<PAGE>
As filed with the Securities and Exchange Commission on February 10, 2000
Registration No. 333-95051
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
AMERICA ONLINE LATIN AMERICA, INC.
(Exact name of registrant as specified in its charter)
Delaware 7370 65-0963212
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
6600 N. Andrews Avenue
Suite 500
Fort Lauderdale, FL 33309
(954) 772-0002
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------
Charles M. Herington
Chief Executive Officer
America Online Latin America, Inc.
6600 N. Andrews Avenue
Suite 500
Fort Lauderdale, FL 33309
(954) 772-0002
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------
With copies to:
Michael L. Fantozzi, Esq. Marc S. Rosenberg, Esq.
Peter S. Lawrence, Esq. Cravath, Swaine & Moore
Mintz, Levin, Cohn, Ferris, Worldwide Plaza
Glovsky and Popeo, P.C. 825 Eighth Avenue
One Financial Center New York, NY 10019
Boston, MA 02111 (212) 474-1000
(617) 542-6000
------------
Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are being offered or
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to Section 8(a), may determine.
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- --------------------------------------------------------------------------------
<PAGE>
PART II
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S> <C>
*1.1 Form of Underwriting Agreement.
*3.1 Restated Certificate of Incorporation of America Online Latin
America, Inc. to be effective upon completion of the initial
public offering.
*3.2 Restated By-laws of America Online Latin America, Inc. to be
effective upon completion of the initial public offering.
*4.1 Form of Class A Common Stock Certificate.
*5.1 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
with respect to the legality of securities being registered.
*10.1 America Online Latin America, Inc. 2000 Stock Option Plan.
+10.2 Form of Stockholders' Agreement by and among America Online
Latin America, Inc., America Online, Inc. and Riverview Media
Corp., dated as of , 2000.
*10.3 Contribution Agreement by and among America Online Latin
America, Inc., AOL Latin America, S.L., America Online, Inc. and
Riverview Media Corp., dated as of , 2000.
*10.4 Registration Rights Agreement by and among America Online Latin
America, Inc.,
America Online, Inc. and Riverview Media Corp., dated as of ,
2000.
+10.5 Form of AOL License Agreement by and between America Online,
Inc. and America Online Latin America, Inc., dated as of ,
2000.
+10.6 Form of AOL Online Services Agreement by and between America
Online, Inc. and America Online Latin America, Inc., dated as of
, 2000.
*10.7 Form of Warrant to be issued by America Online Latin America,
Inc. to America Online, Inc., dated as of , 2000.
@10.8 Letter regarding employment of Charles M. Herington, dated
February 26, 1999.
@21.1 Subsidiaries of America Online Latin America, Inc.
@23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5.1)
@24.1 Powers of Attorney.
</TABLE>
- --------
* To be filed by amendment.
+ Confidential treatment has been requested for portions of this exhibit. These
portions have been omitted and filed separately with the Commission.
@ Previously filed.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Sao Paulo, Brazil, on February 10, 2000.
America Online Latin America, Inc.
/s/ Charles M. Herington
By: _________________________________
Charles M. Herington
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities held on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Charles M. Herington Chief Executive Officer February 10, 2000
______________________________________ (principal executive
Charles M. Herington officer)
* Chief Financial Officer February 10, 2000
______________________________________ (principal financial and
Javier Aguirre accounting officer)
* Director February 10, 2000
______________________________________
Steven I. Bandel
* Director February 10, 2000
______________________________________
Gustavo A. Cisneros
* Director February 10, 2000
______________________________________
Ricardo J. Cisneros
* Director February 10, 2000
______________________________________
Miles R. Gilburne
* Director February 10, 2000
______________________________________
J. Michael Kelly
* Director February 10, 2000
______________________________________
Michael Lynton
* Director February 10, 2000
______________________________________
Robert S. O'Hara, Jr.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director February 10, 2000
______________________________________
Cristina Pieretti
* Director February 10, 2000
______________________________________
Robert W. Pittman
* Director February 10, 2000
______________________________________
Gerald Sokol, Jr.
</TABLE>
* By executing his name hereto, Charles M. Herington is signing this document
on behalf of the persons indicated above pursuant to the powers of attorney
duly executed by such persons and filed with the Securities and Exchange
Commission.
/s/ Charles M. Herington
By: ____________________________
Charles M. Herington
(Attorney-in-fact)
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S> <C>
*1.1 Form of Underwriting Agreement.
*3.1 Restated Certificate of Incorporation of America Online Latin
America, Inc. to be effective upon completion of the initial
public offering.
*3.2 Restated By-laws of America Online Latin America, Inc. to be
effective upon completion of the initial public offering.
*4.1 Form of Class A Common Stock Certificate.
*5.1 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
with respect to the legality of securities being registered.
*10.1 America Online Latin America, Inc. 2000 Stock Option Plan.
+10.2 Form of Stockholders' Agreement by and among America Online
Latin America, Inc., America Online, Inc. and Riverview Media
Corp., dated as of , 2000.
*10.3 Contribution Agreement by and among America Online Latin
America, Inc., AOL Latin America, S.L., America Online, Inc. and
Riverview Media Corp., dated as of , 2000.
*10.4 Registration Rights Agreement by and among America Online Latin
America, Inc.,
America Online, Inc. and Riverview Media Corp., dated as of ,
2000.
+10.5 Form of AOL License Agreement by and between America Online,
Inc. and America Online Latin America, Inc., dated as of ,
2000.
+10.6 Form of AOL Online Services Agreement by and between America
Online, Inc. and America Online Latin America, Inc., dated as of
, 2000.
*10.7 Form of Warrant to be issued by America Online Latin America,
Inc. to America Online, Inc., dated as of , 2000.
@10.8 Letter regarding employment of Charles M. Herington, dated
February 26, 1999.
@21.1 Subsidiaries of America Online Latin America, Inc.
@23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5.1)
@24.1 Powers of Attorney.
</TABLE>
- --------
* To be filed by amendment.
+ Confidential treatment has been requested for portions of this exhibit. These
portions have been omitted and filed separately with the Commission.
@Previously filed.
<PAGE>
[*] - CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS WITH ASTERISKS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF
1933, AS AMENDED.
FORM OF
STOCKHOLDERS' AGREEMENT
by and among
AMERICA ONLINE LATIN AMERICA, INC.,
a Delaware corporation,
AMERICA ONLINE, INC.,
a Delaware corporation,
and
RIVERVIEW MEDIA CORP.,
a British Virgin Islands corporation
DATED AS OF _________, 2000
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ..................................................... 2
Section 1.1 Definitions .................................................. 2
Section 1.2 Usage Generally; Interpretation .............................. 9
ARTICLE II PURPOSE ....................................................... 10
Section 2.1 Purpose ..................................................... 10
Section 2.2 No Partnership .............................................. 10
Section 2.3 Voting ...................................................... 10
ARTICLE III VOTING PROVISIONS ............................................. 10
Section 3.1 Voting Agreements ........................................... 10
ARTICLE IV NON-COMPETITION ............................................... 11
Section 4.1 Non-Competition with the Company ............................ 11
Section 4.2 Repurchase Upon Breach ...................................... 13
ARTICLE V RESTRICTIONS ON TRANSFERS ...................................... 17
Section 5.1 Prohibited Transfers ........................................ 17
Section 5.2 Permitted Transfers ......................................... 17
Section 5.3 Rights of First Refusal ..................................... 18
Section 5.4 Closing Deliveries .......................................... 20
Section 5.5 Direct Comprehensive Competitor ............................. 20
Section 5.6 Purchase of the ODC Holdings; Installment Payments ........... 21
Section 5.7 Third-Party Equity Participants .............................. 21
ARTICLE VI AOL OBLIGATIONS ............................................... 23
ARTICLE VII DEFAULT IN CAPITAL CONTRIBUTIONS; ODC
ADDITIONAL PROTECTIONS; ODC NON-MONETARY
OBLIGATIONS .............................................................. 24
Section 7.1 Default in Capital Contributions ............................ 24
Section 7.2 [Intentionally Omitted]...............Error! Bookmark not defined.
Section 7.3 ODC Non-Monetary Contributions .............................. 25
ARTICLE VIII OTHER AGREEMENTS; LEGENDS ................................... 25
Section 8.1 Legends ..................................................... 25
Section 8.2 Limitation of Liability ..................................... 26
Section 8.3 Registration Rights ......................................... 23
ARTICLE IX TERM AND TERMINATION .......................................... 26
Section 9.1 Term ........................................................ 26
Section 9.2 Termination ................................................. 26
ARTICLE X STANDSTILL PROVISIONS; INDEMNIFICATION ......................... 26
Section 10.1 Limitations on Holders' Ownership .......................... 27
Section 10.2 Indemnification ............................................ 27
ARTICLE XI MISCELLANEOUS ................................................. 29
Section 11.1 Confidential Information ................................... 29
Section 11.2 Governing Law .............................................. 30
Section 11.3 Entire Agreement ........................................... 30
i
<PAGE>
Section 11.4 Assignment .................................................. 30
Section 11.5 Survival .................................................... 31
Section 11.6 Notices ..................................................... 31
Section 11.7 Counterparts; Facsimiles .................................... 32
Section 11.8 Expenses .................................................... 32
Section 11.9 Further Assurances .......................................... 32
Section 11.10 Construction ............................................... 32
Section 11.11 Severability ............................................... 32
ii
<PAGE>
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT (this "Agreement") is made as of this ____ day
---------
of _________, 2000 (the "Effective Date"), by and among America Online Latin
--------------
America, Inc., a Delaware corporation having its principal place of business at
6600 N. Andrews Avenue, Suite 500, Fort Lauderdale, Florida 33309 (the
"Company"), America Online, Inc., a Delaware corporation having its principal
-------
place of business at 22000 AOL Way, Dulles, Virginia 20166 ("AOL"), and
---
Riverview Media Corp., a British Virgin Islands corporation ("ODC"). AOL and ODC
---
are sometimes hereinafter referred to, collectively, as the "Stockholders" and,
------------
individually, as a "Stockholder."
-----------
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
--------------------
Stock, par value $.01 per share (the "Class B Common Stock"), __________ shares
--------------------
of Class C Common Stock, par value $.01 per share (the "Class C Common Stock",
--------------------
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
------------
share (the "Preferred Stock"), consisting of ________ shares of Series B
---------------
Redeemable Convertible Preferred Stock, par value $.01 per share (the "Series B
--------
Preferred Stock"), and __________ shares of Series C Redeemable Convertible
- ---------------
Preferred Stock, par value $.01 per share (the "Series C Preferred Stock" and
------------------------
collectively with the Series B Preferred Stock, the "Preferred Stock");
---------------
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, AOL and ODC and their permitted transferees may elect to convert
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, and thereafter
AOL and ODC and their permitted transferees may elect to convert the shares of
Class B Common Stock and Class C Common Stock into shares of Class A Common
Stock;
WHEREAS, upon the transfer of ownership of any shares of Series B Preferred
Stock or Series C Preferred Stock, other than a transfer permitted under Section
5.2 or pursuant to the provisions of the Certificate of Incorporation (as
defined herein), such shares shall, automatically and with no further action
being required by any party to such transfer or otherwise, be converted into
shares of Class B Common Stock or Class C Common Stock at the Conversion Rate
then in effect and thereafter each such share of Class B Common Stock or Class C
Common Stock, as applicable, immediately and automatically shall be converted
into one share of Class A Common Stock;
WHEREAS, upon the transfer of ownership of any shares of Class B Common
Stock or Class C Common Stock, other than a transfer permitted under Section 5.2
or pursuant to the Certificate of Incorporation, such shares shall,
automatically and with no further action being
<PAGE>
required by any party to such transfer or otherwise, be converted into shares of
Class A Common Stock at a rate of one share of Class A Common Stock for each
share of Class B Common Stock or Class C 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;
WHEREAS, the Company, AOL and ODC have agreed on certain restrictions with
respect to the transfer of shares of Series B Preferred Stock, Series C
Preferred Stock, Class B Common Stock and Class C Common Stock;
WHEREAS, the Company has prepared and filed with the Commission (as defined
herein) a registration statement on Form S-1 (File No. 333-_____), including a
prospectus, and one or more amendments thereto, covering the registration of
shares of Class A Common Stock under the Securities Act, which registration
statement has been declared effective; and
WHEREAS, the Stockholders wish to promote their mutual interests by
imposing certain restrictions and obligations on each other and on the shares of
Preferred Stock and Common Stock now or hereafter owned by each, and, further,
to provide for certain matters pertaining to the management and governance of
the Company;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following terms shall, for the purposes of
-----------
this Agreement and the Schedules and Exhibits hereto, have the following
meanings (terms defined in the singular or the plural include the plural or the
singular, as the case may be):
"Access Services" shall mean, collectively, PC Access Services, TV Access
---------------
Services and Wireless Access Services.
"Acquiring Party" --------------- has the meaning given in Section 4.2(b).
"Action" has the meaning given in the Certificate of Incorporation.
------
"Affiliate" of any Person shall mean any other Person that, directly or
---------
indirectly, controls, is under common control with or is controlled by that
Person. For purposes of this definition, "control" (including, with its
correlative meanings, the terms "controlled by" and "under
2
<PAGE>
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.
"Aggregated Significant Competitors" with respect to Access Services shall
----------------------------------
mean Persons (a) that in the aggregate have Access Service Permanent Subscribers
in those countries within the Territory in which the Company provides Access
Services equal to or greater than [**************] ([**]%) of the Access Service
Permanent Subscribers of the Company in the Territory, provided that such
Persons in the aggregate have at least [*****] PC Access Service Permanent
Subscribers in the Territory, or (b) that in the aggregate have Access Service
Permanent Subscribers in Brazil equal to or greater than [*******] ([**]%) of
the Access Service Permanent Subscribers of the Company in Brazil, provided that
such Persons have at least [*******] PC Access Service Permanent Subscribers in
Brazil. For avoidance of doubt, IP (i.e., Internet protocol) telephony and
related subscribers and customers shall not be considered in determining whether
a Person is a Significant Competitor or Persons together are Aggregated
Significant Competitors.
"AOL" has the meaning set forth in the preamble.
---
"AOL-branded" has the meaning given in the Certificate of Incorporation.
-----------
"AOL Directors" shall mean, collectively, the Class B Directors of the
-------------
Company (as such term is defined in the Certificate of Incorporation).
"AOL Latin America" shall mean AOL Latin America, S.L. (f/k/a Tesjuates,
-----------------
S.L.) a limited liability company organized under the laws of the Kingdom of
Spain and a wholly owned Subsidiary of the Company.
"AOL License" shall mean the AOL License Agreement by and between AOL
-----------
and AOL Latin America, in substantially the form of Exhibit A hereto.
---------
"AOL Marks" has the meaning set forth in the AOL License.
---------
"AOL OLS Agreement" shall mean the AOL Online Services Agreement by and
-----------------
between AOL and AOL Latin America, in substantially the form of Exhibit B
---------
hereto.
"AOL Service(s)" shall mean the Interactive Services that are PC Access
--------------
Services provided worldwide, including the AOL-US Service and any other
international AOL Services, under the brand name America Online(TM) and/or
AOL(TM) existing as of the date hereof or in the future as modified from time to
time.
"AOL-US Service" shall mean the principal AOL Services provided by AOL to
--------------
United States residents on the date hereof, as such service shall be modified
from time to time.
"Board" or "Board of Directors" shall mean the Board of Directors of the
----- ------------------
Company.
3
<PAGE>
"Business" has the meaning given in Section 2.1(a).
--------
"Business Day" shall mean any day, other than a Saturday or Sunday, on
------------
which federally chartered banks in the United States are open for business.
"By-laws" shall mean the By-laws of the Company as in effect as of the date
-------
of this Agreement, as the same may be amended from time to time in accordance
with the terms thereof.
"Call Option" has the meaning given in Section 5.7(b).
-----------
"Call Option Closing" has the meaning given in Section 5.7(b).
-------------------
"Certificate of Incorporation" shall mean the Certificate of Incorporation
----------------------------
of the Company as in effect as of the date of this Agreement, as the same may be
amended from time to time in accordance with the terms thereof.
"CIS License" shall mean the CIS License Agreement by and between AOL and
-----------
AOL Latin America, in substantially the form of Exhibit C hereto.
---------
"CIS Marks" has the meaning given in the CIS OLS Agreement.
---------
"CIS OLS Agreement" shall mean the CIS Online Services Agreement by and
-----------------
between CompuServe and AOL Latin America in substantially the form of Exhibit D
---------
hereto.
"Cisneros Family" shall mean Ricardo Cisneros, Gustavo Cisneros and/or
---------------
their lineal descendants, individually or collectively and/or any trusts for the
exclusive benefit of any one or more of such persons.
"Class A Common Stock" has the meaning set forth in the recitals above.
--------------------
"Class B Common Stock" has the meaning set forth in the recitals above.
--------------------
"Class C Common Stock" has the meaning set forth in the recitals above.
--------------------
"Commission" shall mean the Securities and Exchange Commission, or any
----------
successor agency performing the functions currently performed by the Securities
and Exchange Commission.
"Common Stock" has the meaning set forth in the recitals above.
------------
"Communication Services" has the meaning given in the Certificate of
----------------------
Incorporation.
"Company" has the meaning set forth in the first paragraph hereof.
-------
"Company Securities" shall mean any shares of Common Stock or other Voting
------------------
Stock.
4
<PAGE>
"CompuServe" shall mean CompuServe Interactive Services, Inc.
----------
"CompuServe-branded" shall mean, with respect to any internet or online
------------------
service that such service includes the word "CompuServe" as an integral part of
the name of such internet or online service. For the avoidance of doubt, a
reference to an internet or online service being a "CompuServe" internet or
online service shall not make such service "CompuServe-branded".
"Confidential Information" has the meaning given in Section 11.1.
------------------------
"Content" has the meaning given in the Certificate of Incorporation.
-------
"Damages" has the meaning given in the Certificate of Incorporation.
-------
"Default Rate" shall mean a per annum rate of interest equal to the Prime
------------
Rate plus two hundred (200) basis points.
"Direct Comprehensive Competitor" has the meaning given in Section 5.5.
-------------------------------
"Directly Competitive Service" has the meaning given in Section 6.2(a).
----------------------------
"Disproportionate Dilution" has the meaning given in Section 5.7(b).
-------------------------
"Effective Date" has the meaning set forth in the preamble.
--------------
"Employee" has the meaning given in the Certificate of Incorporation.
--------
"Encumbrance" shall mean any mortgage, pledge, security interest, lien,
-----------
restriction on use or transfer, other than those imposed by law, voting
agreement, adverse claim or encumbrance or charge of any kind (including any
agreement to give any of the foregoing), any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of, or any
agreement to give, any financing statement under the Uniform Commercial Code or
similar law of any jurisdiction.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the Commission promulgated thereunder, as
amended.
"Exercise Notice" has the meaning given in Section 7.1(b).
---------------
"Fair Market Value" shall mean, with respect to any Common Stock of the
-----------------
Company as of any date, the average closing price for the Class A Common Stock
as quoted on any national securities exchange or on the NASDAQ National Market
System for the fifteen trading days ending on the second trading day prior to
such date as reported in the Eastern Edition of The Wall Street Journal. If the
-----------------------
Class A Common Stock shall not be listed on any such exchange or traded on any
such automated quotation system on all such trading days during such 15-trading
day period, the closing or latest reported price for Class A Common Stock in the
over-the-
5
<PAGE>
counter market on each trading day on which such shares are not so listed or
traded as reported by NASDAQ or, if not so reported, then the last sale price
for each such day, as reported by the National Quotation Bureau Incorporated, or
if such organization is not in existence, by an organization providing similar
services (as determined by the Board), shall be deemed to be the closing price
on such trading day. If, at a time when the Class A Common Stock is trading
other than on such an exchange, there shall not have been a sale on any such
trading day, the mean of the last reported bid and asked quotations as reported
in the Eastern Edition of The Wall Street Journal for Class A Common Stock on
-----------------------
such day shall be deemed to be the closing price. If the shares of Class A
Common Stock shall not be so reported on any of such trading days, then the Fair
Market Value per share of such Class A Common Stock shall be the fair market
value thereof as determined in the reasonable judgment of the Board of
Directors. For the purpose hereof, "trading day" shall mean a day on which the
securities exchange or automated quotation system specified herein shall be open
for business or, if the shares of Class A Common Stock shall not be listed on
such exchange or automated quotation system for such period, a day with respect
to which quotations of the character referred to in the next preceding sentence
shall be reported.
"GCL" shall mean the General Corporation Law of the State of Delaware.
---
"GLA" shall mean Galaxy Latin America, LLC, a limited liability company
---
organized under the laws of the State of Delaware, and its successors.
"Governmental Authority" shall mean any domestic or foreign national, state
----------------------
or municipal or other local government or multi-national body, any subdivision,
agency, commission or authority thereof, or any quasi-governmental or private
body exercising any regulatory authority thereunder and any corporation,
partnership or other entity directly or indirectly owned by or subject to the
control of any of the foregoing.
"Holder" shall mean, as of any date, a holder of Series B Preferred Stock,
------
Series C Preferred Stock, Class B Common Stock or Class C Common Stock
outstanding on such date.
"Interactive Services" has the meaning given in the Certificate of
--------------------
Incorporation.
"Internet Portal Services" has the meaning given in the Certificate of
------------------------
Incorporation.
"Launch" shall mean the first commercial availability of an Interactive
------
Service to potential Subscribers in the Territory or a country in the Territory,
as applicable.
"Localized" or "Localization" shall mean (a) the translation of an
--------- ------------
Interactive Service into the language(s) primarily used in a particular country;
and (b) the localization of Content and/or Communication Services, as the case
may be, available through such Interactive Service that is specific to such
country.
"Maximum Disproportionate Dilution" has the meaning given in section
---------------------------------
5.7(b).
"Non-Access Service" has the meaning given in Section 6.2(a).
------------------
6
<PAGE>
"ODC" has the meaning given in the preamble.
---
"ODC Business Unit" has the meaning given in Section 5.2.
-----------------
"ODC Directors" shall mean, collectively, the Class C Directors of the
-------------
Company (as such term is defined in the Certificate of Incorporation).
"Operating Entity" has the meaning given in the Certificate of
----------------
Incorporation.
"Parent Entity" has the meaning given in the Certificate of Incorporation.
-------------
"Party" shall mean each of AOL, ODC and the Company, and each other Person
-----
who becomes a party to this Agreement in accordance with the provisions hereof.
"PC Access Services" has the meaning given in the Certificate of
------------------
Incorporation.
"Permanent Subscriber" shall mean, as of any date and with respect to any
--------------------
Access Service, a Subscriber that has used the applicable Access Service during
the longer of (i) the ninety (90)-day period preceding such date and (ii) the
period preceding such date consisting of sixty (60) days plus the duration of
any free trial period involving such service to which such person is entitled.
Notwithstanding the foregoing, if one or more Access Services is bundled with
one or more other Access Services, a Subscriber shall be deemed to be a
Permanent Subscriber if the foregoing test has been met with respect to at least
one of such bundled Access Services.
"Person" shall mean an individual, sole proprietorship, corporation,
------
partnership, limited liability company, joint venture, trust, unincorporated
organization, mutual company, joint stock company, estate, union, employee
organization, bank, trust company, land trust, business trust or other
organization, whether or not a legal entity, or a Governmental Authority.
"Preferred Stock" has the meaning set forth in the recitals above.
---------------
"Prime Rate" shall mean, for any date, the rate of interest per annum
----------
publicly announced from time to time as the prime rate in effect as of such date
as reported in the "Money Rates" column of the Eastern Edition of The Wall
--------
Street Journal or other comparable source as agreed to by the Parties if The
- -------------- ---
Wall Street Journal is not then publishing such figures. Each change in the
- -------------------
Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.
"Public Sale" shall mean a sale of securities pursuant to an offering
-----------
registered under the Securities Act or in a transaction pursuant to Rule 144 of
the Securities Act.
"Purchase Notice" has the meaning given in Section 5.7(b).
---------------
"Registration Rights Agreement" has the meaning given in Section 6.1.
-----------------------------
7
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"Restricted Activities" has the meaning given in Section 4.1(a).
---------------------
"Restricted Transferee" shall mean any Person that would cause a
---------------------
Stockholder to be in violation of the non-competition provisions of Article IV
hereof if such person became and remained a Special Affiliate of such
Stockholder and shall include, without limitation, each of Terra Networks, Star
Media, Universo Online, IG.com, El Sitio/O Site, Telmex/Prodigy, Ciudad
Internet/Clarin, Microsoft or any of their respective Affiliates.
"RSL-LA" shall mean RSL Communications, Latin America, Ltd., an
------
international business company organized under the laws of the British Virgin
Islands, and its successors in interest.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the Commission thereunder, as amended.
"Series B Preferred Stock" has the meaning set forth in the recitals above.
------------------------
"Series C Preferred Stock" has the meaning set forth in the recitals above.
------------------------
"Significant Competitor" with respect to Access Services shall mean any
----------------------
Person (a) having Access Service Permanent Subscribers in those countries within
the Territory in which the Company provides Access Services equal to or greater
than [************] ([**]%) of the Access Service Permanent Subscribers of the
Company in the Territory, provided that such Person has at least [*****] PC
Access Service Permanent Subscribers in the Territory, or (b) having Access
Service Permanent Subscribers in Brazil equal to or greater than [**********
****] ([**]%) of the Access Service Permanent Subscribers of the Company in
Brazil, provided that such Person has at least [*****] PC Access Service
Permanent Subscribers in Brazil.
"Special Affiliate" has the meaning given in Section 4.1(a).
-----------------
"Special Committee" has the meaning given in the Certificate of
-----------------
Incorporation.
"Stockholder" has the meaning set forth in the preamble.
-----------
"Strategic Partner" shall mean any Person who acquires 25% or more of the
-----------------
equity of the Company and who provides a strategic benefit to the Company in the
form of a contractual relationship or contribution of material, in-kind assets.
"Subscriber" shall mean, as of any date of determination and with respect
----------
to any Interactive Service, any Person who has opened an account with or
otherwise registered as a user of such Interactive Service.
"Subsidiary" has the meaning given in the Certificate of Incorporation.
----------
"Term" has the meaning given in Section 9.1.
----
8
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"Territory" has the meaning given in the Certificate of Incorporation.
---------
"Traditional Media Services" shall mean the delivery of movies, television
--------------------------
shows, sporting events and other forms of traditional entertainment products
intended to be viewed or experienced in uninterrupted fashion (i.e., non-
interactive) from beginning to end over ISDN, cable, satellite, fiber optics or
other form of broadcast media.
"Transfer" shall mean, whether directly or indirectly by merger, operation
--------
of law or otherwise, any sale, assignment, conveyance, transfer, donation or any
other means to dispose of, or pledge, hypothecate or otherwise encumber in any
manner whatsoever, or permit or suffer any Encumbrance.
"TV Access Services" has the meaning given in the Certificate of
------------------
Incorporation.
"Voting Stock" shall mean securities having the right to vote generally in
------------
any election of Directors of the Company (other than solely by reason of the
occurrence of an event).
"Warrant" shall mean that certain warrant of even date herewith and issued
-------
by the Company to AOL.
"Wholly Owned Affiliate" shall mean with respect to any Person any other
----------------------
Person which is directly or indirectly wholly owned by such Person, directly or
indirectly wholly owns such Person or is directly or indirectly wholly owned by
the same Person as such Person, with such ownership to mean possession of both
100% of the equity interest and 100% of the voting interest, except for
directors' qualifying shares, if any. Any Person that is directly or indirectly
wholly-owned by the Cisneros Family shall be deemed a Wholly Owned Affiliate of
ODC.
"Wireless Access Services" has the meaning given in the Certificate of
------------------------
Incorporation.
"Worse Offer" has the meaning given in Section 5.5.
-----------
Section 1.2 Usage Generally; Interpretation. Whenever the context may
-------------------------------
require, any pronoun includes the corresponding masculine, feminine and neuter
forms. All references herein to Articles and Sections shall be deemed to be
references to Articles and Sections of this Agreement unless the context
otherwise requires. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise expressly provided herein, any agreement, instrument
or statute defined or referred to herein or in any agreement or instrument that
is referred to herein means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. All references to Dollars or use of the "$"
symbol shall mean United States Dollars.
9
<PAGE>
ARTICLE II
PURPOSE
Section 2.1 Purpose. The Stockholders have entered into this Agreement
-------
to provide for the manner of dealing in their capacities as stockholders with
certain matters involving the management, conduct and operation of the Company,
including without limitation:
(a) To ensure that the Company's sole line of business shall be to
provide Interactive Services within the Territory (the "Business");
--------
provided, however, that unless and until AOL and ODC shall otherwise agree
in accordance with the provisions hereof and the Certificate of
Incorporation, the Business of the Company shall be limited to providing PC
Access Services, AOL-branded TV Access Services, AOL-branded Wireless
Access Services, and Internet Portal Services in the Territory; and
provided, further, however, that the Company shall not Launch any TV Access
Services, Wireless Access Services or Internet Portal Services in any
country within the Territory unless and until such Launch shall have been
approved by the Special Committee in accordance with the provisions of the
Certificate of Incorporation.
(b) To ensure that the Company conducts the Business under the brand
names "AOL" and/or "America Online" pursuant to the terms and conditions of
the AOL License and CompuServe pursuant to the terms and conditions of the
CIS License.
Section 2.2 No Partnership.
--------------
(a) Nothing in this Agreement shall be construed as creating between
or among any of the Parties a partnership or joint venture.
(b) Except as expressly provided herein or as approved in writing by
the represented Party, no Party shall have the right to represent the other
Party in negotiations with third parties. No Party shall have the right to
enter into an agreement with a third party for the account of the other
Party or for their joint account, except as expressly provided herein or as
may be hereafter approved, or agreed to, by the Parties in writing.
Section 2.3 Voting. To effectuate the intent of Section 2.1 and subject
------
to any agreement reached by the Stockholders in connection with the admission of
a third-party equity participant in the Company as provided in Section 5.7, the
Stockholders shall vote their shares of Voting Stock in accordance with the
provisions of Article III hereof.
ARTICLE III
VOTING PROVISIONS
Section 3.1 Voting Agreements. The Stockholders agree to vote all shares
-----------------
of Voting Stock held by them or their respective Affiliates so as to cause the
following:
10
<PAGE>
(a) The election of each Class A Director (as defined in the
Certificate of Incorporation) proposed for election by the Special
Committee; and
(b) The approval of any expansion of the Business in which the Company
shall be permitted to engage as and when (i) the Company obtains the right
to engage in any such expanded Business in accordance with the provisions
of Section 2.9 of the AOL License and (ii) the Company shall elect to
pursue such expanded business in accordance with the provisions of the AOL
License and the Certificate of Incorporation, including, without
limitation, voting to approve any amendment of the Certificate of
Incorporation as and to the extent required to effect any such expansion of
the Business.
ARTICLE IV
NON-COMPETITION
Section 4.1 Non-Competition with the Company
--------------------------------
(a)(i) Subject to the cure provisions of Section 4.2(b), from the
Effective Date until December 15, 2003 and thereafter for so long as each
of AOL and ODC, together with their respective Wholly-Owned Affiliates and,
with respect to ODC only, Cisneros Family members, holds shares of Voting
Stock equal to at least twenty percent (20%) of the issued and outstanding
shares of Voting Stock (as adjusted to negate the effect of (1) the
admission of third parties admitted as equity participants as contemplated
in Section 5.7 hereof, (2) the issuance of any Company Securities by the
Company or (3) the issuance of any Company Securities upon exercise of the
Warrant) neither Stockholder (nor any third party admitted as a stockholder
of the Company in accordance with this Agreement) nor any Special Affiliate
thereof shall, directly or indirectly, independently of the Company or the
other Stockholder, through a Special Affiliate or otherwise, provide,
acquire or hold any interest in:
(A) a Person providing, or otherwise participating in the
provision within the Territory of, a PC Access Service that is a
Significant Competitor or Persons providing, or otherwise
participating in the provision within the Territory of, PC Access
Services that taken together are Aggregated Significant Competitors;
or,
(B) in the case of AOL and its Special Affiliates, a Spanish or
Portuguese language AOL-branded or CompuServe-branded Internet Portal
Service targeted at end users residing in the Territory (except that
AOL shall have the right to offer such service in one or more
countries within the Territory directly or together with a third party
pursuant to and in compliance with the provisions of Section 2.9 of
the AOL License).
