Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of this
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____ day of _________, 2000 (the "Effective Date"), by and among America Online
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Latin America, Inc., a Delaware corporation having its principal place of
business at 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000
(the "Company"), America Online, Inc., a Delaware corporation having its
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principal place of business at 00000 XXX Xxx, Xxxxxx, Xxxxxxxx 00000 ("AOL"),
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and Riverview Media Corp., a British Virgin Islands corporation having its
principal registered office at P.O. Box 12.128, Blanes Xxxxxx 0000, Xxxxxxxxxx,
Xxxxxxx ("ODC"). AOL and ODC are sometimes hereinafter referred to,
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collectively, as the "Stockholders" and, individually, as a "Stockholder."
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WHEREAS, the Company has an authorized capital of _________ shares of
common stock, consisting of ________ shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock"), __________ shares of Class B Common
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Stock, par value $.01 per share (the "Class B Common Stock"), __________ shares
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of Class C Common Stock, par value $.01 per share (the "Class C Common Stock",
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and collectively with the Class A Common Stock and the Class B Common Stock, the
"Common Stock"), and _________ shares of Preferred Stock, par value $.01 per
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share (the "Preferred Stock"), consisting of ________ shares of Series B
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Redeemable Convertible Preferred Stock, par value $.01 per share (the "Series B
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Preferred Stock"), and __________ shares of Series C Redeemable Convertible
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Preferred Stock, par value $.01 per share (the "Series C Preferred Stock");
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WHEREAS, as of the date hereof AOL owns all of the issued and outstanding
shares of Series B Preferred Stock and ODC owns all of the issued and
outstanding shares of Series C Preferred Stock;
WHEREAS, in connection with the provisions of a Contribution Agreement of
even date herewith by and between the Company, ODC and AOL, the Company has
issued to AOL a warrant (the "Warrant") to purchase shares of Series B Preferred
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Stock and/or Class B Common Stock and/or Class A Common Stock in an aggregate
amount equal to six percent (6%) of the Company's issued and reserved capital
stock;
WHEREAS, AOL and ODC may elect to convert any or all of the shares of
Series B Preferred Stock and Series C Preferred Stock into shares of Class B
Common Stock and Class C Common Stock, respectively;
WHEREAS, AOL and ODC may elect to convert the shares of Class B Common
Stock and Class C Common Stock received upon conversion of the shares of Series
B Preferred Stock and Series C Preferred Stock into shares of Class A Common
Stock;
WHEREAS, the Company, AOL and ODC have agreed that the Company shall, at
the request of a Holder (as defined herein), register under the Securities Act
(as defined herein) and register or qualify under any applicable state
securities or Blue Sky laws, shares of Class A Common Stock owned from time to
time by such Holder so as to permit the Holder to sell in the
public markets the shares of Class A Common Stock into which such shares of
Class B Common Stock and Class C Common Stock are converted;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, the parties hereto hereby agree as follows:
Section 1. Definitions
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Section 1.1 Capitalized terms used herein without definition have the
meanings assigned to such terms in the Stockholders' Agreement (as defined
herein). As used in this Agreement, the following terms shall have the following
meanings:
"Advice" shall have the meaning given in Section 6(c).
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"Agreement" shall have the meaning given in the Preamble.
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"AOL" shall have the meaning given in the Preamble.
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"Business Day" shall mean any day, other than a Saturday or Sunday, on
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which federally chartered banks in the United States are open for business.
"Class A Common Stock" shall have the meaning given in the first Whereas
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Clause.
"Class B Common Stock" shall have the meaning given in the first Whereas
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Clause.
"Class C Common Stock" shall have the meaning given in the first Whereas
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Clause.
"Commission" means the Securities and Exchange Commission, or any successor
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agency performing the functions currently performed by the Securities and
Exchange Commission.
"Common Stock" shall have the meaning given in the first Whereas Clause.
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"Company" shall have the meaning given in the Preamble.
