tax returns and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
the Company or such Subsidiary, as applicable, has set aside on its books
adequate reserves in accordance with GAAP or (b) to the extent that the failure
to do so would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
SECTION 2.9 ERISA; FOREIGN PENSION PLANS.
(a) No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability
is reasonably expected to occur, would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
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(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities, except where
the failure to so comply would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect. Neither the Company nor any
of its Subsidiaries has incurred any obligation in connection with the
termination of or withdrawal from any Foreign Pension Plan which either
individually or in the aggregate are material.
SECTION 2.10 ACCURACY OF INFORMATION.
None of the factual information (other than the projections), if any,
heretofore or contemporaneously furnished in writing to the Purchaser by or on
behalf of the Company in connection with this Agreement or any transaction
contemplated hereby, taken as a whole together with the SEC Documents and other
information otherwise made available to AOLTW and its Affiliates, contains any
untrue statement of a material fact, or omits to state any material fact
necessary to make any information not misleading, and no other factual
information hereafter furnished in writing (other than the projections, if any)
in connection with this Agreement by or on behalf of the Company to the
Purchaser will contain any untrue statement of a material fact or will omit to
state any material fact necessary to make any information not misleading on the
date as of which such information is dated or certified.
SECTION 2.11 REGULATIONS U AND X.
The Company is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock, and no proceeds of any Note will
be used to purchase or carry margin stock or otherwise for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation U or Regulation
X. Terms for which meanings are provided in F.R.S. Board Regulation U or
Regulation X or any regulations substituted therefor, as from time to time in
effect, are used in this Section with such meanings.
SECTION 2.12 ABSENCE OF UNDISCLOSED LIABILITIES.
Except to the extent set forth in (i) any Company SEC Documents, (ii)
Section 2.12 of the Disclosure Schedule or (iii) any financial statements
required to be delivered to existing holders of the Notes (including the notes
thereto), neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. As of each
Closing, no Authorized Officer of the Company knows of any basis for the
assertion against the Company or any of its Subsidiaries of any liability or
obligation of any nature whatsoever that is not set forth in any Company SEC
Documents or the financial statements required to be delivered to existing
holders of the Notes (including the notes thereto) which would, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect.
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SECTION 2.13 CAPITALIZATION AND VOTING RIGHTS.
(a) The authorized capital stock of the Company as of the date of this
Agreement consists of:
(i) 1,250,000,000 shares of Class A Common Stock, par value
$.01 per share of the Company (the "CLASS A COMMON STOCK"), of which
67,057,214 shares are issued and outstanding,
(ii) 250,000,000 shares of Class B Common Stock, par value
$.01 per share (the "CLASS B COMMON STOCK"), of which none are issued
and outstanding,
(iii) 250,000,000 shares of Class C Common Stock, par value
$.01 per share (the "CLASS C COMMON STOCK"; together with the Class A
Common Stock and the Class B Common Stock, the "COMMON STOCK"), of
which none are issued and outstanding, and
(iv) 500,000,000 shares of Preferred Stock, par value $.01 per
share (the PREFERRED STOCK"), of which (x) 150,000,000 shares of Series
B Preferred Stock have been designated, of which 116,010,456 shares are
issued and outstanding, and (y) 150,000,000 shares of Series C
Redeemable Convertible Preferred Stock of the Company (the "SERIES C
PREFERRED STOCK") have been designated, of which 111,413,994 shares
were issued and outstanding.
(b) The outstanding shares of Common Stock and Preferred Stock have
been duly authorized and validly issued, are fully paid and non-assessable, and
were issued in accordance with the registration or qualification provisions of
the Securities Act and any relevant state securities laws or pursuant to valid
exemptions therefrom.
(c) As of the date of this Agreement, except for (i) the conversion
privileges of the Class B Common Stock, the Class C Common Stock and the
Preferred Stock, (ii) the options and warrants listed in Section 2.13 the
Disclosure Schedule and (iii) any rights of shareholders under the Stockholder
Agreements, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), convertible or
exchangeable securities, "phantom" stock rights, stock appreciation rights,
stock-based performance units, proxy or shareholder agreements or agreements of
any kind for the purchase or acquisition from the Company of any of its
securities, nor has the Company taken or agreed to take any action to issue or
grant the same. As of the date of this Agreement, except as set forth in Section
2.13 of the Disclosure Schedule, the Company is not a party or subject to any
agreement or understanding and, to the Company's knowledge, there is no
agreement or understanding between any persons that affects or relates to the
voting or giving of written consents with respect to any security of the Company
or the voting by a director of the Company other than the Stockholders
Agreements, the Voting Agreement, dated March 8, 2002, among AOLTW, America
Online, Inc. ("AOL"), Aspen Investments LLC and Atlantis Investments LLC, and
the Voting Agreement dated as of March 8, 2002 among AOLTW, AOL, Banco Itau,
S.A., Banco Itau, S.A.--Cayman Branch, and Itau Bank Limited. As of the date
hereof, there are no outstanding contractual obligations of the Company to
9
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company other than as provided in the Certificate or arrangements with employees
of or consultants to the Company with respect to shares acquired under the
Company's benefits plans.
SECTION 2.14 INTELLECTUAL PROPERTY.
The Company and its Subsidiaries own or possess adequate patent rights
or licenses or other rights to use patent rights, inventions, trademarks,
service marks, trade names and copyrights necessary to conduct the business now
operated by them. Neither the Company nor any of its Subsidiaries has received
any notice of infringement of or conflict with asserted rights of others with
respect to any patent, patent rights, inventions, trade marks, service marks,
trade names or copyrights, except for infringements or conflicts that would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
SECTION 2.15 BROKER FEES.
Except for fees to be paid by the Company for services rendered by
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the "INVESTMENT BANK") in
connection with the transactions contemplated hereunder, there are and there
shall be, no claims for brokerage commissions, finders fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement made by or on behalf of the Company or its
Affiliates.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as of the date
hereof and as of the date of each Closing as follows:
SECTION 3.1 INVESTMENT REPRESENTATIONS.
