Letter Agreement



 






Exhibit 10.1




 




			
	Time Warner Inc.

One Time Warner Center

New York, NY 10019
	 	America Online, Inc.

22000 AOL Way

Dulles, VA 20166






January 17, 2006




America Online Latin America, Inc.

6600 N. Andrews Avenue, Suite 400

Ft. Lauderdale, Florida 33309

Attn: President




Aspen Investments LLC

c/o Finser Corporation

550 Biltmore Way, Suite 900

Coral Gables, FL 33134

Attn: President




Atlantis Investments LLC

c/o Finser Corporation

550 Biltmore Way, Suite 900

Coral Gables, FL 33134

Attn: President




Ladies and Gentlemen:




     The purpose of this letter is to confirm our understandings and agreements relating to the
payment of certain post-petition costs and expenses associated with the wind-down of America Online
Latin America, Inc. (“AOLA”) and its subsidiaries (the “Wind-Down”).



     As you know, AOLA and certain of its subsidiaries (collectively, the “Debtors”) are
debtors in a jointly administered chapter 11 case pending in the United States Bankruptcy Court for
the District of Delaware. On or about January 17, 2006, the Debtors intend to file a Joint Plan of
Reorganization and Liquidation (the “Plan”) which will provide for the implementation of
the Wind-Down. Pursuant to the Wind-Down, certain of AOLA’s non-Debtor subsidiaries, including AOL
S. de R.L. de C.V. (“AOL Mexico”) and AOL Brasil Ltda. (“AOL Brazil”), will be
liquidated and/or dissolved in accordance with applicable local laws. America Online, Inc.
(“AOL”) is expected to incur actual out-of-pocket costs and expenses in assisting AOLA, AOL
Mexico and AOL Brazil in their efforts to terminate service, discontinue customers, and shut down
operations in connection with the Wind-Down of AOL Mexico and AOL Brazil, as set forth in an
estimate delivered by AOL to AOLA (the “Wind-Down Costs”). The parties hereto have agreed
that AOL will be reimbursed for the Wind-Down Costs in a manner consistent with the following terms
and conditions. Capitalized terms used herein and not defined herein shall have the meanings
ascribed to such terms in the Plan.



 









 





     • All payments made by AOL Mexico and/or AOL Brazil to AOL hereunder shall be made
free and clear of, and without deduction or withholding for or on account of, any taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any governmental authority (“Taxes”), excluding any
Taxes imposed by the jurisdiction in which AOL is organized or is located, or in which its
principal executive office is located or by reason of any connection between the jurisdiction
imposing such Tax and AOL other than in connection with AOL having executed, delivered or performed
its obligations hereunder or performed activities described herein (“Non-Excluded Taxes”);
provided, that if any such Non-Excluded Taxes are required to be withheld from, or
otherwise deducted from, any amounts payable to AOL hereunder, the amounts so payable shall be
increased as necessary so that after making all required deductions for Non-Excluded Taxes
(including deductions applicable to additional sums payable under this paragraph), AOL receives an
amount equal to the sum it would have received had no such deductions been made.



     • If any applicable law requires AOL Mexico and/or AOL Brazil to withhold or deduct any
amounts from any Wind-Down Costs paid to AOL hereunder, AOL Mexico and/or AOL Brazil shall effect
such withholding, remit such amounts to the appropriate governmental authorities and deliver to
AOL, within thirty (30) days of payment of such amounts to the governmental authorities, the
original or a certified copy of a tax receipt issued by such governmental authority evidencing the
payment of any such amounts.



     • AOL Mexico and AOL Brazil shall indemnify AOL, within ten (10) days after written demand
therefor, for the full amount of any Non-Excluded Taxes paid by or with respect to AOL on or with
respect to any payment by or on account of any obligation of AOL hereunder (including Non-Excluded
Taxes imposed or asserted on or attributable to amounts payable under this paragraph) and any
penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or
not such Non-Excluded Taxes were correctly or legally imposed or asserted by the relevant
governmental authority; provided, that AOL shall cooperate with AOL Mexico and AOL Brazil
to contest such Non-Excluded Taxes at the reasonable request of AOL Mexico and/or AOL Brazil.



     • If AOL receives a refund in respect of any amounts paid by AOL Mexico or AOL Brazil
hereunder, which refund in the sole discretion of AOL is allocable to such payment, AOL shall
promptly notify AOLA of such refund and shall, within fifteen (15) days after receipt, repay such
refund and any interest with respect thereto (net of any Taxes payable thereon, taking into account
any offsetting deductions, with respect to such refund and interest received with respect thereto)
to AOLA net of all out-of-pocket expenses of AOL; provided, that AOLA, upon the request of
AOL, agrees to repay the amount paid over to AOLA to AOL in the event that AOL is required to repay
such refund and/or interest.



     • Upon reasonable request by AOLA, AOL Mexico or AOL Brazil, and as permitted by applicable
law, AOL shall deliver to such party properly completed and executed documentation so as to
effectuate the terms of this letter and to permit any payments made hereunder to be made without
withholding of Taxes or at a reduced rate.