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"Demand Filing Date" shall have the meaning given in Section 3.2.
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"Demand Holder" shall have the meaning given in Section 3.1.
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"Demand Registration" shall have the meaning given in Section 3.1.
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"Demand Request" shall have the meaning given in Section 3.1.
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"Effective Date" shall have the meaning given in the Preamble.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
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the rules and regulations of the Commission promulgated thereunder, as amended.
"Holder" means, as of any date, AOL, ODC and each other Person to whom
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either of them shall have assigned any rights hereunder in accordance with the
provisions of Section 10.6 and who owns Registrable Securities as of such date.
"Indemnified Party" shall have the meaning given in Section 8.3.
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"Indemnifying Party" shall have the meaning given in Section 8.3.
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"IPO" means the initial public offering of the Class A Common Stock
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pursuant to an offering registered under the Securities Act.
"Lock-Up Agreement" means the agreement between each Stockholder and an
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underwriter for the IPO, pursuant to which such Stockholder agrees that it will
not, during the Lock-Up Period (as defined below) offer to sell, contract to
sell, or otherwise sell, dispose of, loan, pledge or grant any rights with
respect to any shares of Common Stock, any options or warrants to purchase any
shares of common stock, or any securities convertible into or exchangeable for
any shares of Common Stock now owned or hereafter acquired directly by the
Stockholder or with respect to which the Stockholder has or hereafter acquires
the power of disposition.
"Lock-Up Period" means the respective period agreed to in a Lock-Up
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Agreement by each Stockholder and an underwriter for the IPO during which time
such Stockholder agrees that it will not offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to any
shares of Common Stock, any options or warrants to purchase any shares of Common
Stock, or any securities convertible into or exchangeable for any shares of
Common Stock now owned or hereafter acquired directly by the Stockholder or with
respect to which the Stockholder has or hereafter acquires the power of
disposition.
"Losses" shall have the meaning given in Section 8.1.
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"ODC" shall have the meaning given in the Preamble.
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"Preferred Stock" shall have the meaning given in the first Whereas Clause.
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"Proceeding" means an action, claim, suit, investigation or proceeding
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(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means any prospectus included in a Registration Statement
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(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus
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supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by any Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such Prospectus.
"Register," "Registered" and "Registration," whether or not capitalized,
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mean and refer to a registration effected by preparing and filing a Registration
Statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such Registration Statement.
"Registrable Securities" means any shares of Class A Common Stock issued
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upon conversion of shares of Class B Common Stock or Class C Common Stock
issuable upon conversion of the Series B Preferred Stock and Series C Preferred
Stock, respectively; provided, however, that the shares of Class A Common Stock
that are Registrable Securities shall cease to be Registrable Securities (x)
upon the consummation of any sale of such shares pursuant to (i) an effective
Registration Statement under the Securities Act or (ii) Rule 144, (y) at such
time as such shares of Class A Common Stock (which are issued or which may
become issued upon conversion or exchange of any other security) become eligible
for sale under Rule 144(k) under the Securities Act and (z) with respect to any
Holder, on the first date when all of the Registrable Securities then held by
such Holder are eligible for sale during a single three month period under Rule
144.
"Registration Expenses" shall have the meaning given in Section 7.
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"Registration Statement" means any Registration Statement and any
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additional Registration Statement, including (in each case) the Prospectus,
amendments and supplements to such Registration Statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference in such Registration Statement to be filed
pursuant to the terms of this Agreement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
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Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to the
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Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
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Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and the
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rules and regulations of the Commission promulgated thereunder, as amended.
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"Series B Preferred Stock" shall have the meaning given in the first
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Whereas Clause.
"Series C Preferred Stock" shall have the meaning given in the first
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Whereas Clause.
"Stockholder" shall have the meaning given in the Preamble.
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"Stockholders' Agreement" means that certain Stockholders' Agreement of
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even date herewith by and among the Company, AOL and ODC.
"Subsidiary" shall have the meaning given in the Registration Rights
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Agreement.
