<PAGE>
As filed with the Securities and Exchange Commission on March 31, 2000
Registration No. 333-95051
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------
AMENDMENT NO. 5
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) 229-2100
(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) 229-2100
(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
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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, 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
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth an itemization of all estimated expenses, all
of which we will pay, in connection with the issuance and distribution of the
securities being registered:
<TABLE>
<S> <C>
SEC Registration Fee........................................... $ 182,160
Nasdaq National Market Listing Fee............................. 95,000
NASD Filing Fee................................................ 30,500
Printing and Engraving Fees.................................... 300,000
Legal Fees and Expenses........................................ 1,450,000
Accounting Fees and Expenses................................... 700,000
Blue Sky Fees and Expenses..................................... 5,000
Transfer Agent and Registrar Fees.............................. 2,000
Director and Officer Insurance................................. 200,000
Miscellaneous.................................................. 50,340
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Total........................................................ $3,015,000
==========
</TABLE>
Item 14. Indemnification of Directors and Officers.
Our restated certificate of incorporation provides that we shall indemnify
to the fullest extent authorized by the Delaware General Corporation Law, each
person who is involved in any litigation or other proceeding because such
person is or was a director or officer of AOL-LA or is or was serving as an
officer or director of another entity at our request, against all expense, loss
or liability reasonably incurred or suffered in connection with such service.
Our restated certificate of incorporation provides that the right to
indemnification includes the right to be paid expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that
such advance payment will only be made upon delivery to us of an undertaking,
by or on behalf of the director or officer, to repay all amounts advanced if it
is ultimately determined that such director is not entitled to indemnification.
If we do not pay a proper claim for indemnification in full within 60 days
after we receive a written claim for such indemnification, our restated by-laws
authorize the claimant to bring an action against us and prescribe what
constitutes a defense to such action.
Section 145 of the Delaware General Corporation Law permits a corporation to
indemnify any director or officer of the corporation against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any action, suit or
proceeding brought because such person is or was a director or officer of the
corporation, if such person acted in good faith and in a manner that he
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, if he or
she had no reason to believe his or her conduct was unlawful. In a derivative
action, (i.e., one brought by or on behalf of the corporation), indemnification
may be provided only for expenses actually and reasonably incurred by any
director or officer in connection with the defense or settlement of such an
action or suit if such person acted in good faith and in a manner that he or
she reasonably believed to be in, or not opposed to, the best interests of the
corporation, except that no indemnification shall be provided if such person
shall have been adjudged to be liable to the corporation, unless and only to
the extent that the court in which the action or suit was brought shall
determine that the defendant is fairly and reasonably entitled to indemnify for
such expenses despite such adjudication of liability.
Our restated certificate of incorporation contains a provision, permitted by
the Delaware General Corporation Law, that generally eliminates the liability
of a director to us or our stockholders for monetary damages for a breach of
fiduciary duty as a director, except for liabilities arising:
. from any breach of the director's duty of loyalty to us or our
stockholders;
II-1
<PAGE>
. from acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. under Section 174 of the Delaware General Corporation Law relating to
unlawful payment of dividends or unlawful stock purchase or redemption of
stock; and
. from any transaction from which the director derived an improper personal
benefit.
We intend to enter into insurance policies insuring our directors and
officers against certain liabilities that they may incur in their capacity as
directors and officers.
Additionally, reference is made to the Underwriting Agreement to be filed as
Exhibit 1.1 hereto, which provides for indemnification by the underwriters of
AOL-LA, our directors and officers who sign the Registration Statement and
persons who control AOL-LA, under certain circumstances.