(ii) Subject to the cure provisions of Section 4.2(b), from ________,
2000 until ___________, 2005 and thereafter for so long as each of AOL and
ODC, together with their respective Wholly-Owned Affiliates and, with
respect to ODC only, Cisneros
11
<PAGE>
Family members, holds shares of Voting Stock equal to at least twenty
percent (20%) of the issued and outstanding shares of Voting Stock (as
adjusted to negate the effect of (1) the admission of third parties
admitted as equity participants, the result of which is that ODC suffers a
disproportionate dilution as contemplated in Section 5.7(b) hereof or (2)
the issuance of any Company Securities by the Company upon the exercise of
the Warrant) neither AOL nor any Special Affiliate thereof shall, directly
or indirectly, independently of the Company or the other Stockholder,
through a Special Affiliate or otherwise, provide, acquire or hold any
interest in a Person providing in the Territory, or otherwise participating
in the provision within the Territory of, an AOL-branded TV Access Service
or an AOL-branded Wireless Access Service.
(iii) Subject to the cure provisions of Section 4.2(b), from ________,
2000 until __________, 2005 neither ODC nor any Special Affiliate thereof
shall, directly or indirectly, independently of the Company or the other
Stockholder, through a Special Affiliate or otherwise, provide, acquire or
hold any interest in a Person providing in the Territory, or otherwise
participating in the provision within the Territory of, TV Access Services
or Wireless Access Services that is a Significant Competitor or Persons
providing or otherwise participating in the provision within the Territory
of TV Access Services or Wireless Access Services that taken together are
Aggregated Significant Competitors.
For purposes of this Section 4.1(a), "Special Affiliate" shall mean
-----------------
any Affiliate or other entity in which a Party or the Cisneros Family holds
a direct and/or indirect ownership interest of at least thirty-five percent
(35%), or, in the case of RSL-LA or GLA, in which ODC or the Cisneros
Family holds a direct and/or indirect ownership interest of greater than
fifty percent (50%). For the purposes of this Section 4.1(a), "Access
------
Services", as it relates to the definition of PC Access Services, TV Access
--------
Services and Wireless Access Services, shall include what would otherwise
be a non-Access Service if any such services are bundled with a third-party
Access Service in a joint venture, profit sharing, joint marketing or like
arrangement, whereby: (x) the non-Access Service serves as the default
homepage for the Access Service, (y) the non-Access Service and Access
Service are promoted or marketed as the same service or under the same
brand, or (z) consumers otherwise may reasonably conclude that such bundled
services are one and the same. For the avoidance of doubt, a link on the
homepage of a third-party Access Service to a non-Access Service and/or the
promotion of the non-Access Service as one of the services available to the
end users of the Access Service shall not render the non-Access Service(s)
an "Access Service" for purposes of this Section 4.1(a). (All prohibited
activities under this Section 4.1(a) shall be collectively referred to as
"Restricted Activities".) For the avoidance of doubt, (i) with respect to
----------------------
PC Access Services, TV Access Services and Wireless Access Services, a
Stockholder shall not be deemed to be engaging in a Restricted Activity,
regardless of whether the applicable Person is a Significant Competitor or
together with other Persons is an Aggregated Significant Competitor, unless
the Stockholder has a direct and/or indirect ownership interest in the
applicable Person or Persons of at least thirty five percent (35%) and (ii)
ODC shall not be deemed to be engaging in a Restricted Activity with
respect to GLA and/or RSL-LA, regardless of whether GLA or RSL-LA is a
12
<PAGE>
Significant Competitor or taken together are Aggregated Significant
Competitors, unless ODC or the Cisneros Family has a direct and/or indirect
ownership interest in GLA and/or RSL-LA, as applicable, of greater than
fifty percent (50%).
(b) Notwithstanding paragraph (a), Restricted Activities shall
exclude:
(i) Traditional Media Services;
(ii) IP (i.e., Internet protocol) telephony services; and
(iii) AOL's GlobalNet international roaming communications
network services.
(c) For the avoidance of doubt and subject to the definition of Access
Services in Section 4.1(a) above as it relates to PC Access Services, TV
Access Services and Wireless Access Services, AOL, directly or together
with a third party, shall have the right to offer in the Territory:
(i) Spanish or Portuguese language AOL-branded and CompuServe-
branded online or Internet services that are not Access Services to
the extent provided in Section 2.9 of the AOL License; and
(ii) Non-AOL-branded and non-CompuServe-branded Access Services
or other services that are not PC Access Services.
(d) For the avoidance of doubt, notwithstanding the termination or
non-applicability of the non-competition provisions of Section 4.1(a), AOL
shall have no right to engage in PC Access Services, TV Access Services or
Wireless Access Services or Restricted Activities in the Territory using
the AOL Marks or CIS Marks:
(i) except to the extent expressly provided in this Section 4,
the AOL License or the CIS License, or
(ii) unless the AOL License or CIS License terminates or is
amended to allow such use of the AOL Marks or CIS Marks in accordance
with the express terms of the AOL License or CIS License.
Section 4.2 Repurchase Upon Breach.
----------------------
(a) Subject to the other provisions of this Section 4.2, if a
Stockholder and/or a Special Affiliate thereof violates the prohibitions of
Section 4.1(a)(i) or (iii) and, if applicable, does not remedy such
violation as provided in Sections 4.2(c) and (d), and such Stockholder
and/or Special Affiliate fails to cure such violation and, if applicable,
fails to remedy within thirty (30) Business days of receiving written
notice from the other Stockholder, then, in addition to other remedies
available herein or under law or equity, if
13
<PAGE>
ODC or one of its Special Affiliates is the breaching Person, the Company
shall have the right to purchase all, but not less than all, of ODC's
shares of Voting Stock in the Company (collectively, "ODC's Holdings") at
--------------
their Fair Market Value, less, to the extent such damages are not reflected
in the Fair Market Value, all damages arising as a result of the breach,
such purchase to be effected in accordance with the procedures set forth
herein and in Sections 5.3(d) and 5.4 below. If the Company elects not to
purchase ODC's Holdings upon any breach by ODC or one of its Special
Affiliates hereunder, then AOL shall have the right to purchase all, but
not less than all, of ODC's Holdings on the same terms. If AOL or one of
its Special Affiliates is the breaching Person, then ODC shall have the
right to require AOL to purchase all, but not less than all, of ODC's
Holdings at their Fair Market Value plus, to the extent such damages are
reflected in the Fair Market Value, all damages arising as a result of the
breach, such purchase to be effected in accordance in accordance with the
procedures set forth herein and in Sections 5.3(d) and 5.4 below. The
Company or AOL, as applicable, shall purchase such ODC Holdings in cash,
provided that, (i) if the Company has elected to purchase ODC's Holdings,
the Company may effect such purchase by delivery of its promissory note, in
the full amount of the purchase price therefor, payable over three years
with interest at the Default Rate, compounded annually, and (ii) if AOL is
the purchasing party, then at the option of the non-breaching party, AOL
shall purchase ODC's Holdings in cash or in freely tradable shares of AOL
common stock in installments over a three (3)-year period, with interest at
the Default Rate compounded annually (the "Installment Payments"), subject
--------------------
to the Liquidity Requirements as set forth in paragraph (f) below. If
Installment Payments are chosen, or if the Company elects to effect its
purchase of ODC's Holdings by delivery of its promissory note, then the
purchase price shall be paid in equal quarterly installments of principal
and interest over the applicable period, and evidenced by a promissory note
in form and substance reasonably satisfactory to ODC. At ODC's election the
note or Installment Payments shall be secured by ODC's Holdings being
purchased. If any third party admitted as a stockholder of the Company as
contemplated in Section 5.7 violates the prohibitions contained in Section
4.1(a) and does not remedy such violation as provided in Sections 4.2(c) or
(d), then, in addition to other remedies available herein or under law or
equity, the Company shall have the right to purchase all, but not less than
all, of such third party's shares of Voting Stock in the Company at their
Fair Market Value, less, to the extent such damages are not reflected in
the Fair Market Value, all damages arising as a result of the breach, such
purchase to be effected in accordance with the procedures set forth herein
and in Sections 5.3(d) and 5.4 below. If the Company fails to exercise such
right, then AOL and ODC shall have the right to purchase all or any part of
such third party's shares of Voting Stock in the Company at their Fair
Market Value, less to the extent such damages are not reflected in the Fair
Market Value, all damages arising as a result of the breach. AOL and ODC
shall each be entitled to purchase a portion of such third party's shares
in proportion to the shares of Voting Stock originally sold by AOL and/or
ODC to such third party equity participant, if any, or if no such shares
were originally sold by AOL or ODC, in proportion to their then respective
percentage ownership interests in the Voting Stock. If either Stockholder
chooses not to so purchase any part of a third party's shares that it is
permitted to buy under this Section 4.2, then the other Stockholder may, at
its option, purchase all of the
14
<PAGE>
remainder of such third party's shares.
(b) If, after the Effective Date, a Stockholder and/or any of its
Special Affiliates (the "Acquiring Party") intends to acquire an interest
---------------
in a Person or Persons (which as a result of such acquisition would be a
Special Affiliate(s)) that, directly or indirectly, as part of its or their
activities would cause a Stockholder and/or any of its Special Affiliates
to be engaged in Restricted Activities, then the Acquiring Party shall use
its commercially reasonable efforts (subject to any applicable
confidentiality obligations) to notify the other Stockholder and the
Company of such intent to acquire such interest. If a Stockholder is
precluded from providing the complete notice required hereunder due to a
conflicting confidentiality obligation, the Stockholder must, at a minimum,
notify the other Stockholder and the Company that a conflicting
confidentiality obligation is preventing it from full compliance with this
Section 4.2(b).
(c) If, after the Effective Date, the Acquiring Party acquires an
interest in a Person or Persons (which as a result of such acquisition
becomes a Special Affiliate(s) of the Acquiring Party) that, directly or
indirectly, engages in Restricted Activities, then the Acquiring Party
shall have the option, in its sole discretion, of either: (y) divesting the
Restricted Activities to the extent necessary to be in compliance with
Section 4.1 within one (1) year from the date on which the Acquiring Party
has acquired such an interest in Restricted Activities, or (z) offering
first to the Company and, if not accepted by the Company, then to the other
Stockholder, an opportunity to participate in the Restricted Activities or
offering to contribute that part of the Person conducting Restricted
Activities to the Company in exchange for payment by the Company of the
fair market value thereof. If the Acquiring Party makes an offer pursuant
to clause (z) above, and neither the Company nor the other Stockholder
agrees to acquire such interest for any reason or the Company does not
agree to pay for the Restricted Activities, then the Acquiring Party shall
divest the Restricted Activities to the extent necessary to be in
compliance with Section 4.1 within the later of: (A) one (1) year from the
date on which the Acquiring Party has acquired such an interest in the
applicable Person(s), or (B) six (6) months after receiving written notice
rejecting the Acquiring Party's offer from both the other Stockholder and
the Company, but, in any case, no later than eighteen (18) months after the
date on which the Acquiring Party has acquired such an interest in the
Person.
(d) Notwithstanding any other provision of this Agreement, during the
period that the non-competition provisions of Section 4.1(a) are in force,
if:
(i) the activities of any Stockholder or any of its Special
Affiliates result in such Stockholder and/or its Special Affiliate(s)
becoming a Significant Competitor providing PC Access Services (or, in
the case of ODC and/or its Special Affiliates, TV Access Services or
Wireless Access Services) in the Territory, or
(ii) the activities of the Stockholder and its Special Affiliates
result in such Stockholder or Special Affiliate together becoming an
Aggregated Significant Competitor providing PC Access Services (or, in
the case of ODC
15
<PAGE>
and/or its Special Affiliates, TV Access Services or Wireless Access
Services) in the Territory,
then the Stockholder and/or the Special Affiliate(s), as the case may be,
shall have the option, in its or their sole discretion, of either: (y)
divesting the Restricted Activity to the extent necessary to be in
compliance with Section 4.1 within one (1) year from the date on which it
becomes a Significant Competitor or an Aggregated Significant Competitor,
as the case may be, or (z) offering first to the Company and, if not
accepted by the Company, then to the other Stockholder, an opportunity to
participate in the Restricted Activities or offering to contribute that
part of the Person conducting Restricted Activities to the Company in
exchange for payment by the Company of the fair market value thereof. If
the Acquiring Party makes an offer pursuant to clause (z) above, and the
Company does not agree to pay for the Restricted Activity for any reason or
the Company or the other Stockholder does not agree to acquire such
interest for any reason, then the Acquiring Party shall divest the
Restricted Activity to the extent necessary to be in compliance with
Section 4.1 within one (1) year from the date on which the applicable
Person(s) became a Significant Competitor or Aggregate Significant
Competitor, as the case may be.
(e) Notwithstanding any other provision of this Agreement, during the
period that the non-competition provisions of Section 4.1(a)(i) and (iii),
as applicable, are in force, either Stockholder, either directly or through
a Special Affiliate, may acquire or hold an interest in a Person providing,
or otherwise participating in the provision of, PC Access Services, TV
Access Services (except AOL-branded TV Access Services) and Wireless Access
Services (except AOL-branded Wireless Access Services) within the Territory
so long as such Person is not a Significant Competitor and such Person,
together with the applicable Stockholder and its Special Affiliates, is not
an Aggregated Significant Competitor.
(f) The "Liquidity Requirements" shall be deemed satisfied only if AOL
provides unconditional guarantees to ODC, in form and substance reasonably
satisfactory to ODC, that provide reasonable assurances that ODC can sell
an amount of the AOL common stock received at a price sufficient to provide
the same amount of money to ODC on approximately the same time schedule
that ODC would have received if AOL had chosen to make Installment Payments
in cash and guarantee that if ODC cannot do so, AOL will pay the difference
to ODC. ODC recognizes, however, that it may not "dump" or otherwise sell
such AOL stock in a manner that would disrupt the market for such stock,
and accordingly, the parties shall mutually agree to a procedure and
timetable for the most rapid liquidation of such AOL stock that does not
disrupt the market therefor. Notwithstanding the foregoing, if for any
reason ODC does not sell its AOL stock or any portion thereof within
forty-five (45) days of receipt of such AOL stock or, if later, within the
timetable agreed upon, AOL cannot and does not guarantee that the AOL stock
given to ODC will be equivalent in value to the cash Installment Payments.
(g) If the Company and an Acquiring Party are unable to agree on the
fair market value of the part of any Person conducting Restricted
Activities which such Acquiring
16
<PAGE>
Party is required to offer to the Company pursuant to Section 4.1(c) or
4.1(d), then either party may request an appraisal of such fair market
value by delivery of such a request in writing to the other. Such appraisal
shall be conducted by an investment banking firm of international standing
with experience in valuations of the type of business in question
reasonably acceptable to each of the Company and the Acquiring Party. If
the Acquiring Party acquired the Person that is conducting the Restricted
Activities pursuant to arm's length negotiations with an un-Affiliated
party, then the appraisal of such investment banking firm shall be limited
to determining the percentage of purchase price paid by the Acquiring Party
for such Person attributable to the Restricted Activities. Otherwise, the
investment banking firm may make such appraisal on whatever basis it
reasonably may determine. Any such appraisal shall, absent manifest error,
be binding on the Company, the Acquiring Person and the other Stockholder
for all purposes under this Section 4.1.
ARTICLE V
RESTRICTIONS ON TRANSFERS
Section 5.1 Prohibited Transfers. Except as expressly permitted in this
--------------------
Agreement, neither Stockholder nor any of their respective Affiliates, including
any direct or indirect beneficial owner or ultimate parent of any such entity
(including AOL and ODC), shall, directly or indirectly, Transfer any of the
right, title or interest in (i) any shares of Preferred Stock or Common Stock or
(ii) any of their Affiliates which beneficially own, either directly or
indirectly, any shares of Preferred Stock or Common Stock. Except for Transfers
duly made in accordance with this Article V, no Transfer of Preferred Stock or
Common Stock by a Stockholder shall be valid as against the Company and its
stockholders and any purported transfer not so made in accordance with Article V
shall be null and void and of no force or effect as against the Company and the
other Stockholder.
Section 5.2 Permitted Transfers.
-------------------
(a) Notwithstanding anything in this Agreement to the contrary, each
Stockholder (or any permitted transferee under clauses (i) through (iv)
below) may Transfer shares of Voting Stock owned by it and its rights under
this Agreement as they relate to such transferred Voting Stock as follows:
(i) All or part of the shares of Voting Stock owned by it and its
rights under this Agreement to any transferee that is a Wholly Owned
Affiliate or Parent Entity of a Stockholder provided that no
Restricted Transferee owns or thereafter shall own an interest in such
Parent Entity, which interest, with respect to a Parent Entity, is
acquired directly from such Parent Entity or from one of its
Affiliates;
(ii) All or part of the shares of Voting Stock owned by it and
its rights under this Agreement to any transferee admitted to the
Company as a third party equity holder pursuant to the provisions of
Section 5.7 hereof;
17
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(iii) Up to twenty percent (20%) of the shares of Voting Stock of
such Stockholder to transferees that comprise members of the Cisneros
Family and/or Employees of the Stockholders, provided that (x) prior
to the effective date of any such transfer, the prospective
transferees shall enter into a voting agreement, in form and substance
satisfactory to the Company and the non-transferring Stockholder,
pursuant to which the transferring Stockholder shall retain all voting
rights attributable to the transferred shares or (y) such transfers
are of Class A Common Stock;
(iv) All of the shares of Voting Stock owned by it and its rights
under this Agreement if such Transfer is part of the Transfer to any
party acquiring all (or substantially all) of (A) the business of AOL,
or (B) the ODC Business Unit. For purposes hereof, "ODC Business Unit"
-----------------
means any Person or Persons that individually or collectively owns all
of the equity interests of ODC and its Affiliates and the Cisneros
Family in the Company and RSL-LA; and
(v) All or part of the shares of Voting Stock owned by it as a
result of the pledge, hypothecation or other similar financing
transaction so long as the transferring stockholder continues to have
the sole and exclusive authority and right to vote the shares subject
to such pledge, hypothecation or other financing transaction.
In the event of any Transfer of any Company Securities other than Class A
Common Stock pursuant to Sections 5.2(a)(i) through (iv), the transferee
thereof (or subsequent transferee) shall be entitled to the rights and
privileges set forth in this Agreement and shall be bound and obligated by
the provisions of this Agreement. As a condition to any such Transfer
permitted pursuant to this Section 5.2(a), each transferee that will own
shares of Voting Stock (other than shares of Class A Common Stock) shall,
prior to such transfer, agree in writing to be bound by all of the
provisions of this Agreement and no such transferee shall be permitted to
make any Transfer which the original transferor was not permitted to make.
In connection with any Transfer of any Company Securities other than Class
A Common Stock pursuant to this Section 5.2(a), the transferee shall
execute and deliver to the non-transferring Stockholder and the Company
such documents as may reasonably be requested by the non-transferring
Stockholder and/or the Company to evidence the same.
(b) Each Stockholder may Transfer some or all of the shares of Voting
Stock owned by it to the other Stockholder.
(c) Each Stockholder may Transfer some or all of the Class A Common
Stock owned by it in a Public Sale.
Section 5.3 Rights of First Refusal.
-----------------------
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(a) Except with respect to Transfers permitted pursuant to Section
5.2, if a Stockholder wants to Transfer any shares of Voting Stock to any
other Person (other than to a Restricted Transferee or pursuant to a
pledge, hypothecation or other similar financing transaction in which the
transferring Stockholder continues to have the sole and exclusive authority
and right to vote the shares subject to such pledge, hypothecation or other
financing transaction) in a bona fide transaction, such Stockholder (the
"Offeror") shall be entitled to do so provided that such Offeror first
--------
offers to sell such shares of Voting Stock to the other Stockholder (the
"Offeree") at the same price and the same terms and conditions as the
--------
Offeror would receive from such other Person. The Offeror shall submit to
the Company and the Offeree a written notice (the "Offer Notice") stating
------------
in reasonable detail such price or other consideration and such terms and
conditions and identifying the Person and all Persons who beneficially own
more than five percent (5%) of such Person, proposing to purchase the
shares of Voting Stock. The Offeree shall have a period of thirty (30) days
after the receipt of the Offer Notice in which to accept or reject such
offer. If the Offeree elects to accept such offer, which acceptance must be
for all and not part of the Voting Stock offered for sale, it shall so
indicate within such thirty (30) day period by notice to the Offeror. The
notice required to be given by the Offeree shall specify a date for the
closing of the purchase which, subject to the expiration or early
termination of any waiting period required by any Governmental Authority
and the receipt of any required approvals of any Governmental Authority,
shall not be more than thirty (30) days after the date of the giving of
such notice.
(b) If the Offeree does not exercise its right to purchase all of the
shares of Voting Stock offered for sale pursuant to the provisions of this
Section 5.3, the Offeror of such shares of Voting Stock shall have the
right to sell to the Person identified in the Offer Notice, subject to the
provisions of this Agreement, all (but not less than all) of such shares of
Voting Stock on the same terms and conditions including the price or other
consideration specified in the Offer Notice, free from the restrictions of
Section 5.1 of this Agreement (for purposes of such specific transaction,
but not for purposes of any subsequent transaction) in a bona fide
transaction, for a period of ninety (90) days from the date that the Offer
expires hereunder, provided that any such purchaser shall prior to such
transfer, if such purchaser shall be receiving shares of Voting Stock,
other than shares of Class A Common Stock, agree in writing to be bound by
all of the provisions of this Agreement. At the end of such ninety (90) day
period, the Offeror shall notify the Company and the Offeree in writing
whether its shares of Voting Stock have been sold in a bona fide
transaction during such period. To the extent not sold during such ninety
(90) day period, all of such shares of Voting Stock shall again become
subject to all of the restrictions and provisions of this Section 5.3.
(c) If the Offeree accepts the offer set forth in the Offer Notice,
the purchase price or other consideration per share of the shares of Voting
Stock purchased by the Offeree shall be the price or other consideration
per share offered to be paid by the prospective transferee described in the
Offer Notice, which price shall be paid in cash and/or such other
consideration, at the election of the Offeree.
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(d) If the Offeree accepts the offer set forth in the Offer Notice,
the closing of the purchase shall take place at the principal office of the
Company or such other location as shall be mutually agreeable to the
Offeror and Offeree, and the purchase price shall be paid at the closing by
wire transfer of immediately available funds or in such other appropriate
form if for consideration other than cash. At the closing, the Offeror
shall deliver to the Offeree the certificates evidencing the shares of
Voting Stock to be transferred, duly endorsed and in negotiable form as
well as the items listed in Section 5.4.
Section 5.4 Closing Deliveries. The Offeror at a closing under this
------------------
Article V shall deliver to the Offeree the following:
(a) A duly executed stock power, "Deed of Transfer" or other
appropriate instrument conveying to the Offeree the shares of Voting Stock
being purchased by the Offeree, free and clear of any Encumbrances, except
those in this Agreement which are expressly assumed. If less than all of
the shares of Voting Stock evidenced by a stock certificate are being
purchased, the Company shall, upon receipt of such duly endorsed stock
certificate, issue to the Offeree a stock certificate evidencing the shares
being purchased and issue to the Offeror a stock certificate evidencing the
number of shares not being purchased.
(b) A statement from the Offeror that: (i) except as set forth
therein, the Offeror has no claim against the Company in respect of the
shares of Voting Stock being transferred, including for any unpaid
dividends; and (ii) the Offeror shall perform any of its obligations under
this Agreement that shall continue to be applicable to the Offeror after
such transfer of shares or shall guarantee any such obligations as may be
assumed by the Offeree, unless such guarantee is not then required by the
other parties to this Agreement.
Section 5.5 Direct Comprehensive Competitor. Before ODC or any of its
-------------------------------
Affiliates may Transfer any shares of Voting Stock offered by ODC or any of such
Affiliates pursuant to this Article V to a "Direct Comprehensive Competitor" (as
defined below) of AOL, ODC shall provide AOL with commercially reasonable notice
of its intentions and the terms of the contemplated transaction. Before ODC or
any of its Affiliates may consummate any transaction with such Direct
Comprehensive Competitor, AOL shall have a right, exercisable within thirty (30)
days after written notice from ODC, to purchase such shares on the same terms as
those offered by ODC and/or its Affiliates to the Direct Comprehensive
Competitor. If AOL does not accept this opportunity to purchase ODC's and/or its
Affiliates' shares and ODC and/or its Affiliates wishes to sell such shares to
the Direct Comprehensive Competitor at a price lower than the price offered to
AOL, or on material terms which, when taken as a whole, are less favorable to
ODC and/or its Affiliates than those offered to AOL (a "Worse Offer"), ODC shall
-----------
notify AOL of its intentions and the terms of the Worse Offer. Before ODC and/or
its Affiliates may consummate any Worse Offer transaction with such Direct
Comprehensive Competitor, AOL shall have a right to purchase ODC's and its
Affiliates' shares on the same terms as such Worse Offer, exercisable within
thirty (30) days of written notice from ODC. For purposes of
20
<PAGE>
this Section 5.5, a "Direct Comprehensive Competitor" shall mean a Person or
-------------------------------
entity which owns or controls, directly or indirectly, a multinational business
that includes the provision of comprehensive horizontal (i.e., across multiple,
diverse subject areas) Interactive Services containing Content of general
interest as may be organized under such subject areas as news, sports, and
finance, including, by way of example, [**********************].
Section 5.6 Purchase of the ODC Holdings; Installment Payments. ODC hereby
--------------------------------------------------
agrees that AOL and/or the Company, as applicable, may designate a Subsidiary or
a third party as the acquirer of all or any of ODC's shares of Voting Stock it
may be entitled to purchase hereunder, provided that AOL and/or the Company, as
applicable, unconditionally guarantees the required purchase payments to ODC.
Section 5.7 Third-Party Equity Participants. AOL, ODC and the Company
-------------------------------
shall evaluate the benefits of admitting one or more significant third-party
equity stockholders to the Company, and (except as expressly set forth in this
Agreement) any such admission of a significant third-party equity participant
shall be mutually agreed upon by AOL and ODC in accordance with this Section 5.7
and, if such admission is to be effected in whole or in part by sale of any
Company Securities by the Company, submitted for approval of the Special
Committee and the Board in accordance with the provisions of the Certificate of
Incorporation:
(a) Either of the Stockholders may identify one or more Strategic
Partners, and may enter into discussions with one or more such Strategic
Partners with a view to offering to such Strategic Partners an opportunity
to participate in the equity ownership of the Company. Before one
Stockholder commences negotiations (e.g., making a formal proposal
regarding a significant deal point) it shall provide notice to the other
Stockholder and the Company which shall have the right to participate in
any and all such negotiations. Either Stockholder may, however, direct that
such negotiations not commence and such third party not be considered for
an interest.
(b) Disproportionate Dilution; Call Option.
--------------------------------------
(i) Any such admission of a Strategic Partner to the Company
shall be accomplished in such a manner that the respective Voting
Stock holdings of ODC and AOL in the Company are diluted on a two to
one (2 to 1) basis until the aggregate number of shares of Voting
Stock owned by ODC is reduced to twenty-five percent (25%) of the
aggregate number of shares of Voting Stock then outstanding as
adjusted to reflect any stock splits, reverse stock splits, stock
dividends, stock issuances and similar capital transactions, and,
thereafter the respective Voting Stock holdings of ODC and AOL,
respectively, shall be diluted on a one and one-half to one (1.5 to 1)
basis (collectively, the "Disproportionate Dilution"). Strategic
-------------------------
Partners may be admitted at any entity level or levels (e.g., to the
Company or any other Subsidiary) and in any manner (e.g., by the
issuance of shares by the Company and/or the sale of shares by AOL
and/or ODC), provided, however, that the net effect of all
transactions admitting Strategic Partners does not dilute ODC's
overall (direct or indirect, whether through the Company or otherwise)
percentage ownership of the Voting Stock of the
21
<PAGE>
Company relative to AOL's percentage ownership more than on a 2 to 1
or 1.5 to 1 basis, as applicable ("Maximum Disproportionate
Dilution"). ------------------------
--------
(ii) ODC hereby grants the Company and AOL an option (the "Call
----
Option") to purchase from ODC, and ODC shall be obligated to sell to
------
the Company and AOL, as applicable, such number of shares of Voting
Stock then owned by ODC as may be required to effect the
Disproportionate Dilution. The Company and/or AOL, as applicable, may
exercise the Call Option by written notice (the "Purchase Notice") to
---------------
ODC, which Purchase Notice must be delivered to ODC within thirty (30)
days after the admission of a Strategic Partner to the Company. The
price at which the Call Option shall be exercised shall be determined
pursuant to subsection (A) below, and the date and place of transfer
shall be determined pursuant to subsection (B) below.
(A) Price Determination. The purchase price per share at
-------------------
which the Call Option shall be exercised shall be equal to the
Fair Market Value thereof as of the date of delivery of the
Purchase Notice.
(B) Date and Place of Transfer. The purchase and sale of
--------------------------
the shares owned by ODC to the Company and/or AOL, as applicable,
pursuant to subsection (b)(ii) above shall take place at the
principal place of business of the Company (unless otherwise
agreed by the Stockholders), on a date specified by the Company
and/or AOL, as applicable, but no later than thirty (30) days
after the Purchase Notice has been sent pursuant to subsection
(b)(ii), unless otherwise agreed by the Stockholders (the "Call
----
Option Closing"). At the Call Option Closing, the Company and/or
--------------
AOL, as applicable, shall tender and ODC shall accept payment of
the purchase price by certified or bank check or wire transfer,
and ODC shall deliver to the Company and/or AOL, as applicable,
in exchange therefor the certificate(s) for the shares of Voting
Stock being acquired pursuant to the Purchase Notice, accompanied
by duly executed instruments of transfer and the other documents
required to be delivered pursuant to Section 5.4 hereof.
(c) If for any reason the admission of a Strategic Partner results in
an aggregate dilution of ODC's relative percentage ownership in the Company
greater than the Maximum Disproportionate Dilution, the Stockholders and
the Company shall take all actions necessary to ensure that such excessive
dilution is eliminated by an adjustment in the form of: (i) the sale or
transfer from AOL and/or the Company to ODC of shares of Voting Stock in
the Company, and/or (ii) any other measure reasonably agreed upon by the
Stockholders, such that after such adjustment the resulting dilution of
ODC's ownership interest does not exceed the Maximum Disproportionate
Dilution.
(d) If a Strategic Partner is admitted to the Company, and the manner
of effecting the disproportionate dilution is other than pursuant to the
Call Option, ODC shall be
22
<PAGE>
compensated for any sale or other dilution of ODC's Voting Stock ownership
directly or indirectly in an amount equal to the Fair Market Value thereof.
(e) Any admission of a Non-Strategic Partner to the Company shall
dilute AOL and ODC pro rata.
(f) The method of admitting Strategic Partners and Non-Strategic
Partners (e.g., whether to effect such admission by the issuance of shares
to such new stockholder and/or the sale of shares by AOL and/or ODC), shall
be determined by the Stockholders and, if such method involves the issuance
of any Company Securities or other equity securities of the Company,
submitted to the Special Committee and the Board for their approval in
accordance with the Certificate of Incorporation.
(g) If the shares of Voting Stock held by AOL and/or ODC shall have
been reduced by reason of a sale of a portion of its or their shares of
Voting Stock to a Strategic Partner or Non-Strategic Partner as
contemplated in this Section 5.7, and such Strategic Partner or Non-
Strategic Partner thereafter wants to, or is required to, sell all or a
portion of such shares of Voting Stock, AOL and ODC shall cooperate with
each other and such Strategic Partner or Non-Strategic Partner, as
applicable, so that each of AOL and ODC shall have the right and
opportunity to repurchase any such shares of Voting Stock in proportion to
the shares of Voting Stock originally sold by AOL and/or ODC to such
Strategic Partner or Non-Strategic Partner. If either Stockholder chooses
not to purchase any part of a third-party's shares of Voting Stock which it
is permitted to buy under this Section 5.7(g), then the other Stockholder
or, if it elects not to purchase all of such shares, the Company, may
purchase at its option all of the remainder of such third-party's shares of
Voting Stock.
ARTICLE VI
REGISTRATION RIGHTS
Section 6.1 Registration Rights. The shares of Class A Common Stock that
-------------------
are issued to the Stockholders by the Company upon conversion of Class B Common
Stock or Class C Common Stock or otherwise (including, without limitation, upon
conversion of any Series B Preferred Stock received by AOL upon exercise by AOL
of the Warrant in whole or in part) shall have the registration rights set forth
in the Registration Rights Agreement attached hereto as Exhibit E (the
---------
"Registration Rights Agreement"). The parties agree that, subject to the advance
- ------------------------------
notice requirements set forth in the Certificate of Incorporation, any such
conversion, exercise or exchange shall, except as otherwise expressly set forth
herein or in the Certificate of Incorporation, occur, at the option of the
exchanging or converting Stockholder, contemporaneously with the registration of
the Class A Common Stock to be received, or the consummation of the sale of such
Class A Common Stock pursuant to such registration, or at such other time as
such Stockholder shall request in writing.