"Underwritten Registration or Underwritten Offering" means a registration
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in connection with which securities of the Company are sold to an underwriter
for reoffering to the public pursuant to an effective Registration Statement.
"Warrant" shall have the meaning given in the third Whereas Clause.
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Section 2. "Piggy-Back" Registrations
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Section 2.1 If at any time after the IPO the Company shall determine to
register for its own account or the account of others under the Securities Act
(including (i) in connection with a public offering by the Company other than
the IPO or (ii) a demand for registration made by any stockholder of the Company
including any of the parties hereto) any of its equity securities (other than on
Form S-4 or Form S-8 or their then equivalents relating to shares of Common
Stock to be issued solely in connection with any acquisition of an entity or
business or shares of Common Stock issuable in connection with stock option or
other employee benefit plans) it shall send to each Holder written notice of
such determination and if, within 30 days after receipt of such notice, such
Holder shall so request in writing, the Company shall use its best efforts to
include in such Registration Statement all or any part of the Registrable
Securities such Holder requests to be registered.
Section 2.2 If, in connection with any offering described in Section 2.1
of this Agreement involving an underwriting of common stock to be issued by the
Company, the managing underwriter shall impose a limitation on the number of
shares of such common stock which may be included in the Registration Statement
because in its judgment, such limitation is necessary to effect an orderly
public distribution, then, in the discretion of such managing underwriter, the
Company shall include in such Registration Statements only such portion of the
Registrable Securities with respect to which such Holders have requested
inclusion pursuant hereto as such limitation permits after the inclusion of all
shares of common stock to be registered by the Company for its own account. Any
exclusion of Registrable Securities shall be made pro rata among such Holders
seeking to include such shares, in proportion to the number of such shares
sought to be included by such Holders.
Section 3. "Demand" Registrations
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Section 3.1 At any time commencing at least 180 days after the effective
date of any registration statement covering the IPO, each Holder (a "Demand
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Holder") may, from time to time, make a written request (each a "Demand
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Request") for registration under the Securities Act (a "Demand Registration") of
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all or part of the Registrable Securities held by such Holder; provided,
however, that the Registrable Securities requested to be registered shall, on
the date that the Demand Request is delivered, (i) constitute at least one
percent (1%) of the shares of Common Stock outstanding, which shall include all
shares of Common Stock issuable upon conversion or exchange of all then
outstanding Preferred Stock, or (ii) have an aggregate minimum market value of
at least $50,000,000 before calculation of underwriting discounts and
commissions. Each Demand Request shall specify the number of Registrable Shares
proposed to be sold by such Demand Stockholder.
Section 3.2 Within 15 days after receipt of each Demand Request, the
Company shall give written notice of such Demand Request to all non-requesting
Holders and shall use its best efforts to cause a Registration Statement
covering such of the Registrable Securities as may be requested by any Holders
thereof (including the Holder or Holders giving the initial notice of intent to
offer) to be filed with the Commission not later than 120 days after receipt of
a Demand Request (the "Demand Filing Date") and shall use all commercially
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reasonable efforts to cause the same to be declared effective by the Commission
as promptly as practicable after such filing. Both the Demand Request and any
request to join in such Demand Request shall be considered a single Demand
Request.
Section 3.3 Notwithstanding any other provision set forth in this Section
3, no Holder shall be entitled to deliver a Demand Request within 90 days after
the effectiveness of any Registration Statement filed (i) by the Company
pursuant to an Underwritten Offering by the Company other than the IPO or (ii)
on behalf of any Demand Holder or any other Holder of demand registration rights
with respect to the Common Stock.