Indemnification of AOL and the Cisneros Group
Each of our restated certificate of incorporation and the stockholders'
agreement between AOL, the Cisneros Group and us provides that we will
indemnify AOL and the Cisneros Group to the fullest extent authorized by the
Delaware General Corporation Law if we or any of our stockholders or any other
person bring an action against AOL or the Cisneros Group seeking damages or
other relief based on a breach or alleged breach of a fiduciary or other duty
by AOL or the Cisneros Group based on AOL or the Cisneros Group engaging or
investing in any business activity, including those that might be similar to
and in competition with us, or based on the pursuit by AOL or the Cisneros
group of an investment or a business opportunity or prospective economic
advantage in which we could have an interest or expectancy. Each of our
restated certificate of incorporation and the stockholders' agreement further
provides that the right to indemnification includes the right to be paid
expenses incurred in defending any proceeding in advance of its final
disposition; provided, however, that such advance payment will only be made
upon delivery to us of an undertaking, by or on behalf of AOL or the Cisneros
Group, to repay all amounts advanced if it is ultimately determined that AOL or
Cisneros Group is not entitled to indemnification. If we do not pay a proper
claim for indemnification in full within 60 days after we receive a written
claim for such indemnification, our restated certificate of incorporation and
the stockholders' agreement authorize AOL or the Cisneros Group to bring an
action against us and prescribe what constitutes a defense to such action.
Item 15. Recent Sales of Unregistered Securities.
In the three years preceding the filing of this Registration Statement, we
have sold the following securities that were not registered under the
Securities Act as summarized below.
(a) Issuances of Capital Stock
On , 2000, we entered into a contribution agreement with AOL, Riverview
Media Corp., a wholly owned subsidiary of the Cisneros Group, and AOL Latin
America, S.L. under which we will issue shares of our series B preferred
stock to AOL and shares of our series C preferred stock to Riverview Media
Corp. and two current executives and one former executive of the Cisneros Group
in exchange for their contribution to us of all their interests in AOL Latin
America S.L. AOL contributed a royalty free license in exchange for shares of
our series B preferred stock. We recorded the value of the license at AOL's
historical cost basis, which was zero. The Cisneros Group has agreed to
contribute an aggregate amount of $100 million for our series C preferred
stock. To date, the Company has received $74.4 million, which was recorded as
received.
(b) Issuance of Warrant
On , 2000, we will issue a warrant to AOL to purchase any combination
of shares of series B preferred stock or class A or class B common stock
at a per share exercise price equal to the initial public offering price.
II-2
<PAGE>
(c) Grant of Stock Options
Pursuant to our 2000 Stock Option Plan, immediately prior to the
effectiveness of our initial public offering, we will issue options to purchase
an aggregate of shares of Class A common stock at the initial public
offering price.
The sale and issuance of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, or Regulation D promulgated thereunder, or Rule 701 promulgated
under Section 3(b) of the Securities Act, as transactions by an issuer not
involving a public offering or transactions pursuant to compensatory benefit
plans and contracts relating to compensation as provided under Rule 701. The
recipient of securities in each such transaction represented their intention to
acquire the securities for investment only and not with the view to or for the
sale in connection with any distribution thereof and appropriate legends will
be affixed to the share certificates and instruments issued in such
transactions. All recipients had adequate access, through their relationships
with AOL-LA, to information about us.
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.
on the legality of securities being registered.
@10.1 Form of 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 of employment for Charles M. Herington, dated February
26, 1999.
*10.9 Amended and Restated ODC Guarantee Agreement, dated as of
December 15, 1998.
@+10.10 Agreement by and between Embratel and AOL Brasil Ltda., dated as
of October 18, 1999.
@+10.11 Agreement by and between Netstream Telecom Ltda. and AOL Brasil
Ltda., dated as of September 24, 1999.
+10.12 Form of Amendment to Agreement by and between Embratel and AOL
Brasil Ltda., dated as of October 18, 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>
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* 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has duly caused this Amendment No. 5 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Sao Paulo, Brazil, on March 31, 2000.
America Online Latin America, Inc.
/s/ Charles M. Herington
By: _________________________________
Charles M. Herington
Chief Executive Officer
As required by the Securities Act of 1933, this Amendment No. 5 to the
Registration Statement has been signed by the following persons in the
capacities held on the dates indicated.