23
<PAGE>
ARTICLE VII
DEFAULT IN CAPITAL CONTRIBUTIONS;
ODC ADDITIONAL PROTECTIONS;
ODC NON-MONETARY OBLIGATIONS
Section 7.1 Default in Capital Contributions. ODC shall make additional
--------------------------------
capital contributions to AOL Latin America in installments in the amounts and on
the dates set forth on Schedule 7.1 hereto. Upon any default by ODC in the
timely payment of the full amount of any of such capital contributions, the
Company and AOL shall have the right to effect any or all of the following
remedies:
(a) The Company shall have all remedies available at law or in equity
if any such contribution is not so made. Interest shall accrue on the
unpaid amount thereof at the Default Rate from the date due until the date
paid in full. If any legal proceedings relating to the failure of ODC to
make such a contribution are commenced by the Company, the prevailing party
in such proceedings shall be entitled to its reasonable attorneys' fees and
costs in such proceeding. In addition, for the period commencing on the
first day of the month in which such default occurs until such default is
cured, ODC and each of its Affiliates and Subsidiaries shall not be
entitled to any dividends or other distributions in respect of any of their
Company Securities, which dividends and distributions shall be applied to
the amount of such defaulted contribution and, to the extent not to
applied, be paid to ODC and its Affiliates, as applicable, promptly after
such default shall be fully cured by ODC.
(b) If any such default shall continue for a period of five (5) days
after the due date of any such capital contribution, then, notwithstanding
the Company's and/or AOL's exercise of any additional remedy hereunder, ODC
shall be deemed to have granted AOL an option to acquire an irrevocable
proxy to vote all Voting Stock, including without limitation, all shares of
Series C Preferred Stock and Class C Common Stock, then owned beneficially
or of record by ODC and/or any of ODC's Subsidiaries or Affiliates, in such
manner as AOL shall determine in its sole discretion except as expressly
set forth in paragraph (c) below, including, without limitation, for the
removal of one or more Class C Directors (as such term is defined in the
Certificate of Incorporation). Such proxy shall be deemed to be issued to
AOL immediately upon delivery by AOL of written notice to the Company (the
"Exercise Notice"), with a copy to ODC, to the effect that AOL has elected
---------------
to exercise the option granted herein to obtain such proxy. Such proxy
shall continue in full force and effect until the first to occur of (i) the
date on which payment in full is made by or on behalf of ODC in the full
amount of any such defaulted contribution, with interest thereon from the
date due until the date so paid at the Default Rate and (ii) the last date
on which such proxy legally may be voted by AOL in accordance with the
provisions of the GCL.
(c) If, but only if, any such default shall continue for a period of
thirty (30) days after the due date of any such capital contribution, AOL
shall have the right to use the proxy granted pursuant to paragraph (b)
above to vote all of ODC's shares of Voting Stock to effect the conversion
of all of ODC's and its Subsidiaries and Affiliates' Class C
24
<PAGE>
Common Stock and Series C Preferred Stock into Class A Common Stock and/or
approve one or more amendments to the Certificate of Incorporation
necessary to effect such conversion.
(d) AOL shall have the right, but not the obligation, to pay the
amount of any such defaulted contribution on ODC's behalf. If AOL exercises
such right, AOL shall be deemed to have made a loan to ODC in the amount so
paid by AOL, which loan shall be payable on demand and shall bear interest
from the date of such payment by AOL until paid in full by ODC at the per
annum interest rate equal to the Default Rate. If ODC defaults in payment
on demand of any such amount, AOL shall be able to exercise, in addition to
any other remedies available to it, the remedies set forth in Sections
7.1(b) and (c) above.
Section 7.2. [Intentionally Omitted]
Section 7.3 ODC Non-Monetary Contributions. As an integral part of ODC's
------------------------------
contribution to the Company, ODC or its Affiliates shall provide to the Company,
for the benefit of the Company and its Subsidiaries, the non-monetary
contributions and services set forth in any side agreement between the Company,
AOL and ODC relating to such Non-Monetary Contributions as may be in effect from
time to time. Upon the termination of this Agreement, the rights and obligations
arising under any and all such side agreements in effect at the time of
termination shall continue in full force and effect until the expiration or
termination of such side agreements in accordance with their terms and neither
the Company, nor AOL nor ODC shall be obligated to enter into any additional
side agreements following the date of termination of this Agreement.
ARTICLE VIII
OTHER AGREEMENTS; LEGENDS
Section 8.1 Legends. As long as this Agreement shall remain in full force
-------
and effect, there shall be inscribed upon each certificate of Voting Stock held
by a Stockholder the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, ASSIGNED, HYPOTHECATED OR IN ANY WAY DISPOSED OF OR ENCUMBERED
EXCEPT PURSUANT TO THE TERMS AND CONDITIONS OF A CERTAIN STOCKHOLDERS'
AGREEMENT, DATED AS OF _____________, 2000, AND ANY AMENDMENTS THERETO,
BETWEEN AMERICA ONLINE LATIN AMERICA, INC., AMERICA ONLINE, INC. AND
RIVERVIEW MEDIA CORP., A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE
COMPANY. THE HOLDER AND THE OWNER HEREOF IS SUBJECT TO THE OBLIGATIONS
THEREIN SET FORTH AND CONTAINED AND ANY SUCH DISPOSITION OR
25
<PAGE>
ENCUMBRANCE IN VIOLATION OF SAID STOCKHOLDERS' AGREEMENT SHALL BE NULL AND
VOID.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE, AND MAY NOT BE SOLD,
ASSIGNED, PLEDGED, ENCUMBERED, TRANSFERRED, GRANTED AN OPTION WITH RESPECT
TO OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER
THE ACT.
Section 8.2 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE
-----------------------
LIABLE TO THE OTHER (OR TO ANY AFFILIATE OF THE OTHER) FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY KIND OR NATURE WHATSOEVER
(INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS, PROFITS OR OTHER
PECUNIARY LOSS) ARISING OUT OF THIS AGREEMENT, WHETHER SOUNDING IN TORT,
CONTRACT OR ANY OTHER FORM OF ACTION, EVEN IF THE PARTY AGAINST WHOM SUCH
DAMAGES ARE SOUGHT HAS BEEN ADVISED, HAD REASON TO KNOW, OR IN FACT KNEW OF THE
POSSIBILITY OF SUCH DAMAGES.
ARTICLE IX
TERM AND TERMINATION
Section 9.1 Term. The term of this Agreement (the "Term") shall commence
---- ----
on the Effective Date and shall terminate (i) by mutual agreement of the Parties
in writing, (ii) when the Stockholders have ceased to hold any shares of Voting
Stock in the Company, (iii) by termination pursuant to the provisions of Section
9.2, or (iv) on June 30, 2048, whichever occurs first.
Section 9.2 Termination. Either Stockholder, at its sole discretion, may
-----------
terminate this Agreement by delivering notice of termination and the basis
therefor to the other Stockholder and the Company, at such time as the other
Stockholder ceases to hold a direct or indirect ownership interest in Voting
Stock greater than 10% percent of the number of shares of Voting Stock at any
time outstanding (or such lower percentage resulting solely from admission of
third-party equity participants pursuant to Section 5.7).
ARTICLE X
STANDSTILL PROVISIONS; INDEMNIFICATION
26
<PAGE>
Section 10.1 Limitations on Holders' Ownership. Except for purchases of
---------------------------------
Company Securities made in accordance with this Article X, each Holder agrees
that until December 15, 2003 it will not, nor will it permit any of its
Affiliates other than the Company to directly or indirectly, acquire, offer or
propose to any of the Company's stockholders or any third party to acquire,
solicit an offer to sell or agree to acquire, by purchase, by gift, by joining a
partnership, limited partnership, syndicate or other "group" (as such term is
used in Section 13(d)(3) of the Exchange Act), any Company Securities, except as
follows:
(a) a Holder may acquire Company Securities as consideration for such
Holder's sale of an asset, property or right to the Company;
(b) a Holder may acquire Company Securities in connection with such
Holder's making of a tender offer or exchange offer for not less than 100%
of the shares of Company Securities then outstanding at a price approved by
the disinterested members of the Board of Directors of the Company and
based upon a fairness opinion delivered to the Board of Directors of the
Company by a nationally recognized investment banking firm;
(c) the Holders shall have the right to acquire in the aggregate
shares of Class A Common Stock up to an amount equal to five percent (5%)
of the aggregate number of shares of Class A Common Stock outstanding on
the Effective Date;
(d) AOL may exercise the Warrant; and
(e) as specifically approved by the Board.
Notwithstanding the foregoing, nothing in this Section 10.1 shall prohibit
any Holder or Affiliate of such Holder from acquiring any Company Securities as
a result of any stock dividend, stock split, combination, reorganization,
reclassification or similar event affecting the Company's capital structure.
SECTION 10.2 Indemnification.
---------------
(a) If, and to the extent that, the Company, any stockholder of the
Company or any other Person brings any Action against AOL or ODC or any of
their Affiliates or Subsidiaries (or any of their officers, directors,
agents, shareholders, members, partners, Affiliates or Subsidiaries)
seeking any Damages or injunctive or other equitable relief based on,
arising out of or relating to any breach or alleged breach of any fiduciary
or other duty based on any action or inaction which is permitted by the
provisions of Article THIRD of the Certificate of Incorporation, or which
is otherwise taken in reliance upon the provisions of said Article THIRD,
the Company shall, to the fullest extent permitted by law, indemnify and
hold such Persons harmless from and against all Damages arising out of or
in connection with any such Action. The right to indemnification conferred
herein shall include the right to be paid by the Company the expenses
(including attorneys', accountants', experts' and other professionals'
fees, costs and expenses) incurred in defending any such Action in advance
of its final disposition (hereinafter, an "advancement of expenses");
-----------------------
provided, however, that if, but only if and then only to the
27
<PAGE>
extent, the GCL requires, an advancement of expenses incurred by an
indemnitee hereunder shall be made only upon delivery to the Company of an
undertaking (hereinafter, an "undertaking"), by or on behalf of such
-----------
indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right
to appeal (hereinafter, a "final adjudication") that such indemnitee is not
------------------
entitled to be indemnified for such expenses under this Article THIRD or
otherwise. The rights to indemnification and to the advancement of expenses
conferred herein shall be contract rights and, as such, shall inure to the
benefit of the indemnitee's successors, assigns, heirs, executors and
administrators.
(b) If a claim for indemnification under this Section 10.2 is not paid
in full by the Company within sixty (60) days after a written claim has
been received by the Company, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be
twenty (20) days, the indemnitee may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by
the Company to recover an advancement of expenses pursuant to the terms of
an undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder (but not in
a suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) any suit brought by the
Company to recover an advancement of expenses pursuant to the terms of an
undertaking, the Company shall be entitled to recover such expenses only
upon a final adjudication that, the indemnitee has not met the applicable
standard for indemnification, if any, set forth in the GCL. Neither the
failure of the Company (including the Board, independent legal counsel, or
its stockholders) to have made a determination prior to the commencement of
such suit that indemnification of the indemnitee is proper in the
circumstances because the indemnitee has met the applicable standard of
conduct set forth herein or in the GCL, nor an actual determination by the
Company (including its directors, or a committee thereof, independent legal
counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In any
suit brought by the indemnitee to enforce a right to indemnification or to
an advancement of expenses hereunder, or brought by the Company to recover
an advancement of expenses pursuant to the terms of an undertaking, the
burden of proving that the indemnitee is not entitled to be indemnified, or
to such advancement of expenses, under this Section 10.2 or otherwise,
shall be on the Company.
(c) The rights to indemnification and to the advancement of expenses
conferred in this Section 10.2 shall not be exclusive of any other right
which any person may have or hereafter acquire by any statute, the
Certificate of Incorporation, the Company's By-laws, or any agreement, vote
of stockholders or disinterested directors or otherwise.
28
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ARTICLE XI
MISCELLANEOUS
Section 11.1 Confidential Information. At all times following the
------------------------
date hereof, each Party shall keep strictly confidential and not disclose, use,
divulge, publish or otherwise reveal, directly or through another Person:
(a) information that a Party indicates to the other Party is, or that
the other Party reasonably should know is, any confidential, non-public
information of another Party or an Affiliate of the other Party which was
disclosed pursuant to the AOL License and AOL OLS Agreement, or
(b) any information that a Party indicates to the other Party is, or
that the other Party reasonably should know is, confidential, non-public
information:
(i) relating to the business of any other Party and obtained as a
result of the preparation and negotiation of this Agreement, the
performance by the Parties of their obligations hereunder, or the
joint conduct by the Parties of activities pursuant to this Agreement,
or
(ii) relating to the business of any Subsidiary of the Company;
in each case including, but not limited to, documents and/or information
regarding customers, costs, profits, markets, sales, products, product
development, key personnel, pricing policies, operational methods,
technology, know-how, technical processes, formulae, or plans for future
development of or concerning such other Party or Subsidiary (collectively,
"Confidential Information"), except as may be necessary for the directors,
------------------------
employees, agents or consultants of it and its Affiliates to perform their
respective obligations under this Agreement or conduct of the Business, in
connection with filings with Governmental Bodies as required under
applicable law, including, in particular, the filing of this Agreement and
the Registration Rights Agreement with the Commission in connection with
the initial public offering of the Class A Common Stock; provided that,
except for the filing of this Agreement and the Registration Rights
Agreement with the Commission, no Party shall make any disclosure required
under applicable law before providing the applicable Party with a
reasonable opportunity to seek a protective order. Each Party shall cause
any Persons receiving Confidential Information in accordance with the terms
hereof to retain such Confidential Information in strict confidence. Upon
termination or expiration of this Agreement, each Party shall return to the
other Parties or destroy, as the other Party may direct in its sole
discretion, all memoranda, notes, records, reports and other documents
(including all copies thereof) relating to the Confidential Information of
the other Parties and the Subsidiaries which such Party may then possess or
have under its control. Each Party shall certify in writing to the other
Party within ten (10) Business Days of receiving instructions from the
other Party regarding the return or destruction of such materials of the
other Party that all such materials have been returned or destroyed as the
other Party has directed. If no instruction with respect to the return or
29
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destruction of such materials is provided to the other Party within ten
(10) Business Days of termination or expiration, the Party possessing such
materials shall promptly destroy them. Notwithstanding the foregoing, the
following shall not constitute Confidential Information: (x) information
which was already otherwise known to the recipient at the time of its
receipt in connection with this Agreement, (y) information which is or
becomes freely and generally available to the public through no wrongful
act of the recipient or (z) information which is rightfully received by the
recipient from a third party legally entitled to disclose such information
without breach by the recipient of this Agreement. In the event of any
breach of this Section 11.1, either Party shall have the right, in addition
to any other remedy available at law or in equity, to (a) pursue its claim
either individually or through the Company, as the non-breaching Party
shall in its sole discretion determine, and (b) demand the immediate
dismissal of all personnel actively or passively participating in such
breach.
Section 11.2 Governing Law. This Agreement, and the rights and liabilities
-------------
of the Parties hereunder, shall be governed by the substantive laws of the State
of Delaware, USA without giving effect to its rules relating to conflict of
laws. To the extent otherwise applicable, the United Nations Convention on
Contracts for the International Sale of Goods shall not apply to the
construction or interpretation of this Agreement. Each Party irrevocably
consents to the exclusive jurisdiction of the state and federal courts located
in the State of Delaware for all disputes arising under or related to this
Agreement, which are subject to litigation hereunder, and to service of process
in any jurisdiction in any such action by means of notice delivered pursuant to
Section 11.6 hereof; provided, however to permit a Party either to enforce a
judgment or to seek injunctive relief, each Party also irrevocably consents to
the jurisdiction of the courts in the place where such judgment enforcement or
injunctive relief is sought. Each Party waives any objection it otherwise may
have to the personal jurisdiction and venue of the courts designated in this
Section 11.2.
Section 11.3 Entire Agreement. Except for the agreements specifically
----------------
referred to in this Agreement, this Agreement constitutes the entire agreement
among the Parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements (including, in particular, the Joint
Venture Agreement, dated as of December 15, 1998, by and among Federal
Communications, S.A., AOL, Pan Latin Interactive Ventures C.V., a limited
partnership organized under the laws of the Netherlands, and AOL Latin America),
understandings, negotiations and discussions, whether oral or written, of the
Parties with respect to the subject matter hereof. All exhibits referenced
herein and attached to this Agreement are incorporated hereby and shall be
treated as if set forth herein. No amendment, supplement, modification, waiver
or termination of this Agreement shall be implied or be binding unless executed
in writing by the Party to be bound thereby. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall waiver constitute a
continuing waiver unless otherwise expressly therein provided.
Section 11.4 Assignment. All of the terms and provisions of this
----------
Agreement by or for the benefit of the Parties shall be binding upon and inure
to the benefit their successors and permitted assigns. The rights and
obligations provided under this Agreement may not be
30
<PAGE>
assigned, except in accordance with the provisions of Section 5.2. Except as
expressly provided herein, nothing herein is intended to confer upon any Person,
other than the Parties and their permitted successors, and permitted assigns as
provided herein, any rights or remedies under or by reason of this Agreement.
Section 11.5 Survival. Sections 7.1, 7.3, 8.2, 10.2 and 11.1 shall
--------
survive expiration or termination of this Agreement for any reason, to the
extent set forth in or as necessary to give effect to the applicable provision.
Section 11.6 Notices. All notices, requests, demands and other
-------
communications hereunder shall be in writing in English and shall be deemed to
have been duly given (except as may otherwise be specifically provided herein to
the contrary): (i) if delivered by hand to the Party to whom said notice or
other communication shall have been directed, upon such receipt, (ii) if mailed
by certified or registered mail with postage prepaid, return receipt requested,
on the seventh Business Day after mailing, (iii) if transmitted by telefax, on
the date of transmission, with such transmittal followed by delivery of a
confirmation copy via one of the other methods set out herein, or (iv) if
delivered by electronic mail, on the delivery date, with such transmittal
followed by delivery of a confirmation copy via one of the other methods set out
herein. All notices shall be addressed as set forth below or to any other
address such Party shall notify to the other Party in accordance with this
Section:
If to AOL: America Online, Inc.
22000 AOL Way
Dulles, VA 20166-9323, USA
Attn: President, AOL International
Fax No.: (703) 265-2502
If to any other Holder: at such address and facsimile number as such Holder
shall have furnished the Company in writing, with a
copy to AOL.
If to the Company: America Online Latin America, Inc.
6600 N. Andrews Avenue, Suite 500
Fort Lauderdale, FL 33309, USA
Attn: President
Fax No.: (954) 772-7089
with a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111, USA
Attn: Peter S. Lawrence, Esquire
Fax No.: (617) 542-2241
31
<PAGE>
If to ODC: Riverview Media Corp.
325 Waterfront Drive
Wickhams Cay
Road Town, Tortola
British Virgin Islands
Attn: Legal Department
Fax No.: (284) 494-4980
with a copy to: Finser Corporation
550 Biltmore Way, Suite 900
Coral Gables, FL 33134, USA
Attn: Legal Department
Fax No.: (305) 447-1389
Section 11.7 Counterparts; Facsimiles. This Agreement and each of the
-------------------------
exhibits attached hereto may be executed and delivered in one or more
counterparts, each of which shall be deemed to be an original, and all of which
when taken together shall constitute one and the same instrument and shall
become effective when copies hereof, bearing the signatures of each of the
Parties, shall have been received by the Company, ODC and AOL. Facsimile
signatures to this Agreement and each of the exhibits attached hereto shall be
effective if promptly followed by the original signed Agreement or exhibit, as
the case may be.
Section 11.8 Expenses. The Company shall pay all of its own legal and
--------
other fees and expenses and the expenses of the Stockholders, incurred in
connection with this Agreement, the transactions contemplated hereby, and the
negotiations leading to the same.
Section 11.9 Further Assurances. Each Party shall perform all other acts
------------------
and execute and deliver all other documents as may be necessary or appropriate
to carry out the purposes and intent of this Agreement, as reasonably requested
by the other Parties.
Section 11.10 Construction. The terms and provisions of this Agreement
------------
and the wording used herein shall in all cases be interpreted and construed
simply in accordance with their fair meanings and not strictly for or against
any Party hereto. The captions at the headings of each Section of this Agreement
are for convenience of reference only, and are not intended or to be used or
applied to describe, interpret, construe, define or limit the scope, extent,
intent or operation of this Agreement or of any term or provision hereof.
Section 11.11 Severability. If any provision of this Agreement shall be
------------
held to be incomplete, illegal, invalid or unenforceable, or if it becomes
necessary to amend the Agreement in order to comply with an administrative or
governmental order, the remaining provisions of the Agreement shall stay in
force and the unenforceable, void or incomplete provision shall be replaced by a
valid provision or amendment reflecting the economic and business objectives of
the original Agreement as best as possible.
32
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
33
<PAGE>
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: _________________________________
Name: _______________________________
Title: ______________________________
AMERICA ONLINE, INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
RIVERVIEW MEDIA CORP.
By: _________________________________
Name: _______________________________
Title: ______________________________
34
<PAGE>
SCHEDULE 7.1
ODC CONTRIBUTION SCHEDULE
Date Amount
First Business Day of Q2 2000 $13,000,000
First Business Day of Q3 2000 $10,000,000
First Business Day of Q4 2000 $ 6,000,000
First Business Day of Q1 2001 $ 6,000,000
First Business Day of Q2 2001 $ 3,000,000
First Business Day of Q3 2001 $ 3,000,000
* "Q" means calendar quarter. For example, first Business Day of Q2 would be the
first Business Day of April, first Business Day of Q3 would be the first
Business Day of July, and so forth.
35
<PAGE>
EXHIBIT 10.5
[*] - CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS WITH ASTERISKS, HASs BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF
1933, AS AMENDED.
FORM OF
AOL LICENSE AGREEMENT
THIS AOL LICENSE AGREEMENT (this "Agreement"), dated as of ________, 2000,
entered into by and between America Online, Inc., a Delaware corporation ("AOL"
or "Licensor"), and America Online Latin America, Inc., a Delaware corporation
(the "Company"), having its principal offices at 6600 N. Andrews Avenue, Suite
500, Ft. Lauderdale, FL, USA 33309.
WITNESSETH:
----------
WHEREAS, AOL and Licensee have entered into an Online Services Agreement
(the "AOL OLS Agreement"), pursuant to which AOL agreed, among other
undertakings, to provide certain services to the Company and its subsidiaries
necessary for the conduct by the Company of its Business (as defined herein).
WHEREAS, pursuant to the Restated Certificate of Incorporation of the
Company (as the same may be amended and restated from time to time, the
"Certificate of Incorporation"), the Company is to operate and/or market and
support the Business in the Territory (as defined herein) through certain
operating entities wholly owned, directly or indirectly, by Licensee
(individually, an "Operating Entity," and collectively, the "Operating
Entities").
WHEREAS, on the date hereof, AOL executed a guarantee (the "AOL Guarantee")
for the benefit of the Company and its Operating Entities, pursuant to which AOL
has guaranteed, inter alia, the obligations of Licensor under this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements set forth below,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT:
---------
1. DEFINITIONS; CONSTRUCTION. Capitalized terms used but not defined in the
body of this Agreement shall have the meaning given to such terms in Attachment
----------
A. Other capitalized terms without definition shall have the meanings given in
- -
the Certificate of Incorporation. Unless the context clearly indicates
otherwise, any term defined or used in the singular will include the plural.
Use of the term "include" or "including" will be construed to mean "include
without limitation" or "including without limitation", as applicable.
2. GRANT OF RIGHTS.
2.1 License Grant. Subject to the terms and conditions of this Agreement
-------------
and the Certificate of Incorporation, Licensor hereby grants to Licensee an
exclusive (with respect to PC Access Services, TV Access Services and Wireless
Access Services and a non-exclusive (except as provided in Section 2.9 below)
with respect to Internet Portal Services), but subject to
-1-
<PAGE>
termination of exclusivity pursuant to Section 5 below, non-transferable (except
as expressly provided herein) right and license within the Territory to:
(a) implement, transmit, display, copy, perform and use the Licensed
Products for the sole purpose of, and as necessary for, enabling Licensee to
Launch, operate, provide, manage and administer Licensee Interactive Services in
the Territory as contemplated herein,
(b) sublicense the Client Product to Subscribers pursuant and subject
to the terms and conditions set forth in the subscriber agreements which are
part of the AOL Standard Forms to be used by Licensee pursuant to Section 3.3
below,
(c) access, display and grant to Subscribers (with respect to PC
Access Services, TV Access Services and Wireless Access Services) and to users
of Licensee's Internet Portal Services, the right to access Content through
Licensee Interactive Services, including AOL Services Content and other Content,
but excluding Restricted Content,
(d) market and distribute the Client Product to potential Subscribers
in the Territory directly and through authorized third parties that so market
and distribute on Licensee's behalf,
(e) use Licensor's Confidential Information and Licensed Products only
to the extent necessary (i) to allow Licensee to Launch, provide, manage,
administer and market Licensee Interactive Services in the Territory, (ii) to
allow Licensee to develop, create, procure, market, transmit, maintain, enhance,
manage and administer Content for use in connection with Licensee Interactive
Services, and (iii) to allow Content providers to develop, create, transmit,
procure, market, maintain, enhance, manage and administer Content pursuant and
subject to the terms and conditions set forth in the Content provider agreements
which are part of the AOL Standard Forms to be used by Licensee pursuant to
Section 3.3 below,
(f) use Licensor's training and technical support for the sole purpose
of enabling Licensee to Launch, operate, provide and manage, and administer
Licensee Interactive Services as contemplated herein, and
(g) translate and modify online forms included within the Licensed
Products as reasonably necessary to conform such forms to the local languages,
laws and business practices of the Territory.
All of the foregoing rights are granted solely in connection with the Launch,
operation, provision, management and administration of Licensee Interactive
Services during the Term.
2.2 Third Party Products. Subject to the terms and conditions of this
--------------------
Agreement, Licensor grants to Licensee the same license rights in respect of
Third Party Products that Licensor has granted in respect of the Licensed
Products in Section 2.1, but only to the extent that Licensor is permitted to
grant such license rights to Licensee and subject to the payment of applicable
third-party royalties or fees, if any, as specified in this Section 2.2. All of
the foregoing rights are granted solely in connection with the Launch,
operation, provision, management and administration of Licensee Interactive
Services during the Term. Licensor shall sublicense to Licensee all of such
license rights to Third Party Products to the extent Licensor
-2-
<PAGE>
has such rights as of the Effective Date and thereafter during the Term to the
extent Licensor has such rights and to the extent that Licensor has licensed,
offered to license or otherwise made available such Third Party Products to
other JV Affiliates consistent with AOL's Uniform Policies. Licensor shall use
commercially reasonable efforts to obtain from third parties the best overall
terms for such licenses, which may include royalty bearing licenses as provided
in this Section 2.2, to permit Licensee to use all other Third Party Products.
Licensee shall reasonably assist Licensor in obtaining such licenses and shall
execute any required license agreements if so requested by Licensor. In the
event Licensor's efforts to obtain from a third party appropriate licenses to
permit Licensee to use a Third Party Product are unsuccessful, Licensor shall
use commercially reasonable efforts, at Licensee's expense but in Licensor's
reasonable discretion, either (a) to obtain from another third party license
rights to reasonably similar software that may be substituted for the
unavailable Third Party Product or (b) to develop a commercially reasonable
workaround for the unavailable Third Party Product during the period of its
unavailability. Licensee acknowledges and agrees that prior to the exercise of
any of the rights specified in this Section 2.2, the exercise of which require
that Licensee obtain license rights directly from the owners of Third Party
Products, Licensee shall, with Licensor's commercially reasonable assistance,
first have obtained all necessary license rights from the owners of Third Party
Products to use such products. For the avoidance of doubt, Licensor's obligation
to assist Licensee in obtaining such license rights shall not oblige Licensor to
pay any royalties, fees or other consideration for such rights, or otherwise to
provide financial assistance of any sort to Licensee. Notwithstanding any other
provision of this Agreement, Licensee shall have no obligation to license or use
any Third Party Product for which Licensee is required to pay any expense,
royalty or fee if other JV Affiliates are not required to use such Third Party
Product pursuant to AOL's Uniform Policies consistently applied to all JV
Affiliates. Licensee must, however, accept any license and pay any royalties
required for use of Third Party Products which are Requested Developments or New
AOL Developments. The foregoing shall be applicable only with respect to PC
Access Services until such time as the Company and Licensee shall obtain the
right to offer such TV Access Services and Wireless Access Services in the
Territory in accordance with the provisions of the Certificate of Incorporation.
If and when the Company and Licensee shall obtain the right to offer such TV
Access Services and Wireless Access Services in the Territory, AOL and Licensor
shall provide such Requested Developments and New AOL Developments to Licensee
in respect of such TV Access Services and Wireless Access Services in the
Territory on the same basis as it has theretofore provided them in respect of PC
Access Services.
(a) Licensee Payments for Third Party Products. Subject to Section
------------------------------------------
2.2(b), Licensee shall pay Third Party Product fees and royalties under the
following circumstances: (i) the licensor of a Third Party Product demands a
payment to expand the scope of the existing license grant to permit Licensee to
use the Third Party Product, e.g., to expand existing geographic or usage
restrictions; or (ii) (x) AOL's license agreement with the licensor of the Third
Party Product contains a per host computer charge, per client charge, usage
charge or other charge or fee based upon the nature of the use thereof, and (y)
AOL has dedicated one or more host computers to Licensee, regardless of the
physical location of such computers, or Licensee's use of such Third Party
Products otherwise gives rise to such per client, usage or other charge or fee.
Licensor shall exercise commercially reasonable efforts to obtain for Licensee
such Third Party Products at fees and royalty rates that are the lowest that can
be obtained and at least as
-3-
<PAGE>
favorable as similar fees and royalty rates paid by JV Affiliates on the
Effective Date or thereafter during the Term (taking into account as appropriate
the level of usage and other factors that reasonably impact royalties and fees).
Licensee shall also pay all costs and expenses associated with (A) translating
or otherwise modifying the Third Party Product for use in the Territory; (B)
modifying the Third Party Product to enable such software to be exported to the
Territory; and (C) complying with any import or export control regulations of
the relevant jurisdiction(s) to enable the Third Party Product to be imported
into or exported to the Territory. Licensor represents that in the year
preceding the Effective Date, the total of all royalties, fees and other costs
and expenses attributable to existing Third Party Products for any JV Affiliate
AOL Service in any country did not exceed fifty thousand dollars ($50,000).
(b) Spun-off Licensed Products. In the event AOL and/or its Wholly-
--------------------------
Owned Affiliates should cease to own any component of the Licensed Products,
such component (i) shall, if it is a Core AOL Technology, be deemed a Licensed
Product for the Term and shall not be deemed to be a Third Party Product, and
(ii) shall, if (x) it is a Peripheral AOL Technology, (y) AOL and/or such
Wholly-Owned Affiliate cease to own such Peripheral AOL Technology for a bona
fide business purpose (including achieving wider promulgation of technology in
the marketplace, attracting qualified developers, or achieving enhanced
technical capability, support, maintenance, development or training in respect
of such Peripheral AOL Technology), and (z) the treatment of such Peripheral AOL
Technology as a Third-Party Product would not cause Licensee, at any time during
the Term, to pay greater fees or royalties (taking into account as appropriate
the level of usage and other factors that reasonably impact royalties and fees)
than AOL or any of its Affiliates or JV Affiliates providing AOL Services, then
such Peripheral AOL Technology shall be deemed a Licensed Product for eighteen
(18) months (or such longer period as is consistent with subsection (z) above)
after such Licensed Product component is no longer owned by AOL and/or its
Wholly-Owned Affiliates and shall thereafter be deemed a Third Party Product .
Under such circumstances, if AOL and/or any of its Wholly-Owned Affiliates
elect(s) to use the technology of a third party in lieu of any component of the
Peripheral AOL Technology in providing AOL-US Service, such component shall be
deemed a Licensed Product for eighteen (18) months (or such longer period as is
consistent with subsection (z) above) after AOL elects to use such technology
and shall thereafter be deemed a Third Party Product for the purposes of this
Agreement, subject to subsection (z) above.