Section 3.4 The Company may defer the filing (but not the preparation) of
a Registration Statement required by this Section 3 until a date not later than
120 days after the Demand Filing Date if:
(a) at the time the Company receives the Demand Request, there is (i)
material non-public information regarding the Company which the Board
reasonably determines not to be in the Company's best interest to disclose
and which the Company is not otherwise required to disclose, or (ii) there
is a significant business opportunity (including but not limited to the
acquisition or disposition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or other similar
transaction) available to the Company which the Board reasonably determines
not to be in the Company's best interest to disclose; or
(b) prior to receiving the Demand Request, the Board had determined to
effect an Underwritten Offering and the Company had taken substantial steps
and is proceeding with reasonable diligence to effect such offering.
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A deferral of the filing of a Registration Statement pursuant to this Section
3.5 shall be lifted, and the requested Registration Statement shall be filed
forthwith, if, (x) in the case of a deferral pursuant to clause (a)(i), the
material non-public information is made public by the Company, (y) in the case
of a deferral pursuant to clause (a)(ii), the significant business opportunity
is disclosed by the Company or is terminated, or (z) in the case of a deferral
pursuant to clause (b), the proposed registration for the Company's account is
abandoned. In order to defer the filing of a registration statement pursuant to
this Section 3.5, the Company shall promptly (but in any event within 10 days),
upon determining to seek such deferral, deliver to each Demand Holder a
certificate signed by an executive officer of the Company stating that the
Company is deferring such filing pursuant to this Section 3.5 and an
approximation of the anticipated delay. Within 20 days after receiving such
certificate, the holders of a majority of the Registrable Securities held by the
Demand Holder and each other Holder and for which registration was previously
requested may withdraw such Demand Request by giving written notice to the
Company.
Section 4. Registration Procedures
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Whenever any Holder has requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use its best efforts to
effect the registration of such Registrable Securities and in furtherance
thereof the Company shall:
(a) prepare and file with the Commission on any appropriate form under
the Securities Act with respect to such Registrable Securities and use its
best efforts to cause such Registration Statement to become effective;
(b)(i) prepare and file with the Commission such amendments, including
post-effective amendments and supplements to the Registration Statement as
may be necessary to keep the Registration Statement continuously effective
as to the applicable Registrable Securities for a period of not less than
180 days (or (1) such lesser period as is necessary for the underwriters in
an underwritten offering to sell unsold allotments or (2) such longer
period as may be commercially reasonable if such Registration Statement is
for a shelf registration conducted pursuant to the provisions of Rule 415
(or any similar provisions then in force) promulgated under the Securities
Act); (ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and, as so supplemented or amended, to
be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; (iii) respond as promptly as possible
to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and, as promptly as
possible, provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of
the Securities Act and the Exchange Act with respect to the disposition of
all Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by
the Stockholders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented;
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(c) (i) furnish to the Holders of Registrable Securities to be sold,
their counsel and any managing underwriters, copies of all such documents
proposed to be filed, which documents (other than those incorporated by
reference) will be subject to the review of such Stockholders, their
counsel and such managing underwriters, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond
to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel to such Holders and such underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act;
(d) notify the Holders of Registrable Securities to be sold, their
counsel and any managing underwriters as promptly as possible (and in the
case of (i), below, not less than five (5) days prior to such filing) and
confirm such notice in writing no later than one (1) Business Day following
the day:
(i) when a Prospectus or any Prospectus supplement or post-
effective amendment to the Registration Statement is proposed to be
filed;
(ii) when the Commission notifies the Company whether there will
be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement;
(iii) when the Registration Statement or any post-effective
amendment thereto has become effective;
(iv) of any request by the Commission or any other Federal or
state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information;
(v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement covering
any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose;
(vi) when any of the representations and warranties of the
Company contained in any agreement (including any underwriting
agreement) contemplated hereby shall cease to be true and correct in
all material respects;
(vii) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for
such purpose; and
(viii) of the occurrence of any event that makes any statement
made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so
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that, in the case of the Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a