The Purchaser:
(a) Is experienced in evaluating and investing in companies such as the
Company and can bear the economic risk of its investment in the Notes and the
Applicable Shares. It has substantial experience in investing in and evaluating
private placement transactions of securities in companies similar to the Company
and is capable of evaluating the risks and merits of its investment in the
Company and has the capacity to protect its own interests.
(b) Is acquiring the Notes pursuant to an exemption from registration
under the Securities Act for investment for its own account and not with a view
to, or for resale in connection with, any distribution thereof, and it has no
present intention of selling or distributing the Notes or any of the Applicable
Shares in contravention of the Securities Act. The Purchaser has not been formed
for the specific purpose of acquiring the Notes or the Applicable Shares. Each
acquisition by such Purchaser of Notes or the Applicable Shares hereunder shall
constitute a confirmation of this representation by such Purchaser.
10
(c) Acknowledges that, because they have not been registered under the
Securities Act or any state or foreign securities laws, the Notes it is
purchasing and the underlying Applicable Shares must be held indefinitely unless
subsequently registered under the Securities Act and any applicable state and
foreign securities laws or an exemption from such registration is available. The
Purchaser acknowledges that (i) no U.S. or foreign Federal, state or local
Governmental Authority has made any finding or determination relating to the
fairness of the terms of the investment in the Company proposed hereunder and
neither the Notes nor the underlying Applicable Shares have been registered
under the Securities Act or any applicable state or foreign securities laws,
and, therefore, cannot be resold unless they are subsequently registered under
the Securities Act and such state and foreign securities laws or unless an
exemption from such registration is available, (ii) if an exemption from
registration is available, it may be conditioned on various requirements
including, but not limited to, the time and manner of sale and the holding
period for the Notes and the Applicable Shares, whatever the case may be, and
other requirements outside of the Company's or the Purchaser's control, and
which the Company is under no obligation to, and which it may not be able to
satisfy, (iii) the Purchaser may not resell or otherwise dispose of all or any
part of the Notes or Applicable Shares except as permitted by law and all other
regulations promulgated under the Securities Act and applicable state and
foreign securities laws and, with respect to the Notes, the terms of the Notes,
and (iv) except as is expressly set forth in (w) the Second Amended and Restated
Registration Rights Agreement (as defined in Section 5.1(d) below), (x) the Itau
Stockholder Agreement, (y) the Second Amended and Restated Stockholder Agreement
(as defined herein) and (z) the registration rights agreement in the form
attached hereto as Exhibit E (the "ASSIGNEE REGISTRATION RIGHTS AGREEMENT") to
the extent entered into by the Company with any assignee pursuant to Section
4.4, the Company does not have any obligation to register the Notes or the
Applicable Shares under the Securities Act or any state or foreign securities
laws, and the Company has no present intention of effecting any such
registration.
(d) Is an "accredited investor" as such term is defined in Regulation D
promulgated under the Securities Act.
SECTION 3.2 ORGANIZATION; AUTHORIZATION; NO CONFLICT.
The Purchaser is an organization duly formed and validly existing under
the laws of the jurisdiction of its organization and is in good standing under
such laws. The Purchaser has full power and authority to enter into this
Agreement and the other agreements to which it is a party. All corporate and
shareholder actions on the part of the Purchaser necessary for the performance
of its obligations under this Agreement and the other documents and instruments
delivered or to be delivered by it pursuant to this Agreement have been taken.
This Agreement is a legal, valid and binding obligation of the Purchaser,
enforceable in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and the
availability or lack of availability of specific performance and other equitable
remedies. Neither the execution and delivery of this Agreement or the purchase
of the Notes, nor the consummation of any transaction contemplated by this
Agreement or the Notes, has constituted or resulted in or will constitute or
result in a default or violation under the Purchaser's governing documents or
any material provisions of any material agreement or instrument to which the
Purchaser is bound or any material statutes, rules, regulations or orders
binding upon the Purchaser.
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SECTION 3.3 CONSENTS.
The Purchaser has obtained all necessary consents of and made all
required filings with any Governmental Authority required to be obtained or made
by the Purchaser in connection with the execution, delivery, or performance by
the Purchaser of this Agreement and the Notes, except any required filing of
notification and report forms and the expiration or termination of the waiting
period under the HSR Act in respect of Applicable Shares receivable pursuant to
the terms of the Notes.
SECTION 3.4 BROKERS FEES.
Except for fees to be paid by the Company to the Investment Bank for
services rendered by the Investment Bank in connection with the transactions
contemplated hereunder, there are and there shall be, no claims for brokerage
commissions, finders fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of such Purchaser or any of its Affiliates.
SECTION 3.5 DISCLOSURE OF INFORMATION.
The Purchaser has had an opportunity to discuss the Company's business,
management, financial affairs and the terms and conditions of the offering of
the Notes with the management of the Company.
SECTION 3.6 LEGENDS.
The Purchaser understands that the Notes and the Applicable Shares, and
any securities issued in respect of or in exchange for the Applicable Shares,
may bear one or more restrictive legends regarding registration under applicable
securities laws.
ARTICLE 4
COVENANTS
SECTION 4.1 NOTIFICATION REQUIREMENTS.
The Company shall give prompt notice to the Purchaser of the occurrence
or nonoccurrence of any event known to the Company which would reasonably be
expected to cause the failure of the Company to comply with or satisfy any
representation, warranty, covenant or agreement under this Agreement or the
Notes or the failure of any condition set forth in Article V to be satisfied.