<TABLE>
<S> <C> <C>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Charles M. Herington Chief Executive Officer March 31, 2000
______________________________________ (principal executive
Charles M. Herington officer)
* Chief Financial Officer March 31, 2000
______________________________________ (principal financial and
Javier Aguirre accounting officer)
* Director March 31, 2000
______________________________________
Steven I. Bandel
* Director March 31, 2000
______________________________________
Gustavo A. Cisneros
* Director March 31, 2000
______________________________________
Ricardo J. Cisneros
* Director March 31, 2000
______________________________________
Miles R. Gilburne
* Director March 31, 2000
______________________________________
J. Michael Kelly
* Director March 31, 2000
______________________________________
Michael Lynton
* Director March 31, 2000
______________________________________
Robert S. O'Hara, Jr.
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director March 31, 2000
______________________________________
Cristina Pieretti
* Director March 31, 2000
______________________________________
Robert W. Pittman
* Director March 31, 2000
______________________________________
Gerald Sokol, Jr.
</TABLE>
* By executing his name hereto, Charles M. Herington is signing this document
on behalf of the persons indicated above by the powers of attorney duly
executed by these persons and filed with the Securities and Exchange
Commission.
/s/ Charles M. Herington
By: _________________________________
Charles M. Herington
(Attorney-in-fact)
II-5
<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.
on the legality of securities being registered.
@10.1 Form of 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 of employment for Charles M. Herington, dated February
26, 1999.
*10.9 Amended and restated ODC Guarantee Agreement, dated as of
December 15, 1998.
@+10.10 Agreement by and between Embratel and AOL Brasil Ltda., dated as
of October 18, 1999.
@+10.11 Agreement by and between Netstream Telecom Ltda. and AOL Brasil
Ltda., dated as of September 24, 1999.
+10.12 Form of Amendment to Agreement by and between Embratel and AOL
Brasil Ltda., dated as of October 18, 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>
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* 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>
EXHIBIT 10.12
[*]=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.
AOL Confidential
FOR INTERNAL AOL DISCUSSION ONLY
AMENDMENT TO MASTER AGREEMENT FOR VALUE ADDED SERVICES (BRAZIL)
BY AND BETWEEN
AOL BRASIL LTDA. AND EMPRESA BRASILEIRA DE TELECOMUNICAcoES S.A. - EMBRATEL
This Amendment (the "Amendment"), effective as of March __, 2000 (the
"Amendment Date"), is entered into by and between AOL BRASIL LTDA., a Brazilian
corporation headquartered at Avenida Industrial 600, 2o. Andar, Santo Andre,
08090-500, Sao Paulo - SP, registered with the Ministerio de Fazenda under
number 03.032.579/0001-62, represented by its __,__, hereinafter called AOL, and
EMPRESA BRASILEIRA DE TELECOMUNICAcoES S.A. - EMBRATEL, a Brazilian corporation
headquartered at Av. Presidente Vargas, 1012, CEP 20179-900, Rio de Janeiro -
RJ, registered with the Ministerio de Fazenda under number 33.530.486/0001-29,
represented by its __, __, hereinafter called EMBRATEL, and modifies, and is
incorporated into, the Master Agreement for Value Added Services (Brazil) dated
October 18, 1999 by and between AOL and EMBRATEL (the "Agreement"). This
Amendment modifies the sections of the Agreement as indicated below. Unless
modified herein, all other terms defined in the Agreement shall have the same
meaning when used in this Amendment. All terms and conditions of the Agreement
not otherwise specifically modified in this Amendment remain unchanged and in
full force and effect. In the case of conflict between the terms of this
Amendment and the remaining terms and conditions of the Agreement, the terms of
this Amendment shall control.