material fact or omit to state any 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;
(e) use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment;
(f) if requested by any managing underwriter, if any Registrable
Securities are to be sold in connection with an Underwritten Offering, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment
to the Registration Statement such information as the Company reasonably
agrees should be included therein and (ii) thereafter make all required
filings of such Prospectus supplement or such post-effective amendment as
soon as practicable;
(g) furnish to each Holder of Registrable Securities to be sold, their
counsel and any managing underwriters, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the
extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with
the Commission;
(h) promptly deliver to each Holder of Registrable Securities to be
sold, their counsel, and any underwriters, without charge, as many copies
of the Prospectus or Prospectuses (including each form of Prospectus) and
each amendment or supplement thereto as such Persons may reasonably
request; and the Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Stockholders
and any underwriters in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto;
(i) prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holders,
any underwriters and their counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of
such Registrable Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions within the United States as any selling
Holder or underwriter requests in writing, to keep each such registration
or qualification (or exemption therefrom) effective for at least 180 days
(or such shorter period as the applicable Registration Statement shall be
effective)and to do any and all other acts or things necessary or advisable
to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided, however, that the
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Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction
where it is not then so subject or subject the Company to any material tax
in any such jurisdiction where it is not then so subject;
(j) cooperate with the selling Holders and any managing underwriters
to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to a Registration
Statement, which certificates shall be free, to the extent permitted by
applicable law, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any
such managing underwriters or Stockholders may request at least two
Business Days prior to any sale of Registrable Securities;
(k) upon the occurrence of any event contemplated by Section
4(d)(viii) of this Agreement, as promptly as possible, prepare a supplement
or amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file
all other required documents so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus 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;
(l) use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on the securities exchange,
quotation system, market or over-the-counter bulletin board on which
similar securities issued by the Company are then listed;
(m) enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in Underwritten Offerings) and
take all such other actions in connection therewith (including those
reasonably requested by any managing underwriters in order to expedite or
facilitate the disposition of such Registrable Securities, and those
reasonably requested by the selling Holders whether or not an underwriting
agreement is entered into):
(i) make such representations and warranties to such selling
Holders and such underwriters as are customarily made by issuers to
underwriters in underwritten public offerings, and confirm the same if
and when requested;
(ii) in the case of an Underwritten Offering, obtain and deliver
copies thereof to the managing underwriters, if any, of opinions of
counsel to the Company and updates thereof addressed to each such
underwriter, in form, scope and substance reasonably satisfactory to
any such managing underwriters and counsel to the selling Stockholders
covering the matters customarily covered in
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opinions requested in Underwritten Offerings and such other matters as
may be reasonably requested by such counsel and underwriters;
(iii) immediately prior to the effectiveness of the Registration
Statement, and, in the case of an Underwritten Offering, at the time
of delivery of any Registrable Securities sold pursuant thereto,
obtain and deliver copies to the selling Holders and the managing
underwriters, if any, of "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants of
any Subsidiary (as defined in the Stockholders' Agreement) of the
Company or of any business acquired by the Company for which financial
statements and financial data is, or is required to be, included in
the Registration Statement), addressed to each selling Holder and each
of the underwriters, if any, in form and substance as are customary in
connection with Underwritten Offerings;
(iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures no less favorable to
the selling Holders and the underwriters than those set forth in
Section 8 of this Agreement (or such other provisions and procedures
acceptable to the managing underwriters and such selling Holders); and
(v) deliver such documents and certificates as may be reasonably
requested by the selling Holders, their counsel and any managing
underwriters to evidence the continued validity of the representations
and warranties made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company;
(n) make available for inspection by the selling Holders, any
representative of such Holders, any underwriter participating in any
disposition of Registrable Securities, and any attorney or accountant
retained by such selling Holder or underwriters, at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and