SECTION 4.2 ACTIONS TO ISSUE THE SECURITIES
(a) The Company shall as promptly as practicable (subject to the next
succeeding sentence) take all actions required or advisable in accordance with
any law, rule or regulation or otherwise to obtain the Shareholder Approvals,
effect the Charter Amendments, the issuance of the Notes and the Applicable
Shares under this Agreement and the Notes (whether upon conversion of Notes or
as interest on the Initial Notes in lieu of cash), the issuance of any Class B
Common Stock issued pursuant to the conversion or redemption of the Applicable
Shares or Class A Common Stock issued pursuant to a conversion of such Class B
Common Stock, including, without limitation, (i) complying with all applicable
rules and regulations, including those of the NASDAQ Stock Market, or seeking
12
any available relief from such rules and regulations, (ii) delivering to the
Purchaser, the Initial Notes in the form of EXHIBIT A-1, the PIK Notes in the
form of EXHIBIT A-2, or certificates representing the Applicable Shares (as
payment of interest on the Notes or upon conversion thereof) in accordance with
the provisions of this Agreement and the Notes, as the case may be, (iii) filing
a Form D to the extent required by Regulation D of the Securities Act, (iv)
complying with any applicable state securities or "blue sky" laws, (v) obtaining
an approval for listing on the NASDAQ Stock Market of any Class A Common Stock
issued or issuable upon conversion of the Notes, whether directly or indirectly
through the subsequent conversion of the Applicable Shares or the conversion of
the Class B Common Stock into which such Applicable Shares are converted and
(vi) making all filings which are required under applicable laws and seek all
regulatory approvals required in connection with the issuance of such securities
including, without limitation, any filings under the HSR Act in connection with
any filing made by the Purchaser. Without limiting the immediately preceding
sentence, the Company shall present and seek to obtain the Shareholder Approvals
and any other shareholder approvals necessary in connection with this Agreement,
the Notes, the Charter Amendments, the Certificate of Designation and the
transactions contemplated hereby and thereby at its 2002 annual meeting of
shareholders which shall be held on or before September 25, 2002 (the
"SHAREHOLDERS MEETING") and take all action necessary in accordance with the
DGCL and the Company's Restated Certificate of Incorporation and Bylaws to duly
call, give notice of and convene the Shareholders Meeting. In connection
therewith, the Company shall prepare and file with the SEC the Proxy Statement.
The Proxy Statement shall comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder. The Company shall use reasonable best efforts to have the Proxy
Statement cleared by the SEC as promptly as practicable after filing with the
SEC. The Company shall, as promptly as practicable after receipt thereof,
provide copies of any written comments received from the SEC with respect to the
Proxy Statement to AOLTW and advise AOLTW of any oral comments with respect to
the Proxy Statement received from the SEC. The Company will provide AOLTW with a
reasonable opportunity to review and comment on any amendment or supplement to
the Proxy Statement prior to filing such with the SEC, and will provide AOLTW
with a copy of all such filings made with the SEC. No amendment or supplement to
the Proxy Statement shall be made without the approval of AOLTW, which approval
shall not be unreasonably withheld or delayed. The Company agrees that none of
the information set forth in the Proxy Statement and each amendment or
supplement thereto, at the time of mailing thereof and at the time of the
Shareholders Meeting, will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The Finance Committee has recommended to the Board that
the Board recommend, and the Board and the Special Committee have recommended,
that the shareholders of the Company approve the matters to be submitted for
approval by shareholders at the Shareholders Meeting and give the Shareholder
13
Approvals. The Company shall set forth such recommendations in the Proxy
Statement and shall take all lawful action to solicit proxies in favor of the
approval of the Charter Amendments, this Agreement, the Notes, the Certificate
of Designation and the transactions contemplated hereby and thereby and use its
best efforts to obtain the such approvals.
(b) In addition to and without limiting the Company's covenants
contained in this Article IV, the Company shall use its best efforts to obtain
any Governmental Approvals required for the issuance of the Notes and the
compliance by the Company with its obligations hereunder and thereunder
(including to issue Applicable Shares upon conversion of the Notes). In
furtherance thereof, the Company shall, at the request of the Purchaser in
connection with any filing made or to be made by the Purchaser pursuant to
Section 4.2(c), (i) promptly take all actions necessary to make the filings
required of the Company and its Affiliates under the HSR Act or any other
applicable law, rule or regulation, (ii) comply at the earliest practicable date
with any request for additional information received by the Company or its
Affiliates from the Federal Trade Commission ("FTC") or the Antitrust Division
of the Department of Justice (the "ANTITRUST DIVISION") pursuant to the HSR Act
or under any other applicable Governmental Authority pursuant to any non-U.S.
national antitrust, competition, merger or similar law, rule or regulation
("OTHER INVESTMENT LAWS") and (iii) promptly cooperate with the Purchaser in
connection with the Purchaser's preparation of any necessary filings or
submissions under the HSR Act or such Other Investment Laws and in connection
with resolving any investigation or other regulatory inquiry concerning the
transactions contemplated by this Agreement and the Notes commenced by the FTC,
the Antitrust Division, any state attorneys general or such other Governmental
Authority. The Company shall also, at the request of the Purchaser, make
additional filings under the HSR Act or such Other Investment Laws and again
comply with this Section 4.2(b) as the Purchaser shall reasonably request from
time to time in order to fully realize the rights and benefits under this
Agreement and the Notes (including the conversion rights thereunder).
(c) The Purchaser shall promptly after the date hereof take all actions
necessary to make the filings required of the Purchaser and its Affiliates under
the HSR Act and, if the Purchaser is not AOLTW or a Subsidiary AOLTW, under any
Other Investment Laws, (ii) comply at the earliest practicable date with any
request for additional information received by the Purchaser or its Affiliates
from the Antitrust Division of the Department of Justice pursuant to the HSR Act
and, if the Purchaser is not AOLTW or a Subsidiary of AOLTW, any non-U.S.