2.3 Documentation. Subject to the terms and conditions of this Agreement,
-------------
Licensor hereby grants to Licensee an exclusive (with respect to PC Access
Services, TV Access Services and Wireless Access Services) and a non-exclusive
(except as provided in Section 2.9 below, with respect to Internet Portal
Services), but subject to the termination of exclusivity pursuant to Section 5
below, non-transferable (except as provided herein) license in the Territory to
use, translate into the local language(s) of the Territory, display and
reproduce the Documentation relating to the Licensed Products only within the
Territory and to the extent necessary to Launch, operate, provide, manage and
administer the Licensee Interactive Services; provided, however that Licensee
shall have no right to, and Licensee agrees not to, adapt, alter, modify or
create derivative works of the Documentation other than the translation(s)
contemplated above. Licensor shall provide Licensee with the Documentation set
forth in Attachment B with respect to PC Access Services, and appropriate
------------
documentation as Licensor and Licensee mutually deem necessary or desirable upon
the addition of TV Access Services and/or Wireless Access Services
-4-
<PAGE>
to the Licensee Interactive Services being provided by Licensee. Licensor
reserves the right to amend Attachment B from time to time to permit Licensor to
make such reasonable changes as are necessary for Licensor to provide such
Documentation on a consistent worldwide basis. Licensor shall provide Licensee
with prior notice of such amendments to Attachment B. All of the foregoing
rights granted to Licensee are granted solely in connection with the Launch,
operation, provision, management and administration of Licensee Interactive
Services during the Term. Notwithstanding the foregoing, the Content provider's
guide or the remote managed gateways guide may also be distributed to Content
providers to Licensee Interactive Services provided that Licensee has entered
into an agreement with each such Content provider substantially consistent with
the Content provider agreements which are part of the AOL Standard Forms to be
used by Licensee pursuant to Section 3.3 below, as the same may be modified from
time to time. Licensor shall own all right, title, and interest in the
Documentation and all translations of the Documentation. Licensee shall place on
all such copies of the Documentation an internationally recognized copyright
notice and other proprietary rights legends specified by Licensor. All
translated Documentation will be considered works made for hire commissioned by
Licensor such that copyright ownership of such translations shall immediately
vest in Licensor. If any such Documentation may not be considered works made for
hire under applicable law, Licensee hereby irrevocably assigns to Licensor
without further consideration all of Licensee's right, title and interest in and
to such Documentation, including U.S. and foreign copyrights. Licensee shall
distribute such translations only within the Territory and in connection with
the Licensed Products to the extent provided above.
2.4 AOL Services Content. Without limiting the scope of the license set
--------------------
forth in Section 2.1, Licensor shall provide to Licensee and Licensee's
Subscribers to its PC Access Services, free of charge, access to substantially
all of the AOL-US Services Content and substantially all of the other AOL
Services Content. In addition, Licensor shall provide to Licensee and to users
of Licensee's Internet Portal Services access to AOL-US Services Content and
other AOL Services Content in substantially the same manner they are made
available to users of AOL's US-based Internet Services Portal. As and when the
Company and Licensee shall obtain the right to offer TV Access Services and
Wireless Access Services in the Territory in accordance with the provisions of
the Certificate of Incorporation, Licensor shall provide to Licensee and
Licensee's Subscribers to such Services access to the AOL-US Services Content
and the other AOL Services Content in substantially the same manner such Content
is made available to users of AOL-branded TV Access Services and AOL-branded
Wireless Access Services in the U.S. With respect to any other AOL Services
Content, Licensor shall exercise commercially reasonable efforts to obtain the
rights to provide to Licensee and Licensee's Subscribers access to such other
AOL Services Content on commercially reasonable terms that are as favorable as
access to such Content is made available to any other JV Affiliate. Licensee
may, in the reasonable discretion of the Board of Directors, which the Board of
Directors may exercise for Licensee or on behalf of an Operating Entity,
prominently display its Interconnection pursuant to Section 2.5 of the AOL OLS
Agreement to the AOL-US Service and the other AOL Services and minimize the
number of click throughs from the main menus of the Licensee Interactive
Services necessary to access the main menus of the AOL-US Services and other AOL
Services, in order to facilitate Subscribers' access to the Content on such AOL
Services. In addition, upon the request of Licensee, Licensor shall provide to
Licensee and Licensee's Subscribers, free of charge, direct access (i.e., other
than through Interconnection) to
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<PAGE>
substantially all of the AOL-US Services Content on the same basis, with respect
to the differing Licensee Interactive Services, as is set forth above. The
direct access to other AOL Services and to Content of the AOL-US Service,
contemplated in this Section 2.4 shall be subject, among other reasonable
limitations, to (a) any "referee screens" or other intermediate notices warning
Subscribers that they are changing countries and different standards may
therefore apply, as Licensor deems such notices reasonably necessary to
accommodate local legal and cultural concerns, (b) coordination with the AOL
Services and their respective Content channels to ensure that such access by the
Licensee Interactive Services is technically feasible and will not result in the
distribution of any Restricted Content, and (c) any technical limitations not
due to Licensor's failure to meet its obligations under this Agreement or the
AOL OLS Agreement, which failure is within AOL's reasonable control, precluding
Interconnection or direct access, such as the inability of the Licensee
Interactive Services to access and process Japanese characters.
2.5 License Fees. (a) Except as set forth in this Section 2.5 or as
------------
otherwise expressly provided herein, the licenses granted in Sections 2.1, 2.2,
2.3 and 4.1 shall be royalty-free; provided, however, that to the extent that
any royalty shall be deemed by applicable tax law to exist by virtue of this
Agreement, Licensee will be responsible for any taxes associated therewith.
(b) Notwithstanding the foregoing, if and to the extent that any court
of competent jurisdiction shall invalidate, delete, amend, sever or otherwise
modify any of the provisions of (i) Clauses (c), (d), (e) or (f) of Article
THIRD of the Certificate of Incorporation (or any successors thereto), (ii)
Section 6.4(c) hereof, or (iii) Section 10.2 of the Stockholders' Agreement,
with the result that AOL or any of its Subsidiaries or Affiliates (including,
without limitation, Licensor, but excluding the Company, Licensee and each and
every Operating Entity) becomes liable to the Company, Licensee, any Operating
Entity or any holders of any equity interests in any of them, including, without
limitation, any holders of Class A Common Stock of the Company, for, or
otherwise incurs any, Damages arising out of or in connection with any action or
inaction that was permitted by the provisions of Article THIRD of the
Certificate of Incorporation as in effect as of the time of such action or
inaction (without taking into account any such invalidation, deletion,
amendment, severance or other modification), then Licensee shall be obligated to
pay Licensor a royalty in respect of the licenses granted in Sections 2.1, 2.2,
2.3, 2.9, if any, and 4.1 in an amount equal, in the aggregate, to the full
amount of such Damages, as the same may be incurred from time to time. Such
royalty payments shall be due and payable by Licensee on the date that is thirty
(30) days after receipt of an invoice therefor from Licensor.
2.6 License Limitations.
-------------------
(a) License Exclusions. The licenses granted pursuant to Sections 2.1
------------------
through 2.3 do not include, and Licensee shall have no right hereunder, under
any circumstances, to receive, use or make copies of the Source Code for the
Licensed Products or Third Party Products. Further, the licenses granted
pursuant to Sections 2.1 through 2.3 do not include the right to, and Licensee
agrees not to (i) except to the extent contemplated under Sections 2.3 and
2.1(a) herein and Section 2.2 of the AOL OLS Agreement, adapt, alter, modify,
translate or create derivative works of the Licensed Products, Third Party
Products, Documentation or AOL Services Content, (ii) reverse engineer,
decompile, disassemble, or otherwise attempt to
-6-
<PAGE>
reconstruct the Source Code for the Licensed Products or Third Party Products or
(iii) reverse engineer, reconstruct or otherwise attempt to ascertain, or adapt,
alter or modify, the proprietary protocols, algorithms, internal instructions
and command sets used in the operation of the Licensed Products or the Third
Party Products. Licensee may exercise the license rights granted pursuant to
Sections 2.1 through 2.3 and pursuant to Section 2.9, if any, only within the
Territory; Licensee shall have no right or license, express or implied, to
exercise any of such license rights outside the Territory.
(b) Restricted Content. Licensee agrees that it is necessary, inter
------------------
alia, in order to observe and comply with applicable local laws and the rights
of Content providers and other Persons, not to use, reproduce, market,
distribute, display, perform, transmit or grant access to Restricted Content.
Consistent with AOL's Uniform Policies regarding Restricted Content, in the
event Licensor requests the removal of, or the restriction of access to,
Restricted Content, Licensee shall cooperate, at its own expense, to effectuate
the prompt removal or restriction of access to such Restricted Content and to
take such other actions as Licensor may reasonably specify from time to time in
order to comply with such laws, third-party rights and/or AOL's Uniform Policies
consistently applied to all JV Affiliates.
(c) Implementation of Charges for Access to Content. Licensee agrees
-----------------------------------------------
to pay when due all royalties, fees and other amounts owed to any Licensee
Interactive Services Content provider for Content made available on the AOL
Services that would not have been due in the absence of the access to and usage
of such Content by Subscribers of such AOL Services and otherwise to comply with
the obligations of Licensee under any applicable agreement with the Content
provider. Likewise, Licensee shall have no obligation to pay any royalties,
fees or other amounts due to any Content provider to any other AOL Service.
Licensor shall have the right to implement applicable hourly or other charges
for access to and usage of Content of a particular AOL Service by Subscribers of
other AOL Services (including the Licensee Interactive Services), so long as
such charges apply equally to all AOL Services, including the AOL-US Service and
Licensee Interactive Services. As of the Effective Date, however, Licensor
imposes no such charges.
2.7 Licensee Content. Subject to the terms and conditions of this
----------------
Agreement and the right of Interconnection between and among AOL Services
pursuant to Section 2.5 of the AOL OLS Agreement, Licensee hereby grants to AOL
and its Affiliates the non-transferable (except as expressly provided herein)
right to access, and to grant to Subscribers to AOL Services the right to
access, via Interconnection, substantially all Content available through the
Licensee Interactive Services, including Licensee Content and other Content, but
excluding Restricted Content. Notwithstanding the foregoing, if Licensor
implements a charge between and among AOL Services (including the Licensee
Interactive Services) for access to and usage of Content of each respective AOL
Service pursuant to Section 2.5(c) above, then Licensee will be entitled to
receive payments to the extent that its Licensee Interactive Services' Content
is accessed by Subscribers of the other AOL Services.
2.8 Right to Sublicense. Licensee shall, subject to the approval of the
-------------------
Board of Directors, have the right to sublicense Licensee's rights under
Sections 2.1, 2.2, 2.3 and 4.1 of this Agreement as reasonably necessary to
provide Licensee Interactive Services, including the development of Content for
such services and the distribution of the Client Product to
-7-
<PAGE>
Subscribers of such services and to Operating Entities that are established
pursuant to the Certificate of Incorporation.
2.9 Rights to AOL-Branded Internet Portal Services.
----------------------------------------------
(a) If AOL or any of its Special Affiliates intends to offer any
Internet Portal Service, then Licensee shall have the prior option, exercisable
within six (6) months following notice of such intent from AOL, to offer such
service in the Territory on an exclusive basis, subject to payment to AOL of
[**************************************************
*********************************]. If Licensee elects not to offer such
service in the Territory or does not exercise such option within the six-month
period, then AOL shall have the right to offer such service in the Territory
directly or together with a third party (on financial terms not more favorable
than those offered to Licensee), [****************************
**************************************************] for the use of the AOL or
CompuServe name in the Territory; provided, however, that in no event shall AOL
or its Special Affiliates be entitled to use the AOL or CompuServe name as
provided above in connection with a Directly Competitive Service (as defined
below). For avoidance of doubt, AOL and ODC shall have the right without any
first offer or other obligations to Licensee, to provide a non-AOL-branded or
non-CompuServe-branded Spanish and/or Portuguese language Internet Portal
Service and which is targeted to end users residing in the Territory, but
neither AOL or ODC shall have the right to Interconnect such service with any
AOL-branded or CompuServe-branded Access Service. A "Directly Competitive
Service" shall mean an online or Internet service, that may be but need not be
an Access Service, having comprehensive Content, Communications Services,
features and functions comparable to the existing AOL-US Service (e.g., Yahoo
and Star Media).
(b) If, in accordance with Section 2.9(a), Licensee elects to offer an
Internet Portal Service, then the Parties will, in good faith, negotiate and
execute any agreements necessary to effect the Launch and operation of such
services by Licensee in the Territory including license agreements and service
agreements substantially similar, as applicable, to this Agreement, the AOL OLS
Agreement, the CIS License and the CIS OLS Agreement.
(c) If the Parties are unable to agree on a reasonable license fee or
other reasonable compensation or payment in connection with Section 2.9(a) for
the use of the AOL or CompuServe name or for the allocable pro-rata share of
AOL's cost of developing and/or acquiring a service, then such license fee or
other compensation or payment shall be determined in accordance with the then
current arbitration procedures of the American Arbitration Association.
3. LICENSE REQUIREMENTS.
3.1 Proprietary Notices. Licensee agrees not to obfuscate, remove or
-------------------
alter any of the patent, copyright, trademark, trade secret, proprietary and
other legal notices contained in, or displayed by the use of, the Licensed
Products, Documentation, AOL Services Content or Third Party Products. Licensee
further agrees to reproduce, in each copy of the Licensed Products,
Documentation, AOL Services Content or Third Party Products that is made by
Licensee, such patent, copyright, trademark, trade secret, proprietary and other
legal notices that are included in
-8-
<PAGE>
the Licensed Products, Documentation or Third Party Product provided by Licensor
to Licensee or as otherwise specified by Licensor.
3.2 Translations. For each translated Document, Licensee shall provide
------------
Licensor with one complete copy of such translated Document in both print and
computer-readable format. Licensee shall refer only to the English language
Documentation in any communication with Licensor, including receipt of technical
support from Licensor.
3.3 AOL Standard Forms. Licensor shall provide Licensee with such
------------------
relevant AOL Standard Forms that should be used by Licensee in connection with
the Licensee Interactive Services, including the forms identified on Attachment
----------
C hereto. Licensee shall, at its own expense, translate the AOL Standard Forms
- -
into the local language(s) applicable to the Territory. Except as specifically
set forth in this Agreement, Licensee shall use all such translated AOL Standard
Forms, provided that Licensee may make reasonable modifications consistent with
AOL's Uniform Policies and business practices to such forms to take into account
applicable business model and legal considerations in the relevant country(s) of
the Territory, provided further that any such modifications shall not (i) limit,
diminish or impair in any manner whatsoever Licensor's rights or the effective
and timely exercise thereof, under this Agreement, or any law, treaty or
convention governing industrial or intellectual property rights, trade secrets
or confidential information which is the subject of this Agreement, or the
performance of any obligation thereunder by either party or its Affiliates or
(ii) violate any US export control law, regulation or order. Licensee shall
notify Licensor of any proposed substantive modifications Licensee makes to any
AOL Standard Form and such modifications shall be subject to AOL's approval,
which it may exercise in its reasonable business judgment.
3.4 Compliance with Encryption and Export/Import Laws. Licensor and
-------------------------------------------------
Licensee shall comply, and Licensee shall require all Permitted Sublicensees to
comply, with all of the then-current and applicable laws, rules and regulations
of the United States and all jurisdictions within the Territory relating to the
use of encryption technology and the import and export of technology, software
and technical data, including, but not limited to, any regulations of the United
States Office of Export Administration, and of any other applicable governmental
agencies, and shall not export or re-export any technology, software, technical
data or the direct product of such technology, software and technical data to
any proscribed country listed in such applicable laws, regulations and rules
unless properly authorized.
3.5 Notification of Unauthorized Use. If either party learns of (a) any
--------------------------------
unauthorized use in the Territory of Licensed Products, Documentation, Third
Party Products, or AOL Services Content, or (b) any AOL Services Content in the
Territory that violates an applicable AOL Service Subscriber agreement or the
rights of any Content provider or other Person, or is otherwise unauthorized
Restricted Content, such party shall promptly inform the other party. In such
an event, Licensee, at its own expense, shall take such steps as Licensor may
reasonably request, to protect the rights of Licensor, Licensee, their
Affiliates, and such Content providers and other Persons. Licensor, at its own
expense, shall provide Licensee with commercially reasonable assistance in
protecting such rights of such Persons.
3.6 Ownership of Licensed Products and Documentation. Subject to
------------------------------------------------
Licensee's express license rights under this Agreement, Licensee acknowledges
and agrees that Licensor
-9-
<PAGE>
shall own all right, title, and interest, including all copyrights, trade
secrets, patents, patent applications, trademarks, trademark applications, and
other intellectual property and proprietary rights, throughout the world in the
Licensed Products and Documentation (including the New AOL Developments and
Requested Developments). Licensee agrees that it will not at any time (a) do or
cause to be done any act or thing contesting or in any way impairing or intended
to impair any part of such right, title and interest or (b) represent, expressly
or by implication, that it has any right, title or interest in or to any of the
Licensed Products or Documentation (including the New AOL Developments and
Requested Developments) other than as expressly set forth herein.
3.7 Licensee Technology and Content. All technology and Content developed
-------------------------------
by Licensee or any third party on behalf of or for the benefit of Licensee that
is independent and not derivative of any Licensed Product, Documentation, Third
Party Products, Content from AOL Services other than Licensee Interactive
Services, or other proprietary Licensor materials licensed hereunder, shall be
the sole property of Licensee and neither AOL nor any of its Affiliates shall
have any rights in or to such technology or Content (other than the right to
Interconnect other AOL Services with the Licensee Interactive Services as
expressly provided in Section 2.5 of the AOL OLS Agreement and to grant
Subscribers of the AOL Services access to such Content as expressly provided
herein and the AOL OLS Agreement).
4. TRADEMARKS.
4.1 License to AOL Marks. Subject to the terms and conditions of this
--------------------
Agreement, Licensor hereby grants to Licensee a non-transferable (except as
expressly set forth herein) limited (to the extent expressly set forth herein)
license to use the AOL Marks solely for purposes of Launching, operating,
providing, managing and administering in the Territory: (a) AOL-branded PC
Access Services, (b) AOL-branded TV Access Services (c) AOL-branded Wireless
Access Services, (d) Internet Portal Services, except to the extent provided in
Section 2.9, and (e) any other Interactive Services developed or acquired by
Licensee as determined by the Board of Directors. The License granted in
Clauses (a) , (b), (c) and (d) above shall be exclusive and the license granted
in Clause (d) above shall be non-exclusive (except as provided in Section 2.9).
Licensee shall not use any proposed additional AOL Mark except to the extent it
is approved as a New AOL Mark as provided in and subject to Section 4.6 herein.
Further, Licensee may not use any AOL Marks to the extent such use creates a
substantial risk of (x) infringing a third-party's trademark or similar rights
or (y) subjecting Licensee, Licensor or their respective Affiliates to claims of
unfair competition, trademark dilution, passing off or other claims of any sort
arising from use of a false, misleading or confusing mark.
4.2 Licensee Marks. Licensor acknowledges and agrees that (i) Licensee
--------------
Marks are and shall remain the sole property of Licensee, (ii) nothing in this
Agreement shall convey to Licensor any right of ownership in the Licensee Marks,
(iii) Licensor shall not now or in the future contest the validity of Licensee
Marks, and (iv) Licensor shall not in any manner take any action that would
impair the value of, or goodwill associated with, such Licensee Marks. Licensor
acknowledges and agrees that all use of Licensee Marks shall inure to the
benefit of Licensee. Licensee hereby grants to Licensor, AOL and its Affiliates
a non-transferable (except as expressly set forth herein), worldwide, license to
use in connection with marketing and providing the AOL Services those Licensee
Marks used by Licensee in the Territory on
-10-
<PAGE>
Requested Developments ("Licensed Licensee Marks"), provided that such use of
the Licensed Licensee Marks is not primarily directed towards the Territory. In
addition, Licensee hereby grants to Licensor, AOL and its Affiliates a non-
transferable (except as expressly set forth herein), license to use the Licensed
Licensee Marks in the Territory in connection with the marketing and promotion
of the Licensee Interactive Services, provided that any such use is made in
consultation with Licensee and in furtherance of the Business of Licensee.
Except as expressly set forth herein, such license shall be on the same terms
granted by Licensor to Licensee with respect to the AOL Marks as set forth in
this Section 4. The foregoing license grant shall terminate simultaneously with
the termination of this Agreement. Licensor agrees to comply with such specific
standards for use of the Licensed Licensee Marks as Licensee may, in its
reasonable discretion, establish and modify from time to time in writing and
provide to Licensor. All use by Licensor of the Licensed Licensee Marks with
respect to form and appearance shall be subject to the written usage standards
provided to Licensor by Licensee and the prior written approval of Licensee to
be exercised in accordance with such written guidelines. Once Licensee has
approved a specific use of a mark, Licensor may continue such specific use or
cease and resume such specific use without additional approvals from Licensee.
Licensor may not use any Licensed Licensee Marks to the extent such use creates
a substantial risk of (x) infringing a third-party's trademark or similar rights
or (y) subjecting Licensee, Licensor or their respective Affiliates to claims of
unfair competition, trademark dilution, passing off or other claims of any sort
arising from use of a false, misleading or confusing mark.
4.3 Reservation of Rights. Licensee acknowledges and agrees that (i) the
---------------------
AOL Marks are and shall remain the sole property of Licensor, (ii) nothing in
this Agreement shall convey to Licensee any right of ownership in the AOL Marks;
(iii) Licensee shall not now or in the future contest the validity of the AOL
Marks; and (iv) Licensee shall not in any manner take any action that would
impair the value of, or goodwill associated with, such marks. Licensee
acknowledges and agrees that all use of AOL Marks by Licensee shall inure to the
benefit of Licensor.
4.4 Quality Standards and Maintenance. The parties acknowledge and agree
---------------------------------
that it is necessary for Licensor to maintain uniform standards governing all
material facets of AOL Services in order to provide AOL Service Subscribers
worldwide with high quality, cost effective and consistent levels of service,
and to protect the reputation and goodwill associated with the AOL Services in
the Interactive Services market. Accordingly, Licensee agrees that it shall
provide goods and services offered under the AOL Marks that are as high in
quality as the quality of the goods and services offered by AOL with respect to
the AOL Services and related merchandise subject to reasonable variations
resulting from business, legal and technical factors within the Territory.
Licensee agrees to comply with such specific standards for use of the AOL Marks
as Licensor may, in its reasonable discretion, establish and modify from time to
time in writing and provide to Licensee. All use by Licensee of the AOL Marks
with respect to form and appearance shall be subject to the written usage
standards provided to Licensee by Licensor and, except to the extent provided in
Section 4.6, the prior written approval of Licensor to be exercised in
accordance with such written guidelines. Once Licensor has approved a specific
use of a mark, Licensee may continue such specific use or cease and resume such
specific use without additional approvals from Licensor.
4.5 Cooperation. Licensee agrees to assist Licensor, at Licensor's
-----------
expense (except to the extent provided in Section 4.6) and request, to the
extent reasonably necessary to protect
-11-
<PAGE>
Licensor's rights in the AOL Marks. Without limiting the generality of the
foregoing, at Licensor's request, Licensee shall (i) promptly provide Licensor
with any trademark specimens, (ii) execute all applications for trademark
registrations, assignments or other applicable documents and (iii) perform any
other act reasonably necessary for Licensor to secure or maintain the AOL Marks
in the Territory. Licensee hereby agrees that it will execute at Licensor's
request such additional license agreements and other documents as may be
necessary to carry out the purposes of this Agreement and to comply with the
laws and regulations pertaining to technology or know-how transfer, licensing,
and recordation in the Territory. Finally, Licensor shall consult with Licensee,
as requested by Licensee, from time to time concerning Licensor's use of the AOL
Marks in the Territory on goods or services unassociated with Licensee's
Interactive Services and related merchandise; provided, however, that Licensee
acknowledges and agrees that such consultation rights shall not grant to
Licensee any right to limit, delay or otherwise hinder Licensor's desired use of
the AOL Marks in the Territory on goods or services unassociated with Licensee's
Interactive Services and related merchandise, except to the extent Licensor
would be in breach of its obligations under Section 5 of this Agreement and
Section 2.9 of this Agreement with respect to certain AOL-branded services.
4.6 Trademark Prosecution. Licensor has, as of the Effective Date,
---------------------
registered the Core AOL Marks set forth on Attachment D in the Countries set
------------
forth on Attachment D. Licensee shall inform Licensor of any proposed
------------
additional AOL Mark Licensee desires to use in connection with the Licensee
Interactive Services. Licensor shall not unreasonably withhold or delay its
approval of the use of any such proposed AOL Mark. If Licensor approves such
proposed AOL Mark (a "New AOL Mark"), Licensor may in its reasonable discretion
seek to obtain a trade or service mark registration for such New AOL Mark in
applicable jurisdiction(s) within the Territory. Licensee shall reimburse
Licensor for all costs, fees, and expenses incurred in seeking to obtain New AOL
Mark registrations in the Territory. Licensor shall take steps, in its
reasonable discretion, to protect the AOL Marks within the Territory, including
filing trademark applications. With respect to a Licensee Mark, Licensee may,
in its reasonable discretion, seek to obtain at its own expense trade or service
mark registration for such mark, as the case may be, within the relevant
country(s) of the Territory.
4.7 Domain Names. Subject to this Section 4, Licensee shall have the
------------
right and license to use, on a royalty-free basis, to the extent available under
applicable law and national domain registries, applicable AOL Marks as universal
resource locators, domain names, sub-domain names, newsgroup names and other
similar or related identifiers for Internet uses ("AOL Domain Names"). AOL
Domain names within the Territory registered by AOL as of the Effective Date are
identified in Attachment E and Licensee hereby acknowledges that AOL has not
------------
otherwise registered any other domain names in the Territory. Licensee shall
pay any filing, maintenance, administrative or other fees associated with
establishing and preserving the AOL Domain Names in the Territory. Licensee
shall inform Licensor of proposed new AOL Domain Names Licensee desires to use
in connection with the Licensee Interactive Services. Licensor shall not
unreasonably withhold or delay its approval of the proposed use of any such
proposed AOL Domain Names. If Licensor approves such proposed AOL Domain Name
(a "New AOL Domain Name"), Licensor shall seek to obtain a domain name
registration, subject to availability thereof under the applicable domain name
registry. Licensee shall reimburse Licensor for all costs, fees, and expenses
incurred in seeking to obtain New AOL Domain Name
-12-
<PAGE>
registrations and any applicable fees or other expenses required to maintain
such additional domain names. Licensor shall thereafter take steps, in its
reasonable discretion, to protect registered AOL Domain Names in the Territory.
Licensee shall, at its own expense, take such steps as Licensor and its
Affiliates may reasonably request to assist Licensor in protecting Licensor's,
AOL's and Licensee's rights in AOL Domain Names. Licensee acknowledges and
agrees that (i) the AOL Domain Names and New AOL Domain Names are and shall
remain the sole property of Licensor; (ii) nothing in this Agreement shall
convey to Licensee any right of ownership in the AOL Domain Names; and (iii) all
use of AOL Domain Names and New AOL Domain Names by Licensee shall inure to the
benefit of Licensor.
4.8 Notification of Unauthorized Use. Each party agrees to notify the
--------------------------------
other party of any unauthorized use of the AOL Marks, Licensed Licensee Marks,
AOL Domain Names, or New AOL Domain Names by third parties promptly as such use
shall come to such notifying party's attention. Licensor shall initially have
the sole right and discretion to bring proceedings alleging infringement of AOL
Marks, AOL Domain Names, or New AOL Domain Names or unfair competition against
such third parties ("Offensive Proceedings") and to defend proceedings brought
or threatened against Licensor or Licensee based on use of AOL Marks, AOL Domain
Names, or New AOL Domain Names. Licensee shall take such steps as Licensor and
its Affiliates may reasonably request, at Licensee's expense, to assist Licensor
in protecting Licensor's, AOL's and Licensee's rights in the AOL Marks, AOL
Domain Names, or New AOL Domain Names. In the event that Licensor notifies
Licensee in writing that Licensor elects not to prosecute an Offensive
Proceeding, Licensee may request in writing that Licensor bring such proceeding,
and upon such request, Licensor shall bring such proceeding, with all reasonable
expenses incurred in connection therewith to be borne by Licensee.
5. EXCLUSIVITY
5.1 Limitations.
-----------
(a) Products and Content. Except as otherwise expressly provided in
--------------------
Section 5.3, neither AOL nor Licensor shall, either directly or through any
Affiliate, use itself, or grant or license to any third party the right to use,
the Licensed Products, Third Party Products, Documentation or AOL Services
Content for the provision of PC Access Services or AOL-branded TV Access
Services or Wireless Access Services within the Territory.
(b) AOL Marks. Except as otherwise provided in Section 5.3, neither
---------
AOL nor Licensor shall, either directly or through any Affiliate, use itself, or
grant to any third party the right to use the AOL Marks, for purposes of
Launching or operating in the Territory: (a) PC Access Services and Internet
Portal Services or AOL-branded TV Access Services or Wireless Access Services
(b) AOL-branded Interactive Services other than PC Access Services, Internet
Portal Services, TV Access Services and Wireless Access Services except to the
extent provided in Section 2.9 of this Agreement, or (c) any other Interactive
Services developed or acquired by the Licensee as determined by the Board of
Directors
-13-
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5.2 Term. The provisions of Section 5.1 above shall remain in effect as
----
to any particular Access Service until any of the following occur:
(a) with respect to Section 5.1(a) (as it relates to PC Access
Services only) and non-AOL branded PC Access Services only, the non-competition
covenant of Section 4.1(a)(i) of the Stockholders' Agreement terminates pursuant
to its terms;
(b) with respect to Section 5.1(a) (as it relates to TV Access
Services and Wireless Access Services only), the non-competition covenant of
Section 4.1(a)(ii) of the Stockholders' Agreement terminates pursuant to its
terms; or
(c) with respect to all Access Services, this Agreement terminates
pursuant to Section 8.
5.3 Exceptions. Notwithstanding any provision of Section 4 and this
----------
Section 5, AOL and its Affiliates (or its designee) shall have the right to use
AOL Marks in the Territory to the extent provided in and subject to Section
2.9(a) of this Agreement. There will be no exceptions from the exclusivity
provisions for "component" or worldwide deals, as to which AOL and the Company
shall reach mutually agreeable terms in a timely manner in order to enable AOL
"component" and worldwide deals with third parties
5.4 Global Licenses. Licensor and Licensee shall reach agreement on
---------------
mutually agreeable terms and conditions in a timely manner to enable AOL and its
Affiliates to enter into agreements with third parties pursuant to which such
third parties are granted worldwide license rights in the Licensed Products (or
any component(s) thereof) in respect of any Access Service (including the
portions or components of the Licensed Products that enable the provision of
such Access Service) and/or in the AOL Marks with respect to such Access
Service, including, without limitation, the method of allocation of the
royalties or other fees accruing from such agreements in respect of the use of
the Licensed Products and/or AOL Marks within and outside of the Territory.
6. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; LIABILITY.
6.1 Licensor. Licensor represents and warrants to Licensee as follows:
--------
(a) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action of Licensor and this Agreement is a
valid and binding obligation of Licensor, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors' rights generally and subject to the applicability of general
principles of equity and principles of public policy.
(b) The execution, delivery and performance by Licensor of this
Agreement will not violate or conflict with the operating agreement or other
governing documents of Licensor, any applicable U.S. law or regulation, or any
order, writ, judgment or decree of any court or governmental authority to which
Licensor is subject, or result in a violation, breach of, or default under any
contract, lease, or other agreement binding on Licensor, any of which
violations, conflicts, breaches or defaults will have a material adverse effect
on Licensor's ability
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<PAGE>
to perform its obligations hereunder, and no consent or authorization of, or
filing with or notification to, any governmental entity or other person where
the failure to obtain such consent or submit such filing or notification would
have a material adverse effect on Licensor's ability to perform its obligations
hereunder is required for the performance by Licensor under such agreements.
(c) At the Effective Date and thereafter during the Term, Licensor
owns or controls and shall own or control the rights in and to the Licensed
Products, Documentation, Third Party Products, AOL Services Content, AOL Marks
and AOL Domain Names necessary to effectuate the grants of rights with respect
to PC Access Services from Licensor to Licensee as contemplated herein.