its subsidiaries, and cause the officers, directors, agents and employees
of the Company and its subsidiaries to supply all information in each case
reasonably requested by any such Holder, representative, underwriter,
attorney or accountant in connection with the Registration Statement;
provided, however, that any information that is determined in good faith by
the Company to be of a confidential nature at the time of delivery of such
information shall be kept confidential by such Persons, unless (i)
disclosure of such information is required by court or administrative order
or is necessary to respond to inquiries of regulatory authorities; (ii)
disclosure of such information, in the opinion of counsel to such Person,
is required by law; (iii) such information becomes generally available to
the public other than as a result of a disclosure or failure to safeguard
by such Person; or (iv) such information becomes available to such Person
from a source other
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than the Company and such source is not known by such Person to be bound by
a confidentiality agreement with the Company;
(o) comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earnings statements satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 not later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment
or best efforts Underwritten Offering and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal
quarter of the Company after the effective date of the Registration
Statement, which statement shall conform to the requirements of Rule 158;
(p) require each selling Holder to furnish to the Company information
regarding such Holder and the distribution of such Registrable Securities
as is required by law to be disclosed in the Registration Statement, and
the Company may exclude from such registration the Registrable Securities
of any such selling Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request. If the
Registration Statement refers to any such Holder by name or otherwise as
the holder of any securities of the Company, then such Holder shall have
the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar Federal statute then
in force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to
the time that such reference ceases to be required; and
(q) not file a Registration Statement to which the Holder of a
majority of the Registrable Securities covered thereby or its counsel or
any managing underwriter shall reasonably object in writing within three
(3) Business Days of their receipt thereof
Section 5. Lock-Up Agreement
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Each Holder agrees, if such Holder is so requested by the managing
underwriter in the IPO, to enter into a Lock-Up Agreement, provided that the
Lock-Up Period required therein shall not exceed 180 days.
Section 6. Stockholder Covenants
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Each Holder hereby covenants and agrees that:
(a) it will not sell any Registrable Securities under the Registration
Statement until it has received notice from the Company that such
Registration Statement and any post-effective amendments thereto have
become effective;
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(b) it and its officers, directors or Affiliates (as defined in the
Stockholders' Agreement), if any, will comply with the Prospectus delivery
requirements of the Securities Act as applicable to them in connection with
sales of Registrable Securities pursuant to a Registration Statement;
(c) upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Section 4(d)(iv), (v), (vi), (vii) and
(viii) of this Agreement, such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement
until such Holder's receipt of the copies of the supplemented Prospectus
and/or amended Registration Statement or until it is advised in writing
(the "Advice") by the Company that the use of the applicable Prospectus may
------
be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement.
Section 7. Registration Expenses
---------------------
Except to the extent limited by the applicable state law, all fees and
expenses incident to the performance of or compliance with this Agreement by the
Company shall be borne by the Company whether or not pursuant to an Underwritten
Offering and whether or not any Registration Statement is filed or becomes
effective and whether or not any Registrable Securities are sold pursuant to any
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any securities exchange or market on which Registrable
Securities are required hereunder to be listed, and (B) in compliance with state
securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Stockholders in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the managing underwriters, if any, determine)); (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing Prospectuses if the printing of
Prospectuses is requested by the managing underwriters, if any; (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company; (v) Securities Act liability insurance, if the Company desires such
insurance; (vi) fees and expenses of all other Persons retained by the Company
in connection with the consummation of the transactions contemplated by this
Agreement; and (vii) all of the internal expenses of the Company incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties, the expense of any
annual audit, the fees and expenses incurred in connection with the listing of
the Registrable Securities on any securities exchange as required hereunder (all
such expenses being referred to herein as "Registration Expenses"); provided,
---------------------
however, that except as expressly set forth herein, in no event shall
Registration Expenses include any underwriting discounts, commissions, or fees
attributable to the sale of the Registrable Securities or any counsel,
accountants or other persons retained by the Holders incurred in connection with
the consummation of the transactions contemplated by this Agreement.