Governmental Authority pursuant to any applicable Other Investment Laws and
(iii) promptly cooperate with the Company in connection with the Company's
preparation of any necessary filings or submissions under the HSR Act and, if
the Purchaser is not AOLTW or a Subsidiary of AOLTW, under any Other Investment
Laws and in connection with resolving any investigation or other regulatory
inquiry concerning the transactions contemplated by this Agreement and the Notes
commenced by the Antitrust Division or state attorneys general and, if the
Purchaser is not AOLTW or a Subsidiary of AOLTW, any such non-U.S. Governmental
Authority pursuant to any applicable Other Investment Laws. The Purchaser shall
also, at the request of the Company, make additional filings under the HSR Act
and, if the Purchaser is not AOLTW or a Subsidiary of AOLTW, under any
applicable Other Investment Laws and again comply with this Section 4.2(c) as
the Company shall reasonably request from time to time in order to fully realize
the rights and benefits under this Agreement and the Notes (including the
conversion rights thereunder).
14
SECTION 4.3 REIMBURSEMENT OF LEGAL FEES.
(a) The Company shall reimburse AOLTW from time to time upon the
presentation of a reasonably detailed invoice for (i) the reasonable outside
attorney's fees incurred by AOLTW and its Affiliates in connection with (x) the
development, preparation and execution of this Agreement, and any amendment,
assignment, supplement, or modification of this Agreement, the Notes, the
Certificate of Designation, the Charter Amendments and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby and (y) prior unconsummated
transactions relating to the procurement of financing by the Company, including
the structuring, negotiation and preparation of (A) credit facility
documentation, guaranties and security documents with respect to third-party
bank financing and (B) inter-shareholder arrangements and commitments related to
such unconsummated financing transactions and (ii) if a Default shall occur, the
outside attorney's fees incurred by AOLTW and its Affiliates in connection with
the enforcement or preservation of any rights under this Agreement, the Notes,
the Certificate of Designation, the Charter Amendments and any other documents
prepared in connection herewith or therewith.
(b) The Company shall reimburse any Purchaser that is not AOLTW or a
Subsidiary of AOLTW from time to time upon the presentation of a reasonably
detailed invoice for the reasonable outside attorney's fees incurred by such
Purchaser in connection with (i) the development, preparation and execution of
this Agreement and any amendment, assignment, supplement, or modification of
this Agreement, the Notes, the Certificate of Designation, the Charter
Amendments and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby, and
(ii) if a Default shall occur, the enforcement or preservation of any rights
under this Agreement, the Notes, the Certificate of Designation, the Charter
Amendments and any other documents prepared in connection herewith or therewith;
PROVIDED, HOWEVER, (x) in connection with any amendment, supplement or other
modification of this Agreement, the Notes, the Certificate of Designation, the
Charter Amendments or any other documents prepared in connection herewith or
therewith, the Company shall not be responsible for the fees and expenses of
more than one counsel for all such Purchasers as a group and (y) in connection
with any assignment of this Agreement or rights hereunder or the transfer of any
Notes, the Company shall not be responsible for the fees and expenses of any
assignee or transferee or proposed assignee or transferee relating to such
assignee or transferee's due diligence investigation of the Company or
negotiation with the assigning or transferring Purchaser.
SECTION 4.4 ASSIGNEE REGISTRATION RIGHTS
If AOLTW assigns any of its rights to purchase Initial Notes under this
Agreement to any Person that is not a Subsidiary of AOLTW pursuant to Section
7.1 hereof, the Company shall execute and deliver to such assignee at the
Closing pursuant to which such assignee purchases Initial Notes, the Assignee
Registration Rights Agreement. Within 30 days of the receipt of the Assignee
Registration Rights Agreement from the Company, such assignee shall have the
right (i) to become a party to such agreement by executing a counterpart
signature page to such agreement and thereafter, the Class A Common Stock issued
or issuable, directly or indirectly, by the Company upon conversion of or as
interest on the Notes shall be deemed "Registrable Securities" thereunder in
15
accordance with its terms or (ii) refuse to become a party to such agreement,
and thereafter, such assignee shall thereafter lose the right to become a party
to such Agreement; PROVIDED that failure to deliver a counterpart signature page
to such agreement to the Company within such 30 day period shall constitute
refusal for the purposes of clause (ii) above. Any assignee of any rights to
purchase Initial Notes under this Agreement shall be a third-party beneficiary
for the purposes of this Section 4.4. If AOLTW assigns any of its rights to
purchase Initial Notes under this Agreement to any Subsidiary of AOLTW pursuant
to Section 7.1 hereof, such Subsidiary shall, as a condition to consummating the
assignment of the right to purchase such Initial Notes to such Subsidiary, agree
in writing to become a party to the Second Amended and Restated Registration
Rights Agreement by executing a counterpart signature page thereto and shall
have the same rights and benefits as AOLTW thereunder.
SECTION 4.5 RESALE RESTRICTION ON APPLICABLE SHARES.
(a) AOLTW and any Purchaser that is a Subsidiary of AOLTW agrees not to
sell any of the shares of Class A Common Stock received by it upon (x)
conversion of any Note or (y) conversion of any Preferred Stock received by it
upon conversion of any Note for a period of 45 days following such receipt of
Class A Common Stock. For the avoidance of doubt, this restriction shall not
apply to the sale of capital stock or securities of the Company acquired by
AOLTW and any Purchaser that is a Subsidiary of AOLTW in any other manner or
held, or received in respect of securities held, prior to the date hereof.
(b) If AOLTW assigns any of its rights to purchase Initial Notes under
this Agreement to any Subsidiary of AOLTW pursuant to Section 7.1 hereof, such
Subsidiary shall, as a condition to consummating the assignment of the right to
purchase such Initial Note to such Subsidiary, agree in writing to become a
party to the Second Amended and Restated Stockholders Agreement by executing a
counterpart signature page thereto and shall have the same rights and benefits
as AOLTW thereunder.
SECTION 4.6 FURTHER ASSURANCES.
At any time and from time to time after the date hereof, each party
hereto shall also execute and deliver such further instruments or documents and
take such further actions as may be reasonably necessary or requested by the
other party in order to evidence or effectuate the consummation of the
transactions contemplated by this Agreement and the Notes and to otherwise carry
out the intent of the parties hereunder.