(d) At the Effective Date and thereafter during the Term, with respect
to PC Access Services only, the Licensed Products and Documentation do and shall
not infringe on any U.S. copyrights. At the Effective Date, with respect to the
Core AOL Marks, (A) Licensor has registered such Core AOL Marks in the countries
in the Territory identified in Section 2 of Attachment D, (B) Licensor has
------------
sought a trade or service mark registration for such Core AOL Marks in the
countries in the Territory identified in Section 2 of Attachment D, but does not
------------
represent or warrant that such marks qualify for registration under applicable
law, and (C) to the actual knowledge of the AOL Senior Executive Officers,
without any investigation whatsoever, except for those Marks identified, and for
the reasons described, in Section 3 of Attachment D, such Core AOL Marks do not
------------
infringe the rights of any third party in the Territory and there are no claims
by AOL that such Core AOL Marks are being infringed in the Territory by a third
party. Notwithstanding anything to the contrary herein, all representations and
warranties by Licensor with respect to intellectual and industrial property
rights are set forth in Sections 6.1 (c) and (d). For the avoidance of doubt,
Licensor does not make representations and warranties with respect to AOL Domain
Names, except as provided in subsection (a) above.
6.2 Licensee. Licensee represents and warrants to Licensor as follows:
--------
(a) Any modification, alteration or combination thereof by Licensee of
the Licensed Products, Documentation, or Third Party Product, or any work or
product created by Licensor pursuant to the specification or specific order of
Licensee does not infringe the copyright rights owned by a third party under the
laws of the countries within the Territory or the U.S.
(b) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action of Licensee and this Agreement is a
valid and binding obligation of Licensee, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors' rights generally and subject to the applicability of general
principles of equity and principles of public policy.
(c) The execution, delivery and performance by Licensee of this
Agreement will not violate or conflict with the operating agreement or other
governing documents of Licensee, any applicable U.S. law or regulation, or any
order, writ, judgment or decree of any court or governmental authority to which
Licensee is subject, or result in a violation, breach of,
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or default under any contract, lease, or other agreement binding on Licensee,
any of which violations, conflicts, breaches or defaults will have a material
adverse effect on Licensee's ability to perform its obligations hereunder, and
no consent or authorization of, or filing with or notification to, any
governmental entity or other person where the failure to obtain such consent or
submit such filing or notification would have a material adverse effect on
Licensee's ability to perform its obligations hereunder is required for the
performance by Licensee under such agreements.
6.3 [Intentionally Omitted].
6.4 Indemnity.
---------
(a) Licensor shall, at its expense, defend any action, suit or
proceeding brought (other than by any shareholder of Licensee or any Affiliate
thereof) against Licensee or any Affiliate thereof, to the extent it results
from breach of a covenant or a representation or warranty by Licensor under
Section 6.1 above and Licensor shall indemnify and hold Licensee and any
Affiliate thereof harmless from and against all damages, costs, expenses
(including, but not limited to, attorneys' fees), obligations or liabilities
payable by Licensee to any third party (other than any shareholder of Licensee
or any Affiliate thereof) directly relating to or resulting from any such
action, suit or proceeding, provided, however, that Licensor shall not settle
any claim without Licensee's prior written approval, not to be unreasonably
withheld, delayed or conditioned.
(b) Licensee shall, at its expense, defend any action, suit or
proceeding brought by any party against Licensor or any Affiliate thereof, to
the extent it results from breach of a covenant or a representation or warranty
by Licensee under Section 6.2 above and Licensee shall indemnify and hold
Licensor or any Affiliate thereof harmless from and against all damages, costs,
expenses (including, but not limited to, attorneys' fees), obligations or
liabilities payable by Licensor to any third party (other than any Affiliate of
Licensor) directly relating to or resulting from any such action, suit or
proceeding, provided, however, that Licensee shall not settle any claim without
Licensor's prior written approval, not to be unreasonably withheld, delayed or
conditioned.
(c)(i) If, and to the extent that, the Company, Licensee, any
Operating Entity, any stockholder of the Company, any equity holder of
Licensee or any Operating Entity, or any other Person brings any Action
against AOL or Licensor (or any of their officers, directors, agents,
shareholders, members, partners, Affiliates or Subsidiaries) seeking any
Damages or injunctive or other equitable relief based on, arising out of or
relating to any breach or alleged breach of any fiduciary or other duty
based on any action or inaction which is permitted by the provisions of
Article THIRD of the Certificate of Incorporation, Licensee shall indemnify
and hold such Persons harmless from and against all Damages arising out of
or in connection with any such Action. The right to indemnification
conferred herein shall include the right to be paid by Licensee an
Advancement of Expenses. Neither AOL, Licensor nor any other Person
entitled to indemnification under this Section 6.4(c) shall be required, as
a condition to any such Advancement of Expenses, be required to deliver to
Licensee any Undertaking. The rights to indemnification and to the
Advancement of Expenses conferred herein shall
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inure to the benefit of the indemnitee's successors, assigns, heirs,
executors and administrators.
(ii) If a claim for indemnification under this Section 6.4(c) is not
paid in full by Licensee within sixty (60) days after a written claim has
been received by Licensee, except in the case of a claim for an Advancement
of Expenses, in which case the applicable period shall be twenty (20) days,
the indemnitee may at any time thereafter bring suit against Licensee to
recover the unpaid amount of the claim. If successful in whole or in part
in any such suit, or in a suit brought by Licensee to recover an
Advancement of Expenses, the indemnitee shall be entitled to be paid also
the expense of prosecuting or defending such suit. In any suit brought by
the indemnitee to enforce a right to indemnification or to an Advancement
of Expenses hereunder, or brought by Licensee to recover an Advancement of
Expenses pursuant, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such Advancement of Expenses, under this
Section 6.4(c) or otherwise, shall be on Licensee .
(iii) The rights to indemnification and to the Advancement of
Expenses conferred in this Section 6.4(c) shall not be exclusive of any
other right which any person may have or hereafter acquire by any statute,
the Certificate of Incorporation, the Company's By-laws, or any agreement,
vote of stockholders or other equity holders, disinterested directors or
otherwise.
6.5 Alternatives. If a Licensed Product, Documentation or component
------------
thereof becomes or, in Licensor's opinion, is likely to become the subject of an
injunction preventing its use as contemplated herein, Licensor shall, at its
expense and reasonable discretion, use commercially reasonable efforts to
procure for Licensee the right to continue using the Licensed Product or
Documentation, as the case may be; replace or modify the Licensed Product or
Documentation, as the case may be, so that it becomes non-infringing; or delete,
if technically feasible, as the case may be, the relevant Object Code or text
from the Licensed Product or Documentation, respectively, so that it becomes
non-infringing; provided that any such replacement or modified Licensed Product
or Documentation shall provide functionality and performance that is
substantially similar to the applicable Licensed Product or Documentation.
6.6 Indemnification Procedures. The indemnified party shall (a) give the
--------------------------
indemnifying party prompt written notice of such action, or proceeding (and in
no event more than seven (7) Business Days following the indemnified party's
receipt of notice of such suit, action or proceeding), (b) at the indemnifying
party's request and expense, permit the indemnifying party, through its counsel,
to defend such claim or suit, and (c) give the indemnifying party reasonable
information, assistance and authority to do so. To the extent the indemnified
party fails to provide notice as required above and to the extent such failure
hinders the indemnifying party's ability to perform its indemnification
obligations set forth in Section 6.3, then such indemnification obligations
shall be waived to an extent commensurate with the hindrance caused by such
delay in notification or failure to notify. The indemnifying party shall have
exclusive control of the defense if it elects to defend any such suit, including
appeals, negotiations and the right to effect a settlement or compromise thereof
(provided that, as a condition to any such settlement or compromise, the
indemnified party shall not incur any
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liability or obligation). The indemnified party may be represented by counsel at
its own expense in any action being defended by the indemnifying party.
Notwithstanding anything to the contrary contained in the foregoing, in the
event Licensor is the indemnified party with respect to any intellectual
property claim, Licensor shall have the right to exclusive control of the
defense, at Licensee's reasonable cost and expense, if it elects to defend any
such suit, including appeals, negotiations and the right to effect a settlement
or compromise thereof; provided, however that Licensee shall have the right to
participate in settlement negotiations, if any, and shall have the right to
approve such settlement, which shall not be unreasonably withheld, delayed or
conditioned. Licensee shall reimburse Licensor for all of Licensor's reasonable
costs and expenses in connection with such defense and for any damages or other
liability in connection therewith, including any settlement obligations.
6.7 Sole Remedy. The foregoing provisions of this Section 6 set forth the
-----------
exclusive rights and remedies of Licensee with respect to any infringement by
any Licensed Product or Documentation.
6.8 DISCLAIMER OF OTHER WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN THIS
------------------------------
SECTION 6, LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE
LICENSED PRODUCTS, DOCUMENTATION, THIRD PARTY PRODUCTS, AOL SERVICES CONTENT,
AOL MARKS, AOL DOMAIN NAMES OR OTHERWISE. LICENSOR DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS AND IMPLIED, INCLUDING, WITHOUT LIMITATION, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.9 LIMITATION OF LIABILITY. EXCEPT AS PROVIDED IN SECTION 6.4, IN NO
-----------------------
EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL OR
SPECIAL DAMAGES, LOST PROFITS, LOST SAVINGS OR ANY OTHER CONSEQUENTIAL OR
SIMILAR DAMAGES, REGARDLESS OF THE FORM OF ACTION, EVEN IF THAT PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, RESULTING FROM BREACH OF ITS
OBLIGATIONS UNDER THIS AGREEMENT.
7. CONFIDENTIALITY.
7.1 Restriction on Use. Each Party shall treat as confidential all
------------------
Confidential Information of the other party and shall use such Confidential
Information only to the extent necessary to allow Licensee to provide Licensee
Interactive Services and develop Content as contemplated under this Agreement.
Neither party shall disclose any such Confidential Information to any third
party except as may be reasonably required in connection with the use of
Licensed Products or Documentation pursuant to this Agreement, and in all cases
subject to the recipient entering into a written confidentiality agreement
imposing obligations upon such third party that are at least as protective of
such information as those set forth in this Agreement. Without limiting the
foregoing, each party agrees to use at least the same degree of care with
respect to the Confidential Information of the other which it uses to protect
its own similarly valuable Confidential Information from unauthorized disclosure
or use, but no less than a reasonable standard of care.
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7.2 Termination of Obligations. The parties' obligations under this
--------------------------
Section 7 shall survive any termination of this Agreement; provided, however,
such obligations shall terminate five (5) years after such termination with
respect to Confidential Information regarding solely financial or marketing
matters and (b) ten (10) years after such termination with respect to all other
Confidential Information (except for Source Code for which such obligations
shall continue so long as such Source Code is protected by the laws applicable
to trade secrets or similar legal principles).
8. TERM AND TERMINATION.
8.1 Term. The term of this Agreement shall begin on the Effective Date
----
and, except as set forth herein, terminate only as provided in Section 8.2.
8.2 Termination by Licensor. Licensor may terminate this Agreement
-----------------------
effective upon notice to Licensee if (1)(A)(i) Licensee materially breaches
Licensee's obligations pursuant to Sections 2.1, 2.3, 2.6, 4, 9.2 or 9.3 or
Licensee's obligations to make payments to Licensor under this Agreement, (ii) a
Senior Executive Officer of Licensee intentionally breaches, or knowingly
permits an intentional breach of, Licensee's obligations pursuant to Section 7
or, with respect only to the initial press release regarding this Agreement,
Section 9.13, and such breach results in substantial adverse consequences to
Licensor, and (B) Licensee fails to cure such breach within ninety (90) calendar
days after receipt by Licensee of written notice of such breach or (2) Licensee
breaches in any material respect any of its obligations set forth in Section
6.4(c).
8.3 Effect of Termination. Notwithstanding the foregoing provisions of
---------------------
this Section 8, Sections 1 (and any other defined term herein), 2.5, 2.6, 3.5,
3.6, 4.3, 6.4, 6.6, 6.7, 6.8, 6.9, 7, this Section 8.3 and Sections 8.4 and 9
shall survive any termination of this Agreement. Immediately following any such
termination, Licensee shall (a) return to Licensor or destroy all copies of the
Licensed Products, Documentation, and all components thereof, together with all
other proprietary information of Licensor in Licensee's possession or control,
including any Confidential Information, and (b) make no further use of the
Licensed Products, Documentation, components thereof, or any such proprietary
information. In the event Licensee elects to destroy all copies of the items
set forth in clause (a) above, a duly authorized officer of Licensee shall, upon
completion by Licensee of such destruction, certify in writing to Licensor that
Licensee has in fact performed such destruction. In no event shall either party
be entitled to exercise any right of offset or similar remedy against any
amounts payable to the other party under this Agreement, whether in connection
with any termination of this Agreement or otherwise
8.4 Equitable Relief and Damages. The parties acknowledge and agree that,
----------------------------
in the event of a threatened or actual breach of Section 7 or 9.13 or an actual
breach of any other provision of this Agreement and failure to cure any such
breach within thirty (30) calendar days following notice thereof from the other
party, damages alone will be an inadequate remedy, that such breach will cause
the other party great, immediate and irreparable injury and damage, and that,
accordingly, each party shall be entitled to injunctive and other equitable
relief, including mandatory injunctive relief and specific performance, in
addition to, and not in lieu of, any remedies it may have at law or under this
Agreement. The parties further acknowledge and agree that each party shall be
entitled to all damages as a remedy for any such breach (except a threatened
breach of Section 7 or 9.13), to the extent provided under Section 6.9 above.
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9. GENERAL PROVISIONS.
9.1 Relationship of Parties. The parties are and shall be independent
-----------------------
contractors. Neither party, its employees, consultants, third party contractors
or agents shall be deemed under this Agreement to be the agents, employees,
partners or joint venturers of the other, nor does either party have any
authority to enter into any obligation on behalf of the other. Neither party
shall make any express or implied representations to any third party to the
contrary.
9.2 No Use of Name or Trademarks. Subject to Section 9.13 below and, in
----------------------------
the absence of the other party's prior written consent or a separate agreement
between the parties hereto to the contrary, neither party shall be entitled to
use the name of the other in promotional, advertising and other similar
materials, it being understood that this shall not restrict either party from
referring to the relationship between the parties to the extent required by law
in connection with financial disclosure or similar requirements. Except as set
forth in Section 4 above, neither Party will, without the other's prior written
approval of such proposed use, use the other's trademarks, service marks, trade
names, logos or other commercial or product designations, for any purpose
(including, but not limited to, use in connection with any products, promotions
or advertisements).
9.3 Assignment. The rights and obligations of the parties hereto will
----------
bind and inure to the benefit of their respective permitted successors; provided
that neither party may assign its rights or obligations, either in whole or in
part, without the prior written consent of the other, except to Permitted
Sublicensees as provided in Section 2.8 and to Wholly-Owned Affiliates of a
party, but only for so long as such entities remain Wholly-Owned Affiliates of
the assignor party. For avoidance of doubt, no assignment shall relieve any
party of any of its obligations under this Agreement or AOL of any of its
obligations under the AOL Guarantee. Any attempted assignment in violation of
the provisions of this Section 9.3 shall be void.
9.4 Governing Law.
-------------
This Agreement shall be construed and enforced in accordance with the
laws of the State of New York, USA, but without giving effect to its laws or
rules relating to conflicts of laws, the Uniform Commercial Code, or the United
Nations Convention on Contracts for the International Sale of Goods. To permit
the enforcement of judgments entered under this Section 9.4 and the application
of judicial injunctive relief as permitted hereunder, each party consents to the
jurisdiction of the courts in the place where such judgment enforcement or
injunctive relief is sought. Each party waives any objection it otherwise may
have to the personal jurisdiction and venue of such courts.
9.5 Severability. If any provision of this Agreement shall be held to be
------------
illegal, invalid or unenforceable, that provision of the Agreement will be
enforced to the maximum extent permissible so as to give effect to the intent of
the parties, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. In such event,
the parties agree to negotiate in good faith alternate provisions to substitute
for any such provisions in order to give effect, to the maximum extent
permissible, the intent of any such provision.
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9.6 Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing in English and shall be deemed to have been duly
given (except as may otherwise be specifically provided herein to the contrary):
(i) if delivered by hand or courier service which provides evidence of delivery
to the party to whom said notice or other communication shall have been
directed, upon such receipt, (ii) if mailed by registered or U.S. certified mail
with postage prepaid, return receipt requested, on the seventh Business Day
after mailing, (iii) if transmitted by telefax, on the date of transmission, or
(iv) if delivered by electronic mails on the delivery date, with such
transmittal followed by delivery of a confirmation copy via one of the other
methods set out herein. All notices shall be addressed as set forth below or to
any other address such party shall notify to the other party in accordance with
this Section 9.6:
If to Licensor, to:
America Online, Inc.
22000 AOL Way
Dulles, VA 20166-9323
Attention: President, International
and an additional copy at the same address to the attention of the AOL
General Counsel with a fax number of (703) 265-2208.
If to Licensee, to:
America Online Latin America, Inc.
6600 N. Andrews Avenue
Suite 500
Fort Lauderdale, FL 33309
Attn: Chief Executive Officer
Fax: (954) 772-7089
with a copy to:
America Online, Inc.
22000 AOL Way
Dulles, VA 20166-9323
Attention: President, International
Fax: (703) 265-2502
and
Finser Corporation
550 Biltmore Way
Suite 900
Coral Gables, FL 33134
Attention: Legal Department
Fax: (305) 447-1389
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9.7 No Waiver. Failure by either party to enforce any provision of this
---------
Agreement will not be deemed a waiver of future enforcement of that or any other
provision.
9.8 No Rights in Third Parties. This Agreement is made for the benefit of
--------------------------
Licensor and Licensee and not for the benefit of any third parties other than
the Permitted Sublicensees.
9.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed an original, but which collectively
will constitute one and the same instrument.
9.10 Headings and References. The headings and captions used in this
-----------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.11 Construction. This Agreement has been negotiated by the parties and
------------
their respective counsel. This Agreement will be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either party.
9.12 Audit Rights. In the event that any of the rights granted hereunder
------------
shall be royalty bearing as contemplated in and subject to Section 2, other than
as set forth in Section 2.5(b), or there are any incremental costs or fees
claimed by Licensor with respect to Third Party Products as set forth in Section
2.2, each party hereto and its representatives shall have the right to examine,
copy and audit the books and records of the other party relating to this
Agreement for purposes of verifying the timely payment of all amounts payable
hereunder or the basis for any costs or fees claimed, as the case may be, upon
not less than thirty (30) Business Days' prior written notice, and in any event
no more frequently than quarterly. In the event that any such review shall
determine (a) a deficiency in an amount of such royalties exceeding five percent
(5%) of the amount paid or (b) claims of costs or fees exceeding by five percent
(5%) the actual amount owed, as the case may be, the other party shall pay the
out-of-pocket expenses incurred in connection with such review, including all
professional fees, and shall pay all delinquent and undisputed amounts or refund
all overcharged amounts, as the case may be, within fifteen (15) Business Days
of receipt of written notice thereof.
9.13 Publicity. Except as may be required by law or in response to an
---------
order of a court or governmental agency (provided, however, the discloser shall
provide prompt written notice thereof to the other party), the execution and
content of this Agreement and the transactions contemplated herein shall be kept
in confidence by the parties, and neither party shall make any public
announcement or issue any press release relating thereto without the prior
written approval of the other party and, in the case of Licensee, subject to the
delivery of a complete and accurate English translation thereof to Licensor at
least three (3) Business Days prior to any such public announcement or issuance.
9.14 Taxes. Licensee shall be responsible for the collection of any and
-----
all value added, consumption, sales, use or similar taxes and fees payable with
respect to the licensing, distribution or use of the Licensed Products or
Documentation by Licensee in the Territory and shall pay such collected taxes to
the relevant tax authorities. Licensee shall be entitled to collect
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from the relevant payee or payor any such taxes owed. The following two examples
illustrate, without limitation, the foregoing terms. Subscribers of the Licensee
Interactive Service shall bear the cost of any relevant taxes; Licensee shall
collect and pay such taxes to the relevant tax authorities. Except as provided
in Section 2.4, Licensor shall bear the cost of any applicable income or
withholding taxes for any license fees to be paid to it by Licensee; Licensee
shall collect and pay such withholding taxes to the relevant tax authorities.
9.15 Further Assurances. Each party shall perform all other acts and
------------------
execute and deliver all other documents as may be necessary to secure all
necessary authorizations and approvals of this Agreement by all applicable local
and U.S. governmental bodies. In addition, if and when the Company and Licensee
shall obtain the right to offer such TV Access Services and Wireless Access
Services in the Territory, AOL and Licensor shall negotiate with Licensee and
the Company regarding such modifications to this agreement, including the
attachments hereto, as reasonably may be necessary or required to enable
Licensee to provide such TV Access Services and Wireless Access Services in the
Territory in a manner substantially similar to the basis on which it is
providing such services in the United States.
9.16 Export Controls. Each party shall comply with all applicable United
---------------
States laws, regulations and executive orders relating to the exportation of the
Licensed Products or Documentation and with applicable local and all other
national laws and regulations relating to such Products, including those
relating to their exportation and importation. Each party shall cooperate with
the other party as reasonably requested to permit each party to comply with the
laws and administrative regulations of the United States and the Licensee
Territory controlling the export of commodities and technical data.
9.17 Complete Agreement. This Agreement, including all Attachments hereto
------------------
which are incorporated herein by reference and the Related Agreements constitute
the entire agreement between the parties with respect to the subject matter
hereof, and supersede and replace all prior or contemporaneous understandings or
agreements, written or oral, regarding such subject matter. No amendment to or
modification of this Agreement shall be binding unless in writing and signed by
a duly authorized representative of both parties.
9.18 AOL Notification. Licensor agrees to notify Licensee promptly upon
----------------
the initial Launch by AOL of any TV Access Services or Wireless Access Services
anywhere in the world.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date first set forth above.
AMERICA ONLINE, INC. AMERICA ONLINE LATIN AMERICA, INC.
By: ________________________ By: ________________________
Name: ______________________ Name: ______________________
Title: _____________________ Title: _____________________
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LIST OF ATTACHMENTS
Attachment A Definitions
Attachment B Documentation
Attachment C AOL Standard Forms
Attachment D AOL Marks
Attachment E AOL Domain Names
Attachment F Territory
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ATTACHMENT A
Definitions
As used in this Agreement, the following terms, whether in the singular or the
plural, have the following meanings:
1. "AAA" shall have the meaning set forth in Section 9.4(b)(i).
2. "Access Service" shall mean, collectively, PC Access Services, TV
Access Services, Wireless Access Services.
3. "Action" shall have the meaning set forth in the Certificate of
Incorporation.
4. "Advancement of Expenses" shall have the meaning set forth in the
Certificate of Incorporation.
5. "Affiliate" shall mean, for purposes of this Agreement, as to any
Person, any other Person that, directly or indirectly, controls, is under common
control with, or is controlled by, that Person, provided no Operating Entity
shall be considered an Affiliate of Licensor or AOL. For avoidance of doubt,
any Person that is controlled by the Cisneros Family shall be deemed an
Affiliate of ODC. 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.
6. "Agreement" shall have the meaning specified in the preamble of this
Agreement.
7. "AOL" shall have the meaning specified in the preamble of this
Agreement.
8. "AOL-branded" shall have the meaning set forth in the Certificate of
Incorporation.
9. "AOL Brand Products" shall mean "flanker" AOL-branded product offerings
that are part of and integrated into the AOL-US Service (such as AOL
NetFind(TM), AOL Netmail(TM), AOL.COM and AOL Instant Message(TM)).
10. "AOL Domain Names" shall have the meaning given in Section 4.7.
11. "AOL Guarantee" shall have the meaning set forth in the recitals
hereto.
12. "AOL Marks" shall mean the Core AOL Marks, the Mixed AOL Marks and New
AOL Marks, collectively.
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13. "AOL OLS Agreement" shall have the meaning specified in the recitals
to this Agreement.
14. "AOL Proprietary Object Code" shall mean all Object Code in which AOL
and/or its Wholly-Owned Affiliates own on or after the Effective Date, all
rights, title, and interest (including all copyright, patent, trade secret and
other intellectual property rights).
15. "AOL Service(s)" shall mean the Interactive Services that are PC
Access Services that AOL provides worldwide, including the AOL-US Service and
any other international AOL Services, under the brand name America Online(TM)
and/or AOL(TM) existing as of the Effective Date or in the future and modified
from time to time. From and after the date that Licensee obtains the right to
provide any TV Access Services and/or Wireless Access Services to Subscribers,
AOL Services shall be deemed to include the TV Access Services and Wireless
Access Services that AOL provides worldwide under the brand name America
Online(TM) and/or AOL(TM) as the same may be modified by AOL from time to time.
16. "AOL Services Content" shall mean the Content available on the AOL
Services, that is displayed to an individual end-user by the Client Product and
Server Product, and provided by AOL, a JV Affiliate or a Content provider to
AOL, a JV Affiliate or their respective Affiliates, but excluding Object Code,
Restricted Content, Content on the Internet (including Internet Content
represented by pointers or similar icons or visual displays on the applicable
AOL Service), and Content in respect of which neither AOL nor any JV Affiliate
has any contractual rights or obligations.
17. "AOL-US Service" shall mean the principal AOL Services provided by AOL
to United States residents on the date hereof, as such service shall be modified
from time to time.
18. "AOL Standard Forms" shall mean the standard forms, policies and
contracts that AOL uses in conducting the AOL-US Service, which Licensee shall
translate and modify in accordance with Section 3.3 . AOL Standard Forms
include the terms of service agreement(s) with Subscribers, content agreements
with Content providers, and other forms, policies and contracts used by AOL in
conducting the AOL-US Service.
19. "Audiovisual Presentation" shall mean any pictorial, graphic, video
and/or audiovisual works, including any icons, screens, music and characters,
utilized in, or created as a result of, execution of any Licensed Products.
20. "Board of Directors" shall mean the Board of Directors of the Company,
as the same may be constituted from time-to-time.
21. "Business" shall mean Interactive Services that Licensee elects to
pursue, including Interactive Services substantially similar to the AOL-US
Service (but adapted to the local markets), in accordance with the provisions of
the Certificate of Incorporation.
22. "Business Day" shall have the meaning set forth in the Stockholders'
Agreement.
23. "Certificate of Incorporation" shall have the meaning set forth in
the preamble.
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24. "CIS License" shall have the meaning set forth in the Stockholders'
Agreement.
25. "CIS OLS Agreement" shall have the meaning set forth in the
Stockholders' Agreement.
26. "Cisneros Family" shall mean Ricardo Cisneros, Gustavo Cisneros and/or
their lineal descendants, individually or collectively and/or any trusts for the
exclusive benefit of any one or more of such persons.
27. "Client Product" shall mean each component of the Licensed Products
that executes on one or more operating systems being used by an individual end-
user. Examples of the functions provided by the Client Product include
Audiovisual Presentations to the end-user and the exchange of information with
the Server Product.
28. "Communication Services" includes chat, e-mail, message boards, online
transactions and other forms of online interaction.
29. "Compuserve-branded" shall have the meaning set forth in Stockholders'
Agreement.
30. "Confidential Information" shall mean (a) any Confidential Information
as defined in the Related Agreements and (b) any information that a party
indicates to the other party is, or that the other party reasonably should know
is confidential, non-public business, financial or technical information, know
how, trade secrets or other confidential or proprietary information (i)
disclosed by one party or its Affiliates to the other pursuant to this Agreement
in oral, visual, written, graphic, machine readable or other form or (ii)
discovered by one party or its Affiliates only through decompilation, reverse
engineering or a similar process with respect to the other party's or its
Affiliates' software. Confidential Information shall include any such
confidential, non-public information (x) relating to the business of a party and
obtained as a result of the preparation and negotiation of this Agreement or the
performance by the parties of their obligations hereunder, (y) relating to the
business of a party, in each case including, but not limited to, documents
and/or information regarding customers, costs, profits, markets, sales,
products, product development, key personnel, pricing policies, operational
methods, technology, know-how, technical processes, formulae, or plans for
future development, or (z) Documentation. Notwithstanding the foregoing,
Confidential Information shall not include information which:
(A) was in the public domain at the time it was disclosed or enters
the public domain without violation of this Agreement by the receiver;
(B) was known to the receiver, without restriction, at the time of the
disclosure;
(C) is disclosed with the prior written approval of the discloser;
(D) was independently developed by the receiver without any use of the
Confidential Information, including by employees or other agents of the receiver
who have not been exposed to the Confidential Information;
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<PAGE>
(E) becomes known to the receiver, without restriction, from a third
party without breach of this Agreement by the receiver and otherwise not in
violation of the discloser's rights;
(F) is disclosed to third parties by the discloser intentionally,
without restrictions similar to those contained in this Agreement; or
(G) is disclosed in accordance with the order or requirement of a
court, administrative agency, or other governmental body, provided the receiver
gives prompt written notice to the discloser and a reasonable opportunity to
seek a protective order or otherwise to prevent or limit the disclosure.
31. "Content" shall mean either (i) text or (ii) multimedia information
which contains one or any combination of any of the following in digital form or
such other forms as may become available in the future: text, graphics, video,
sound, still images, or the like.
32. "Core AOL Marks" shall mean the trademarks and service marks using the
brands America OnlineO and/or AOLO that are set forth in Section 1 of Attachment
----------
D, as amended by Licensor from time to time to reflect Licensor's then-current
- -
marketing and branding policies and any other marks Licensor makes generally
available for use by all JV Affiliates; provided, however, that any such mark
set forth in Section 1 of Attachment D shall not be deleted from such list
------------
unless AOL discontinues use of such mark on a worldwide basis with respect to
the AOL Services in accordance with AOL's Uniform Policies.
33. "Core AOL Technology" shall mean the portion of the Licensed Products
that embodies: (a) the AOL Rainman/FDO portion of the AOL-US Service and (b)
the core functionality that is currently and in the future during the Term
available on all AOL Services (e.g., chat rooms, e-mail, message boards, and
Internet access), as such functionality may be modified from time to time on the
AOL Services.
34. "Costs" shall have the meaning set forth in Section 9.4(b)(iv).
35. "Damages" shall have the meaning set forth in the Certificate of
Incorporation.
36. "Directly Competitive Service" shall have the meaning set forth in
Section 2.9(a).
37. "Documentation" (including its correlative "Document") shall mean, at
any given time, the most current version of all available manuals and other
written materials, including style guides, owned at any point in time on or
after the Effective Date by AOL or any of its Wholly-Owned Affiliates that
relate to the Licensed Products including all materials useful for understanding
and operating Object Code and machine-readable text or graphic files, and which
are subject to display or printout.
38. "Effective Date" shall have the meaning set forth in the first
paragraph of this Agreement.
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<PAGE>
39. "Error Correction" shall have the meaning set forth in the AOL OLS
Agreement.
40. "Interactive Services" shall mean the provision of Content or
Communication Services which may be provided through the use of any protocols,
standards, or platforms (including Internet or Internet derivative protocols,
standards, and platforms, including, without limitation, CDMA and other wireless
access protocols) for remote access by narrowband or broadband infrastructure,
including POTS, ISDN, satellite, cable, fiber optics, and hybrid CD-ROM.
41. "Interconnect" or "Interconnection" shall have the meaning given in
the AOL OLS Agreement.
42. "Internet Portal Services" shall have the meaning set forth in the
Certificate of Incorporation.
43. "JV Affiliate(s)" shall mean any joint venture outside of the United
States in which AOL directly or indirectly owns an equity interest and whose
services are Interconnected with the AOL-US Services.
44. "JV Affiliate Requested Developments" shall mean all developments by
AOL or any Affiliate on behalf of or for the benefit of any JV Affiliate.
45. "Launch" shall mean the first commercial availability of an
Interactive Service to potential Subscribers in the Territory or a country in
the Territory, as applicable.
46. "Launch Software" shall have the meaning set forth in the AOL OLS
Agreement
47. "Licensed Products" shall mean all (I) AOL Proprietary Object Code (a)
deemed to be appropriate in AOL's reasonable business judgment for use in
Launching, operating, providing, managing and administering Licensee Interactive
Services (including Object Code for Client Product, Server Product, Core AOL
Technology, applications, programming interfaces and Error Corrections); (b)
embodied in the development tools to develop, create, and enhance Content for
use in connection with Licensee Interactive Services; (c) that (i) is an
upgrade, enhancement, or modification of an item set forth in the foregoing
subsections (a) and (b), whether patentable or not, and (ii) is appropriate for
use in Launching, operating, providing, managing and administering Licensee
Interactive Services, or developing, creating, and enhancing Content for use in
connection with Licensee Interactive Services, as the case may be; or (d) that
(A) is an upgrade, enhancement, or modification to a Third Party Product created
by AOL, (B) is incorporated by AOL or any Affiliate into any AOL Services, and
(C) for which Licensor or any Affiliate has received all necessary rights to
license to Licensee as set forth in this Agreement; (II) AOL Proprietary Object
Code comprising the client and server software components of AOL Brand Products;
and (III) any other Object Code deemed to be a Licensed Product under this
Agreement. For the avoidance of doubt, Licensed Products include the Launch
Software, New AOL Developments, Requested Developments and JV Affiliate
Requested Developments. Licensed Products exclude (a) all development tools,
regardless of the creator, except those set forth in subsection (I)(b) of the
first sentence above, (b) Third Party
-30-
<PAGE>
Products or upgrades, enhancements, or modifications to same, except those set
forth in subsection (I)(d) of the first sentence above, (c) any server software
or server-based technology for AOL Brand Products, and (d) any and all products
relating to the CIS Services (as defined in the CIS License), unless such
products also relate to, and are used in connection with, the AOL Services, are
covered under a separate license agreement pursuant to the CIS License.