1. INTERNATIONAL TRANSIT SERVICES
Section 1 of the Agreement is hereby amended by adding the following provisions
at the end of Section 1("Scope of Services"):
The services under this Agreement include, the provision of fully-
redundant dedicated private line backhaul capacity to AOL between
Brazil and the United States ("International Transit Services"), which
are part of the network.
EMBRATEL shall provide International Transit Services to AOL as
follows:
(a) Within ten (10) days of the Amendment Date, EMBRATEL shall re-route AOL's
existing traffic over [*] of Internet bandwidth capacity on the [*]
submarine cable (the "Initial [*] Capacity").
(b) EMBRATEL shall provide AOL a [*] leased line fiber-optic circuit with up to
STM-1 bandwidth capacity on the Americas III submarine cable (the "Americas
II Circuit") between Brazil and the USA. EMBRATEL shall provide AOL the
capacity not later than July 1, 2000. EMBRATEL shall provide AOL the
Americas II Circuit for [*] years starting on the Effective Date of the
Agreement. EMBRATEL shall notify AOL in
<PAGE>
writing of the date in which the Americas II Circuit will be made available
to AOL at least fifteen (15) days prior such date.
(c) AOL may choose: (i) activate the entire STM-1 bandwidth capacity on the
Americas II Circuit upon the earlier of July 1, 2000 or the date the
Americas III Circuit is made available to AOL; or (ii) initially activate
DS-3 bandwidth capacity on the Amercias II Circuit upon the earlier of July
1, 2000 or the date the Americas III Circuit is made available to AOL, and,
thereafter, activate additional units of DS-3 bandwidth capacity until the
entire STM-1 capacity on the Americas II Circuit is filled. Such
activation will be made by AOL by providing 30 days prior written notice to
EMBRATEL specifying the bandwidth to be activated.
(d) During the time the dedicated lease line fiber optic circuit is
provisioned, and upon activation of Amercias II capacity for EMBRATEL's
Internet backbone, EMBRATEL shall route all AOL traffic over the Americas
II Circuit (including traffic previously routed over the Initial [*]
Capacity and the Additional [*] Capacity, if applicable). Embratel shall
move AOL's traffic to Americas II Internet before any other customer.
(e) If EMBRATEL does not provide the [*] dedicated Circuit to AOL by [*] as
provided in Section 1(b), EMBRATEL shall provide AOL, in addition to the
Initial [*] Capacity, [*] of bandwidth capacity on the [*] submarine cable
(the "Additional [*] Capacity") as of [*] and re-route existing AOL traffic
not already routed through the Initial [*] Capacity over the Additional [*]
Capacity. In any event, EMBRATEL shall use its best commercial efforts to
provide AOL the Additional [*] Capacity as of April 30, 2000 and re-route
existing AOL traffic not already routed through the Initial [*] Capacity
over the Additional [*] Capacity.
(f) If EMBRATEL does not provide AOL the leased line over Americas II Circuit
by [*], AOL may (i) terminate the provision of the Americas II Circuit [*],
or (ii) terminate the provision of all International Transit Services [*],
by providing EMBRATEL written notice of such termination.
(g) AOL may terminate the provision of International Transit Services at any
time upon the delivery of a 30-day notice and the payment of an early
termination fee consisting of [*] of the amount corresponding to the months
until the expiration date multiplied by the amount of the Service Provision
Bill -CPS in force in the termination month. .
<PAGE>
(h) International Transit Services shall be provided by EMBRATEL in accordance
with the performance measures set forth in Schedule A hereto ("Performance
Measures").