ARTICLE 5
CONDITIONS TO CLOSINGS
SECTION 5.1 CONDITIONS TO THE PURCHASER'S OBLIGATIONS TO PURCHASE THE
INITIAL NOTES.
The obligation of the Purchaser to purchase and pay for the Initial
Notes to be purchased by it at each Closing is subject to the satisfaction or
waiver of the following conditions on or prior to such Closing (unless such
condition specifies satisfaction on a different date, in which case, such
condition shall be satisfied as of such date). These conditions are for the
Purchaser's sole benefit and may be waived (in whole or in part) only by the
Purchaser and only in writing.
16
(a) With respect to each Closing, each representation and warranty of
the Company set forth in Article 2 hereof shall be true and correct in all
material respects except for those qualified by materiality or Material Adverse
Effect, and each representation and warranty set forth in Article 2 that is
qualified by materiality or Material Adverse Effect shall be true and correct in
all respects.
(b) With respect to each Closing, all covenants, agreements and
conditions contained in this Agreement to be performed by the Company on or
prior to such Closing shall have been performed or complied with in all material
respects.
(c) With respect to each Closing, no Default (as defined in the Notes)
shall have occurred or be continuing immediately before or after such Closing.
(d) With respect to the First Closing, the Company and the other
parties thereto (other than AOLTW and AOL) shall have duly executed and
delivered to the Purchaser the Second Amended and Restated Registration Rights
Agreement in the form attached hereto as EXHIBIT F (the "SECOND AMENDED AND
RESTATED REGISTRATION RIGHTS AGREEMENT"). With respect to each Subsequent
Closing in which the Purchaser is not AOLTW or a Subsidiary of AOLTW, the
Company shall have duly executed and delivered to the Purchaser an Assignee
Registration Rights Agreement.
(e) With respect to the First Closing, the Company and the other
parties thereto (other than AOLTW and AOL) shall have duly executed and
delivered to the Purchaser the Second Amended and Stockholders Agreement in the
form attached hereto as Exhibit G (the "SECOND AMENDED AND RESTATED STOCKHOLDERS
AGREEMENT").
(f) With respect to the First Closing, Banco Itau S.A., a Brazilian
Sociedade Anonima, Banco Itau S.A.--Cayman Branch, a Brazilian Sociedade
Anonima, Banco Xxxxxx X.X., a Brazilian Sociedade Anonima and Itau Bank Limited,
a Cayman limited liability company, shall have duly executed and delivered to
the Purchaser the waiver in the form attached hereto as EXHIBIT H (the "ITAU
LETTER").
(g) With respect to each Closing, the Purchaser shall have received a
certificate of the Chief Executive Officer of the Company, dated as of such
Closing, certifying as to the matters set forth in paragraphs (a) and (b) of
this Section 5.1; and
(h) With respect to each Closing, the Purchaser shall have received a
legal opinion, dated as of such Closing, in the form attached hereto as EXHIBIT
I and (i) with respect to the First Closing and each Subsequent Closing in which
an assignee who is not an Affiliate of AOLTW shall purchase Initial Notes for
the first time, such opinion shall be from Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C. and (ii) with respect to all other Subsequent Closings, such
opinion shall be from either Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
or in-house legal counsel for the Company.
(i) With respect to the First Closing, the Purchaser shall have
received a certificate of the Secretary or an Assistant Secretary of the Company
which shall certify the resolutions of the Board (and its committees and
members) providing for the approval of this Agreement and the Notes, a specimen
of the Initial Notes, the names of the officers of the Company authorized to
17
sign this Agreement, the Notes and the other documents, instruments or
certificates to be delivered pursuant to this Agreement by the Company or any of
its officers, together with the true signatures of such officers.
(j) With respect to the First Closing, the Company shall have filed
with the Secretary of the State of the State of Delaware the Certificate of
Designation.
(k) With respect to each Closing, the Company shall have executed and
delivered to the Purchaser a cross-receipt, dated as of such Closing, in the
form attached hereto as EXHIBIT J, pursuant to which the Company acknowledges
receipt of the purchase price received from the Purchaser in connection with
such Closing.
(l) With respect to each Closing, the Company shall have executed and
delivered to the Purchaser the Initial Notes to be sold by it to the Purchaser
at such Closing.
(m) With respect to the First Closing, AOLTW shall have received a
complete and correct copy of the opinion of the Investment Bank regarding
fairness delivered to the Financing Committee of the Board to the effect that
the sale of the Initial Notes in accordance with the terms of this Agreement and
the Exhibits attached hereto is fair to the Company from a financial point of
view.
(n) With respect to each Closing, all other governmental approvals and
other consents and waivers necessary for the consummation of the transactions
contemplated by this Agreement and the Notes shall have been obtained, and all
of such governmental approvals and other consents and waivers shall be in form
and substance reasonably satisfactory to the Majority Purchaser.
(o) With respect to each Closing, all corporate and other proceedings
in connection with the transactions contemplated by this Agreement and the Notes
and all documents and instruments incident to such transactions shall be
reasonably satisfactory to the Majority Purchaser and outside counsel to the
Majority Purchaser, and the Purchaser and outside counsel to the Majority
Purchaser shall have received all such counterpart originals or certified or
other copies of documents as the Majority Purchaser or outside counsel to the
Majority Purchaser or outside counsel to the Majority may reasonably request.
(p) With respect to each Subsequent Closing, the Purchaser shall have
received a Funding Notice complying with the terms of Section 1.1 in respect of
such Closing.
SECTION 5.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS TO ISSUE INITIAL
NOTES.
The obligation of the Company to issue and sell the Initial Notes to be
sold by it to the Purchaser at each Closing is subject to the satisfaction or
waiver of the following conditions on or prior to such Closing (unless such
condition specifies satisfaction on a different date, in which case, such
condition shall be satisfied as of such date). These conditions are for the
Company's sole benefit and may be waived (in whole or in part) only by the
Company and only in writing.