48. "Licensee Interactive Services" shall mean the PC Access Services,
Internet Portal Services and, from and after the date on which Licensee obtains
the rights to offer TV Access Services and Wireless Access Services, TV Access
Services and Wireless Access Services conducted by Licensee in the Territory
from time to time. The Licensee Interactive Services comprising PC Access
Service shall initially be a PC Access Service that is substantially similar to
the AOL-US Service as adapted and localized to the applicable local market, as
such service may be expanded or modified by the Board of Directors in accordance
with the Certificate of Incorporation, including by adding other Interactive
Services. The Licensee Interactive Services comprising TV Access Service in the
Territory shall initially be a TV Access Service that is substantially similar
to the AOL-branded TV Access Service then being offered by AOLin the United
States, as adapted and localized to the applicable local market, as such service
may be expanded or modified by the Board of Directors in accordance with the
Certificate of Incorporation, including by adding other Interactive Services.
The Licensee Interactive Services comprising Wireless Access Services in the
Territory shall initially be a Wireless Access Service that is substantially
similar to the AOL-branded Wireless Access Service then being offered by AOL in
the United States, as adapted and localized to the applicable local market, as
such service may be expanded or modified by the Board of Directors in accordance
with the Certificate of Incorporation, including by adding other Interactive
Services.
49. "Licensee Mark" shall mean any trade or service mark used by Licensee
in the Territory in providing Licensee Interactive Services that does not
contain one or more elements of a Core AOL Mark.
50. "Licensed Licensee Mark" shall have the meaning set forth in Section
4.2.
51. "Mixed AOL Mark" shall mean any trade or service mark that contains
(a) one or more elements of a mark that is, or was at any time, a Core AOL Mark
and (b) additional symbols, marks, or designs.
52. "New AOL Developments" shall have the meaning set forth in the AOL OLS
Agreement.
53. "New AOL Domain Name" shall have the meaning set forth in Section 4.7.
54. "New AOL Mark" shall have the meaning set forth in Section 4.6.
55. "Object Code" shall mean (i) machine-executable programming
instructions, substantially or entirely in binary form, which are intended to be
directly executable by an operating system after suitable processing and linking
but without the intervening steps of
-31-
<PAGE>
compilation or assembly, and (ii) other executable code (e.g. programming
instructions written in procedural or interpretive languages).
56. "ODC" shall mean Riverview Media Corp., a British Virgin Islands
corporation.
57. "Offensive Proceedings" shall have the meaning set forth in Section
4.8.
58. "Operating Entity(ies)" shall have the meaning set forth in the
recitals to this Agreement.
59. "Panama Convention" shall have the meaning set forth in Section
9.4(b)(i).
60. "PC Access Services" shall have the meaning given in the Certificate
of Incorporation.
61. "Peripheral AOL Technology" shall mean any portion of the Licensed
Products that are not a Core AOL Technology.
62. "Person" shall mean an individual, corporation, partnership, limited
liability company, trust, unincorporated organization, or other legal entity, or
a governmental body, or their equivalent under the applicable legal system.
63. "Rainman/FDO" shall mean (a) the key software necessary for Content
providers to present their information to Subscribers of the AOL-US Service
(e.g., enabling a content provider to control the structural organization within
its area, to translate the Content provider's existing Content into the Rainman
format, and to maintain the area and Content over time) and (b) the programming
software necessary to control all client displays on the AOL-US Service for the
Microsoft Windows and Apple Macintosh platforms, sometimes referred to as Forms
Display Operation.
64. "Related Agreements" shall mean the Certificate of Incorporation, the
Stockholders' Agreement, the AOL OLS Agreement, the CIS License, the CIS OLS
Agreement, and all of its Exhibits and Attachments to any thereof.
65. "Requested Developments" shall have the meaning set forth in the AOL
OLS Agreement.
66. "Restricted Content" shall mean Content that, (a) if stored or
displayed by, or accessible from, a Licensee Interactive Service or an AOL
Service may or would violate (i) any applicable law, rule or regulation, (ii)
the rights of the Content provider or other Person, or (iii) any duty or
obligation of Licensor or Licensee to any Person; (b) is determined by AOL, in
its sole discretion, but consistent with AOL's Uniform Policies, to be
inappropriate for display; or (c) cannot be displayed due to the technical
reasons which are not due to Licensor's failure to meet its obligations under
this Agreement and the AOL OLS Agreement (e.g., a different operating system is
required, as is the case with respect to Japan).
67. "Rules" shall have the meaning set forth in Section 9.4(b)(i).
-32-
<PAGE>
68. "Senior Executive Officers" shall mean the Chief Executive Officer and
Chief Operating Officer of a Person, each Senior Vice President or Executive
Vice President of a Person, and the General Counsel of a Person, and any other
management personnel of a Person with equivalent titles or decision-making
authority. For purposes of this Agreement, Gustavo Cisneros, Ricardo Cisneros
and Steven Bandel shall be deemed to be Senior Executive Officers of ODC.
69. "Server Product" shall mean the components of the Licensed Products
executing on the computers acting as a host system for any AOL Services.
Functions provided by the Server Product include, exchanging information with
the Client Product, storing information, exchanging information with third party
services via gateways, and administering such AOL Services.
70. "Service Notice" shall have the meaning set forth in the AOL OLS
Agreement.
71. "Source Code" shall mean the human-readable form of the Object Code,
including comments, logic manuals, flow charts, principles of operation, and
procedural language and materials for understanding, implementing, and
maintaining the Object Code and source code.
72. "Special Affiliates" shall have the meaning set forth in the
Stockholders' Agreement.
73. "Stockholders' Agreement" shall mean the Stockholders' Agreement,
dated as of __________, 2000, by and among AOL, ODC and the Company.
74. "Subscriber" shall mean, as of any date of determination and with
respect to any Interactive Service, any Person who has opened an account with or
otherwise registered as a user of such Interactive Service.
75. "Term" shall mean the period of time that this Agreement is in effect,
as set forth in Section 8.1.
76. "Territory" shall mean the countries listed on Attachment F.
------------
77. "Third Party Products" refers to computer software products licensed
from third parties (other than AOL or AOL's Wholly-Owned Affiliates) and
utilized by AOL in operating any AOL Services at the Effective Date or
thereafter during the Term, including software products readily available in the
market place pursuant to a "shrink-wrap" license or similar form license
agreement. To avoid any doubt, Third Party Products shall not include Licensed
Products.
78. "Tribunal" shall have the meaning set forth in Section 9.4(b)(i).
79. "TV Access Service" shall have the meaning set forth in the
Certificate of Incorporation.
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<PAGE>
81. "Uniform Policies" shall mean all AOL policies, procedures, methods of
doing business and other rules or practices of any sort with respect to any
subject matter generally applicable and consistently applied to all JV
Affiliates. For the avoidance of doubt, not all Uniform Policies of AOL will be
relevant to every JV Affiliate or lead to the same result with respect to each
JV Affiliate. An AOL policy to comply with local obscenity laws may, for
example, prohibit the distribution of Content on one AOL Service in one country
but permit dissemination of the same Content on another AOL Service in another
country.
82. "Undertaking" shall have the meaning set forth in the Certificate of
Incorporation.
83. "Voting Stock" shall have the meaning set forth in the Certificate of
Incorporation.
84. "Wholly-Owned Affiliates" shall mean with respect to any Person any
other Person which is directly or indirectly wholly owned by such Person,
directly or indirectly wholly owns such Person or is directly or indirectly
wholly owned by the same Person as such Person, with such ownership to mean
possession of both 100% of the equity interest and 100% of the voting interest,
except for directors' qualifying shares, if any. Any Person which is directly
or indirectly wholly owned by the Cisneros Family shall be a Wholly-Owned
Affiliate of ODC.
85. "Wireless Access Service" shall have the meaning set forth in the
Certificate of Incorporation.
-34-
<PAGE>
ATTACHMENT B
Documentation
Licensor shall provide Licensee with the following Documentation and
Confidential Information:
A. [************]
B. [***********************]
C. [***********************]
D. [***********************]
E. [***********************]
F. [***********************]
G. [***********************]
H. [***********************]
I. [***********************]
J. [***********************]
K. [***********************]
L. [***********************]
M. [***********************]
N. [***********************]
O. [***********************]
P. [***********************]
One (1) printed and computer-readable copy of each manual, in English, shall be
shipped to Licensee at Licensor's expense within ten (10) Business Days after
the date in which a Service Notice is received by Licensor.
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<PAGE>
ATTACHMENT C
AOL STANDARD FORMS
As of the Effective Date, AOL Standard Forms include the forms identified
below:
1. AOL Terms of Service Agreement
. Member Agreement
. Community Guidelines
. Privacy Policy
2. AOL Marketplace Policies
3. AOL Advertising Guidelines
4. AOL Standard Agreements
. Interactive Services Agreement
. Content License Agreement
. Web Pointing Agreement
. Consulting Services Agreement
. Standard Marketing Agreement
. Standard Advertising Agreement
. Shopping Channel Agreement
. Standard NDA
-36-
<PAGE>
ATTACHMENT D
AOL MARKS
1. Core AOL Marks. The Core AOL Marks licensed pursuant to this Agreement are:
--------------
[***********************]
[***********************]
[***********************]
[***********************]
[***********************]
[***********************]
[***********************]
[***********************]
[***********************]
[***********************]
2. Registration Status in the Territory. The status of registration of the
------------------------------------
Core AOL Marks in certain countries in the Territory is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Country Mark Classes Filed File or Registration Date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Argentina [**************] [****] [************] ([******])
- --------------------------------------------------------------------------------------------------
[*************** [*****] [***********] ([******])
**********]
- --------------------------------------------------------------------------------------------------
[*****] [*********] [***********] ([********])
[*********] ([********])
- --------------------------------------------------------------------------------------------------
[**********] [***] [*********] ([*********])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Bolivia [**************] [**********] [*************]
([*******])
- --------------------------------------------------------------------------------------------------
[*************** [**********] [*************] ([*******])
**********]
- --------------------------------------------------------------------------------------------------
[****] [**********] [***************] ([*****])
- --------------------------------------------------------------------------------------------------
[*************] [**********] [**************] ([******])
- --------------------------------------------------------------------------------------------------
[*****************] [*******] [************] ([*******])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Brazil [************] [**********] [*************]
([*********])
- --------------------------------------------------------------------------------------------------
[************** [******** *************** ([*********])
**********] ********] [**********] ([********])
[**********] ([********])
- --------------------------------------------------------------------------------------------------
[****] [********* [****************]
********] [******] ([**********])
- --------------------------------------------------------------------------------------------------
</TABLE>
-37-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Country Mark Classes Filed File or Registration Date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[***********] [*********** [******************] [*********]
*********] ([********])
- --------------------------------------------------------------------------------------------------
[*****************] [********* [***********] ([*******])
******] [***********] ([********])
[***********] ([********])
- --------------------------------------------------------------------------------------------------
[*********] [******] [***********] ([********])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Chile [*************] [*********] [************] ([********])
[*************] ([*******])
- --------------------------------------------------------------------------------------------------
[************** [****] [************] ([*******])
********]
- --------------------------------------------------------------------------------------------------
[***] [**] [************] ([*********])
- --------------------------------------------------------------------------------------------------
[*************] [**********] [***********] ([*********])
[*************] ([**********])
- --------------------------------------------------------------------------------------------------
[***************] [****] [*****] ([******])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Colombia [*************] [****] [**********] ([*********])
[**********] ([*********])
- --------------------------------------------------------------------------------------------------
[************* [****] [*********] ([********])
********] [*********] ([********])
- --------------------------------------------------------------------------------------------------
[***] [**] [*********] ([********])
- --------------------------------------------------------------------------------------------------
[*********] [**] [*********] ([*******])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Costa Rica [************] [*******] [*********] ([********])
[*********] ([*********])
[*********] ([*********])
- --------------------------------------------------------------------------------------------------
[************ [*********] [*********] ([********])
*********] [**********] ([*********])
[**********] ([*******])
[**********] ([*********])
- --------------------------------------------------------------------------------------------------
[*****] [*********] [*******] ([********])
[********] ([*********])
[*********] ([*********])
[**********] ([*******])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Dominican [**************] [*******] [**********]
Republican ([********])
- --------------------------------------------------------------------------------------------------
[*************** [*******] [**************]
********] ([*********])
- --------------------------------------------------------------------------------------------------
[***] [*******] [**************]
([*********])
- --------------------------------------------------------------------------------------------------
</TABLE>
-38-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Country Mark Classes Filed File or Registration Date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ecuador [*************] [********** [**************]
***] ([*******])
- --------------------------------------------------------------------------------------------------
[*************** [**********] [***************]
********] ([********])
- --------------------------------------------------------------------------------------------------
[****] [*********] [***************]
([*********])
- --------------------------------------------------------------------------------------------------
[********** [*********] [****************] ([******])
*******]
- --------------------------------------------------------------------------------------------------
[***********] [**] [**********] ([*******])
- --------------------------------------------------------------------------------------------------
[********] [********] [*************] ([******])
- --------------------------------------------------------------------------------------------------
[***************] [********* [**************]
*****] ([**********])
- --------------------------------------------------------------------------------------------------
[*******] [********] [*************] ([******])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
El Salvador [***********] [*********] [*************]
([********])
[*********] ([*******])
- --------------------------------------------------------------------------------------------------
[************ [*********] [*******] ([*********])
******] [********] ([********])
[************] ([*******])
- --------------------------------------------------------------------------------------------------
[****] [*********] [**************]
([********])
[************] ([*******])
[**********] ([********])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Guatemala [**************] [*********] [*********] ([********])
[*********] ([*********])
[*********] ([*********])
[**********] ([*******])
- --------------------------------------------------------------------------------------------------
[************* [*******] [**********] ([*******])
*******] [********] ([*********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[***] [*******] [********]
([**********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[*********] [**] [********] ([********])
- --------------------------------------------------------------------------------------------------
</TABLE>
-39-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Country Mark Classes Filed File or Registration Date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Honduras [*************] [********* [********] ([********])
**] [********] ([********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[*************** [*********] [********] ([********])
********] [********] ([********])
[********] ([********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[*****] [********] [********]
([********])
- --------------------------------------------------------------------------------------------------
[**********] [**] [********] ([********])
- --------------------------------------------------------------------------------------------------
[***********] [**] [********] ([********])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Mexico [*************] [*****] [********] ([********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[************** [*****] [********] ([********])
**********]
- --------------------------------------------------------------------------------------------------
[*****] [********] [********] ([********])
[********] ([********])
[********] ([********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[************] [**********] [*************] ([*******])
- --------------------------------------------------------------------------------------------------
[*****************] [*******] [********] ([********])
- --------------------------------------------------------------------------------------------------
[********] [*********] [********] ([********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Nicaragua [************] [**********] [********] ([********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[************* [**********] [********]
*****] ([********])
- --------------------------------------------------------------------------------------------------
[***] [**********] [********] ([********])
[********]
([********])
- --------------------------------------------------------------------------------------------------
[*********] [****] [********] ([********])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Panama [*************] [**] [********] ([********])
- --------------------------------------------------------------------------------------------------
[********] [**] [********] ([********])
- --------------------------------------------------------------------------------------------------
</TABLE>
-40-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Country Mark Classes Filed File or Registration Date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Paraguay [************] [**********] [********] ([********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[*************** [**********] [********] ([********])
*********] [********] ([********])
- --------------------------------------------------------------------------------------------------
[***] [**********] [*************] ([*******])
- --------------------------------------------------------------------------------------------------
[*********] [**] [********] ([********])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Uruguay [*************] [**********] [*************] ([*******])
- --------------------------------------------------------------------------------------------------
[*************** [**********] [************] ([********])
*********]
- --------------------------------------------------------------------------------------------------
[***] [**********] [*************] ([*******])
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Venezuela [**************] [****] [********] ([********])
- --------------------------------------------------------------------------------------------------
[************** [****] [********] ([********])
*********] [********] ([********])
- --------------------------------------------------------------------------------------------------
[****] [*********] [********] ([********])
[********] ([********])
- --------------------------------------------------------------------------------------------------
[****************] [******] [********] ([********])
- --------------------------------------------------------------------------------------------------
[*********] [**] [********] [([********])
- --------------------------------------------------------------------------------------------------
</TABLE>
3. Issues Relating to Core AOL Marks Actually Known by AOL. As of the Effective
--------------------------------------------------------
Date, there are certain issues relating to Core AOL Marks for the reasons
described below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Country Opposition/Action brought by Defendant Status
AOL for use of...
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Argentina [********] [********] [********]
[********]
[********]
[********]
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Brazil [********]
- --------------------------------------------------------------------------------------------------
[********] [********] [********]
[********] [********] [********]
</TABLE>
-41-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Country Opposition/Action brought by Defendant Status
AOL for use of...
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[********]
[********]
[********]
[********]
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Chile [****************] [********] [********
[********] ******** ********
********]
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Colombia [****************] [********] [********
[****************] ******** ********]
[****************]
[****************]
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Mexico [****************] [****************] [********] [********
******** ********
********]
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Venezuela [********] [****************] [********
[****************] ******** ********]
- --------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
ATTACHMENT E
AOL DOMAIN NAMES
AOL has applied for or obtained AOL Domain Names in countries in the
Territory as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Country Domain Name Status of Registration
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Argentina [********] [********] ([****** ********])
[********]
- ----------------------------------------------------------------------------------------------------
Brazil [********] [********] ([****** ********])
- ----------------------------------------------------------------------------------------------------
Chile [********] [********] ([********])
- ----------------------------------------------------------------------------------------------------
Colombia [********] [********] ([****** *****])
- ----------------------------------------------------------------------------------------------------
Ecuador [********] [****************]
- ----------------------------------------------------------------------------------------------------
El Salvador [********] [******] ([*************])
- ----------------------------------------------------------------------------------------------------
Guatemala [********] [****************]
- ----------------------------------------------------------------------------------------------------
Mexico [********] [****************]
[********] [****************]
- ----------------------------------------------------------------------------------------------------
Nicaragua [********] [****************]
- ----------------------------------------------------------------------------------------------------
Panama [********] [****************]
- ----------------------------------------------------------------------------------------------------
Peru [********] [*****] ([************** ])
- ----------------------------------------------------------------------------------------------------
Puerto Rico [********] [******] ([**************])
- ----------------------------------------------------------------------------------------------------
Venezuela [********] [*****] ([***************])
- ----------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
ATTACHMENT F
TERRITORY
Anguilla Haiti
Antigua Honduras
Argentina Jamaica
Aruba Martinique
Bahamas Mexico
Barbados Netherlands Antilles
Barbuda Nevis Montserrat
Belize Nicaragua
Bolivia Panama
Brazil Paraguay
Caicos Islands Peru
Cayman Islands Puerto Rico
Chile St. Kitts
Colombia St. Lucia
Costa Rica St. Maarten
Cuba St. Martin
Dominica St. Vincent
Dominican Republic Suriname
Ecuador The Grenadines
El Salvador Tobago
French Guiana Trinidad
Grenada Turks Islands
Guadeloupe Uruguay
Guatemala Venezuela
Guyana Virgin Islands
-44-
<PAGE>
EXHBIT 10.6
[*] - CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS WITH ASTERISKS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF
1933, AS AMENDED.
FORM OF
AOL ONLINE SERVICES AGREEMENT
THIS AOL ONLINE SERVICES AGREEMENT (this "Agreement"), dated as of
_________, 2000 (the "Effective Date"), is entered into by and between America
Online, Inc., ("AOL" or "Service Provider"), a corporation organized under the
laws of the state of Delaware, having its principal offices at 22000 AOL Way,
Dulles, Virginia, USA 20166-9323, and America Online Latin America, Inc., a
Delaware corporation (the "Company" or "Recipient"), having its principal
offices at 6600 N. Andrews Avenue, Suite 500, Ft. Lauderdale, FL, USA 33309.
WITNESSETH:
----------
WHEREAS, Service Provider is engaged in the business of providing
Interactive Services worldwide.
WHEREAS, the Company operates and/or markets and supports the Business in
the Territory through certain operating entities owned by the Company, including
Recipient.
WHEREAS, concurrent with the execution hereof, the Company and AOL have
entered into the related AOL License Agreement (the "AOL License"), pursuant to
which AOL has granted to the Company certain rights and licenses for conducting
the Recipient Interactive Services. In connection therewith, and pursuant to
the Related Agreements, AOL has agreed to extend to the Company certain
services, including technical support, training and related services pertaining
to AOL Services, that are necessary to Launch and operate the Recipient
Interactive Services in the Territory, all as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
AGREEMENT:
---------
1. DEFINITIONS; CONSTRUCTION. Capitalized terms used but not defined in the
body of this Agreement shall have the meaning given to such terms in Attachment
----------
A. Other capitalized terms used without definition shall have the meanings
- -
given in the AOL License. Unless the context clearly indicates otherwise, any
term defined or used in the singular shall include the plural. Use of the term
"include" or "including" shall be construed to mean "include without limitation"
or "including without limitation", as applicable.
-1-
<PAGE>
2. PROVISION OF CERTAIN ONLINE SERVICES. In connection with the AOL License,
and subject to the Related Agreements, Service Provider shall provide Recipient
with the services described in this Section 2 in order to facilitate the Launch
and operation by Recipient of AOL-branded PC Access Services in the Territory.
At such time that the Board of Directors approves the development and Launch of
one or more additional Recipient Interactive Service(s) in particular country(s)
in the Territory pursuant to the Company's Certificate of Incorporation,
Recipient shall notify Service Provider in writing of such approval and identify
the particular country(s) in the Territory and what Recipient Interactive
Services are to be provided (such notice, the "Service Notice"), and Service
Provider shall commence provision of the services described in this Section 2 in
such countries and/or with respect to such additional Recipient Interactive
Services.
2.1 Consistency of AOL Services. The parties acknowledge and agree
---------------------------
that it is necessary for Service Provider to maintain uniform standards
governing all material facets of AOL Services in order to provide subscribers
worldwide with high quality, cost effective and consistent levels of service,
and to protect the reputation and goodwill associated with the AOL Services in
the Interactive Services market. Accordingly, Service Provider shall provide
Recipient with the services described herein in a manner consistent with such
objectives.
2.2 Licensed Product Development Services.
-------------------------------------
(a) Launch Software. As promptly as practicable following the date
---------------
hereof, and pursuant to the terms and conditions of this Agreement, Service
Provider shall provide Recipient with the launch software, in accordance with
the requirements set forth in Attachment B (the "Launch Software"), to be used
------------
in connection with the Launch by Recipient of a PC Access Service in the
country(s) in the Territory identified by Recipient as aforesaid. All
Launch Software shall be deemed to be components of the Licensed Products.
Recipient shall have the same license rights to the Launch Software as
those rights granted to Recipient in Section 2 of the AOL License with
respect to the Licensed Products. Recipient shall pay Service Provider for
the localization of the Launch Software at MFN Rates. All payments under
this Section 2.2(a) shall be made within twenty (20) Business Days following
submission of quarterly invoices, which shall include a breakdown, on a time and
material basis, in reasonable detail of the charges, in respect of the work
carried out during the preceding quarter. Recipient shall pay Service Provider
at MFN Rates for the internationalization or localization of post-Launch
modifications to the Licensed Products in accordance with the process described
in Section 2.2(d) below.
(b) New AOL Developments. Service Provider shall provide
---------------------
Recipient with New AOL Developments for the Recipient Interactive Services as
described in this Section 2.2(b). At the beginning of each calendar quarter,
Service Provider shall conduct a technology review and provide Recipient with
Service Provider's New AOL Development intentions for that quarter with respect
to the Recipient Interactive Services that Recipient is then providing.
Recipient shall pay Service Provider at MFN Rates for any internationalization
or localization required to implement New AOL Developments for such Recipient
Interactive Services in accordance with the process described in Section 2.2(d)
below. Recipient acknowledges and agrees that New AOL Developments shall be
deemed to be Licensed Products under the AOL License. Recipient shall have the
same license rights to the New AOL
-2-
<PAGE>
Developments as those rights granted to Recipient in Section 2 of the AOL
License with respect to the Licensed Products. Consistent with Service
Provider's Uniform Policies regarding New AOL Developments and, subject to
Section 2.2 of the AOL License, Service Provider shall exercise commercially
reasonably efforts to retain and grant to Recipient all rights with respect to
Third Party Product enhancements on the same terms as set forth in Section 2.2
in the AOL License.
(c) Requested Developments. Upon Recipient's request, and subject
----------------------
to the good faith agreement of Service Provider and Recipient in writing upon
reasonable terms and conditions of such development, including commercially
reasonable payment terms at MFN Rates, all in accordance with the process
described in Section 2.2(d) below, Service Provider shall develop revisions,
enhancements and/or modifications of the Licensed Products and provide other
development services related to the Recipient Interactive Services that
Recipient is then providing or in respect of which it has delivered a Service
Notice ("Requested Developments"). Recipient acknowledges and agrees that
Requested Developments shall be deemed to be Licensed Products. Recipient shall
have the same license rights to the Requested Developments as those rights
granted to Recipient in Section 2 of the AOL License with respect to the
Licensed Products.
(d) Process for Developments. The process for internationalizing
------------------------
and localizing New AOL Developments and for requesting Requested Developments
shall be conducted through a marketing requirements document ("MRD") developed
by AOL's international product marketing group in conjunction with Recipient,
containing reasonably sufficient information in order for Service Provider to
make a technical assessment and to provide an initial estimate of the timetable
and total pricing for completion of the development services. Service Provider
shall negotiate in good faith with Recipient all reasonable MRDs, provided that
Recipient acknowledges and agrees that Service Provider will not accept MRDs
that in Service Provider's reasonable opinion, may compromise security or
performance or otherwise do not comply with AOL's Uniform Policies. If Service
Provider reasonably believes that an MRD would have such effect, Service
Provider shall exercise commercially reasonable efforts to assist Recipient in
developing an MRD that does not have such effect but that provides the
functionality that Recipient desires. Service Provider and Recipient recognize
that the level of information required in an MRD will vary according to the
specified functionality, but must contain a sufficient level of information and
detail for Service Provider to assess fully the nature and scope of the project
and its technical feasibility. The parties acknowledge that Recipient may need
to consult with Service Provider's management, technology and international
staffs in order to develop the MRD. Upon written acceptance of an MRD by Service
Provider, Service Provider shall provide the applicable development services in
accordance with the terms and conditions of such MRD, including commercially
reasonable payment terms at MFN Rates.
2.3 Training, Technical Support, Documentation and Additional Support
-----------------------------------------------------------------
Services
- --------
(a) Training and Technical Support.
------------------------------
(i) Scope. Service Provider shall provide Recipient with
-----
the pre-Launch and post-Launch Training and Technical Support set forth in
Attachment D with respect to PC Access Services and with appropriate pre-Launch
and post-Launch Training and Technical
-3-
<PAGE>
support as may be agreed by Service Provider and Recipient with respect to
Wireless Access Services and TV Access Services in substantially the manner
Service Provider is providing them in the United States after Recipient obtains
the right to Launch such Services in the Territory. With respect to such
Training and Technical Support, Service Provider reserves the right to amend
Attachment D from time to time to permit Service Provider to make such
- ------------
reasonable changes as are necessary for Service Provider to provide such items
on a consistent worldwide basis; provided that any such amendment shall not
increase the rates or expand the fee structure applicable to Recipient any more
than such rates are increased or fee structure expanded with respect to other JV
Affiliates consistent with AOL's Uniform Policies. Service Provider shall
provide Recipient with prior notice of such amendments to Attachment D.
------------
(ii) Exchange Program. Service Provider shall, upon the request of
----------------
Recipient and subject to Service Provider's reasonable discretion and the
availability of its personnel, send qualified English-speaking employees from
among Service Provider's Content production and technical personnel to
Recipient's offices to assist and train Recipient's Trainees. During the time
such exchange personnel participate in the aforementioned exchange program, (i)
Service Provider shall pay all of their salary and standard Service Provider
benefits, and (ii) Recipient shall either pay or reimburse Service Provider for
all of their air travel, lodging, local transportation, meals, and other out-of-
pocket expenses associated with such travel; provided that such expenses conform
to Recipient's general and reasonable policies regarding expenses for its own
employees and such arrangement is at least as favorable as any similar
arrangement with any JV Affiliate, taking into account any reasonable
differences in payment or reimbursement policies due to differences in location.
Recipient shall also pay or reimburse Service Provider for reasonable
incremental expenses incurred by such exchange personnel as a result of their
relocation and travel, including increased cost of living, increased tax burden,
or other factors attendant to relocating to a different country.
(iii) Contacts. Service Provider shall promptly after the
--------
Effective Date and as necessary from time to time thereafter provide Recipient
with an up-to-date list of contact names and telephone numbers of the
individuals providing Training and Technical Support.
(b) Documentation. The Documentation and Confidential Information
-------------
identified in Attachment B of the AOL License shall be periodically updated by
------------
Service Provider. After a Service Notice and thereafter from time to time as
necessary to reflect updates, Recipient will receive one (1) print and computer-
readable copy of each final, finished release of such Documentation and
Confidential Information in English as it becomes available.
(c) Licensed Product Support and Maintenance.
----------------------------------------
(i) Error Correction; Virus Deletion. Recipient shall promptly
disclose to Service Provider any Errors or Viruses in the Licensed Products of
which Recipient becomes aware. The minimum amount of information to be provided
when disclosing an Error or a Virus is set forth in Attachment C. Service
-------------
Provider shall, at no charge to Recipient, use commercially reasonable efforts
to (i) correct any material, replicable Errors in Licensed Products, and (ii)
use industry-standard software programs to detect material Viruses and to delete
material Viruses in the Licensed Products. However, if Recipient is determined
to have been either the source or direct conduit for the Error or Virus,
Recipient shall promptly pay
-4-
<PAGE>
Service Provider for such Error Correction or Virus Deletion, as the case may
be, on a commercially reasonable time and materials basis at MFN Rates. Service
Provider shall assign the same priority and apply the level of effort that
Service Provider uses for similar priority Errors or Viruses for the AOL-US
Service, as set forth in Attachment C, and will promptly on commercially
------------
reasonable terms and conditions (A) supply the Error Correction to Recipient
when available and/or (B) perform the Virus Deletion. Service Provider shall
have the right to amend from time to time the AOL Error Correction and/or Virus
Deletion Policies set forth in Attachment C, respectively, if such amendment is
------------
made in connection with a change in AOL's worldwide Error Correction or Virus
Deletion Policy, as the case may be, and applies substantially equally to all
AOL Services, including the AOL-US Service. Service Provider shall provide
Recipient with prior notice of such amendments.
(ii) Other Maintenance Terms. With respect to Third Party
-----------------------
Products, Service Provider shall provide Recipient with all associated third-
party support and maintenance rights, including error correction and/or deletion
of Viruses, as applicable, to the extent that Service Provider may grant or pass
through to Recipient such rights at no additional cost to Service Provider;
provided, however, that Service Provider shall have no obligation to obtain such
support and maintenance rights for Recipient other than to provide Recipient
commercially reasonable assistance in obtaining maintenance service for Third
Party Products at rates at least as favorable as those applicable to any JV
Affiliate, subject to any reasonable difference in rates or cost due to
location, usage or other reasonable factors that might impact the level and cost
of support and maintenance. To the extent Recipient receives the right to use a
Third Party Product and Service Provider pays the maintenance fees for such
Product, Recipient shall promptly reimburse Service Provider for that percentage
of such maintenance fees attributable to Recipient's use of that Third Party
Product.
(d) Additional Support Services. Service Provider shall provide
---------------------------
Recipient additional support services relating to the Licensed Products at MFN
Rates.