(i) If EMBRATEL fails to meet Performance Measures and such failure results in
an outage of International Transit Services, EMBRATEL shall credit AOL, in
the invoice for the month immediately following the month in which the
outage occurs, an amount equal to (i) (a) [*]. EMBRATEL shall not be
required to make such credit if the outage results from:
(1) non-routine operations undertaken by a Party, provided the Parties
have agreed in writing in advance of such operations to excuse
outages resulting from such operations;
(2) an Act of God;
(3) a force majeure event; or
(4) reasonable scheduled maintenance performed by EMBRATEL, provided
EMBRATEL has provided AOL at least fifteen (15) days prior written
notice of such outage and the reasons therefore;
2. [*]
Section 2.5 of the Agreement is hereby replaced in its entirety by the following
provisions:
2.5 [*]
3. INTERNATIONAL TRANSIT FEES
Section 2.1(d) is hereby amended by deleting clauses (c) ("routing through
Internet international circuits") and (d) ("recurring backhaul circuit
charges"). A new Section 2.6 is hereby incorporated to the Agreement consisting
of the following provisions:
2.6 International Transit Fees. Fees for International Transit
--------------------------
Services ("International Transit Fees") are, as of the date AOL
activates bandwidth in the Americas II Circuit, the following, subject
to item 2.1 (f) of the Agreement:
(a) [*] per month for the first unit of DS-3 capacity activated if
AOL activates an initial DS-3 capacity on the Americas II
Circuit as provided in Section 1(c)(ii).
(b) [*] per month for the second unit of DS-3 capacity activated
if AOL activates an initial DS-3 capacity on the Americas II
Circuit as provided in Section 1(c)(ii) and subsequently
activates a second unit of DS-3 capacity .
(c) [*] per month if AOL activates the entire STM-1 capacity on
the Americas II Circuit either (i) as provided in Section
1(c)(i),
<PAGE>
or (ii) if AOL initially activates DS-3 capacity on the
Americas II Circuit pursuant to Section 1(b)(ii) and
subsequently activates the second and third units of DS-3
capacity (e.g., all three units of DS-3 capacity are
activated).
The prices presented above do not include any taxes. Such prices are
[*] and shall be [*] every month, on the release date of the
corresponding invoice.
The prices are for an international circuit from AOL Headquarters in
Virginia - USA, terminating in one of EMBRATEL operations building in
Sao Paulo - Brazil. Any changes on the circuit termination outside of
Embratel facilities in Sao Paulo may require price adjustment.
In case AOL does not activate the entire STM-1 capacity within [*] of
this Amendment Date, then EMBRATEL shall charge AOL for the entire
STM-1, according to 2.6 (c), as if such capacity was activated. As of
the date of AOL activates bandwidth in the Americas II Circuit, the
Base Price shall not include fees for International Transit Services.
4. MODEM FEES
Section 2.1(a) is hereby amended by replacing the Base Price of [*] per [*]
Modem per month with a new Base Price of [*] per [*] Modem per month. The new
Base Price set forth above shall become effective as of the date AOL activates
bandwidth on the [*] circuit or as of the date AOL terminates the provision of
International Transit Services.
5. MARKET PRICING
A new Section 2.7 is hereby incorporated to the Agreement consisting of the
following provisions:
2.7 Market Pricing.
--------------
(a) If industry pricing for similar services purchased in
similar quantities provided by other modem service
providers are materially lower than the fees set forth in
2.1(a), the parties shall renegotiate the fees for modem
services to bring them in line with industry pricing.
(b) If AOL receives [*] that provides telecommunications
services in Brasil with a similar capability to deliver
similar International Transit Services to AOL [*] EMBRATEL
to AOL for International Transit Services, then, upon
presentation of such [*], EMBRATEL shall enter into good
faith discussions with AOL in order to [*] on this
Agreement [*].
6. MARKET PRICING REMEDIES
A new Section 2.8 is hereby incorporated to the Agreement consisting of the
following provisions:
2.8 Market Pricing Remedies.
-----------------------
(a) If EMBRATEL does not reduce its fees for Modems as
<PAGE>
provided in Section 2.7(a), then AOL may, by providing
written notice to EMBRATEL, (i) be released from its
commitment to order [*] Modems from EMBRATEL pursuant to
Section 1.1 of the Agreement, and/or (ii) decommission
Modems as specified by AOL without incurring any liability
to EMBRATEL.