(a) The representations and warranties of the Purchaser set forth in
Article 3 hereof shall be true and correct in all material respects as of the
date hereof.
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(b) All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchaser on or prior to the date hereof shall
have been performed or complied with in all material respects.
(c) The Purchaser shall have delivered the purchase price by wire
transfer in immediately U.S. dollars for the Initial Notes being purchased by it
at such Closing.
(d) The Purchaser shall have executed and delivered to the Company a
cross-receipt, dated as of such Closing, in the form attached hereto as EXHIBIT
J, pursuant to which the Purchaser acknowledges receipt of the Initial Notes
received from the Company in connection with such Closing.
(e) With respect to the First Closing, AOLTW and AOL shall have duly
executed and delivered to the Purchaser the Second Amended and Restated
Registration Rights Agreement.
(f) With respect to the First Closing, AOLTW and AOL shall have duly
executed and delivered to the Purchaser the Second Amended and Restated
Stockholders Agreement.
ARTICLE 6
INDEMNIFICATION
SECTION 6.1 INDEMNIFICATION BY THE COMPANY.
The Company shall defend, indemnify and hold harmless AOLTW, the
Purchaser and their respective Affiliates (EACH, AN "INDEMNIFIED PARTY") and
each director, officer, member, partner, employee and agent thereof against any
obligations, loss, damage, claim, liability, judgment, suits or settlement of
any nature or kind, including all costs and expenses relating thereto, including
without limitation, interest, penalties and reasonable attorneys' fees
(including any attorneys' fees incurred in enforcing this Section 6.1)
(collectively "DAMAGES"), arising out of, resulting from or relating to:
(i) the breach of any representation or warranty or failure to
perform any covenants or agreements by the Company contained in Article
2, or in any certificate or document delivered by the Company to the
Purchaser pursuant to this Agreement;
(ii) the breach by the Company of any covenant or agreement
(whether to be performed prior to or after any Closing) contained in
this Agreement or the Notes; or
(iii) the transactions contemplated by this Agreement and the
Notes;
in each case other than Damages which are the result of such Purchaser's gross
negligence, willful misconduct, or violation of any state or federal statute
imposing liability on creditors.
SECTION 6.2 NON-EXCLUSIVE REMEDY.
The indemnification remedies provided in this Article 6 shall not be
deemed to be exclusive. Accordingly, the exercise by any Person of any of its
rights under this Article VI shall not be deemed to be an election of remedies
19
and shall not be deemed to prejudice, or to constitute or operate as a waiver
of, any other right or remedy that such Person may be entitled to exercise
(whether under this Agreement, the Notes, any other contract, any law or
otherwise).
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 SUCCESSORS AND ASSIGNS; ASSIGNMENT. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, permitted assigns, heirs, executors and
administrators of the parties hereto and shall inure to the benefit of and be
enforceable by AOLTW and/or its successors and permitted assigns. This Agreement
and any rights and obligations related hereto may not be assigned by the Company
without the prior written consent of AOLTW. AOLTW may assign its rights and
obligations under this Agreement to any Person other than a Competitor without
the consent of the Company; PROVIDED, that (i) as a condition to any such
assignment, any proposed assignee shall execute and deliver to the Company a
counterpart signature page to this Agreement in the form of EXHIBIT J and shall
expressly agree (x) to be a "Purchaser" hereunder and to be bound by the terms
and conditions hereof and (y) to make each of the representations and warranties
set forth in Article 3 of this Agreement, (ii) AOLTW shall not be permitted to
assign its rights under Section 4.2(a) to review or approve the Proxy Statement
or amendments thereto, (iii) no assignment hereunder by AOLTW to an Affiliate of
AOLTW shall relieve AOLTW from any of its obligations hereunder and (iv) no
assignment by AOLTW to any Person that is not an Affiliate of AOLTW shall
relieve AOLTW of the obligation to purchase any Notes hereunder at any Closing
if such assignee refuses or fails to purchase such Notes at such Closing in
violation of its obligations hereunder. Any purported assignment of this
Agreement in violation of the provisions of this Section 7.1 is null and void.
SECTION 7.2 AMENDMENTS AND WAIVERS.
No modification, amendment or waiver of any provision of this Agreement
shall be effective unless such modification, amendment or waiver is in writing
and signed by the parties hereto. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
SECTION 7.3 NOTICES.
All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) upon receipt of confirmation of successful transmission when sent
by facsimile if sent during the normal business hours of the recipient and
otherwise on the next succeeding business day, (iii) three business days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (iv) one business day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the addresses set
forth below (unless and until the party giving such notice has been given
written notice of a change in such address by the other party):
20
If to the Company:
America Online Latin America, Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Fax (000) 000-0000
with copies to:
America Online Latin America, Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
If to the Purchaser:
AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Treasurer
Fax: (000) 000-0000
with copies to:
AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
SECTION 7.4 ENTIRE AGREEMENT; SUPERSEDES PRIOR AGREEMENTS.
This Agreement and the Notes constitute the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and thereof and no party shall be liable or bound to any other in
any manner by any representations, warranties, covenants and agreements except
as specifically set forth herein and therein.
21
SECTION 7.5 DELAYS OR OMISSIONS.
It is agreed that no delay or omission to exercise any right, power or
remedy accruing to any party, upon any breach, default or noncompliance by
another party under this Agreement, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on any party's part
of any breach, default or noncompliance under this Agreement or any waiver on
such party's part of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies available under this Agreement or applicable law or
otherwise afforded to any party, shall be cumulative and not alternative.
SECTION 7.6 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York. Each party irrevocably consents to the
exclusive jurisdiction of the courts of the State of New York and the United
States located in the City of New York for all disputes arising under or related
to this Agreement, which are subject to litigation hereunder including actions
seeking injunctive relief, and to service of process in any jurisdiction in any
such action by means of notice delivered pursuant to Section 7.3 hereof;
PROVIDED, HOWEVER, to permit a party to enforce a judgment each party also
irrevocably consents to the jurisdiction of the courts in the place where such
judgment enforcement is sought. Each party waives (i) any objection it otherwise
may have to the personal jurisdiction and venue of the courts designated in this
Section 7.6 and (ii) the right to trial by jury.