 









 





     • AOL Mexico agrees, and AOLA agrees to cause AOL Mexico, to reimburse AOL in an amount up to
$300,000 for Wind-Down Costs incurred by AOL in connection with the shut-down of AOL Mexico (the
“AOL Mexico Wind-Down Costs”). AOL will be reimbursed for any AOL Mexico Wind-Down Costs
(up to the $300,000 cap) as and when services resulting in AOL Mexico Wind-Down Costs are performed
and billed to AOL Mexico. AOL and AOLA agree to cooperate to produce a separate agreement between
AOL and AOL Mexico and all other documentation reasonably required to ensure optimal
externalization of funds in respect of the payment of the AOL Mexico Wind-Down Costs. AOL agrees
to take reasonable commercial efforts to minimize the amount of the AOL Mexico Wind-Down Costs and
only to charge AOL Mexico for actual out-of-pocket costs and expenses incurred in connection with
the shut-down of AOL Mexico.



     • AOL Brazil agrees, and AOLA agrees to cause AOL Brazil, to reimburse AOL in an
amount up to $1,004,000 for Wind-Down Costs incurred by AOL in connection with the shut-down of AOL
Brazil (the “AOL Brazil Wind-Down Costs”). AOL will be reimbursed for any AOL Brazil
Wind-Down Costs (up to the $1,004,000 cap) as and when services resulting in AOL Brazil Wind-Down
Costs are performed and billed to AOL Brazil. AOL and AOLA agree to cooperate to produce a
separate agreement between AOL and AOL Brazil and all other documentation reasonably required to
ensure optimal externalization of funds in respect of the payment of the AOL Brazil Wind-Down
Costs. AOL agrees to take reasonable commercial efforts to minimize the amount of the AOL Brazil
Wind-Down Costs and to only charge AOL Brazil for actual out-of-pocket costs and expenses incurred
in connection with the shut-down of AOL Brazil and, to the extent AOL’s actual out-of-pocket costs
and expenses depend upon negotiations with third parties, to take reasonable commercial efforts to
minimize the amount of such costs.



     • To the extent that any payments hereunder have not been paid as and when required
by either AOL Mexico or AOL Brazil (the “Unpaid Costs”), AOLA shall pay the amount of the
Unpaid Costs to AOL from Available Cash (after payment or reservation of amounts necessary to pay
distributions on account of the Series A-1 Beneficial Interests and the Series A-2 Beneficial
Interests, if the LLC Option is elected) on a par with amounts payable on account of the Series C
Beneficial Interests, at the rate of 50% of such Available Cash to AOL, on the one hand, and 50% of
such Available Cash to the holders of the Series C Beneficial Interests, on the other hand, until
any such Unpaid Costs are paid in full.



     • Each of AOLA, AOL Mexico and AOL Brazil represents and warrants, severally and not jointly,
as to itself and not as to any other entity, that it is duly authorized to execute and deliver this
letter agreement and that each of its obligations hereunder are valid, binding and enforceable
against it in accordance with its terms, subject to, in the case of (i) AOLA, the occurrence of the
Effective Date or entry of an order of the Bankruptcy Court (which may be the Confirmation Order)
authorizing this letter agreement, and (ii) AOL Mexico and/or AOL Brazil, applicable foreign
exchange regulations and bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other similar laws of general application affecting creditors’ rights.



 









 





     Please confirm that the foregoing sets forth our agreement by signing and returning to us the
duplicate copy of this letter. This letter agreement may be executed in multiple counterparts, any
of which may be transmitted by facsimile or by electronic mail in portable document format, and
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.



	 	 	 	 	 
	 	Very truly yours,





TIME WARNER INC.

 	 
	 	By:  	/s/ Katherine Brown
 	 
	 	 	Name:  	Katherine Brown 	 
	 	 	Title:  	Vice President 	 
	 
	 	AMERICA ONLINE, INC.

 	 
	 	By:  	/s/ Steven Swad
 	 
	 	 	Name:  	Steven Swad 	 
	 	 	Title:  	Chief Financial Officer 	 



 









 






	 	 	 	 	 



Acknowledged and Agreed as of

the date first written above:




	 	 	 	 	 
	AMERICA ONLINE LATIN AMERICA, INC.

 	 
	By:  	/s/ Charles M. Herington
 	 
	Name:  	Charles M. Herington 	 
	Title:  	President & CEO 	 
	 
	AOL S. DE R.L. DE C.V.

 	 
	By:  	/s/ Eduardo A. Escalante
 	 
	Name:  	Eduardo A. Escalante 	 
	Title:  	President 	 
	 
	AOL BRASIL LTDA.

 	 
	By:  	/s/ Milton R. Camargo
 	 
	Name:  	Milton R. Camargo 	 
	Title:  	President 	 



 









 






	 	 	 	 	 
	ASPEN INVESTMENTS L.L.C.

 	 
	By:  	/s/ Cristina Pieretti
 	 
	Name:  	Cristina Pieretti 	 
	Title:  	Vice President 	 
	 
	ATLANTIS INVESTMENTS L.L.C.

 	 
	By:  	/s/ Cristina Pieretti
 	 
	Name:  	Cristina Pieretti 	 
	Title:  	Vice President