2.4 Host Computer Access and Operations.
-----------------------------------
(a) Access. Service Provider shall provide Recipient with Host
------
Computer Access as necessary to operate Recipient Interactive Services in a
manner substantially similar to the AOL-US Services and Recipient shall
compensate Service Provider for such access at MFN Rates.
(b) Information Provider Connection. Upon Recipient's request and at
-------------------------------
Recipient's expense, Service Provider shall provide Recipient's Content
providers with the capability to make a network connection to the AOL Services
host system via direct TCP/IP or other mutually agreeable network connection for
the purpose of permitting such providers to provide and manage Recipient
Interactive Service Content with respect to PC Access Services and, if
applicable, with respect to Wireless Access Services and TV Access Services
after Recipient obtains the right to Launch such Services in the Territory.
Recipient shall have the right to seek reimbursement from its Content providers
for the cost of such network connections; provided, however, that Recipient
shall remain primarily liable for such costs in any event.
-5-
<PAGE>
(c) Operations. Subject to Section 2.4(a), Service Provider shall
----------
have the sole right within its complete discretion to control the operations of
its computers providing Host Computer Access to Recipient. On the Effective
Date, computers providing Host Computer Access for all AOL Services are located
in the United States. Subject to approval by the Board of Directors, computers
providing Host Computer Access for the Recipient Interactive Services may be
located remotely within the Territory if technically and financially feasible,
provided that: (i) such operations shall be subject to a remote host computer
access technical plan to be developed by Service Provider, in consultation with
Recipient and the Company, and (ii) Recipient and the Company shall compensate
Service Provider for services in connection with the implementation and
operation of any remote Host Computer Access at applicable MFN Rates.
2.5 Interconnection.
---------------
(a) AOL-branded Access Services Interconnection. With respect to
-------------------------------------------
AOL-branded PC Access Services, and, following their Launch by Recipient, AOL-
branded TV Access Services, AOL-branded Wireless Access Services and Internet
Portal Services operated by Recipient, Service Provider shall provide Recipient
with a non-exclusive Interconnection between the AOL Services and the AOL-
branded Recipient Interactive Services. Likewise, with respect to PC Access
Services, and, following their Launch by Recipient, TV Access Services, Wireless
Access Services, and Internet Portal Services, Recipient shall provide, to such
AOL Services providing such access, substantially comparable non-exclusive
Interconnection to such AOL-branded Recipient Interactive Services. Both parties
acknowledge that such Interconnection between and among the AOL Services, as
well as access to each AOL Service's Content, shall be subject to the Related
Agreements and any technical limitations of the Recipient Interactive Services
which are not due to the failure of Service Provider to meet its obligations
under this Agreement or the AOL License (e.g. a different operating system is
required, as is the case with the AOL Service in Japan).
(b) Other AOL Services Interconnection.
----------------------------------
(i) AOL-branded Internet Portal Services Interconnection.
----------------------------------------------------
Subject to and in accordance with the Related Agreements, if AOL is entitled to
and offers an AOL-branded Internet Portal Service in the Territory, then AOL and
its Affiliates shall have the right to Interconnect (subject to applicable
limitations in agreements with third parties) such AOL-branded Internet Portal
Service with: (A) any AOL-branded Access Services, and (B) any AOL-branded
Internet Portal Services (to the extent offered by Recipient pursuant to Section
2.9(a) of the AOL License), in each case then being offered by Recipient.
Specifically, in such event: (1) Recipient shall provide, to such AOL Services
providing such access, substantially comparable non-exclusive Interconnection to
such AOL-branded Recipient Interactive Services, and (2) Recipient shall be
entitled to receive reasonable compensation for Interconnection in the amount of
(y) an allocation of ongoing costs of running the applicable AOL-branded
Interactive Service offered by Recipient reasonably allocable to such
Interconnection plus (z) the amount that third parties pay for access to Content
of the applicable Recipient Interactive Service offered by Recipient, if
anything, to the extent that such Interconnection results in access to such
Content.
-6-
<PAGE>
(ii) License to Certain Recipient Content. If AOL and its
------------------------------------
Affiliates have the right to Interconnect to AOL-branded Interactive Services
offered by Recipient in the Territory pursuant to paragraph (i) above, Recipient
hereby grants to AOL and its Affiliates the non-transferable (except as
expressly provided herein) right to access, and to grant to subscribers to AOL
Services the right to access, Content available through any such Interconnected
AOL-branded Interactive Services offered by Recipient, including access to
Recipient Content and other Content, but excluding Restricted Content.
2.6 AOL Operating Standards. The Parties agree that Recipient
-----------------------
shall exercise commercially reasonable efforts to implement and maintain
reasonable operating standards, specifications and procedures ("AOL Operating
Standards") as follows:
(a) As to each of the AOL Operating Standards set forth in
Attachment E, Service Provider shall, with respect to PC Access Services,
- ------------
prescribe, and Recipient shall implement and maintain, such AOL Operating
Standards, provided that such AOL Operating Standards shall be applied to
Recipient in a manner that is not less favorable to Recipient than the manner in
which such AOL Operating Standards are applied to other JV Affiliates.
(b) As to other operating matters, such as sales, marketing,
customer service, business development and Content programming, Service Provider
shall provide advice to Recipient, to which Recipient shall give good faith
consideration.
(c) Service Provider may provide Recipient with any changes to the
AOL Operating Standards in writing from time to time and Recipient shall
implement such changes to AOL Operating Standards in accordance with
commercially reasonable schedules to the extent that such changes do not
materially expand or modify the categories of standards described therein and do
not unreasonably interfere with the operations of Recipient.
(d) For the avoidance of doubt, the Parties agree that (i) any
standard, specification or procedure relating to interoperability of the AOL
Services shall be conclusively deemed to be subject to subsection (a) above, and
(ii) Recipient agrees not to adopt or implement any standard, specification or
procedure relating to such interoperability without the prior approval of
Service Provider, provided that Service Provider agrees to provide any changes
or enhancements to the AOL Operating Standards in a commercially reasonable
manner such that Recipient may implement such changes or enhancements without
unreasonable interference with its operations.
(e) Service Provider and Recipient shall each designate one
individual having appropriate qualifications to confer on a regular basis
regarding AOL Operating Standards and their implementation and maintenance.
2.7 Rights of Operating Entities. Recipient may direct that the
----------------------------
services from Service Provider to which it is entitled hereunder are to be
provided for the benefit of Operating Entities that are established pursuant to
the Certificate of Incorporation. All such services provided for the benefit of
Operating Entities hereunder shall be subject to all of the terms and conditions
of this Agreement and the Related Agreements.
-7-
<PAGE>
3. REPRESENTATIONS AND WARRANTIES AND RELATED MATTERS.
3.1 Service Provider. Service Provider represents and warrants to
----------------
Recipient that the execution, delivery and performance of this Agreement have
been duly authorized by all necessary action of Service Provider and this
Agreement is a valid and binding obligation of Service Provider, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting
the enforcement of creditor's rights generally and subject to the applicability
of general principles of equity and principles of public policy.
3.2 Recipient. Recipient represents and warrants to Service Provider
---------
that the execution, delivery and performance of this Agreement have been duly
authorized by all necessary action of Recipient and this Agreement is a valid
and binding obligation of Recipient, enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency, fraudulent
conveyance or other similar laws affecting the enforcement of creditor's rights
generally and subject to the applicability of general principles of equity and
principles of public policy.
3.3 DISCLAIMER OF OTHER WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN
------------------------------
THIS SECTION 3, SERVICE PROVIDER MAKES NO REPRESENTATIONS OR WARRANTIES WITH
RESPECT TO THE SERVICES PROVIDED HEREUNDER. SERVICE PROVIDER DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS AND IMPLIED, INCLUDING, WITHOUT LIMITATION, IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND TITLE.
3.4 LIMITATION OF LIABILITY. EXCEPT AS EXPRESSLY PROVIDED IN SECTION
-----------------------
3.5, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR INDIRECT,
INCIDENTAL OR SPECIAL DAMAGES, LOST PROFITS, LOST SAVINGS OR ANY OTHER
CONSEQUENTIAL OR SIMILAR DAMAGES, REGARDLESS OF THE FORM OF ACTION, EVEN IF THAT
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, RESULTING FROM BREACH
OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
3.5 Indemnity.
---------
(a) Service Provider shall, at its expense, defend any action, suit
or proceeding brought (other than by any shareholder of Recipient or any
Affiliate of Recipient) against Recipient or any Affiliate thereof, to the
extent it results from breach of a representation or warranty by Service
Provider under Section 3.1 above and Service Provider shall indemnify and hold
Recipient and/or any Affiliate of Recipient thereof harmless from and against
all damages, costs, expenses (including, but not limited to, attorneys' fees),
obligations or liabilities payable by Recipient and/or any Affiliate thereof to
any third party (other than any shareholder of Recipient or any Affiliate of
Recipient) directly relating to or resulting from any such action, suit or
proceeding, provided, however, that Service Provider shall not settle any claim
without Recipient's prior written approval, not to be unreasonably withheld,
delayed or conditioned.
-8-
<PAGE>
(b) Recipient shall, at its expense, defend any action, suit or
proceeding brought by any party against Service Provider or any Affiliate
thereof, to the extent it results from breach of a representation or warranty by
Recipient under Section 3.2 above and Recipient shall indemnify and hold Service
Provider and/or any Affiliate thereof harmless from and against all damages,
costs, expenses (including, but not limited to, attorneys' fees), obligations or
liabilities payable by Service Provider and/or any Affiliate thereof to any
third party (other than any Affiliate of Service Provider) directly relating to
or resulting from any such action, suit or proceeding, provided, however, that
Recipient shall not settle any claim without Service Provider's prior written
approval, not to be unreasonably withheld, delayed or conditioned.
(c)(i) If, and to the extent that, the Company, Recipient, any other
Operating Entity, any stockholder of the Company, any equity holder of
Recipient or any other Operating Entity, or any other Person brings any
Action against Service Provider (or any of its officers, directors, agents,
shareholders, members, partners, Affiliates or Subsidiaries) seeking any
Damages or injunctive or other equitable relief based on, arising out of or
relating to any breach or alleged breach of any fiduciary or other duty
based on any action or inaction which is permitted by or taken or not taken
in reliance on the provisions of Article THIRD of the Certificate of
Incorporation, Recipient shall indemnify and hold such Persons harmless
from and against all Damages arising out of or in connection with any such
Action. The right to indemnification conferred herein shall include the
right to be paid by Recipient an Advancement of Expenses. Neither Service
Provider nor any other Person entitled to indemnification under this
Section 3.5(c) shall be required, as a condition to any such Advancement of
Expenses, be required to deliver to Recipient any Undertaking. The rights
to indemnification and to the Advancement of Expenses conferred herein
shall inure to the benefit of the indemnitee's successors, assigns, heirs,
executors and administrators.
(ii) If a claim for indemnification under this Section 3.5(c) is not
paid in full by Recipient within sixty (60) days after a written claim has
been received by Recipient, except in the case of a claim for an
Advancement of Expenses, in which case the applicable period shall be
twenty (20) days, the indemnitee may at any time thereafter bring suit
against Recipient to recover the unpaid amount of the claim. If successful
in whole or in part in any such suit, or in a suit brought by Recipient to
recover an Advancement of Expenses, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
Advancement of Expenses hereunder, or brought by Recipient to recover an
Advancement of Expenses pursuant, the burden of proving that the indemnitee
is not entitled to be indemnified, or to such Advancement of Expenses,
under this Section 3.5(c) or otherwise, shall be on Recipient.
(iii) The rights to indemnification and to the Advancement of
Expenses conferred in this Section 3.5(c) shall not be exclusive of any
other right which any person may have or hereafter acquire by any statute,
the Certificate of Incorporation, the Company's By-laws, or any agreement,
vote of stockholders or other equity holders, disinterested directors or
otherwise.
-9-
<PAGE>
3.6 Indemnification Procedures. The indemnified party shall (i) give the
--------------------------
indemnifying party prompt written notice of such action, or proceeding (and in
no event more than seven (7) Business Days following the indemnified party's
receipt of notice of such suit, action or proceeding), (ii) at the indemnifying
party's request and expense, permit the indemnifying party, through its counsel,
to defend such claim or suit, and (iii) give the indemnifying party reasonable
information, assistance and authority to do so. To the extent the indemnified
party fails to provide notice as required above and such failure hinders the
indemnifying party's ability to perform its indemnification obligations set
forth in Section 3.5, then such indemnification obligations shall be waived to
an extent commensurate with the hindrance caused by such delay in notification
or failure to notify. The indemnifying party shall have exclusive control of
the defense if it elects to defend any such suit, including appeals,
negotiations and the right to effect a settlement or compromise thereof
(provided that, as a condition to any such settlement or compromise, the
indemnified party shall not incur any liability or obligation). The indemnified
party may be represented by counsel at its own expense in any action being
defended by the indemnifying party. Notwithstanding anything to the contrary
contained in the foregoing, in the event Service Provider is the indemnified
party with respect to any intellectual property claim, Service Provider shall
have the right to exclusive control of the defense, at Recipient's reasonable
cost and expense, if it elects to defend any such suit, including appeals,
negotiations and the right to effect a settlement or compromise thereof;
provided, however that Recipient shall have the right to participate in
settlement negotiations, if any, and shall have the right to approve such
settlement, which shall not be unreasonably withheld, delayed or conditioned.
Recipient shall reimburse Service Provider for all of Service Provider's
reasonable costs and expenses in connection with such defense and for any
damages or other liability in connection therewith, including any settlement
obligations.
4. CONFIDENTIALITY.
4.1 Restriction on Use. Each party shall treat as confidential all
------------------
Confidential Information of the other party and shall use such Confidential
Information only to the extent necessary (a) to allow Recipient to provide
Recipient Interactive Services as contemplated under this Agreement or (b) as
permitted under the AOL License. Neither party shall disclose any such
Confidential Information to any third party except as may be reasonably required
in connection with the use of Licensed Products or Documentation pursuant to
this Agreement or the AOL License, and in all cases subject to the Recipient
entering into a written confidentiality agreement imposing obligations upon such
third party that are at least as protective of such information as those set
forth in this Agreement. Without limiting the foregoing, each party agrees to
use at least the same degree of care with respect to the Confidential
Information of the other which it uses to protect its own similarly valuable
Confidential Information from unauthorized disclosure or use, but no less than a
reasonable standard of care.
4.2 Termination of Obligations. The parties' obligations under this
--------------------------
Section 4 shall survive any termination of this Agreement; provided, however,
such obligations shall terminate (a) five (5) years after such termination with
respect to Confidential Information regarding financial and marketing matters
and (b) ten (10) years after such termination with respect to all other
Confidential Information (except for Source Code for which such obligations
shall continue as long as such Source Code is protected by the laws applicable
to trade secrets or similar legal principles).
-10-
<PAGE>
5. TERM; TERMINATION.
5.1 Term. The term of this Agreement shall begin on the Effective Date
----
and shall terminate only as provided in Section 5.2.; provided, however, that
notwithstanding the foregoing, this Agreement shall terminate automatically upon
the termination of the AOL License for any reason.
5.2 Termination for Cause. Service Provider may terminate this Agreement
---------------------
effective upon notice to Recipient if (A)(i) Recipient materially breaches
Recipient's obligations to make payments to Service Provider under this
Agreement, including, without limitation, any indemnity payments required under
Sections 3.5 or 3.6, or (ii) a Senior Executive Officer of Recipient
intentionally breaches, or knowingly permits an intentional breach of,
Recipient's obligations pursuant to Section 4 or, with respect only to the
initial press release regarding this Agreement, pursuant to Section 7.13, and
such breach results in substantial adverse consequences to Service Provider, and
(B) Recipient fails to cure such breach within ninety (90) calendar days after
receipt by Recipient of written notice of such breach.
5.3 Effect of Termination. Notwithstanding the foregoing provisions of
---------------------
this Section 5, Section 1 (and any other defined term herein), Sections 3.3,
3.4, 3.5, 3.6 and 4, this Section 5.3, Section 6.1 and Section 7 shall survive
any termination of this Agreement.
6. RECIPIENT BREACHES. The parties acknowledge and agree that, in the
event of a threatened or actual breach of Section 4 or 7.13 or an actual breach
of any other provision of this Agreement and failure to cure any such breach
within thirty (30) calendar days following notice thereof from the other party,
damages alone shall be an inadequate remedy, that such breach shall cause the
other party great, immediate and irreparable injury and damage, and that,
accordingly, each party shall be entitled to injunctive and other equitable
relief, including mandatory injunctive relief and specific performance, in
addition to, and not in lieu of, any remedies it may have at law or under this
Agreement. Recipient further acknowledges and agrees that Service Provider shall
be entitled to all damages as a remedy for such breach (except a threatened
breach of Section 4) to the full extent permitted under Sections 3.4 and 3.5
above.
7. GENERAL PROVISIONS.
7.1 Relationship of Parties. The parties are and shall be independent
-----------------------
contractors. Neither party, its employees, consultants, third party contractors
or agents shall be deemed under this Agreement to be the agents, employees,
partners or joint venturers of the other, nor does either party have any
authority to enter into any obligation on behalf of the other. Neither party
shall make any express or implied representations to any third party to the
contrary.
7.2 No Use of Name or Trademarks. Subject to Section 7.13 below and, in
----------------------------
the absence of the other party's prior written consent or a separate agreement
between the parties hereto to the contrary, neither party shall be entitled to
use the name of the other in promotional, advertising and other similar
materials, it being understood that this shall not restrict either party from
reference to the relationship between the parties to the extent required by law
in connection with financial disclosure or similar requirements. Except as set
forth in Section 4 of the AOL License, neither party will, without the other's
prior written approval of such proposed use, use
-11-
<PAGE>
the other's trademarks, service marks, trade names, logos or other commercial or
product designations, for any purpose (including, but not limited to, use in
connection with any products, promotions, advertisements or exhibitions).
7.3 Assignment. The rights and liabilities of the parties hereto shall
----------
bind and inure to the benefit of their respective permitted successors; provided
that neither party may assign its rights or obligations under this Agreement,
either in whole or in part, without the prior written consent of the other.
Notwithstanding the foregoing, Recipient may direct that the services to be
provided by Service Provider hereunder are to be provided for the benefit of
Wholly Owned Affiliates of Recipient for so long as such entities remain Wholly-
Owned Affiliates, and Service Provider may assign any of its rights and
obligations hereunder to any Wholly-Owned Affiliate or Affiliates. Any attempted
assignment in violation of the provisions of this Section 7.3 shall be void. For
avoidance of doubt, no assignment shall relieve any party of any of its
obligations under this Agreement. If Service Provider makes any assignment in
accordance with this Section 7.3, then Service Provider shall contemporaneously
therewith execute an unconditional guarantee for the benefit of Recipient in the
form of the AOL Guarantee, adjusted only as necessary to reflect that the
obligations guaranteed under such guarantee shall be the obligations of Service
Provider under this Agreement.
7.4 Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with the laws of the State of New York, USA, but without giving
effect to its laws or rules relating to conflicts of laws, the Uniform
Commercial Code, or the United Nations Convention on Contracts for the
International Sale of Goods. To permit the enforcement of judgments entered
under this Section 7.4 and the application of judicial injunctive relief as
permitted hereunder, each party consents to the jurisdiction of the courts in
the place where such judgment enforcement or injunctive relief is sought. Each
party waives any objection it otherwise may have to the personal jurisdiction
and venue of such courts.
7.5 Severability. If any provision of this Agreement shall be held to
------------
be illegal, invalid or unenforceable, that provision of the Agreement shall be
enforced to the maximum extent permissible so as to give effect to the intent of
the parties, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. In such event,
the parties agree to negotiate in good faith alternate provisions to substitute
for any such provisions in order to give effect, to the maximum extent
permissible, the intent of any such provision.
7.6 Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing in English and shall be deemed to have been duly
given (except as may otherwise be specifically provided herein to the contrary):
(a) if delivered by hand or courier service which provides evidence of delivery
to a party to whom said notice or other communication shall have been directed,
upon such receipt, (b) if mailed by registered or certified U.S. air mail with
postage prepaid, return receipt requested, on the seventh Business Day after
mailing, or (c) if transmitted by telefax, on the date of transmission, (d) if
delivered by e-mail on the day of dispatch, with such transmittal followed by
delivery of a confirmation copy via one of the other methods set out herein.
All notices shall be addressed as set forth below or to any other address such
Party shall notify to the other party in accordance with this Section 7.6:
-12-
<PAGE>
If to Service Provider, to:
America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166-9323,
Attention: President AOL-International
Telefax: 703-265-2502
with a copy to:
America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166-9323,
Attention: General Counsel
Telefax: 703-265-2208
If to Recipient, to:
America Online Latin America, Inc.
6600 N. Andrews Avenue, Suite 500
Fort Lauderdale, FL 33309, USA
Attn: President
Fax No.: (954) 772-7089
with a copy to
America Online, Inc.
22000 AOL Way
Dulles, VA 20166-9323
Attention: General Counsel
Fax: 703-265-2208
and
Finser Corporation
550 Biltmore Way
Suite 900
Coral Gables, FL 33134
Attention: Legal Department
Fax: (305) 447-1389
7.7 No Waiver. Failure by either party to enforce any provision of this
---------
Agreement shall not be deemed a waiver of future enforcement of that or any
other provision.
-13-
<PAGE>
7.8 No Rights in Third Parties. This Agreement is made for the benefit
--------------------------
of Service Provider and Recipient and not for the benefit of any third parties
other than Operating Joint Entities and Distributors as provided herein.
7.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but which collectively
shall constitute one and the same instrument.
7.10 Headings and References. The headings and captions used in this
-----------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.11 Construction. This Agreement has been negotiated by the parties and
------------
their respective counsel. This Agreement shall be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either party.
7.12 Audit Rights. Each party hereto and its representatives shall have
------------
the right to examine, copy and audit the books and records of the other party
relating to this Agreement for purposes of verifying the timely payment of all
amounts payable hereunder or the basis for any costs or fees claimed, as the
case may be, upon not less than ten (10) Business Days' prior written notice,
and in any event no more frequently than quarterly. In the event that any such
review shall determine (a) a deficiency in an amount of such access or service
fees exceeding five percent (5%) of the amount paid or (b) claims of costs or
fees exceeding by five percent (5%) the actual amount owed, as the case may be,
the other party shall pay the out-of-pocket expenses incurred in connection with
such review, including all professional fees, and shall pay all delinquent and
undisputed amounts or refund all overcharged amounts, as the case may be, within
fifteen (15) Business Days of receipt of written notice thereof.
7.13 Publicity. Except as may be required by law or in response to an
---------
order of a court or governmental agency (provided, however, the discloser shall
provide prompt notice thereof to the other Party and a reasonable opportunity to
seek to prevent or limit such disclosure), the execution and content of this
Agreement and the transactions contemplated herein shall be kept in confidence
by the parties, and neither party shall make any public announcement or issue
any press release relating thereto without the prior written approval of the
other party and, in the case of Recipient, subject to the delivery of a complete
and accurate English translation thereof to Service Provider at least three (3)
Business Days prior to any such public announcement or issuance.
7.14 Taxes. Recipient shall be responsible for the collection of any and
-----
all value added, consumption, sales, use or similar taxes and fees payable with
respect to the performance of services or provision of Host Computer Access
provided hereunder in the Territory and shall pay such collected taxes to the
relevant tax authorities. Recipient shall be entitled to collect from the
relevant payee or payor any such taxes owed. The following two examples
illustrate, without limitation, the foregoing terms. Subscribers of the
Recipient Interactive Service shall bear the cost of any relevant taxes;
Recipient shall collect and pay such taxes to the relevant tax authorities.
Service Provider shall bear the cost of any applicable income or withholding
taxes
-14-
<PAGE>
for service fees to be paid to it by Recipient; Recipient shall collect and pay
such withholding taxes to the relevant tax authorities.
7.15 Further Assurances. Each party shall perform all other acts
------------------
and execute and deliver all other documents as may be necessary to secure all
necessary authorizations and approvals by this Agreement of all applicable local
and U.S. governmental bodies.
7.16 Export Controls. Each party shall comply with all applicable
---------------
United States laws, regulations and executive orders relating to the export of
Confidential Information and technical information and data and any other
sensitive materials and with local and all other national laws and regulations
relating to such information and materials, including those relating to their
exportation and importation. Each party shall cooperate with the other party as
reasonably requested to permit each party to comply with the laws and
administrative regulations of the United States and the jurisdictions within the
Territory controlling the export of commodities and technical data.
7.17 Complete Agreement. This Agreement, including all attachments
------------------
hereto which are incorporated herein by reference and all related agreements
constitute the entire agreement between the parties with respect to the subject
matter hereof, and supersede and replace all prior or contemporaneous
understandings or agreements, written or oral, regarding such subject matter. No
amendment to or modification of this Agreement shall be binding unless in
writing and signed by a duly authorized representative of both parties.
7.18 Further Assurances. Each party shall perform all other acts and
-------------------
execute and deliver all other documents as may be necessary to secure all
necessary authorizations and approvals of this Agreement by all applicable local
and U.S. governmental bodies. In addition, if and when the Company and
Recipient shall obtain the right to offer such TV Access Services and Wireless
Access Services in the Territory, AOL shall negotiate with Recipient regarding
such modifications to this Agreement, including the attachments hereto, as
reasonably may be necessary or required to enable Recipient to provide such TV
Access Services and Wireless Access Services in the Territory in a manner
substantially similar to the basis on which it is providing such services in the
United States.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date set forth below.
AMERICA ONLINE LATIN AMERICA ONLINE, INC.
AMERICA, INC.
By:______________________ By:_____________________________
Name:____________________ Name:___________________________
Title:___________________ Title:__________________________
-15-
<PAGE>
LIST OF ATTACHMENTS
Attachment A Definitions
Attachment B Launch Software Specifications
Attachment C Error Correction and Virus Deletion Policies
Attachment D Training and Technical Support
Attachment E AOL Operating Standards
Attachment F MFN Rates
-16-
<PAGE>
ATTACHMENT A
Definitions
As used in this Agreement, the following terms, whether in the singular or
the plural, have the following meanings:
1. "Access Services" shall mean, collectively, PC Access Services, TV
Access Services and Wireless Access Services.
2. "Action" shall have the meaning set forth in the Certificate of
Incorporation.
3. "Advancement of Expenses" shall have the meaning set forth in the
Certificate of Incorporation.
4. "Affiliate" shall mean, for purposes of this Agreement, as to any
Person, any other Person that, directly or indirectly, controls, is under common
control with, or is controlled by, that Person, provided neither Recipient nor
any other Operating Entity shall be considered an Affiliate of AOL. For
avoidance of doubt, any Person (other than Recipient and any other Operating
Entity) that is controlled by the Cisneros Family shall be deemed to be an
Affiliate of ODC. 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.
5. "AOL-branded" shall have the meaning set forth in the AOL License.
6. "AOL Guarantee" shall have the meaning set forth in the AOL License.
7. "AOL License" shall have the meaning set forth in the recitals hereto.
8. "AOL Services" shall mean, initially, the Interactive Services that are
PC Access Services provided worldwide, including the AOL-US Service and any
other international AOL Services, under the brand name America Online(TM) and/or
AOL(TM) existing as of the Effective Date or in the future and modified from
time to time. From and after the date that any additional Recipient Interactive
Services are provided by Recipient in accordance with the provisions hereof, the
AOL License and the Certificate of Incorporation, AOL Services shall be deemed
to include such additional Recipient Interactive Services provided worldwide,
including the comparable AOL-US Service and any other international AOL
Services, under the brand name America Online(TM) and/or AOL(TM) existing as of
Launch of such additional Recipient Interactive Services or in the future and
modified from time to time.
9. "AOL Seventy-Five Percent Affiliate" means any Person in which AOL or
any of its Affiliates owns, directly or indirectly through any Person or
Persons, at least seventy-five percent (75%) of the equity interests.
-17-
<PAGE>
10. "AOL-US Service" means the principal AOL Service provided by AOL to
United States residents on the date hereof, as such service shall be modified
from time to time.
11. "Business" shall mean Interactive Services that Recipient elects to
pursue, including Interactive Services substantially similar to the AOL-US
Service (but adapted to the local markets), in accordance with the provisions of
the Related Agreements.
12. "Board of Directors" shall have the meaning set forth in the
Certificate of Incorporation.
13. "Business Day" shall mean any day on which commercial banks are not
authorized or required to close in New York, New York, USA.
14. "Certificate of Incorporation" shall mean the Restated Certificate of
Incorporation of the Company as in effect from time to time.
15. "Cisneros Family" shall mean Ricardo Cisneros, Gustavo Cisneros and/or
their lineal descendants, individually or collectively and/or any trusts for the
exclusive benefit of any one or more of such persons
16. "Client Product" shall have the meaning set forth in the AOL License.
17. "Communication Services" includes chat, e-mail, message boards, online
transactions and other forms of online interaction.
18. "Confidential Information" shall have the meaning set forth in the AOL
License.
19. "Content" shall mean either (i) text or (ii) multimedia information
which contains one or any combination of any of the following in digital form or
such other forms as may become available in the future: text, graphics, video,
sound, still images, or the like.
20. "Damages" shall have the meaning set forth in the Certificate of
Incorporation.
21. "Dependency" means any task or deliverable required of Recipient or a
third party that is beyond the reasonable control of Service Provider on which
the timely development and delivery of the Launch Software is dependent. Such
Dependencies include timely management decisions by Recipient, Recipient's
hiring a sufficient number of producers on a timely basis, timely rollout of a
sufficient network infrastructure by Recipient, and the availability of and
connectivity to a local third party billing processor.
22. "Documentation" shall have the meaning set forth in the AOL License.
23. "Effective Date" shall have the meaning set forth in the first
paragraph of this Agreement.
24. "Error" means any mistake, problem or defect, other than a Virus, in
AOL Proprietary Object Code that (a) renders such Object Code inoperable, (b)
causes such Object
-18-
<PAGE>
Code to fail to conform to any Documentation thereof in any respect, (c) causes
incorrect results in any respect, or (d) causes incorrect functions to occur in
any respect.
25. "Error Correction" means any correction of an Error provided by
Service Provider to Recipient pursuant to Section 2.3(c).
26. "Force Majeure Event" means any circumstance beyond the reasonable
control of Service Provider that precludes, hinders, delays or renders
impracticable the performance of any Service Provider obligation under this
Agreement. Such events include wars, civil disturbances, strikes, Acts of God,
floods, fire, and governmental interference.
27. "Host Computer Access" means access to those portions of Service
Provider's host computers and related software reasonably necessary to operate
the Recipient Interactive Service in a manner substantially similar to the AOL-
US Services.
28. "Interactive Service(s)" shall have the meaning set forth in the
Certificate of Incorporation.
29. "Interconnect" or "Interconnection" means the electronic connection
that enables the transmission of Content and other information between and among
AOL Services (including the AOL-US Service and Recipient Interactive Services)
as described in Section 2.5 and further permits Subscribers of the AOL Services
to access such Content and other information.
30. "JV Affiliate" shall have the meaning set forth in the AOL License.
31. "Launch" shall mean the first commercial availability of an
Interactive Service to potential Subscribers in the Territory or a country in
the Territory, as applicable .
32. "Launch Software" shall have the meaning set forth in Section
2.2(a).
33. "Licensed Products" shall have the meaning set forth in the AOL
License.
34. "MFN Rates" means the lowest rates, if any, charged by AOL, Service
Provider or any Affiliates of AOL to (a) any JV Affiliate or (b) any other
Person, in both cases specifically excluding any AOL Seventy-Five Percent
Affiliates, offering AOL Services or similar Interactive Services for services,
products or materials similar to the applicable services, products or materials
provided by Service Provider to Recipient pursuant to this Agreement. MFN Rates
existing at the Effective Date include the rates described on Attachment F,
------------
which Attachment shall be amended by Service Provider and delivered to Recipient
from time to time in order to accurately reflect and notify Recipient of any
change in MFN Rates or any additional services, products or materials provided
by Service Provider. Notwithstanding the foregoing, with respect to MFN Rates
for any Interactive Services in addition to PC Access Services, if AOL is not
providing such Interactive Services at the time of determination of such MFN
Rates to (a) any JV Affiliate or (b) any other Person, in both cases
specifically excluding any AOL Seventy-Five Percent Affiliates, then MFN Rates
for such Interactive Services shall mean [___________]
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<PAGE>
35. "MRD" shall have the meaning given in Section 2.2(d).
36. "New AOL Developments" means those new products or services provided by
Service Provider to Recipient that are required under Service Provider's
standard operations and other Uniform Policies, applied equally to all JV
Affiliates, which Service Provider may modify from time to time in its sole
discretion.