SECTION 7.7 SEVERABILITY.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or any other jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
SECTION 7.8 TITLES AND SUBTITLES.
The titles of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.
SECTION 7.9 COUNTERPARTS; FACSIMILE SIGNATURES.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument. Signatures to this Agreement may be transmitted by facsimile.
22
SECTION 7.10 SURVIVAL OF WARRANTIES.
The warranties, representations and covenants of the Company and the
Purchaser contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closings and shall continue as
long as any Notes are outstanding or issuable, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of the Purchaser or any other holder of a Note.
SECTION 7.11 OTHER DEFINITIONS.
The following terms as used in this Agreement shall have the following
meanings set forth below. Capitalized terms used in this Agreement and not
otherwise defined in this Agreement shall have the meanings ascribed to such
terms in the Notes.
(a) "AFFILIATE" means, with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person, for so
long as such Person remains so associated to the specified Person.
(b) "APPLICABLE SHARES" means
(i) prior to the occurrence of a Class B Triggering Event (as
defined in the Certificate), if AOLTW or any AOLTW Affiliated Holder is
the Holder
(A) the Series F Preferred Stock, prior to the
automatic conversion of the Series F Preferred
Stock into Series B Preferred Stock pursuant to
the certificate of designation with respect to the
Series F Preferred Stock; and
(B) the Series B Preferred Stock, after the automatic
conversion of the Series F Preferred Stock into
Series B Preferred Stock pursuant to the
certificate of designation with respect to the
Series F Preferred Stock
(ii) after the occurrence of a Class B Triggering Event, or if
any Person other than AOLTW or any AOLTW Affiliated Holder is the
Holder, the Class A Common Stock.
(c) "ASSET SALE" means any Disposition (other than Dispositions
permitted under clauses (b), (c), (d), (e) and (f) of Section 6.8 of the Notes)
of property, rights or other assets or series of related Dispositions of
property, rights or other assets that yields aggregate gross proceeds to the
Company or any of its Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $100,000.
(d) "CAPITAL STOCK" means, with respect to any Person at any time, any
and all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of capital stock, partnership
interests (whether general or limited) or equivalent ownership interests in or
issued by such Person, and with respect to the Company includes, without
limitation, any and all shares of Class A Common Stock, Class B Common Stock,
23
Class C Common Stock par value $.01 per share of the Company, Series B Preferred
Stock, Series C Redeemable Convertible Preferred Stock of the Company and Series
F Preferred Stock.
(e) "CASH EQUIVALENTS" means (a) marketable direct obligations issued
by, or guaranteed by, the United States Government or any agency thereof or any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be); (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits; (c) commercial paper of an issuer rated at
least A-1 by Standard & Poor's Ratings -Services ("S&P") or P-1 by Xxxxx'x
Investors Service, Inc. ("MOODY'S"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally; (d) repurchase
obligations of any commercial bank satisfying the requirements of clause (b) of
this definition with respect to securities issued or fully guaranteed or insured
by the United States government; (e) securities with maturities of one year or
less from the date of acquisition; (f) shares of money market mutual or similar
funds which invest in assets satisfying the requirements of clauses (a) through
(e) of this definition; (g) instruments issued or guaranteed by the government
of Brazil or Mexico or any other jurisdiction where the Company or any of its
Subsidiaries conducts business (other than Argentina).
(f) "COMPETITOR" means any Person that competes or any Person whose
Affiliates compete in a material way with the Company or any of its operating
companies including, without limitation: Xxxxx.xxx, StarMedia, Yahoo, XXX.xxx,
TerraLycos, Universo Online, Prodigy and Ciudad Internet. For purposes of this
definition of "Competitor" only, 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 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 Notwithstanding the
above, "COMPETITOR" shall not include any Person (or any of such Person's
Affiliates) who does not compete in a material way with the Company or any of
its operating companies and who is primarily engaged in the business of making
private equity investments and that owns securities representing no more than
20% of the outstanding voting power of any Competitor so long as such Person
owning such securities has no more than the right to one director on the board
of directors (or a comparable representative on a comparable governing body) of
such Competitor; but "COMPETITOR" shall include the Affiliates of such Person to
the extent any such Affiliate competes in a material way with the Company or any
of its operating companies.
(g) "CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.
24
(h) "DISPOSITION" (or similar words such as "DISPOSE") means any direct
or indirect sale, transfer, license, lease, contribution or other conveyance
(including by way of merger) of, or the granting of options, warrants or other
rights to, any of the Company's or its Subsidiaries' property, rights or other
assets (including accounts receivable and Capital Stock of Subsidiaries) to any
other Person (other than to the Company or any Subsidiary) in a single
transaction or series of related transactions.
(i) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to Sections of ERISA also refer to any successor Sections thereto.
(j) "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
(k) "ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or in Section
303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any unfunded liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by the Company or any ERISA Affiliate of any
notice concerning the imposition on such entity of Withdrawal Liability or a
determination that a Multiemployer Plan with respect to which such entity is
obligated to contribute or is otherwise liable is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; or (h)
the occurrence, with respect to a Plan or a Multiemployer Plan, of a nonexempt
"prohibited transaction" (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could reasonably be expected to result in liability
to the Company.
(l) "EXEMPTED FINANCINGS" means, collectively, any issuance or sale of
any shares of Capital Stock or other Securities (including pursuant to the
exercise or conversion of any rights, options, warrants or other rights) to
officers, directors and employees of the Company in such number and manner as
shall be determined by the Board.
(m) "FOREIGN PENSION PLAN" means any plan, fund (including without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Company or any one or
more of its Subsidiaries primarily for the benefit of employees of the Company
25
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
(n) "GOVERNMENTAL AUTHORITY" means any governmental, regulatory or
administrative agency, authority, instrumentality or commission or any court,
tribunal or judicial or arbitral body of the United States (federal, state or
local) or otherwise or any other country or the European Community or any other
supranational organization or body.