(b) If the parties are unable to reach an agreement regarding
market price conditions as provided in Section 2.7(a), then
AOL may, [*] the provision of International Transit
Services [*] to EMBRATEL, including the termination penalty
of Section 1(g), by providing written notice to EMBRATEL of
such termination.
7. PAYMENT TERMS
Section 2.4 of the Agreement is hereby amended by adding the following
provisions at the beginning of such section:
EMBRATEL will [*] AOL International Transit Fees on a [*] basis [*].
8. TERM
Section 8.1 of the Agreement is hereby amended by deleting the first sentence of
such section ("The term of this relationship shall be three (3) years from the
Effective Date") and replacing it with the following provisions:
The term of the Agreement shall be [*] years from the
Americas II Circuit activation date, provided that the
provision of Modems and services related thereto (other
than International Transit Services) shall terminate three
(3) years after the Effective Date of the Agreement.
9. FORCE MAJEURE
Section 14.3(d) of the Agreement is hereby replaced in its entirety by the
following provisions:
(d) If any of the circumstances described in this Section
prevent, hinder or delay performance of a material portion
of the Services necessary for the performance of AOL's
critical functions, taken as a whole, for more than [*]
hours, then AOL may: (iii) [*] the provision of
International Transit Services if International Transit
Services are materially affected by such force majeure
circumstances.
10. LANGUAGE AND COUNTERPARTS
This Amendment is executed in English, and AOL shall, within thirty (30)
days as of the Amendment Date, provide EMBRATEL a translation of this Amendment
into Portuguese to be executed by both Parties. The Parties shall agree upon
the final version of the Portuguese
<PAGE>
translation as soon as practicable. In case of any discrepancies between the
English version and the Portuguese version of this Amendment, the Portuguese
version shall prevail. This Amendment may be executed in several counterparts ,
each of which shall be deemed an original, but all of which, when taken
together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as
of the Amendment Date.
Sao Paulo, March __, 2000
<TABLE>
<CAPTION>
<S> <C>
AOL BRASIL LTDA. EMPRESA BRASILEIRA DE TELECOMUNICAOES - embratel
By: By:
----------------------------------------- ---------------------------------------------
Name: Name:
---------------------------------------- --------------------------------------------
Title: Title:
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</TABLE>
WITNESSES:
<TABLE>
<CAPTION>
<S> <C>
By: By:
----------------------------------------- --------------------------------------------
Name: Name:
---------------------------------------- -----------------------------------------
RG: RG:
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</TABLE>
<PAGE>
AOL Confidential
FOR INTERNAL AOL DISCUSSION ONLY
SCHEDULE A
PERFORMANCE MEASURES
--------------------
o International Transit Services shall be provided on a net availability of [*]
(measured over the preceding 90 day period).
o The undersea portion of the International Transit Services meets the
performance criteria of ITU-T G.826 and has line monitoring and protection
switching.
o The inland portion of the International Transit Services has the ability to
carry commercial traffic between the system interface at the Fortaleza cable
station to the inland point of interface meeting performance criteria of ITU-
T G.826 and has protection switching capability. The interface to the system
shall be an optical interface as specified in ITU Recommendation G.957 and be
1+1 (or equivalent) protected.
o The connection between the Fortaleza cable station and Sao Paulo will be
delivered through EMBRATEL's [*].
o Day to day operation of the International Transit Services will be under the
control of the Embratel Network Operations Center (the "Embratel NOC"). The
------------
Embratel NOC will be manned 24 hours per day, 7 days per week, and will
provide comprehensive end to end monitoring of the system between AOL -
Virginia, Fortaleza Cable Station, and Sao Paulo.
o The Embratel NOC will act as the Restoration Control Office (RCO) and
coordinate all system restoration activity. Internal restoration, using the
Drop and Continue Add/Drop Multiplexers (ADMs) and Synchronous Digital
Hierarchy (SDH) loop technology, will be automatic, with an interruption of
less than [*].