37. "Operating Entities" shall have the meaning set forth in the
Certificate of Incorporation.
38. "Object Code" shall have the meaning set forth in the AOL License.
39. "PC Access Services" shall have the meaning set forth in the
Certificate of Incorporation.
40. "Person" shall mean an individual corporation, partnership, limited
liability company, trust, unincorporated organization or other legal entity, or
a governmental body, or their equivalent under applicable law.
41. "Recipient Interactive Services" shall have the meaning set forth in
the AOL License with respect to Licensee Interactive Services.
42. "Related Agreements" shall mean the Certificate of Incorporation, AOL
License and the Stockholders' Agreement of even date herewith by and among AOL,
ODC and the Company.
43. "Requested Developments" shall have the meaning given in Section 2.2(c).
44. "Restricted Content" shall have the meaning set forth in the AOL
License.
45. "Senior Executive Officers" shall mean the Chief Executive Officer and
Chief Operating Officer of a Person, each Senior Vice President and Executive
Vice President of a Person, and the General Counsel of a Person, and any other
management personnel of a Person with equivalent titles or decision-making
authority. For purposes of this Agreement, Gustavo Cisneros, Ricardo Cisneros
and Steven Bandel shall be deemed to be Senior Executive Officers of ODC.
46. "Service Notice" shall have the meaning given in Section 2.
47. "Source Code" shall have the meaning set forth in the AOL License.
48. "Subscriber" shall mean, as of any date of determination and with
respect to any Interactive Service, any Person who has opened an account with or
otherwise registered as a user of such Interactive Service.
49. "Subsidiary" shall have the meaning set forth in the Certificate of
Incorporation.
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<PAGE>
50. "Technical Support" means the technical support set forth in Section 2.3
to be provided by Service Provider to Recipient.
51. "Term" shall mean the period of time that this Agreement is in effect,
as set forth in Section 5.1.
52. "Territory" shall have the meaning set forth in the AOL License.
53. "Third Party Products" shall have the meaning set forth in the AOL
License.
54. "Training" means the training to be provided by Service Provider to
Recipient for the sole purpose of enabling Recipient to launch, operate,
provide, market and manage or administer Recipient Interactive Services as
contemplated herein.
55. "Trainee" means an employee of Recipient, or its respective Affiliates,
who is reasonably proficient in the English language, possesses strong computer
literacy and skills, and is well versed in the technical aspects of Interactive
Services.
56. "TV Access Services" shall have the meaning set forth in the
Certificate of Incorporation.
57. "Undertaking" shall have the meaning set forth in the Certificate of
Incorporation.
58. "Uniform Policies" shall have the meaning set forth in the AOL License.
59. "Virus" means any computer code intentionally designed to disrupt,
disable, harm, or otherwise impede in any manner, including aesthetical
disruptions or distortions, the operation of a computer program, or any other
associated software, firmware, hardware, or computer system (including local
area or wide-area networks), in a manner not intended by its creator(s).
60. "Virus Deletion" means any deletion of a Virus performed by Service
Provider pursuant to Section 2.3(c).
61. "Wholly-Owned Affiliate" shall mean with respect to any Person any
other Person which is directly or indirectly wholly owned by such Person,
directly or indirectly wholly owns such Person or is directly or indirectly
wholly owned by the same Person as such Person, with such ownership to mean
possession of both 100% of the equity interest and 100% of the voting interest,
except for directors' qualifying shares, if any. Any Person which is directly
or indirectly wholly owned by the Cisneros Family shall be a Wholly-Owned
Affiliate of ODC.
62. "Wireless Access Services" shall have the meaning set forth in the
Certificate of Incorporation.
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ATTACHMENT B
PC Access Services
Launch Software Specifications
Subject to the terms and conditions of this Agreement, the Launch Software:
. [*****************************************]
. [***********************************************************************
******************************************].
. [***********************************************************************
***********]
. [***********************************************************************
******************************************].
. [**********************************************************************
******************************************].
. [*************************************************]
. [***********************************************************************
***************].
. [***********************************************************************
******************************************].
. [***********************************************************************
****************************************************].
. [************************************************]
. [***********************************************************************
*********].
. [***********************************************************************
******************************************].
. [***********************************************************************
***********************************************************************
***********************************************************************
******************************************].
. [***********************************************************************
******************************************].
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. [***********************************************************************
********************].
. [***********************************************************************
***********************************************************************
******************************************].
. [***********************************************************************
***********************************************************************
******************************************].
. [***********************************************************************
******************************************].
. [***********************************************************************
***********************************************************************
******************************************].
. [***********************************************************************
******************************************].
. [***********************************************************************
******************************************].
. [***********************************************************************
******************************************].
. [***********************************************************************
********************].
. [***********************************************************************
*************************].
Subject to the terms and conditions of this Agreement, post-Launch, the Launch
Software:
. [**********************************************************************]
. [***********************************************************************
******************************************].
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ATTACHMENT C
Error Correction and Virus Deletion Policies
1. Error Correction Policy.
1.1 Reporting Errors. Recipient shall report Errors to Service Provider by
----------------
electronically posting Errors in Service Provider's Problem Tracking Database
(Vantive) for consideration and resolution. When reporting an Error, Recipient
shall provide Service Provider with at least the following information:
(a) a description of the Error;
(b) Error documentation including all dumps, traces, error messages,
logs, and screen prints required to evaluate the Error; and
(c) failure case, including all environment, configuration, users
and functional information required to recreate the Error.
1.2 Error Severity Levels. Service Provider shall assign all replicable
---------------------
Errors a severity level as follows:
(a) [***********************************************************
************************************************************
************************************************************
******************************** ******************************************]
(b) [***********************************************************
***************************************************************************
*****************************************************************************
**]
(c) [***********************************************************
****************************************]
Depending on the severity level of an Error, Service Provider shall use
commercially reasonable efforts to correct such Error within its standard, U.S.
and worldwide time periods. As part of Service Provider's amendments from time
to time of the AOL Error Correction Policy, Service Provider shall have the
right to revise program code, program specifications, design, Documentation,
messages, error messages, and operating procedures applicable to all JV
Affiliates.
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2. Virus Deletion Policy.
2.1 Reporting Viruses. Recipient shall report Viruses to Service Provider by
-----------------
electronically posting Viruses in Service Provider's Problem Tracking Database
(Vantive) for consideration and resolution. When reporting a Virus, Recipient
shall provide Service Provider with at least the following information:
(a) a description of the Virus;
(b) Virus documentation, if available, including all dumps, traces,
error messages, logs, and screen prints required to evaluate the Virus; and
(c) a description of the tools or procedures used to detect the Virus.
2.2 Deleting Viruses. Service Provider shall use commercially reasonable
----------------
efforts to delete any such Virus with the same priority and level of effort that
Service Provider or AOL uses for similar Viruses for AOL-US Services and all
other AOL Services. As part of Service Provider's amendments from time to time
of the AOL Virus Deletion Policy, Service Provider shall have the right to
revise program code, program specifications, design, Documentation, messages,
error messages, and operating procedures applicable to all JV Affiliates.
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ATTACHMENT D
Training and Technical Support
1. Training.
1.1 General.
-------
(a) Scope. Service Provider shall provide Training at Service
-----
Provider's offices in the USA on mutually agreed upon dates. If requested by
Recipient, such Training may be videotaped for use by Recipient in the Territory
to assist with the understanding of the subject matter by those individuals who
attended such Training or to train those individuals who did not attend such
Training. Service Provider shall provide the Training as set forth herein to
Recipient only once; provided, however, that in the event Recipient requests
repetitions of such Training, and the parties mutually agree, Service Provider
shall provide Recipient with such repetitive Training at Recipient's expense as
set forth in Section 1.3 below. The objective of the Training shall be to enable
Recipient's personnel attending such Training to train Recipient's other
personnel as required. All Training provided by Service Provider shall be
conducted in English.
(b) Hiring. Recipient shall use commercially reasonable efforts
------
to hire on a timely basis all individuals to be Trained by Service Provider so
that Service Provider may provide the Training at the times set forth herein.
Service Provider shall, at the Request of Recipient, provide Recipient with
assistance in such hiring, including without limitation, providing summaries of
the qualifications of trainees, reviewing the qualifications of potential
trainees, and participating in the interviews of same.
(c) Fees; Expenses. Recipient shall pay Service Provider for all
--------------
Training (including any repetition of the Training) on a commercially reasonable
time and materials basis at MFN Rates. Unless MFN Rates are more favorable,
Recipient shall be responsible for the payment or reimbursement of all
reasonable air travel, lodging, local transportation, meals, and other out-of-
pocket expenses incurred by Trainees or Service Provider's trainers in
connection with the Training.
1.2 PC Access Services Pre-Launch Training. Prior to the Launch of
--------------------------------------
Recipient's PC Access Services, Service Provider shall provide the Training set
forth in this Section 1.2. To the extent any component of Training,
Documentation, or Technical Support, to be provided prior to such Launch is not
an essential requirement for the successful launch of the Recipient Interactive
Services, and if the parties so agree, the provision of such component may be
deferred until after the Launch as mutually agreed.
(a) Phase 1. The first phase of the Training ("Phase 1") shall be
-------
provided for up to eight (8) Trainees and will last for up to two (2) weeks.
Phase 1 will commence within thirty (30) calendar days after Recipient obtains
the necessary computer workstations in the Territory with confirmed access to
AOL host services, build tools and the online production and test system. Phase
1 shall cover the following topics:
(i) [*****************************************]
(ii) [*****************************************]
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(iii) [******************]
. [***************]
. [*************]
. [*********]
. [*****]
(iv) [*****************]
(v) [****************************]
. [********]
. [********]
. [*************]
. [****************]
. [****]
(b) Phase 2. The second phase of the Training ("Phase 2") shall be
-------
provided for up to three (3) Trainees who have mastered the skills taught in
Phase 1, will last for up to two (2) weeks, and may be conducted with trainees
from other countries. Phase 2 will commence within ninety (90) calendar days
after the end of Phase 1. Phase 2 shall cover the following topics:
(i) [************]
(ii) [******************]
(iii) [*********************]
(iv) [**************]
(v) [***********]
(c) Phase 3. The third phase of the Training ("Phase 3") shall be provided
-------
for up to three (3) Trainees who have mastered the skills taught in Phases 1 and
2, will last for two (2) weeks, and may be conducted with trainees from other
countries. Phase 3 will commence within ninety (90) calendar days after the
Launch. Phase 3 shall cover the following topics:
(i) [****************************]
(ii) [*******************]
(iii) [****************]
(iv) [**************************]
(v) [************]
(vi) [****************]
(d) Management Information System (MIS) Training. Service Provider shall
--------------------------------------------
provide up to fifteen (15) members of Recipient's staff who are reasonably
proficient in English with two (2) sessions, each lasting up to three (3) days
with AOL MIS personnel that will cover all relevant aspects of AOL-US Services
MIS know-how. The topics covered in such sessions shall include, but shall not
be limited to:
(i) [********]
(ii) [********]
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The first Training session will occur as soon as possible after the Recipient
hires the necessary MIS employees. The second Training session will occur
within sixty (60) calendar days before the Launch.
(e) Marketing Training. Service Provider shall provide up to four (4)
------------------
members of Recipient's marketing staff who are reasonably proficient in English
with two (2) sessions, each lasting up to three (3) days, with AOL marketing
personnel that will cover all relevant aspects of AOL-US Services marketing
know-how. The first Training session will occur as soon as possible after the
Recipient hires the necessary marketing employees.
(f) Business Development Training. Service Provider shall provide up
---------------------------
to four (4) members of Recipient's information provider business development
staff who are reasonably proficient in English with two (2) sessions, each
lasting up to three (3) days, with AOL information provider business development
personnel that will cover all relevant aspects of AOL information provider
relationship and business development know-how. The first Training session will
occur as soon as possible after the Recipient hires the necessary business
development employees. The second Training session will occur within six (6)
months before the reasonably estimated Launch.
(g) Subscriber Support Training. Service Provider shall provide up to
---------------------------
eight (8) members of Recipient's Subscriber support staff, who are reasonably
proficient in English and are the managers or supervisors of principal roles,
with training lasting up to ten (10) days with AOL Subscriber support personnel
(depending on the person's role). Such sessions will cover all relevant aspects
of AOL Subscriber support know-how for that role. This Training session will
occur as soon as possible after the Recipient hires such managers of Recipient's
Subscriber support.
(h) Public Relations Training. Service Provider shall provide up to
------------------------
three (3) members of Recipient's public relations staff who are reasonably
proficient in English with one (1) session, which will last one (1) day, with
AOL Corporate Communications personnel that will cover all relevant aspects of
AOL public relations know-how. The Training session will occur as soon as
possible after the Recipient hires the necessary public relations employees.
(i) Finance, Accounting, and Business Planning Training. Service
---------------------------------------------------
Provider shall provide up to three (3) members of Recipient's finance staff who
are reasonably proficient in English with two (2) sessions, each lasting up to
two (2) days, with AOL finance and accounting personnel that will cover all
relevant aspects of AOL finance, accounting and business planning know-how. The
first Training session will occur as soon as possible after the Recipient's
chief financial officer has been hired. The second Training session will occur
when Recipient has enough information with which to make a pricing decision with
respect to the cost to Subscribers of the Recipient Interactive Services and
will be more of a working session.
(j) Legal Training. Service Provider shall provide Recipient's primary
--------------
in-house personnel in charge of legal affairs or primary outside counsel, as the
case may be, who shall be reasonably proficient in English, with one (1) session
lasting up to two (2) weeks with AOL legal personnel that will cover all
relevant AOL legal issues, procedures, and AOL Standard Forms. This Training
session will occur as soon as possible after the Recipient's
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<PAGE>
primary in-house personnel in charge of legal affairs or primary outside
counsel, as the case may be, has been hired. Thereafter, Service Provider shall
provide such in-house Recipient individual on annual basis with an AOL legal
department training session, which will be held at locations to be determined by
Service Provider.
1.3 PC Access Services Post-Launch Training. After the Launch of
----------------------------------------
Recipient's PC Access Services, Service Provider shall provide Training for up
to three (3) Trainees that covers (a) new or changed features and functionality
of the AOL-US Service and (b) the underlying architecture of the AOL-US Service.
Service Provider shall offer such Training according to a schedule it shall
publish at least three (3) weeks prior to such Training. Service Provider shall
have the right, in its reasonable discretion, to provide such post-Launch
Training by E-mail, video conferencing, or other methods should changes in
technology after the Effective Date not warrant in-person Training. With
respect to any repetitions of such Training required by Recipient after the
Launch, Recipient shall provide such Training.
2. Technical Support.
2.1 General.
-------
(a) Scope. Service Provider shall provide Recipient with
-----
Technical Support (as defined below) in English as described in this Section 2.
(b) Designated Recipient Contacts. Recipient shall designate four
-----------------------------
technical contacts ("Designated Contacts") who shall be the only individuals
entitled to consult with Service Provider, as the case may be, to receive
Technical Support. Such Designated Contacts shall have successfully completed at
least Training Phases 1 and 2, and after it has been offered, Training Phase 3.
(c) Fees; Expenses. Service Provider shall provide all Technical
--------------
Support to Recipient on a commercially reasonable time and materials basis at
MFN Rates. Unless MFN Rates are more favorable, Recipient shall be responsible
for the payment or reimbursement of all reasonable air travel, lodging, local
transportation, meals, and other out-of-pocket expenses incurred by Recipient's
and Service Provider's employees in connection with the Technical Support.
2.2 PC Access Services Pre-Launch Technical Support. Prior to the
-----------------------------------------------
Launch of Recipient's PC Access Services, Service Provider shall provide
Recipient with (a) technical support in English that equals one (1) qualified
full-time employee and (b) technologies program management in English that
equals one (1) qualified full-time employee (collectively, "Technical Support").
From Service Provider's offices in the U.S.A., Service Provider shall provide
such Technical Support with AOL's international support team, which shall have
at least one qualified staff member who is reasonably fluent in the language of
the relevant country(ies) in the Territory, via e-mail and telephone during such
team's normal office hours or, in emergencies, during non-business hours,
including Network and Host Operational Support and JV Assistance on a 24 hours
per day, 7 days per week basis. In the event the foregoing method of providing
remote Technical Support is not practical, Recipient shall send one or more
Designated Contacts (as defined above) to Service Provider's offices in the
U.S.A. or, upon
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<PAGE>
Recipient's request with Service Provider's consent, not to be unreasonably
withheld, Service Provider and AOL personnel shall travel to Recipient to
provide necessary Technical Support.
2.3 PC Access Services Post-Launch Technical Support. After the Launch
------------------------------------------------
of Recipient's PC Access Services, Service Provider shall provide Recipient with
Technical Support in English that equals two (2) qualified full-time employees.
From Service Provider's offices in the USA, Service Provider shall provide such
Technical Support with Service Provider's international support team, which
shall have at least one qualified staff member whose native language is the
language of the relevant country in the Territory, via e-mail and telephone
during such team's normal office hours or, in emergencies, during non-business
hours, including Network and Host Operational Support and JV Assistance on a 24
hours per day, 7 days per week basis. In the event the foregoing method of
providing remote technical support is not practical, Recipient shall send one or
more Designated Contacts (as defined in Section 2.1(b) above) to Service
Provider's offices in the USA or, upon Recipient's request with Service
Provider's consent, not to be unreasonably withheld, Service Provider personnel
shall travel to Recipient to provide necessary Technical Support.
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<PAGE>
ATTACHMENT E
AOL Operating Standards
1. System Definition
-----------------
a. Network Technology
------------------
(i) Modems: AOL determines the types of modems deployed.
(ii) Routers: AOL determines the specifications of routers to
be used.
(iii) Cables: AOL determines the specifications of cable
connections.
(iv) Interfaces: AOL determines interface combination to be
utilized.
(v) Data Concentration: AOL determines which data concentrators
to be used and in what configuration.
(vi) Network Management Systems: AOL determines which management
systems are to be used to monitor the system.
b. Telecommunications
------------------
(i) Modem Deployment: AOL authorizes modem deployment
strategies.
(ii) Common Carrier
(a) Technology: AOL approves the technology for each
carrier.
c. Host System
-----------
(i) Hardware
(a) Configuration: AOL determines configuration for
running processes.
(b) Acquisition: AOL is responsible for determining
hardware to be acquired.
(c) Location: AOL determines where hardware is to be
located, subject to relocation of computers providing Host Computer Access
to the Territory pursuant to Section 2.4 (c) of this Agreement.
(ii) Software
(a) AOL Enhancements/Modifications: AOL determines
which enhancements and modifications are to be made to the software system
components.
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<PAGE>
(b) Replication: AOL determines how many instances of a given
process/server will be running at one time.
(c) Addition: AOL determines which new software can be added to
or accessed through the system.
(d) Location: AOL determines which software is to be installed on
which machine.
(iii) Information Providers
(a) Configuration: AOL determines the configuration for IP
connections.
(b) System Specification: AOL determines the specifications
for IP Systems.
(c) Software Modifications: AOL authorizes software
modifications from IP providers (RMG).
(iv) System Content
(a) Implementation - AOL determines whether content
modifications are being implemented correctly.
(b) Forms Management: AOL determines whether forms
management is being implemented correctly.
(v) Third Party Functionality: Recipient will present all requests
to AOL. If the technology requires integration into the AOL Service (i.e.,
client or host integration), then such request must be approved by AOL. If the
technology does not require such integration, then Recipient will consult with
AOL, and AOL will have the right to reject any requests, in its reasonable
discretion, if such request will have an adverse impact on the AOL Service.
2. Client Software
---------------
a. Code
----
(i) AOL Functionality Features: AOL determines features of client
software including necessary user interface components.
(ii) Upgrades: AOL determines what/when upgrades are required.
(iii) Error Correction: AOL determines error correction and fixes.
b. Configuration
-------------
c. Code-dependent: AOL determines client configurations that are
--------------
required for the software to run correctly.
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<PAGE>
d. Operating System: AOL determines which operating systems are to be
----------------
supported.
e. Third Party Functionality: Recipient will present all requests to
-------------------------
AOL. If the technology requires integration into the AOL Service (i.e., client
or host integration), then such request must be approved by AOL. If the
technology does not require such integration, then Recipient will consult with
AOL, and AOL will have the right to reject any requests, in its reasonable
discretion, if such request will have an adverse impact on the AOL Service.
3. Procedural Areas
----------------
a. Operational Maintenance
(i) Hardware: AOL determines maintenance policies and procedures
for hardware, systems software, and networks.
(ii) Software: AOL determines maintenance policies and procedures
for hardware, systems software, and networks.
(iii) Network: AOL determines maintenance policies and procedures
for hardware, systems software, and networks.
b. Release/Installation Scheduling
-------------------------------
(i) Hardware: AOL determines release/installation policies and
procedures for hardware, systems software, network, client software, content and
bundling.
(ii) QA, System Validation & Verification
c. Hardware: AOL determines policies and procedures for hardware,
--------
software, and network testing.
d. Software: AOL determines how software is to be tested.
--------
e. Network: AOL determines how network changes are to be tested.
-------
f. Client: AOL determines how client changes are to be tested.
------
g. RMG: AOL determines how RMGs are to be tested.
---
4. Business Systems
----------------
a. Billing data collection through output to Recipient: AOL
---------------------------------------------------
determines the manner of billing data collection within the AOL system and
formats for outputs to payment processors.
b. Order data collection through output to Recipient: AOL determines
-------------------------------------------------
the manner of order data collection within the AOL system and formats for output
to designated recipients.
c. Statistical data collection through output to Recipient: AOL
-------------------------------------------------------
determines the manner of statistical data collection within the AOL system and
format for output to Recipient.
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<PAGE>
5. Reporting
---------
a. System Status: AOL determines format for reporting system status,
-------------
statistical reporting, and membership reporting.
6. Support
-------
a. Operations Control Center
-------------------------
(i) Technology: AOL determines technology to be used for Operations
Control Centers.
(ii) Notification Process: AOL determines the policies and
procedures for notification, escalation and problem resolution processes.
b. Customer Call Center
--------------------
(i) Technology: AOL determines the technology to be used for the
Customer Call Center.
7. System Definition
-----------------
a. Telecommunication
-----------------
(i) Network Access Providers
(a) Vendor - Recipient will submit any vendor choice decisions
to AOL for consideration.
b. Host System
-----------
(i) Software
(a) Recipient Enhancements: Recipient will submit any
enhancement request decisions to AOL for approval and, if approved, scheduling.
(b) Recipient Bug Fixes: Recipient will submit any bug fix
request decisions to AOL for consideration.
(ii) Information Providers
(a) Vendor: Recipient will submit any vendor decisions to
AOL for consideration.
(b) Type of Content (not data): Recipient will submit any
decisions about type of content to be provided by an IP to AOL for
consideration.
(iii) System Content
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<PAGE>
(a) Format: Recipient will submit any decisions about changes
in system content formats to AOL for consideration.
(iv) Release/Blocking of Client Software: Recipient will submit any
decisions about releasing and/or blocking of client software to AOL for
consideration.
8. Client Software
---------------
a. Code
----
(i) Recipient New Features: Recipient will submit any new feature
request decisions to AOL for consideration.
(ii) Recipient Bug Fixes: Recipient will submit any bug fix request
decisions to AOL for consideration.
b. Configuration
-------------
(i) INI files: Recipient will submit any decisions about changes to
INI files to AOL for consideration.
9. Management Information Processing
---------------------------------
a. Billing from data output to member: Recipient will submit any
----------------------------------
decisions about billing processing and output formats to AOL for consideration.
b. Ordering from data output to member/fulfillment: Recipient will
-----------------------------------------------
submit any decisions about order processing and output formats to AOL for
consideration.
c. Statistical processing from data output to management: Recipient will
-----------------------------------------------------
submit any decisions about statistical report processing and output formats to
AOL for consideration.
d. Selection of Billing Vendor: Recipient will submit any vendor
---------------------------
selection decisions for billing processing to AOL for consideration.
10. Reporting
---------
a. Dissemination: Recipient will submit any management report
-------------
dissemination list decisions to AOL for consideration.
b. Re-formatting: Recipient will submit any decisions on format
-------------
changes for management reports to AOL for consideration.
11. Support
-------
a. Operations Control Center
-------------------------
(i) Location: Recipient will submit any decisions on location
of Operations Control Centers to AOL for consideration.
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<PAGE>
b. Customer Call Center
--------------------
(i) Location: Recipient will submit any decisions on location of
Customer Call Centers to AOL for consideration.
12. End User Agreements
a. TOS: Recipient will submit any decisions in Terms of Service
---
agreements to AOL for consideration.
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<PAGE>
ATTACHMENT F
MFN RATES
This Attachment F identifies the MFN Rates existing on the Effective Date,
which rates shall be amended by Service Provider from time to time to include
additional services and/or materials hereafter provided by Service Provider (or
its Affiliates) applicable to JV Affiliates (including Recipient) in accordance
with the Uniform Policies or to reflect changes to the MFN Rates. These rates
apply both to initial development for Launch and post-Launch maintenance.
As a reference point, for AOL's FY99 the standard Service Provider rates
(the "Standard Service Provider Rates") are either $[***]/person/month or an
average hourly rate of $[**]/hour, depending upon the type of work being
performed. The cost per person is a blended rate, equal to the cost to Service
Provider of providing services (without any mark-up), across the total pool of
full time employees performing work for the JV Affiliates. The hourly rate is
the blended rate, equal to the cost to Service Provider of providing such
services (without any mark-up), of all services being provided hourly. Where
there is dedicated management, a [**]% management fee is also applied. These
rates and the rates applicable to other JV Affiliates are projected to increase
in the future.
1. Host, Network and Internet Usage
There are two types of charges that relate to the costs of managing data outside
of the Territory: (i) usage of Service Provider's host computer system ("AOL
Host") and (ii) usage of transatlantic and U.S. data networks and the Internet.
(i.) AOL Host costs include the costs of equipment (including leases and
maintenance), operations staffing (including salaries, benefits and
related employee expenses), and overhead (including cables, contractors,
travel expenses, supplies, training and other reasonable overhead
expenses). These costs are shared among all AOL Services around the
world. On a monthly basis, Service Provider will calculate the cost of
the AOL Host and derive an hourly rate for host usage. This actual rate
will then be applied against actual usage by Recipient to determine the
monthly costs charged to Recipient. As a reference point, the rate
applied in [******] of [****] was $[**]/hour. If Service Provider
installs a sub-system or other portion of the AOL Host ("POD") within
the Territory for the sole purpose of providing host services to
Recipient, all such POD-related expenses will be paid by Recipient,
including equipment (including lease expenses and maintenance),
facilities (including rent, utilities, and initial build-out
depreciation), staffing (including salaries, benefits, training, travel,
and relocation) and local Internet connection costs.
(ii.) Transatlantic data communications costs will be charged to Recipient as
agreed upon by the various network providers and Recipient. The costs,
if any, of routing Recipient data communications from the termination
point(s) of the transatlantic data communications facilities and the AOL
Host will be charged to Recipient. The cost of Internet access by
applicable Subscribers from the AOL Host will be billed to Recipient.
2. Host and Client Development
There are two categories of development work that will be charged to Recipient:
(i.) Internationalization ensures that Licensed Products are enabled to
function outside the United States, including without limitation ensuring
that
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<PAGE>
Licensed Products can display non-English characters and character sets
commonly used outside the United States. Recipient will be charged an
allocable portion of full time equivalent employees of Service Provider's
performing Internationalization related to the Recipient service, after the
Effective Date, at standard Service Provider Rates.
(ii.) Requested Developments: Service Provider will provide estimates
in advance of charging Recipient for Requested Developments. Charges for
work by Service Provider employees will be based on standard Service
Provider Rates, while charges for external consultants will be based on
market rates.
3. Technology Planning and Management (TP&M)
TP&M activities include working with various Service Provider divisions
(including without limitation International Product Marketing, Development,
Quality Assurance, International Operations, Release Management, and Member
Services) to coordinate, plan, schedule, track and provide status reports on
development work related to Licensed Products and Requested Developments for
Recipient. Recipient will be charged for dedicated TP&M staff resources at
standard Service Provider rates.
4. Business Systems
Service Provider's Business Systems group develops, manages, enhances and
supports Licensed Products involved with subscriber billing and payment
processing; subscriber usage tracking; marketing, advertising and commerce
tracking and reporting; and other related features and functionality of the
Licensed Products. Charges for Business Systems work by Service Provider
employees will be based on standard Service Provider rates, while charges for
external consultants will be based on market rates.
5. Member Services Development
There are two categories of Member Services development work that will be
charged to Recipient:
(i.) Internationalization of Licensed Products related to Member
Services ensures that such products are enabled to function outside the
United States, including without limitation ensuring that such products can
display non-English characters and character sets commonly used outside the
United States. Recipient will be charged an allocable portion of Service
Provider's costs after the Effective Date associated with
Internationalization of Licensed Products related to Member Services.
(ii.) Requested Developments: Service Provider will provide estimates
in advance of charging Recipient for Requested Developments related to
Member Services. Charges for work by Service Provider employees will be
based on standard Service Provider rates, while charges for external
consultants will be based on market rates.
6. Business Systems Operations
Service Provider's Business Systems Operations group is responsible for the
operation and support of Licensed Products related to Business Systems and
Member Services, including without limitation customer billing processing, data
integrity, reporting, bulk-mail activities, ad server and customer care systems.
Charges for Business Systems Operations work by Service Provider employees will
be based on standard Service Provider rates, while charges for external
consultants will be based on market rates.
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<PAGE>
7. Localization
Service Provider's Localization group creates and maintains Licensed Products
translated or otherwise customized for AOL Services outside the United States
("Localization"), including without limitation the Localization of Licensed
Products at the request of Recipient. Charges for Localization work by Service
Provider employees will be based on standard Service Provider hourly rates.
8. Joint Venture Assistance (JVA)
Service Provider's JVA group provides support to AOL Services outside the United
States for those Licensed Products that are development tools used to develop,
create, update and enhance Content for use in connection with Licensee
Interactive Services. Recipient will be charged an allocable portion of Service
Provider's costs associated with JVA based on standard Service Provider Rates,
plus a nominal *** (**)-percent management fee.
9. International Product Marketing (IPM)
Service Provider's IPM group is responsible for working with AOL Services
outside the United States to research, draft and provide status reports on
Marketing Requirements Documents (MRDs). Recipient will be charged an allocable
portion of Service Provider's costs associated with IPM based on standard
Service Provider Rates, plus a nominal [**] ([**])-percent management fee.
10. Bundling/Marketing Extensions
Service Provider may negotiate for the extension of bundling and other marketing
and subscriber acquisition agreements to the Territory for the benefit of
Recipient ("Bundling/Marketing Extensions"). Recipient shall pay Service
Provider a royalty for each Subscriber registration that results from such
Bundling/Marketing Extensions ("Bounty"). Nothwithstanding anything contained
in this Agreement, the amount of each Bounty under each Bundling/Marketing
Extension shall be mutually agreed by Service Provider and Recipient, and
subject to approval of the holders of a majority of the Recipient's Series C
Common Stock and Series C Preferred Stock (as such terms are defined in the
Certificate of Incorporation), voting together as a single class.
11. Commerce Extensions
Service Provider may negotiate for the extension of advertising and electronic
commerce agreements to the Territory for the benefit of Recipient ("Commerce
Extensions"). Recipient shall pay Service Provider a royalty for each Commerce
Extension ("Commission"). The amount of the Commission under each Commerce
Extension shall be no less than [***] percent ([**]%). If Recipient negotiates
for the extension of one of its advertising and/or electronic commerce
agreements to an AOL Service outside of the Territory, then Recipient will be
entitled to a commission of no less than fifteen percent ([**]%).
12. Knowledge Transfer
Service Provider will be reimbursed by Recipient for all expenses related to the
transfer of Internet online business know-how to Recipient, including without
limitation reasonable expenses related to travel to Recipient-designated sites
for meetings, training, and related activities. Service provider will not
charge Recipient for such expenses without prior expressed approval of
Recipient.
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<PAGE>
13. Other Charges
Service Provider will charge Recipient for all material expenses associated with
a direct request for work by the Recipient. Such charges may include a
[*********] percent ([**]%) management fee if there is dedicated management.
Service Provider will not charge Recipient for such expenses without prior
expressed approval of Recipient.
Examples of such work include without limitation requests for:
i) support such as public relations, legal, tax, accounting/audit,
and development;
ii) specialized marketing or content analysis
iii) assistance from Service Provider's International Operations or
Member Services groups miscellaneous equipment
Other costs which must be transferred between global AOL Service business units
include:
i) cross-network settlement of network costs
ii) the settlement of Globalnet usage
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