(o) "GUARANTEE OBLIGATIONS" of or by any Person (the "GUARANTOR") means
any obligation, contingent or otherwise, of the guarantor guaranteeing or
purporting to guarantee any Indebtedness of any other Person (the "PRIMARY
OBLIGOR") in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or (d) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness; PROVIDED that the term Guarantee Obligations shall not include
endorsements for collection or deposit in the ordinary course of business.
(p) "HEDGING OBLIGATIONS" means, with respect to any Person, all
liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates, securities prices or currency
exchange rates.
(q) "INDEBTEDNESS" of any Person means, without duplication:
(i) all obligations of such Person for borrowed money or
advances and all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments;
(ii) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(iii) all Capitalized Lease Liabilities of such Person;
(iv) net Hedging Obligations of such Person;
(v) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services (excluding (x) current accounts payable
in the ordinary course of business which are not overdue for a period
of more than 90 days or, if overdue for more than 90 days, as to which
either (A) such amounts are accrued on the books of such Person or (B)
a dispute exists and adequate reserves in conformity with GAAP have
been established on the books of such Person and (y) payment
obligations of such Person pursuant to agreements entered into in the
ordinary course of business, which payment obligations are contingent
on another Person's satisfactory provision of goods and services), and
26
indebtedness of others secured by a Lien on property owned or being
acquired by such Person (including indebtedness arising under
conditional sales or other title retention agreements, but excluding
operating leases or Synthetic Lease), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse (but
only to the extent of the lesser of the fair market value of the
property subject to such Lien and the amount of such indebtedness);
(vi) obligations arising under Synthetic Leases; and
(vii) all Guarantee Obligations of such Person in respect of
any of the foregoing. Notwithstanding the foregoing, Indebtedness shall
not include any obligations to make Tax Distributions. The Indebtedness
of any Person shall include the Indebtedness of any other Person
(including any partnership in which such Person is a general partner)
to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such Person,
except to the extent the terms of such Indebtedness provide that such
Person is not liable therefore.
(r) "ITAU STOCKHOLDER AGREEMENT" means the Amended and Restated
Registration Rights and Stockholders' Agreement entered into as of March 30,
2001 by and among the Company, Banco Itau, Banco Itau, S.A., a Brazilian
Sociedade Anonima, Banco Xxxxxx, X.X., a Brazilian Sociedade Anonima, Banco
Itau, S.A.--Cayman Branch, a Brazilian Sociedade Anonima. and Itau Bank Limited,
a Cayman limited liability company, AOL, Aspen Investments LLC and Atlantis
Investments LLC.
(s) "LIEN" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest as to assets owned by the
relevant Person under the Uniform Commercial Code or comparable law of any
jurisdiction).
(t) "MAJORITY PURCHASER", for any Closing, means the Purchaser or
Purchasers purchasing more than 50% of the aggregate principal amount of Initial
Notes to be issued, subject to the satisfaction or waiver of the applicable
conditions specified in Article V hereof, by the Company at such Closing.
(u) "MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
(v) "NET CASH PROCEEDS" means (a) in connection with any Asset Sale,
the proceeds thereof in the form of cash and Cash Equivalents (including any
such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
27
otherwise, but only as and when received) of such Asset Sale, net of attorneys'
fees, accountants' fees, investment banking fees and other customary fees and
expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any Financing, the proceeds thereof in
the form of cash and Cash Equivalents, net of attorneys' fees, accountants'
fees, investment banking fees, and other customary fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing issuance or sale of Capital Stock or
other Securities).
(w) "PERSON" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivisions thereof.
(x) "SECURITIES" means (i) any shares of the Company's Capital Stock or
other debt or equity securities of the Company, (ii) any security convertible,
with or without consideration, into any shares of the Company's Capital Stock or
other debt or equity securities of the Company (including any option to purchase
such a convertible security), (iii) any security carrying any warrant to or
right to subscribe to or purchase any shares of the Company's Capital Stock or
other debt or equity securities of the Company, and (iv) any warrant or right
convertible into or exercisable for, with or without consideration, any shares
of the Company's Capital Stock or other debt or equity securities of the
Company.
(y) "SERIES B PREFERRED STOCK" means the Series B Redeemable
Convertible Preferred Stock, par value $.01 per share, of the Company.
(z) "SERIES F PREFERRED STOCK" means the Series F Redeemable
Convertible Preferred Stock, par value $.01 per share, of the Company.
(aa) "STOCKHOLDER AGREEMENTS" means, collectively, the Itau
Stockholders Agreement and the Second Amended and Restated Stockholders
Agreement dated as of the date hereof among the Company, AOLTW, AOL, Aspen
Investments LLC and Atlantis Investments LLC.
(bb) "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. Unless otherwise specified herein, each
reference to a Subsidiary will refer to a Subsidiary of the Company.
(cc) "TAX DISTRIBUTION" means, with respect to any period,
distributions made to any Person by a Subsidiary of such Person on or with
respect to income and other Taxes, which distributions are not in excess of the
tax liabilities that would have been payable by such Subsidiary on a stand-alone
28
basis, and which are calculated in accordance with, and made no earlier than as
required by, the terms of the applicable organization document which require
such distribution.
IN WITNESS WHEREOF, the parties hereto have executed this NOTE PURCHASE
AGREEMENT as of the date set forth in the first paragraph hereof.
AOL TIME WARNER INC.
By: /s/ XXX XXXXXX
-------------------------------------
Name: XXX XXXXXX
Title: VICE PRESIDENT
AMERICA ONLINE LATIN AMERICA, INC.
By: /s/ XXXXX XXXXXXXX
-------------------------------------
Name: XXXXX XXXXXXXX
Title: VICE PRESIDENT AND SECRETARY
29