13
Section 8. Indemnification and Contribution
--------------------------------
Section 8.1 Indemnification by the Company. The Company shall,
------------------------------
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder and their agents, brokers, investment advisors and employees of each
of them and each underwriter of the Registrable Securities and their officers,
directors, affiliates, partners and any broker or dealer through whom such
shares may be sold and each Person, if any, who controls (within the meaning of
Section 15 of the Securities Act) such Holder or any such underwriter, to the
fullest extent permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, costs of
preparation and reasonable attorneys' fees) and expenses (collectively,
"Losses"), as incurred, arising out of or relating to any untrue or alleged
------
untrue statement of a material fact contained in any Registration Statement, any
Prospectus or any form of Prospectus or in any amendment or supplement thereto
or in any preliminary Prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of Prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading (in the case of any Prospectus or form of
Prospectus or supplement thereto, in light of the circumstances under which they
were made), except to the extent, but only to the extent, that such untrue
statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein,
which information was reasonably relied on by the Company for use therein or to
the extent that such information relates to such Holder or such Holder's
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in any
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto. The Company shall notify the Holders promptly
of the institution, threat or assertion of any Proceeding of which the Company
is aware in connection with the transactions contemplated by this Agreement.
Section 8.2 Indemnification by Holders. Each Holder shall, severally and
--------------------------
not jointly, indemnify and hold harmless the Company, the directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review) arising solely out of or based solely upon any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of Prospectus, or arising solely out of or based solely
upon any untrue statement or omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading to the
extent, but only to the extent, that such untrue statement or omission is
contained or omitted, as the case may be, in any information so furnished in
writing by such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of Prospectus or to the extent that such
information relates to such Holder or such
14
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto. In no event shall the liability of any selling
Holder hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
Section 8.3 Conduct of Indemnification Proceedings.
--------------------------------------
(a) If any Proceeding shall be brought or asserted against any Person
entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified
-----------------
Party promptly shall notify the Person from whom indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall assume
-------------------
the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.
(b) An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof,
provided, however, the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses; or (2) the
Indemnifying Party shall have failed promptly to assume the defense of such
Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any
such Proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at
the reasonable expense of the Indemnifying Party, the Indemnifying Party
shall not have the right to assume the defense thereof and such counsel
shall be at the reasonable expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter
of such Proceeding.
(c) All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend
15
such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten (10) Business Days
of written notice thereof to the Indemnifying Party (regardless of whether
it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may
require such Indemnified Party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such
Indemnified Party is not entitled to indemnification hereunder).
Section 8.4 Contribution.
------------
(a) If a claim for indemnification under Section 8.1 or 8.2 is
unavailable to an Indemnified Party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with
its terms (by reason of public policy or otherwise), then each Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to
the amount paid or payable by such Indemnified Party as a result of such
Losses, in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as
any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates
to information supplied by, such Indemnifying Party or Indemnified Party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed
to include, subject to the limitations set forth herein, any reasonable
attorneys' or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party in accordance with its terms.
In no event shall the liability of any selling Holder hereunder be greater
in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(b) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 8, no
Stockholder shall be required to contribute, in the aggregate, any amount
in excess of the amount by which the proceeds actually received by such
Stockholder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Stockholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.
16
(c) The indemnity and contribution agreements contained in this
Section 8 are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties.
Section 8.5 Rule 144. Following the IPO, the Company covenants that:
--------
(a) it will file the reports required to be filed by the Company under
the Securities Act and the Exchange Act, so as to enable the Holders to
sell Registrable Securities pursuant to Rule 144 under the Securities Act;
(b) it shall cooperate with any Holder in connection with any sale,
transfer or other disposition by such Holder of any Registrable Securities
pursuant to Rule 144 under the Securities Act;
(c) it will take such action as any Holder may reasonably request, all
to the extent required from time to time to enable such Holder to sell its
Common Stock without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions; and
(d) upon the request of any Holder, it shall deliver to such Holder a
written certification of a duly authorized officer as to whether it has
complied with such requirements.
Section 9. Term of Registration Rights.
---------------------------
The rights of Holders with respect to the registration rights granted
pursuant to this Agreement shall remain in effect, subject to the terms hereof,
so long as there are Registrable Securities or securities which are directly or
indirectly convertible or exchangable for Registrable Securities issued and
outstanding.
Section 10. Miscellaneous.
-------------
Section 10.1 Entire Agreement; Amendments. This Agreement contains the
----------------------------
entire understanding of the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral or written, with
respect to such matters.
Section 10.2 Notices. Any and all notices or other communications or
-------
deliveries required or permitted to be provided pursuant to this Agreement shall
be in writing and shall be deemed to have been received (a) upon hand delivery
(receipt acknowledged) or delivery by telex (with correct answer back received),
telecopy or facsimile (with transmission confirmation report) at the address or
number designated below (if delivered on a Business Day during normal business
hours where such notice is to be received), or the first Business Day following
such delivery (if delivered on a Business Day after normal business hours where
such notice is to be received) or
17
(b) on the second Business Day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. The address for the Company shall be:
America Online Latin America, Inc., 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx
Xxxxxxxxxx, XX 00000, XXX; Attention: Chief Executive Officer; fax: (954) 772-
7089. The addresses for each Holder shall be maintained by the Company. Copies
of all notices shall be sent to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Xxxxx X.
Xxxxxxxx, Esq.; fax: (000) 000-0000, or such other address as may be designated
in writing hereafter, in the same manner, by such person.
Section 10.3 Remedies. In the event of a breach by the Company or by a
--------
Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
Section 10.4 No Inconsistent Agreements. Neither the Company nor any of its
--------------------------
Subsidiaries has, as of the date hereof, nor shall the Company or any of its
Subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any of its Subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person. Without limiting the generality of the foregoing, the Company
shall not grant to any Person the right to request the Company to register any
securities of the Company under the Securities Act unless the rights so granted
are subject in all respects to the prior rights in full of the Holders, and are
not otherwise in conflict or inconsistent with the provisions of this Agreement.
Section 10.5 Amendments and Waivers. No provision of this Agreement may be
----------------------
waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Holders; or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter. Notwithstanding the
foregoing, no such amendment shall be effective to the extent that it applies to
less than all of the Holders. The Company shall not offer or pay any
consideration to a Holder for consenting to such an amendment or waiver unless
the same consideration is offered to each Holder and the same consideration is
paid to each Holder which consents to such amendment or waiver.
18
Section 10.6 Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and permitted assigns of each of
the parties. The rights of each Holder hereunder, including the right to have
the Company register for resale Registrable Securities in accordance with the
terms of this Agreement, shall be automatically assignable by each Holder
together with the Registrable Security, or the securities into which such
Registrable Securities are convertible or exchangeable into, to which such
rights relate if: (a) the Holder agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (i) the name and address of such transferee or assignee, and
(ii) the securities with respect to which such registration rights are being
transferred or assigned, (c) following such transfer or assignment the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and applicable state securities laws, (d) the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
of this Agreement, and (e) such transfer shall have been made in accordance with
the applicable requirements of any agreement applicable to the transfer of such
shares, including, without limitation, the Stockholders' Agreement. The rights
to assignment shall apply to the Holders (and to subsequent) successors and
assigns.
Section 10.7 No Third-Party Beneficiaries. This Agreement is intended for
----------------------------
the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
Section 10.8 Cumulative Remedies. The remedies provided herein are
-------------------
cumulative and not exclusive of any remedies provided by law.
Section 10.9 Severability. If any term, provision, covenant or restriction
------------
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
19
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
AMERICA ONLINE LATIN AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
-----------------------------
Title: Chief Executive Officer
----------------------------
AMERICA ONLINE, INC.
By: /s/ Xxxxxx Xxxxx, Xx.
-------------------------------
Name: Xxxxxx Xxxxx, Xx.
-----------------------------
Title: Senior Vice President and
General Manager International
-----------------------------
RIVERVIEW MEDIA CORP.
By: /s/ Xxxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxxx Xxxxxxxx
-----------------------------
Title: Attorney-in-Fact
----------------------------
20
